<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
-----------------
STANT CORPORATION
(Name of Subject Company)
E&W ACQUISITION CORP.
TOMKINS PLC
(Bidders)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
854727-10-4
(CUSIP Number of Class of Securities)
GEORGE S. PAPPAYLIOU
TOMKINS INDUSTRIES INC.
4801 SPRINGFIELD STREET
DAYTON, OH 45431
(513) 476-0241
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on behalf of Bidders)
COPY TO:
ERIC J. FRIEDMAN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
APRIL 11, 1997
(Date of Event Which Requires Filing Statement on Schedule 13D)
CALCULATION OF FILING FEE
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
TRANSACTION VALUATION* $395,954,707.00 AMOUNT OF FILING FEE $79,191.00
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee
only. The amount assumes the purchase of 18,416,498 shares of common
stock, $.01 par value, of Stant Corporation (the "Company") (the
"Shares"), at a price per Share of $21.50 in cash (the "Offer Price").
Such number of Shares represents all the Shares outstanding as of April
9, 1997, plus 2,189,683 Shares issuable upon the exercise of
outstanding, non-contingent stock options.
[ ] 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: None
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
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Exhibit Index is located on Page 8
<PAGE>
CUSIP NO. 854727-10-4
14D-1 AND 13D
<TABLE>
<CAPTION>
<S> <C>
Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
1. E&W Acquisition Corp.
- ---------------------------------------------------------------------------------------------
Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
2.
- ---------------------------------------------------------------------------------------------
SEC Use Only
3.
- ---------------------------------------------------------------------------------------------
Source of Funds
4.
AF
- ---------------------------------------------------------------------------------------------
Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or
2(f) [ ]
5.
- ---------------------------------------------------------------------------------------------
Citizenship or Place of Organization
6.
Delaware
- ---------------------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned By Each Reporting Person*
7.
9,229,595
- ---------------------------------------------------------------------------------------------
Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
8.
- ---------------------------------------------------------------------------------------------
Percent of Class Represented By Amount in Row (7)*
9.
Approximately 50.1% of the Shares outstanding on a fully diluted basis as of
April 9, 1997
- ---------------------------------------------------------------------------------------------
Type of Reporting Person
10.
CO
- ---------------------------------------------------------------------------------------------
</TABLE>
* See footnote on following page.
2
<PAGE>
CUSIP NO. 854727-10-4
14D-1 AND 13D
<TABLE>
<CAPTION>
<S> <C> <C>
Names of Reporting Person
1. S.S. or I.R.S. Identification No. of Above Persons
Tomkins PLC
- ---------------------------------------------------------------------------------------------
Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
2.
- ---------------------------------------------------------------------------------------------
SEC Use Only
3.
- ---------------------------------------------------------------------------------------------
Source of Funds
4.
WC or BK
- ---------------------------------------------------------------------------------------------
Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e)
or 2(f) [ ]
5.
- --------------------------------------------------------------------------
Citizenship or Place of Organization
6.
England
- -----------------------------------------------------------------------------
Aggregate Amount Beneficially Owned By Each Reporting Person*
7.
9,229,595
- -----------------------------------------------------------------------------
Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [ ]
8.
- -----------------------------------------------------------------------------
Percent of Class Represented By Amount in Row (7)*
9.
Approximately 50.1% of the Shares outstanding on a fully diluted basis as of
April 9, 1997
- -----------------------------------------------------------------------------
Type of Reporting Person
10.
CO
- -----------------------------------------------------------------------------
</TABLE>
- ------------
* On April 9, 1997, Tomkins Corporation, a wholly owned subsidiary of
Tomkins PLC ("Parent"), and E&W Acquisition Corp., an indirect wholly
owned subsidiary of Parent (the "Purchaser"), entered into a Stockholder
Agreement, dated as of April 9, 1997 (the "Stockholder Agreement"), with
Bessemer Capital Partners, L.P., the beneficial owner of an aggregate of
9,229,595 Shares (the "Selling Stockholder"), or approximately 50.1% of
the Company's outstanding Shares on a fully diluted basis. Pursuant to
the Stockholder Agreement, the Selling Stockholder has agreed to validly
tender pursuant to the Offer and not withdraw all Shares which are
beneficially owned by the Selling Stockholder prior to the expiration
date of the Offer. The Stockholder Agreement provides that the Purchaser
has an irrevocable option to acquire from the Selling Stockholder, at
$21.50, all of the Selling Stockholder's Shares if certain conditions
are met. Pursuant to the Stockholder Agreement, the Selling Stockholder
has also delivered a proxy to the Purchaser to vote, or grant a consent
or approval in respect of, the Shares subject to the Stockholder
Agreement in favor of the Merger (as defined in the Offer to Purchase)
and against any transaction with a third party that would impede or
frustrate the Merger Agreement (as defined in the Offer to Purchase).
The Stockholder Agreement is more fully described in Section 12 --
"Purpose of the Offer, Merger, Merger Agreement and Stockholder Agreement"
of the Offer to Purchase dated April 11, 1997 (the "Offer to Purchase").
3
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 relates to the offer by the
Purchaser to purchase all outstanding shares of common stock, par value $.01
per share (the "Shares"), of Stant Corporation, a Delaware corporation, at
$21.50 per Share, net to the seller in cash, on the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 11, 1997 (the
"Offer to Purchase"), and in the related Letter of Transmittal, copies of
which are attached hereto as Exhibits (a)(1) and (a)(2), respectively (which,
as amended or supplemented from time to time, together constitute the
"Offer"). This Tender Offer Statement on Schedule 14D-1 also constitutes a
Statement on Schedule 13D with respect to the acquisition by Parent
and the Purchaser of beneficial ownership of the Shares subject
to the Stockholder Agreement. The item numbers and responses thereto below
are in accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Stant Corporation, a Delaware
corporation (the "Company"). The address of the Company's principal executive
offices is 425 Commerce Drive, Richmond, Indiana 47374.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6--"Price Range of Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is filed by the Purchaser and Parent. The
information set forth in the Introduction, in Section 9--"Certain Information
Concerning the Purchaser and Parent" and in Schedule I of the Offer to
Purchase is incorporated herein by reference.
(e)-(f) During the last five years, none of the Purchaser Entities (as
defined in the Offer to Purchase) nor, to their knowledge, any of the persons
listed in Schedule I (Directors and Executive Officers) to the Offer to
Purchase, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, in Section
9--"Certain Information Concerning the Purchaser and Parent," in Section
11--"Background of the Offer; Contacts with the Company" and in Section
12--"Purpose of the Offer, Merger, Merger Agreement and Stockholder
Agreement" of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10--"Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(g) The information set forth in the Introduction, in Section
7--"Effect of the Offer on the Market for the Shares; Nasdaq Quotation and
Exchange Act Registration" and in Section 12--"Purpose of the Offer, Merger,
Merger Agreement and Stockholder Agreement" of the Offer to Purchase is
incorporated herein by reference.
4
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction and in Section
12--"Purpose of the Offer, Merger, Merger Agreement and Stockholder
Agreement" is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, in Section 9--"Certain
Information Concerning the Purchaser and Parent," in Section 11--"Background
of the Offer; Contacts with the Company," and in Section 12--"Purpose of the
Offer, Merger, Merger Agreement and Stockholder Agreement" of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction, in Section 16--"Fees and
Expenses" and in Section 17--"Miscellaneous" of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9--"Certain Information Concerning
the Purchaser and Parent," of the Offer to Purchase, including the financial
statements and related notes thereto incorporated by reference in Section 9,
is incorporated herein by reference.
The incorporation by reference herein of the above-referenced financial
information does not constitute an admission that such information is
material to a decision by a stockholder of the Company whether to sell,
tender or hold shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth under Introduction, in Section 9--"Certain
Information Concerning the Purchaser and Parent," in Section 11--"Background
of the Offer; Contacts with the Company," and in Section 12--"Purpose of the
Offer, Merger, Merger Agreement and Stockholder Agreement" of the Offer to
Purchase is incorporated herein by reference.
(b)-(c) The information set forth in Section 12--"Purpose of the Offer,
Merger, Merger Agreement and Stockholder Agreement" and in Section
15--"Certain Legal Matters" of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in Section 7--"Effect of the Offer on the
Market for the Shares; Nasdaq Quotation and Exchange Act Registration" of the
Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated April 11, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
5
<PAGE>
(a)(7) Form of Summary Advertisement, dated April 11, 1997.
(a)(8) Text of Press Release, dated April 9, 1997.
(a)(9) Text of Press Release, dated April 11, 1997.
(b) None
(c)(1) Agreement and Plan of Merger, dated as of April 9, 1997, by and
among Tomkins Corporation, the Purchaser and the Company.
(c)(2) Stockholder Agreement, dated as of April 9, 1997, by and among
Tomkins Corporation, the Purchaser and Bessemer Capital Partners, L.P.
(c)(3) Letter from Mr. W. Thomas Margetts to Tomkins Corporation and the
Purchaser dated April 9, 1997.
(c)(4) Confidentiality and Nondisclosure Agreement, dated March 12, 1997,
by and among Tomkins Corporation, Bessemer Partners & Co. and the Company.
(c)(5) Letter Agreement, dated April 2, 1997, between Parent and the
Company.
(d) None.
(e) Not applicable.
(f) None.
6
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: April 11, 1997
E & W Acquisition Corp.
BY: /s/ Geoffrey D. Eaton
-------------------------------
Name: Geoffrey D. Eaton
Title: President and Chief
Executive Officer
Tomkins PLC
BY: /s/ Simon M. Webber
-------------------------------
Name: Simon M. Webber
Title: Executive Officer --
Corporate
Development Unit and
Legal Counsel
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
- ----------- --------
<S> <C> <C>
(a)(1) Offer to Purchase, dated April 11, 1997 ........................................
(a)(2) Letter of Transmittal...........................................................
(a)(3) Notice of Guaranteed Delivery ..................................................
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees........................................................................
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees....................................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9........................................................................
(a)(7) Form of Summary Advertisement, dated April 11, 1997 ............................
(a)(8) Text of Press Release, dated April 9, 1997......................................
(a)(9) Text of Press Release, dated April 11, 1997 ....................................
(b) None ...........................................................................
(c)(1) Agreement and Plan of Merger, dated as of April 9, 1997, by and among Tomkins
Corporation, the Purchaser and the Company......................................
(c)(2) Stockholder Agreement, dated as of April 9, 1997, by and among Tomkins
Corporation, the Purchaser and Bessemer Capital Partners, L.P. .................
(c)(3) Letter from Mr. W. Thomas Margetts to Tomkins Corporation and the Purchaser
dated April 9, 1997.............................................................
(c)(4) Confidentiality and Nondisclosure Agreement, dated March 12, 1997, by and among
Tomkins Corporation, Bessemer Partners & Co. and the Company....................
(c)(5) Letter Agreement, dated April 2, 1997, between Parent and the Company. ........
(d) None............................................................................
(e) Not applicable..................................................................
(f) None............................................................................
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
STANT CORPORATION
AT
$21.50 NET PER SHARE
BY
E&W ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TOMKINS PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES (AS DEFINED HEREIN) WHICH CONSTITUTES AT LEAST A MAJORITY OF THE
SHARES OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS. SEE SECTION 14.
IN CONNECTION WITH THE EXECUTION OF THE MERGER AGREEMENT (AS DEFINED
HEREIN), BESSEMER CAPITAL PARTNERS, L.P., THE BENEFICIAL OWNER OF
APPROXIMATELY 56.9% OF THE OUTSTANDING SHARES, AGREED TO TENDER SUCH SHARES
PURSUANT TO THE OFFER.
THE BOARD OF DIRECTORS OF STANT CORPORATION (THE "COMPANY") HAS APPROVED
THE OFFER AND THE MERGER (AS DEFINED HEREIN), HAS DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
IMPORTANT
Any stockholder desiring to tender all or any portion of such
stockholder's shares of common stock, par value $.01 per share, of the
Company (the "Shares"), should either (a) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and mail or deliver it together with the
certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 3 or (b) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder whose Shares are 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.
Any stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer described in this Offer to
Purchase on a timely basis may tender such Shares by following the procedures
for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other tender offer materials may also be
directed to the Information Agent. A stockholder may also contact brokers,
dealers, commercial banks and trust companies for assistance concerning this
Offer.
The Dealer Manager for the Offer is:
BZW [LOGO]
April 11, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
INTRODUCTION .................................................................................. 1
1. Terms of the Offer..................................................................... 3
2. Acceptance for Payment and Payment for Shares.......................................... 5
3. Procedures for Tendering Shares........................................................ 6
4. Withdrawal Rights...................................................................... 8
5. Certain Federal Income Tax Consequences................................................ 8
6. Price Range of Shares; Dividends....................................................... 9
7. Effect of the Offer on the Market for the Shares; Nasdaq Quotation and Exchange Act
Registration......................................................................... 10
8. Certain Information Concerning the Company............................................. 10
9. Certain Information Concerning the Purchaser and Parent................................ 12
10. Source and Amount of Funds............................................................. 13
11. Background of the Offer; Contacts with the Company..................................... 13
12. Purpose of the Offer, Merger, Merger Agreement and Stockholder Agreement .............. 14
13. Dividends and Distributions............................................................ 23
14. Conditions to the Offer................................................................ 23
15. Certain Legal Matters.................................................................. 25
16. Fees and Expenses...................................................................... 26
17. Miscellaneous.......................................................................... 27
Schedule I--DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER ........................ I-1
</TABLE>
1
<PAGE>
To the Holders of Common Stock of
STANT CORPORATION:
INTRODUCTION
E&W Acquisition Corp., a Delaware corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Tomkins PLC, a corporation organized
under the laws of England (the "Parent"), hereby offers to purchase all
outstanding shares of common stock, par value $.01 per share (the "Shares"),
of Stant Corporation, a Delaware corporation (the "Company"), at $21.50 per
Share (the "Offer Price"), net to the seller in cash, without interest, upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, as amended or supplemented
from time to time, together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all fees of BZW, the investment
banking division of Barclays Bank PLC ("BZW"), which is acting as the Dealer
Manager (the "Dealer Manager"), and all fees and expenses of Citibank, N.A.,
which is acting as the Depositary (the "Depositary"), and of MacKenzie Partners,
Inc., which is acting as the Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16.
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which would represent at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition"). See Section
14.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 9, 1997 (the "Merger Agreement"), by and among the Company,
Tomkins Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent ("Tomkins Corporation"), and the Purchaser. The Merger Agreement
provides that, among other things, following the consummation of the Offer
and the satisfaction or waiver of the other conditions set forth in the
Merger Agreement, the Purchaser will be merged with and into the Company (the
"Merger"), with the Company continuing as the surviving corporation (the
"Surviving Corporation"). At the effective time of the Merger (the "Effective
Time"), each outstanding Share (other than Shares owned by the Company or by
any subsidiary of the Company and Shares owned by Tomkins Corporation, the
Purchaser or any other subsidiary of Tomkins Corporation or held by
stockholders, if any, who are entitled to and who properly exercise
dissenters' rights under Delaware law) will be converted into the right to
receive an amount in cash equal to the price per Share paid pursuant to the
Offer, without interest. See Section 12.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO
AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS
THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
Morgan Stanley & Co. Incorporated, the Company's financial advisor
("Morgan Stanley"), has delivered to the Board of Directors of the Company
its written opinion to the effect that, as of the date of such opinion, the
consideration to be received by the holders of Shares pursuant to the Offer
and the Merger is fair from a financial point of view to such holders. Such
opinion is set forth in full as an exhibit to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being mailed to stockholders of the Company herewith.
The Merger Agreement provides that promptly upon the purchase by the
Purchaser of Shares pursuant to the Offer, the Purchaser shall be entitled to
designate up to such number of directors on the Board of Directors of the
Company as will give the Purchaser representation on the Board of Directors
of the Company equal to at least that number of directors, rounded up to the
next whole number, which is the product of (a) the total number of directors
on the Board of Directors of the Company (giving effect to the directors
elected pursuant to this sentence) multiplied by (b) the percentage that (i)
such number of Shares so accepted for payment and paid for by the Purchaser
plus the number of Shares otherwise owned by the Purchaser or any other
subsidiary of Tomkins Corporation bears to (ii) the number of such
1
<PAGE>
Shares outstanding. Notwithstanding the foregoing, Tomkins Corporation and
the Purchaser have agreed that, until the Effective Time, the Board of
Directors of the Company shall have at least two directors who were directors
on the date of the Merger Agreement and who are not officers of the Company
(the "Independent Directors") or shall have at least three Independent
Directors in the event the total number of directors on the Board of
Directors of the Company is greater than six; provided, however, that, in
such event, if the number of Independent Directors shall be reduced below two
for any reason whatsoever, any remaining Independent Directors shall be
entitled to designate persons to fill such vacancies who shall be deemed to
be Independent Directors for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate two persons to
fill such vacancies who shall not be officers, stockholders or affiliates of
the Company, Tomkins Corporation or the Purchaser, and such persons shall be
deemed to be Independent Directors for purposes of this Agreement. In the
Merger Agreement, the Company has agreed to take all action requested by
Tomkins Corporation necessary to effect any such election, including mailing
to its stockholders the Information Statement containing the information
required by Section 14(f) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Rule 14f-1 promulgated thereunder, and to promptly,
at the option of the Purchaser, either increase the size of the Board of
Directors of the Company or obtain the resignation of such number of its
current directors as is necessary to enable the Purchaser's designees to be
elected or appointed to the Board of Directors of the Company. The
consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption
of the Merger Agreement by the requisite vote of the stockholders of the
Company. See Section 12. Under the Company's Restated Certificate of
Incorporation and Delaware law, except as otherwise described below, the
affirmative vote of the holders of a majority of the outstanding Shares is
required to approve and adopt the Merger Agreement and the Merger.
Consequently, if the Purchaser acquires (pursuant to the Offer or otherwise)
at least a majority of the then outstanding Shares, the Purchaser will have
sufficient voting power to approve and adopt the Merger Agreement and the
Merger without the vote of any other stockholder.
Under Delaware law, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, the Purchaser will be
able to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
stockholders. In such event, Tomkins Corporation, the Purchaser and the
Company have agreed to take, at the request of the Purchaser, all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of the Company's
stockholders. If, however, the Purchaser does not acquire at least 90% of the
then outstanding Shares pursuant to the Offer or otherwise and a vote of the
Company's stockholders is required under Delaware law, a significantly longer
period of time will be required to effect the Merger. See Section 12.
The Merger Agreement provides that, following the satisfaction or waiver
of the conditions to the Offer, the Purchaser will accept for payment, in
accordance with the terms of the Offer, all Shares validly tendered pursuant
to the Offer as soon as practicable after the Expiration Date (as hereinafter
defined). The Merger Agreement provides that the Purchaser may under certain
circumstances, from time to time, extend the expiration date of the Offer
beyond the time it would otherwise be required to accept validly tendered
Shares for payment. The Offer will not remain open following the time Shares
are accepted for payment.
In connection with the execution of the Merger Agreement, Tomkins
Corporation and the Purchaser entered into a Stockholder Agreement, dated as
of April 9, 1997 (the "Stockholder Agreement"), with Bessemer Capital
Partners, L.P. (the "Selling Stockholder"), the beneficial owner of an aggregate
of 9,229,595 Shares, or approximately 56.9% of the Shares outstanding on
April 9, 1997 (50.1% of the outstanding Shares on a fully diluted basis).
Pursuant to the Stockholder Agreement, the Selling Stockholder has agreed to
validly tender pursuant to the Offer and not withdraw all Shares which are
beneficially owned by the Selling Stockholder not later than the fifth
business day after the commencement of the Offer. The Stockholder Agreement
provides that Purchaser has an irrevocable option to acquire from the Selling
Stockholder, at $21.50, all of the Selling Stockholder's Shares if (i) the
Merger Agreement is terminated in accordance with (3) or (4) under
"Termination of the Merger Agreement" below or (ii) the Merger Agreement is
terminated in accordance with (2)(a) under "Termination of the
2
<PAGE>
Merger Agreement" below and (x) the Selling Stockholder shall have breached
its agreement to tender its Shares pursuant to the Offer or (y) at the time
of such termination, the Minimum Condition shall not have been satisfied.
Subject to certain conditions specified in the Stockholder Agreement, such
option is exercisable in whole but not in part for the 120 day period
following the first to occur of the foregoing events. The Stockholder
Agreement is more fully described in Section 12.
In addition, in connection with the execution of the Merger Agreement,
Tomkins Corporation, the Purchaser and W. Thomas Margetts, the Senior Vice
President--Corporate Development of the Company and the beneficial owner of
204,099 Shares (or approximately 1% of the outstanding Shares on a fully
diluted basis), of which 202,299 are Shares issuable upon exercise of Stock
Options, entered into a letter agreement (together with the Merger Agreement
and the Stockholder Agreement, the "Operative Agreements") pursuant to which
Mr. Margetts agreed that if he were to exercise any of his Stock Options
during the pendency of the Offer, he would validly tender (or cause the
record owner of such shares to validly tender), and not withdraw, pursuant to
and in accordance with the terms of the Offer, all of the Shares issued upon
such exercise. In addition, Mr. Margetts also agreed not to exercise his
Stock Options following consummation of the Offer.
According to the Company, as of April 9, 1997 there were 16,226,815 Shares
issued and outstanding, no Shares held by the Company in its treasury,
1,217,481 Shares reserved for issuance pursuant to the Company's outstanding
employee stock options ("Plan Options") granted pursuant to stock option
programs or arrangements of the Company (the "Stock Plans"), of which Plan
Options covering 485,400 Shares have been granted subject to obtaining
approval of the Company's stockholders at the Company's 1997 Annual Meeting
of Stockholders and (absent such approval) will not become exercisable as a
result of the transactions contemplated by the Operative Agreements (the
"Conditional Options"), and 1,457,602 Shares reserved for issuance pursuant
to other options ("Other Options" and, together with the Plan Options, the
"Stock Options") granted to employees and former employees of the Company.
Pursuant to the Merger Agreement, the Company has agreed to postpone its 1997
Annual Meeting of Stockholders during the pendency of the Offer. Accordingly,
for purposes of the Offer, "fully diluted basis" assumes that no Shares will
be issued upon exercise of the Conditional Options. Based upon the foregoing
information, the Minimum Condition would be satisfied if 9,208,250 Shares
were validly tendered. Accordingly, upon tender into the Offer of the
9,229,595 Shares beneficially owned by the Selling Stockholder, the Minimum
Condition will be satisfied.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension
or amendment), the Purchaser will accept for payment and pay for all Shares
which are validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight,
New York City time, on Thursday, May 8, 1997, unless and until the Purchaser,
in its sole discretion (but subject to the terms of the Merger Agreement),
shall have extended the period of time during which the Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition. See Section 14, which sets forth in full the conditions to
the Offer. If the Minimum Condition is not satisfied or any or all of the
other events set forth in Section 14 shall have occurred or shall be
determined by the Purchaser to have occurred prior to the Expiration Date,
the Purchaser reserves the right (but shall not be obligated) to (i) decline
to purchase any of the Shares tendered in the Offer and terminate the Offer
and return all tendered Shares to the tendering stockholders, (ii) waive any
or all conditions to the Offer, to the extent permitted by applicable law and
the provisions of the Merger Agreement, and, subject to complying with
applicable rules and regulations of the Securities and Exchange Commission
(the "SEC"), purchase all Shares validly tendered, (iii) subject to the terms
of the Merger Agreement, extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain the Shares
which have been tendered during the period or periods for which the Offer is
extended or (iv) subject to
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the terms of the Merger Agreement, amend the Offer. The Merger Agreement
provides that the Purchaser will not, without the consent of the Company,
reduce the number of Shares sought in the Offer, reduce the Offer Price,
modify or add to the conditions of the Offer set forth in "Conditions to the
Offer" below or otherwise amend the Offer in any manner materially adverse to
the Company's stockholders, except as provided in the next two sentences,
extend the Offer, change the form of consideration payable in the Offer, or
waive or modify the Minimum Condition. Notwithstanding the foregoing, the
Purchaser may, without the consent of the Company, (i) extend the Offer for a
period of not more than 10 business days beyond the initial expiration date
of the Offer (which initial expiration date shall be 20 business days
following commencement of the Offer), if on the date of such extension less
than 90% of the outstanding Shares have been validly tendered and not
properly withdrawn pursuant to the Offer, (ii) extend the Offer from time to
time if at the initial expiration date or any extension thereof the Minimum
Condition or any of the other conditions to the Purchaser's obligation to
purchase Shares set forth in paragraphs (a), (b) and (e) under "Conditions to
the Offer" below, shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (iii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or
the staff thereof applicable to the Offer and (iv) extend the Offer for any
reason for a period of not more than 10 business days beyond the latest
expiration date that would otherwise be permitted under clauses (i), (ii) or
(iii) of this sentence. In addition, the Purchaser shall at the request of
the Company extend the Offer for five business days if at any scheduled
expiration date of the Offer any of the conditions to the Purchaser's
obligation to purchase Shares shall not be satisfied; provided, however, that
the Purchaser shall not be required to extend the Offer beyond December 31,
1997.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, subject to the terms of the Merger Agreement and
regardless of whether or not any of the events set forth in Section 14 shall
have occurred or shall have been determined by the Purchaser to have
occurred, (i) to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary and (ii) to
amend the Offer in any respect by giving oral or written notice of such
amendment to the Depositary. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 14. Any extension, amendment or termination will be
followed as promptly as practicable by public announcement thereof, the
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 in accordance with Rules 14d-4(c), 14d-6(d) and
14e-1(d) under the Exchange Act. Without limiting the obligation of the
Purchaser under such rules or the manner in which the Purchaser may choose to
make any public announcement, the Purchaser currently intends to make
announcements by issuing a release to the Dow Jones News Service and the
London Stock Exchange.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the
Offer, the Depositary may retain tendered Shares on behalf of the Purchaser,
and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 4.
However, the ability of the Purchaser to delay the payment for Shares which
the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the Minimum Condition, subject to the Merger Agreement), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage
of securities sought, will depend upon the facts and circumstances, including
the relative materiality of the terms or information. With respect to a
change in price or a change in percentage of securities sought, a minimum
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ten business day period is required to allow for adequate dissemination to
stockholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in
the Offer, such increase will be applicable to all stockholders whose Shares
are accepted for payment pursuant to the Offer. The Merger Agreement provides
that, without the Company's consent, the Purchaser will not decrease the price
or the number of Shares sought in the Offer. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
The Company has provided the Purchaser with its list of stockholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on
the stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), the Purchaser will purchase, by accepting for
payment, and will pay for, all Shares validly tendered prior to the
Expiration Date (and not properly withdrawn in accordance with Section 4
promptly after the later to occur of (i) the Expiration Date and (ii) any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), applicable to the purchase of Shares
pursuant to the Offer having expired or been terminated. Subject to the
applicable rules of the SEC and the terms of the Merger Agreement, the
Purchaser expressly reserves the right to delay acceptance for payment of, or
payment for, Shares pending receipt of any such regulatory approvals
specified in Section 14, including approval under the HSR Act. See Sections
14 and 15. The Purchaser understands that, in accordance with the applicable
rules of the SEC, any delay in accepting Shares regardless of cause may not
exceed an "unreasonable length of time." Accordingly, if it appears at the
time that the Offer is scheduled to expire that the approval under the HSR
Act specified in Section 14 hereof is not likely to be obtained within a
reasonable length of time thereafter, the Purchaser will either extend the
Offer or terminate the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares ("Stock Certificates") or timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility") pursuant to
the procedures set forth in Section 3, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) or, in the case of a
book-entry transfer, an Agent's Message (as defined below) and (iii) any
other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, tendered Shares if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment. Payment for Shares accepted pursuant
to the Offer will be made by deposit of the purchase price with the
Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting payments to
such tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY DELAY
IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering
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shareholders must thereafter look solely to the Depositary for payment of
amounts owed to them by reason of the acceptance for payment of Shares
pursuant to the Offer.
If any tendered Shares are not accepted pursuant to the Offer for any
reason, or if Stock Certificates are submitted evidencing more Shares than
are tendered, Stock Certificates evidencing Shares not purchased or tendered
will be returned, without expense to the tendering stockholder (or in the
case of Shares tendered by book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 3, such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), as promptly as practicable after the
expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole at any
time or in part from time to time, to Parent or to one or more of its
affiliates, the right to purchase all or a portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
the Purchaser of its obligations under the Offer and will in no way prejudice
the rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (in
the case of any book-entry transfer), and any other required documents, must
be received by the Depositary at its address set forth on the back cover of
this Offer to Purchase prior to the Expiration Date. In addition, either (i)
the Stock Certificates evidencing Shares must be received by the Depositary
along with the Letter of Transmittal or Shares must be tendered pursuant to
the procedures for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case prior to the
Expiration Date or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry transfer at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, must, in any case, be
transmitted to and received by the Depositary at its address set forth on the
back cover of this Offer to Purchase prior to the Expiration Date or the
tendering stockholder must comply with the guaranteed delivery procedures
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"),
unless the Shares tendered thereby are tendered (i) by a registered holder of
Shares who has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal, or (ii) for the account of an Eligible Institution.
See Instruction 1 of the Letter of Transmittal.
If a Stock Certificate is registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or a
Stock Certificate not accepted for payment or not tendered is to be returned,
to a person other than the registered holder(s), then the Stock Certificate
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 Stock
Certificate, with the signature(s) on such Stock Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
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THE METHOD OF DELIVERY OF STOCK CERTIFICATES, THE LETTER OF TRANSMITTAL
AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Stock Certificates are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, or the procedures for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless
be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary prior to the Expiration Date as provided below;
and
(iii) the Stock Certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal, are received by the Depositary within three Nasdaq
National Market System trading days after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by
the Depositary of (i) Stock Certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares, (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and (iii) any other documents required by the
Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH TENDERING STOCKHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER
("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP
WITHHOLDING. IF A STOCKHOLDER DOES NOT PROVIDE SUCH STOCKHOLDER'S CORRECT TIN
OR FAILS TO PROVIDE THE CERTIFICATIONS DESCRIBED ABOVE, THE INTERNAL REVENUE
SERVICE MAY IMPOSE A PENALTY ON SUCH STOCKHOLDER AND PAYMENTS THAT ARE MADE
TO SUCH STOCKHOLDER WITH RESPECT TO SHARES PURCHASED PURSUANT TO THE OFFER
MAY BE SUBJECT TO BACKUP WITHHOLDING AT A RATE OF 31%. ALL STOCKHOLDERS
SURRENDERING SHARES PURSUANT TO THE OFFER SHOULD COMPLETE AND SIGN THE MAIN
SIGNATURE FORM AND THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF
TRANSMITTAL TO PROVIDE THE INFORMATION AND CERTIFICATION NECESSARY TO AVOID
BACKUP WITHHOLDING (UNLESS AN APPLICABLE EXEMPTION EXISTS AND IS PROVED IN A
MANNER SATISFACTORY TO THE PURCHASER AND THE DEPOSITARY). SEE INSTRUCTION 9
AND "IMPORTANT TAX INFORMATION" IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, whose determination will
be final and binding on all parties. The Purchaser reserves the absolute
right to reject any or all tenders of any Shares determined by it not to be
in proper form or if the acceptance for payment of, or payment for, such
Shares may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right, in its sole discretion, subject
to the Merger Agreement, to waive any of the conditions of the Offer or any
defect or irregularity in any tender with respect to Shares of any particular
stockholder, and the Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the Instructions
thereto) will be final and binding. None of the Purchaser, Parent, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in
tenders or will incur any liability for failure to give any such
notification.
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Other Requirements. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the
Purchaser as the stockholder's attorneys-in-fact and proxies, in the manner
set forth in the Letter of Transmittal, each with full power of substitution,
to the full extent of the stockholder's rights with respect to the Shares
tendered by the stockholder and accepted for payment by the Purchaser (and
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after the date of the Merger Agreement). All such proxies
shall be considered coupled with an interest in the tendered Shares. This
appointment will be effective when, and only to the extent that, the
Purchaser accepts Shares for payment. Upon acceptance for payment, all prior
proxies given by the stockholder with respect to the Shares or other
securities will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by such
stockholder (and if given or executed, will not be deemed to be effective)
with respect thereto. The designees of the Purchaser will, with respect to
the Shares and other securities, be empowered to exercise all voting and
other rights of such stockholder as they in their sole discretion may deem
proper at any annual, special or adjourned meeting of the Company's
stockholders, by written consent or otherwise. The Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting and other rights of a record
and beneficial holder, including rights in respect of acting by written
consent, with respect to such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between
the tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable, provided that Shares tendered pursuant
to the Offer may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after June 10, 1997, or at such
later time as may apply if the Offer is extended.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary
at its address set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name
of the registered holder, if different from that of the person who tendered
such Shares. If Stock Certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Stock Certificates, the serial numbers of the
particular Stock Certificates and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution, except in the case of
Shares tendered for the account of an Eligible Institution, must also be
furnished to the Depositary as described above. If Shares have been tendered
pursuant to the procedures for book-entry transfer as set forth in Section 3,
any notice of withdrawal must also specify the name and number of the account
at the appropriate Book-Entry Transfer Facility to be credited with the
withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
ANY SHARES PROPERLY WITHDRAWN WILL BE DEEMED NOT TO HAVE BEEN VALIDLY
TENDERED FOR PURPOSES OF THE OFFER. However, withdrawn Shares may be
re-tendered by following one of the procedures described in Section 3 at any
time prior to the Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash for Shares pursuant to the Offer (or the Merger) will
be a taxable transaction for U.S. federal income tax law purposes and may
also be a taxable transaction under applicable state, local
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or foreign tax laws. The tax consequences of such receipt pursuant to the
Offer (or the Merger) may vary depending upon, among other things, the
particular circumstances of the stockholder. In general, a stockholder who
receives cash for Shares pursuant to the Offer (or the Merger) will recognize
gain or loss for federal income tax purposes equal to the difference between
the amount of cash received in exchange for the Shares sold and such
stockholder's adjusted tax basis in such Shares.
Provided that the Shares constitute capital assets in the hands of the
stockholder, such gain or loss will be capital gain or loss, and will be long
term capital gain or loss if the holder has held the Shares for more than one
year at the time of sale. Under present law, long term capital gains
recognized by an individual stockholder generally will be taxed at a maximum
U.S. federal marginal tax rate of 28%, and long term capital gains recognized
by a corporate stockholder will be taxed at a maximum U.S. federal marginal
tax rate of 35%. In addition, under present law, the ability to use capital
losses to offset ordinary income is limited.
A stockholder that tenders Shares may be subject to backup withholding at
a rate of 31% unless a TIN is provided by such stockholder and such stockholder
certifies that such number is correct or properly certifies that such
stokholder is awaiting a TIN, or unless an exemption applies. See "Backup
Federal Income Tax Withholding" under Section 3 and Instruction 9 and
"Important Tax Information" in the Letter of Transmittal.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE OFFER (OR THE MERGER) TO THEM, INCLUDING THE APPLICATION AND EFFECT OF
THE ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. IN
ADDITION, THE DISCUSSION SET FORTH ABOVE MAY NOT APPLY TO PARTICULAR
CATEGORIES OF STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES
PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED
STATES, AND FOREIGN CORPORATIONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS, FINANCIAL INSTITUTIONS OR ENTITIES THAT ARE OTHERWISE SUBJECT
TO SPECIAL TAX TREATMENT.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares trade on the Nasdaq National Market System under the symbol
"STNT." The following table sets forth, for the fiscal quarters indicated,
the high and low sales price per Share on the Nasdaq National Market System,
as well as dividends paid. All prices set forth below are as reported in
published financial sources:
<TABLE>
<CAPTION>
MARKET PRICE
--------------------
HIGH LOW DIVIDENDS
--------- --------- -----------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
First Quarter ................ $16.250 $12.500 $.02
Second Quarter ............... 14.000 10.000 .02
Third Quarter ................ 11.750 9.250 .02
Fourth Quarter ............... 10.500 8.500 .02
YEAR ENDED DECEMBER 31, 1996:
First Quarter ................ 12.250 9.250 .02
Second Quarter ............... 12.000 9.750 .02
Third Quarter ................ 11.750 9.500 .02
Fourth Quarter ............... 15.750 9.750 .02
YEAR ENDING DECEMBER 31, 1997:
First Quarter ................ 17.250 13.375 .02
Second Quarter
(through April 10, 1997) .... 21.50 14.250 N/A
</TABLE>
On April 8, 1997, the last full trading day prior to the announcement of
the terms of the Merger Agreement, the reported closing sales price per Share
on the Nasdaq National Market System was
9
<PAGE>
$16.625. On April 10, 1997, the last full trading day prior to the
commencement of the Offer, the reported closing sales price per Share on the
Nasdaq National Market System was $21 17/64. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION AND
EXCHANGE ACT REGISTRATION
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of holders of
Shares and could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Depending upon the aggregate market value and per share price of any
Shares not purchased pursuant to the Offer, the Shares may no longer meet the
standards for continued inclusion in the Nasdaq National Market System, which
require that an issuer have at least 200,000 publicly held shares with a
market value of $1 million held by at least 400 stockholders or 300
stockholders holding round lots. If these standards were not met, quotations
might continue to be published in the over-the-counter "additional list" or
in one of the "local lists," but if the number of holders of Shares falls
below 300, or if the number of publicly held Shares falls below 100,000, or
there is not at least two market makers for the Shares, the National
Association of Securities Dealers ("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 Company, or by any beneficial owner of more than 10
percent of the Shares, ordinarily will not be considered as being publicly
held for this purpose. In the event the Shares were no longer eligible for
Nasdaq quotation, 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 possible termination of registration under
the Exchange Act, as described below, and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, following
the Offer it is possible that the Shares would no longer constitute "margin
securities" for the purposes of the margin regulations of the Federal Reserve
Board and therefore could no longer be used as collateral for loans made by
brokers.
The Shares are currently registered under the Exchange Act. Registration
of the Shares under the Exchange Act may be terminated upon application of
the Company to the SEC if the Shares are not listed on a national securities
exchange or Nasdaq and there are fewer than 300 record holders of the Shares.
Termination of registration of the Shares under the Exchange Act would reduce
substantially the information required to be furnished by the Company to its
stockholders and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with stockholders'
meetings pursuant to Section 14(a) and the requirements of Rule 13e-3 under
the Exchange Act with respect to "going private" transactions no longer
applicable to the Company. Furthermore, if the Purchaser acquires a
substantial number of Shares or the registration of the Shares under the
Exchange Act were to be terminated, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose
of such securities pursuant to Rule 144 under the Securities Act of 1933 may
be impaired or eliminated. If registration of the Shares under the Exchange
Act were terminated prior to the consummation of the Merger, the Shares would
no longer be "margin securities" or be eligible for Nasdaq reporting. It is
the present intention of the Purchaser to seek to cause the Company to make
an application for termination of registration of the Shares as soon as
possible following the Offer if the requirements for termination of
registration are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The information concerning the Company contained in this Offer to
Purchase, including financial information (other than the Company's 1997
budget information provided below), has been taken from
10
<PAGE>
or is based upon publicly available documents and records on file with the SEC
and other public sources. Neither Parent nor the Purchaser assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which were unknown to
Parent or the Purchaser.
The Company is a Delaware corporation with its principal executive offices
located at 425 Commerce Drive, Richmond, Indiana 47374. The telephone number
of the Company at such offices is (765) 962-6655. The Company is a designer,
manufacturer and distributor of a broad range of automotive parts and tools.
Set forth below is a summary of certain consolidated financial information
with respect to the Company, excerpted or derived from the information
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996. More comprehensive financial information is included
in such reports and other documents filed by the Company with the SEC, and
the following summary is qualified in its entirety by reference to such
reports and other documents and all of the financial information (including
any related notes) contained therein. Such reports and other documents may be
inspected and copies may be obtained from the offices of the SEC in the
manner set forth below.
STANT CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1996 1995 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ................................ $657,067 $612,358 $287,946 $253,567
Income from Operations .................. 56,644 47,628 31,404 27,336
Income Before Extraordinary Loss and
Cumulative Effect of Accounting Changes 21,419 14,659 16,399 11,989
Extraordinary Loss ...................... -- -- (435) (3,322)
Cumulative Effect of Accounting Changes -- -- (418) (7,105)
Net Income .............................. 21,419 14,659 15,546 1,562
Preferred Dividends ..................... -- -- -- (1,276)
Net Income Applicable to Common Stock .. 21,419 14,659 15,546 286
Net Income Per Share
Primary Basis .......................... $ 1.28 $ 0.88 $ 0.92 $ 0.02
Fully Diluted Basis .................... $ 1.26 $ 0.88 $ 0.92 $ 0.02
Average Common Stock and Equivalents
Primary Basis .......................... 16,661 16,686 16,954 13,436
Fully Diluted Basis .................... 17,010 16,691 16,954 13,685
Cash Dividend per Share ................. $ 0.08 $ 0.08 $ 0.08 $ 0.04
DECEMBER 31,
----------------------------------------------
1996 1995 1994 1993
---------- ---------- ---------- ----------
BALANCE SHEET DATA:
Total Assets ............................ $581,571 $573,536 $584,026 $241,908
Total Debt .............................. 222,984 250,383 260,190 35,639
Total Stockholders' Equity .............. 200,562 178,096 166,002 152,385
</TABLE>
Certain Operating Relationships. In the ordinary course of business, The
Gates Rubber Company ("Gates"), a wholly owned subsidiary of Parent,
purchases caps, clamps, thermostats and gaskets from the Company for resale.
11
<PAGE>
Available Information. The Company is subject to the information filing
requirements of the Exchange Act and is required to file reports and other
information with the SEC relating to its business, financial condition and
other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, options granted to them, the
principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be described in
proxy statements distributed to the Company's stockholders and filed with the
SEC. These reports, proxy statements and other information should be
available for inspection and copying at the SEC's office at 450 Fifth Street,
N.W., Washington, D.C. 20549, and also should be available for inspection and
copying at the regional offices of the SEC located at Seven World Trade
Center, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material
may also be obtained by mail, upon payment of the SEC's customary fees, from
the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
The SEC also maintains an internet web site at http://www.sec.gov that
contains reports, proxy statements and other information. Copies should also
be available at the offices of the Nasdaq National Market System, 1735 K
Street, N.W. Washington, D.C. 20006.
During the course of the discussions between Parent and the Company that
led to the execution of the Merger Agreement, the Company provided Parent
with certain information about the Company and its financial performance
which is not publicly available. The information provided included the Company's
1997 budget as an independent company (i.e., without regard to the impact to the
Company of a transaction with Parent), which included the following information:
total sales, $718.7 million; EBITDA (earnings before interest, taxes,
depreciation and amortization), $94 million; and operating profit, $62.2
million. The foregoing budget information was prepared by the Company
solely for internal use and not for publication or with a view to complying
with the published guidelines of the SEC regarding projections or with the
guidelines established by the American Institute of Certified Public
Accountants and are included in this Offer to Purchase only because they were
furnished to Parent. The budget is "forward-looking" and inherently subject
to significant uncertainties and contingencies, many of which are beyond the
control of the Company, including industry performance, general business and
economic conditions, changing competition, adverse changes in applicable
laws, regulations or rules governing environmental, tax or accounting matters
and other matters. One cannot predict whether the assumptions made in
preparing the budget will be accurate, and actual results may be materially
higher or lower than those contained in the budget. The inclusion of this
information should not be regarded as an indication that Parent, the
Purchaser, the Company or anyone who received this information considered it
a reliable predictor of future events, and this information should not be
relied on as such. None of Parent, the Purchaser or the Company assumes any
responsibility for the validity, reasonableness, accuracy or completeness of
the budget and the Company has made no representation to Parent or the
Purchaser regarding the budget information described above.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
The Purchaser is a newly incorporated Delaware corporation and an indirect
wholly owned subsidiary of Parent. To date the Purchaser has not conducted
any business other than in connection with the Offer and the Merger. The
principal executive offices of the Purchaser are located at 4801 Springfield
Street, Dayton, Ohio 45431.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent are set forth in Schedule I
hereto.
Parent is a corporation organized under the laws of England with its
principal office located at East Putney House, 84 Upper Richmond Road, London
SW15 2ST England. Parent is a broadly based international manufacturing
company which owns and operates businesses located principally in the United
States and the United Kingdom. Parent is primarily engaged in seven business
sectors: (1) fluid controls, (2) services to industry, (3) professional,
garden & leisure products, (4) industrial products, (5) milling & baking, (6)
food products and (7) Gates (power transmission and hose and connector
products).
12
<PAGE>
Tomkins Corporation is a Delaware corporation and a wholly owned
subsidiary of Parent. Tomkins Corporation is a holding company whose holdings
include Parent's interests in United States subsidiaries. Tomkins
Corporation's principal office is located at 4801 Springfield Street, Dayton,
Ohio 45431.
Until immediately prior to the time the Purchaser purchases Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions
contemplated by the Offer and the Merger. Because the Purchaser is a newly
formed corporation and has minimal assets and capitalization, no meaningful
financial information regarding the Purchaser is available.
Financial information with respect to Parent and its subsidiaries is
included in Parent's Annual Report on Form 20-F for the fiscal year ended
April 27, 1996, which is incorporated herein by reference, and other
documents filed by Parent with the SEC. Such reports and other documents
should be available for inspection and copies thereof should be obtainable in
the manner set forth below under "Available Information."
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act applicable to foreign private issuers and in
accordance therewith files reports and other information with the SEC. Such
reports and other information may be inspected and copies may be obtained
from the offices of the SEC in the same manner as set forth with respect to
information concerning the Company under the heading "Available Information"
in Section 8. Such material should also be available at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
Except as set forth in this Offer to Purchase, none of the Purchaser or
Parent (collectively, the "Purchaser Entities"), or, to the best knowledge of
any of the Purchaser Entities, any of the persons listed on Schedule I, has
any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangement, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Except as
set forth in this Offer to Purchase, none of the Purchaser Entities, or, to
the best knowledge of any of the Purchaser Entities, any of the persons
listed on Schedule I, has had any business relationships or transactions with
the Company or any of its executive officers, directors or affiliates that
would require reporting under the rules of the SEC. Except as set forth in
this Offer to Purchase, there have been no contacts, negotiations or
transactions between the Purchaser Entities, or their respective subsidiaries
or, to the best knowledge of any of the Purchaser Entities, any of the
persons listed on Schedule I, and the Company or its affiliates, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets. Except as set forth in this Offer to Purchase, none of the
Purchaser Entities or, to the best knowledge of any of the Purchaser
Entities, any of the persons listed on Schedule I, beneficially owns any
Shares or has effected any transactions in the Shares in the past 60 days.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and to pay related fees and expenses is
approximately $410 million. The Purchaser plans to obtain all funds needed
for the Offer and the Merger through loans from Parent which Parent will fund
from cash accounts and available lines of credit. No final decisions have
been made by Parent concerning the source of funds to be used for purchase of
the Shares. However, the Offer is not conditioned on obtaining financing.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
For a number of years, Gates has acquired various products from the
Company in the ordinary course of business, including caps, thermostats,
gaskets and clamps. See Section 8.
For the past several years, Gates has monitored the Company as a potential
acquisition candidate. In January 1997, Parent decided to approach the
Company regarding a possible acquisition, following the
13
<PAGE>
January 1997 appointment of John P. Reilly as the Company's President and
Chief Executive Officer. On March 10, 1997, a representative of Parent met
with a representative of the Company in New York City to discuss Parent's
possible interest in acquiring the Company. At such meeting, the parties
agreed to provide to Parent certain information regarding the Company.
On March 12, 1997, Tomkins Corporation, the Company and an affiliate of
the Selling Stockholder entered into a confidentiality agreement preceding
Parent's review of certain information concerning the Company.
On March 14, 1997, representatives of Parent met with representatives of
the Company in New York City to discuss Parent's review of information
concerning the Company which could lead to an offer to acquire the Company.
Between March 17 and March 24, 1997, representatives of Parent met with
representatives of the Company to discuss the Company's business, valuation
parameters of the Company and to discuss generally the terms and conditions
of a possible transaction, including Parent's requirement that the Selling
Stockholder sign a Stockholder Agreement providing for the sale of the Shares
owned by it to Parent, through a tender of such Shares in the Offer or
otherwise.
On April 1, 1997, the Company engaged Morgan Stanley & Co. Incorporated to
assist the Company in its evaluation of any offer which might be made by
Parent.
On April 2, 1997, the Company agreed to negotiate exclusively with Parent
regarding Parent's proposed acquisition of the Company until April 30, 1997.
On April 4, 1997, Parent provided the Company with a revised Merger
Agreement in response to a form of Merger Agreement furnished by the Company.
On April 5, 1997, representatives of Parent and representatives of the
Company began negotiating the terms of a definitive Merger Agreement and a
definitive Stockholder Agreement.
Negotiations between Parent and the Company continued through April 8,
1997, culminating in Parent and the Company agreeing upon a form of Merger
Agreement and a form of Stockholder Agreement which were presented to and
approved by a Committee of Parent's Board of Directors at a meeting held on
April 8, 1997, subject to finalization of certain open items.
After completion of final negotiations, a meeting of the Board of
Directors of the Company was held on April 9, 1997, at which the definitive
Merger Agreement was approved by the Board of Directors of the Company.
Following this approval, the Merger Agreement and the Stockholder Agreement
were executed, and the transactions were publicly announced on April 9, 1997.
12. PURPOSE OF THE OFFER, MERGER, MERGER AGREEMENT AND STOCKHOLDER
AGREEMENT
The purpose of the Offer, the Merger, the Merger Agreement and the
Stockholder Agreement is to enable Parent to acquire control of, and the
entire equity interest in, the Company. Upon consummation of the Merger, the
Company will become a subsidiary of Tomkins Corporation. The Offer and the
Stockholder Agreement are intended to increase the likelihood that the Merger
will be effected.
Merger Agreement. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to
the Merger Agreement which is incorporated herein by reference and a copy of
which has been filed with the SEC as an exhibit to Parent's and the
Purchaser's Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1").
The Merger Agreement may be examined and copies may be obtained at the places
and in the manner set forth in Section 8 of this Offer to Purchase.
The Offer. The Merger Agreement provides that, subject to the provisions
of the Merger Agreement, as promptly as practicable but in no event later
than five business days after the announcement of the execution of the Merger
Agreement, the Purchaser will commence the Offer and that, upon the terms and
subject to prior satisfaction or waiver of the conditions of the Offer, the
Purchaser will purchase all Shares validly tendered pursuant to the Offer.
The Merger Agreement provides that, without the written consent of the
Company, the Purchaser will not reduce the number of
14
<PAGE>
Shares sought in the Offer, reduce the Offer Price, modify or add to the
conditions of the Offer set forth in "Conditions to the Offer" below or
otherwise amend the Offer in any manner materially adverse to the Company's
stockholders, except as provided in the next two sentences, extend the Offer,
change the form of consideration payable in the Offer, or waive or modify the
Minimum Condition. Notwithstanding the foregoing, the Purchaser may, without
the consent of the Company, (i) extend the Offer for a period of not more
than 10 business days beyond the initial expiration date of the Offer (which
initial expiration date shall be 20 business days following commencement of
the Offer), if on the date of such extension less than 90% of the outstanding
Shares have been validly tendered and not properly withdrawn pursuant to the
Offer, (ii) extend the Offer from time to time if at the initial expiration
date or any extension thereof the Minimum Condition or any of the other
conditions to the Purchaser's obligation to purchase Shares set forth in
paragraphs (a), (b) and (e) under "Conditions to the Offer" below, shall not
be satisfied or waived, until such time as such conditions are satisfied or
waived, (iii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer and (iv) extend the Offer for any reason for a period
of not more than 10 business days beyond the latest expiration date that
would otherwise be permitted under clauses (i), (ii) or (iii) of this
sentence. In addition, the Purchaser shall at the request of the Company
extend the Offer for five business days if at any scheduled expiration date
of the Offer any of the conditions to the Purchaser's obligation to purchase
Shares shall not be satisfied; provided, however, that the Purchaser shall
not be required to extend the Offer beyond December 31, 1997.
The Merger. The Merger Agreement provides that following the satisfaction
or waiver of the conditions described below under "Conditions to the Merger",
the Purchaser will be merged with and into the Company, and each then
outstanding Share (other than Shares owned by the Company or by any
subsidiary of the Company and Shares owned by Tomkins Corporation, the
Purchaser or any other subsidiary of Tomkins Corporation or held by
stockholders, if any, who are entitled to and who properly exercise
dissenters' rights under Delaware law), will be converted into the right to
receive an amount in cash equal to the price per Share paid pursuant to the
Offer, without interest.
Vote Required to Approve Merger. The Delaware General Corporate Law (the
"DGCL") requires, among other things, that the adoption of any plan of merger
or consolidation of the Company must be approved by the Board of Directors
and generally by the holders of the Company's outstanding voting securities.
The Board of Directors of the Company has approved the Offer and the Merger,
consequently, the only additional action of the Company that may be necessary
to effect the Merger is approval by such stockholders if the "short-form"
merger procedure described below is not available. Under the DGCL, the
affirmative vote of holders of a majority of the outstanding Shares
(including any Shares owned by the Purchaser), is generally required to
approve the Merger. If the Purchaser acquires, through the Offer or
otherwise, voting power with respect to at least a majority of the
outstanding Shares (which would be the case if the Selling Stockholder were
to tender all of the Shares which are subject to the Stockholder Agreement
pursuant to the Offer and the Purchaser were to accept for payment and
purchase all such Shares), it would have sufficient voting power to effect
the Merger without the vote of any other stockholder of the Company. However,
the DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other stockholders of
the subsidiary. Accordingly, if, as a result of the Offer or otherwise, the
Purchaser acquires or controls the voting power of at least 90% of the
outstanding Shares, the Purchaser could, and intends to, effect the Merger
without prior notice to, or any action by, any other stockholder of the
Company.
Conditions to the Merger. The Merger Agreement provides that the Merger is
subject to the satisfaction or waiver of the following conditions: (1) if
required by applicable law, the Merger Agreement shall have been adopted by
the affirmative vote or consent of the holders of a majority of the
outstanding Shares in accordance with applicable law and the Company's
Restated Certificate of Incorporation, (2) the waiting period (and any
extension thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired, and (3) no temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or
15
<PAGE>
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that each of the Company, the Purchaser and Tomkins
Corporation shall have used its best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
Termination of the Merger Agreement. The Merger Agreement may be
terminated at any time prior to the Effective Time, whether before or after
approval of matters presented in connection with the Merger by the
stockholders of the Company, (1) by mutual written consent of the Company and
Tomkins Corporation (2) by either the Company or Tomkins Corporation if (a)
the Purchaser shall not have purchased any Shares pursuant to the Offer prior
to December 31, 1997, provided, however, that the passage of such period
shall be tolled for any part thereof during which any party shall be subject
to a nonfinal order, decree, ruling or action restraining, enjoining or
otherwise prohibiting the purchase of Shares pursuant to the Offer or the
consummation of the Merger; and provided further that the right to terminate
the Merger Agreement as described in clause 2(a) shall not be available to
any party whose failure to fulfill any of its obligations under any Operative
Agreement results in the failure of any such condition or (b) if any Federal,
state or local government or any court, administrative or regulatory agency
or commission or other governmental authority or agency, domestic or foreign
(a "Government Entity"), shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the purchase of Shares pursuant to the Offer or the Merger and
such order, decree or ruling or other action shall have become final and
nonappealable, (3) by the Company if (a) the Board of Directors of the
Company approves or recommends a superior proposal under circumstances
described below in the second paragraph under "Takeover Proposals" and (b)
the Company has paid to Tomkins Corporation an amount in cash equal to the
sum of the Termination Fee (as defined below), or (4) by Tomkins Corporation
or the Purchaser if the Purchaser terminates the Offer as a result of the
occurrence of any event set forth in paragraph (d) of "Conditions to the
Offer" below.
Takeover Proposals. The Merger Agreement provides that the Company shall
not, nor shall it permit any of its subsidiaries to, nor shall it authorize
or permit any director, officer or employee of, or any investment banker,
attorney or other advisor or representative of, the Company or any of its
subsidiaries to: (1) solicit, initiate or encourage the submission of any
takeover proposal, (2) except as provided in the next paragraph, enter into
any agreement with respect to any takeover proposal or (3) participate in any
discussions or negotiations regarding, or furnish to any person any
non-public information with respect to the Company, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes,
or may reasonably be expected to lead to, any takeover proposal; provided,
however, that prior to the acceptance for payment of Shares pursuant to the
Offer, to the extent required by the fiduciary obligations of the Board of
Directors of the Company, as determined in good faith by a majority of the
members thereof based on the advice of outside counsel, the Company may, in
response to an unsolicited bona fide takeover proposal from a person that the
Board of Directors of the Company reasonably believes has the financial
ability to make a superior proposal (as defined below), subject to compliance
with the second following paragraph, furnish non-public information with
respect to the Company to such person pursuant to a customary confidentiality
agreement and participate in discussions or negotiations (including the
solicitation of revised takeover proposals) with such person. The Merger
Agreement defines "takeover proposal" as any proposal for a merger or other
business combination involving the Company or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, more than
30% of the equity securities of the Company or more than 30% of the Company's
consolidated total assets, other than the transactions contemplated by the
Operative Agreements.
The Merger Agreement provides further that neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Tomkins Corporation or
the Purchaser, the approval or recommendation by such Board of Directors or
any such committee of the Offer, the Merger Agreement or the Merger or (ii)
approve or recommend, or propose to approve or recommend, any takeover
proposal. Notwithstanding the foregoing, the Board of Directors of the
Company, to the extent required by the fiduciary obligations thereof, as
determined in good faith by a majority of the members thereof based on the
advice of outside counsel, may approve
16
<PAGE>
or recommend (and, in connection therewith, withdraw or modify its approval
or recommendation of the Offer, the Merger Agreement or the Merger) a
superior proposal. For purposes of the Merger Agreement, a "superior
proposal" means a bona fide takeover proposal made by a third party on terms
which the Board of Directors of the Company determines in its good faith
judgment to be more favorable to the Company's stockholders than the Offer
and the Merger.
In addition to the obligations of the Company set forth in the preceding
paragraph, the Merger Agreement provides that the Company shall advise
Tomkins Corporation orally and in writing of any takeover proposal or any
inquiry with respect to or which could lead to any takeover proposal and the
identity of the person making any such takeover proposal or inquiry. The
Company is further required under the terms of the Merger Agreement to keep
Tomkins Corporation fully informed of the status and details of any such
takeover proposal or inquiry; provided, however, that neither the Company nor
its Board of Directors are required to take any action that the Board of
Directors of the Company determines in good faith, based on the advice of
outside counsel, would be inconsistent with its fiduciary duties.
The Merger Agreement provides that nothing contained therein shall
prohibit the Company and its Board of Directors from complying with Rule
14e-2 under the Exchange Act, or issuing a communication meeting the
requirements of Rule 14d-9(e) under the Exchange Act, with respect to any
tender offer; provided, however, that the Company may not, except as
permitted by the second preceding paragraph, withdraw or modify its position
with respect to the Offer or the Merger or approve or recommend, or propose
to approve or recommend, a takeover proposal.
Fees and Expenses. The Merger Agreement provides that the Company shall
pay to Parent upon demand a fee of $15,000,000 (the "Termination Fee") if (i)
Tomkins Corporation or the Company terminates the Merger Agreement under the
circumstances described in clause 2(a) under "Termination of the Merger
Agreement" as a result of the failure of any condition set forth in paragraph
(d) under "Conditions to the Offer" below, (ii) (a) after the date of the
Merger Agreement, any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have publicly made a takeover proposal,
(b) the Offer shall have remained open until at least the scheduled
expiration date immediately following the date such takeover proposal is made
(and in any event for at least ten business days following the date such
takeover proposal is made), (c) the Minimum Condition shall not have been
satisfied at the expiration of the Offer and (d) the Merger Agreement shall
thereafter be terminated by either Tomkins Corporation or the Company under
the circumstances described in clause 2(a) under "Termination of the Merger
Agreement," or (iii) the Merger Agreement is terminated under the
circumstances described in clauses (3) or (4) under "Termination of the
Merger Agreement."
Conduct of Business by the Company. The Merger Agreement provides that
during the period from the date of the Merger Agreement to the earlier of the
Effective Time and the appointment or election of the Purchaser's designees
to the Board of Directors of the Company pursuant to the terms of the Merger
Agreement (such earlier time, the "Control Time"), the Company shall, and
shall cause its subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
conducted prior to the date of the Merger Agreement and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them to the end that their goodwill and ongoing businesses
shall be unimpaired at the Effective Time. The Merger Agreement further
provides that, except as contemplated by the Merger Agreement or otherwise
approved in writing by Tomkins Corporation, during the period from the date
of the Merger Agreement to the Control Time, the Company shall not, and shall
not permit any of its subsidiaries to, (1) (a) declare, set aside or pay any
dividends on, or make any other distributions in respect of, any of its
capital stock, other than dividends and distributions by any direct or
indirect wholly owned subsidiary of the Company to its parent, (b) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (c) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or any
other securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
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(2) issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities other than the issuance of Shares upon
the exercise of Stock Options outstanding on the date of the Merger Agreement
in accordance with their present terms; (3) amend its certificate of
incorporation, by-laws or other comparable charter or organizational
documents; (4) acquire or agree to acquire (a) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (b) any
assets that are material, individually or in the aggregate, to the Company
and its subsidiaries taken as a whole, except purchases of inventory in the
ordinary course of business consistent with past practice; (5) sell, lease,
license, mortgage or otherwise encumber or subject to any lien or otherwise
dispose of any of its properties or assets, except sales of inventory in the
ordinary course of business consistent with past practice; (6) (a) incur any
indebtedness for borrowed money or guarantee any such indebtedness of another
person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any "keep well"
or other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of the
foregoing, except for short term borrowings incurred in the ordinary course
of business consistent with past practice and pursuant to existing
agreements, or (b) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct or
indirect wholly owned subsidiary of the Company, (7) make or agree to make
any new capital expenditure or expenditures which, individually, is in excess
of $30,000 or, in the aggregate, are in excess of $250,000; (8) (a) grant to
any officer of the Company or any of its subsidiaries any increase in
compensation, except as was required under employment agreements in effect as
of December 31, 1996, (b) grant to any officer of the Company or any of its
subsidiaries any increase in severance or termination pay, except as was
required under employment, severance or termination agreements in effect as
of December 31, 1996, (c) enter into any employment, severance or termination
agreement with any officer of the Company or any of its subsidiaries or (d)
amend any benefit plan in any respect; (9) make any change in accounting
methods, principles or practices materially affecting the Company's assets,
liabilities or business, except insofar as may have been required by a change
in generally accepted accounting principles; (10) pay, discharge, settle or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms; (11) except
in the ordinary course of business, modify, amend or terminate any material
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be
bound, or waive or release or assign any material rights or claims; (12) make
any material tax election or settle or compromise any material income tax
liability; or (13) authorize any of, or commit or agree to take any of, the
foregoing actions.
Pursuant to the Merger Agreement, the Company shall not, and shall not
permit any of its subsidiaries to, take any action that would or that could
reasonably be expected to result in (1) any of its representations and
warranties set forth in the Merger Agreement that are qualified as to
materiality becoming untrue, (2) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (3)
except as otherwise permitted by the provisions of the Merger Agreement
described above under "Takeover Proposals", any of the conditions to the
Offer or to the Merger not being satisfied. In addition, the Merger Agreement
provides that the Company shall take appropriate action to postpone the
annual meeting of stockholders of the Company originally scheduled to be held
on April 30, 1997 until termination of the Merger Agreement, and until such
time the Company shall take no further action with respect to the matters
contemplated to be considered by the stockholders at such meeting.
In addition, the Merger Agreement provides that the Company shall promptly
advise Tomkins Corporation orally and in writing of any change or event
having, or which, insofar as can reasonably be foreseen, would have, a
material adverse effect on the Company and its subsidiaries taken as a whole.
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Board of Directors. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment by Purchaser for, any Shares pursuant
to the Offer, the Purchaser shall be entitled to designate such number of
directors on the Board of Directors of the Company as shall give the
Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to at least
that number of directors, rounded up to the next whole number, which is the
product of (a) the total number of directors on the Board of Directors of the
Company (giving effect to the directors elected pursuant to this sentence)
multiplied by (b) the percentage that (i) such number of Shares so accepted
for payment and paid for by the Purchaser plus the number of Shares otherwise
owned by the Purchaser or any other subsidiary of Tomkins Corporation bears
to (ii) the number of such Shares outstanding, and the Company shall, at such
time, cause the Purchaser's designees to be so elected; provided, however,
that in the event that the Purchaser's designees are appointed or elected to
the Board of Directors of the Company, until the Effective Time such Board of
Directors shall have at least two Independent Directors or shall have at
least three Independent Directors in the event the total number of directors
on the Board of Directors of the Company is greater than six; and provided
further that, in such event, if the number of Independent Directors shall be
reduced below two for any reason whatsoever, any remaining Independent
Directors shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of the Merger
Agreement or, if no Independent Directors then remain, the other directors
shall designate two persons to fill such vacancies who shall not be officers,
stockholders or affiliates of the Company, Tomkins Corporation or the
Purchaser, and such persons shall be deemed to be Independent Directors for
purposes of the Merger Agreement. Subject to applicable law, the Company has
agreed to take all action requested by Tomkins Corporation necessary to
effect any such election, including mailing to its stockholders the
Information Statement containing the information required by Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company shall
make such mailing with the mailing of the Schedule 14D-9 (provided that the
Purchaser shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect
to the Purchaser's designees). In connection with the foregoing, the Company
shall promptly, at the option of the Purchaser, either increase the size of
the Board of Directors of the Company or obtain the resignation of such
number of its current directors as is necessary to enable the Purchaser's
designees to be elected or appointed to the Board of Directors of the Company
as provided above. The Merger Agreement also provides that the provisions of
this paragraph are in addition to and shall not limit any rights which the
Purchaser, Tomkins Corporation or any of their affiliates may have as a
holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
Stock Options. The Merger Agreement provides that (a) either prior to or
as soon as practicable following the consummation of the Offer, the Board of
Directors of the Company (or, if appropriate, any committee administering the
Stock Plans) shall adopt such resolutions or take such other actions as are
required to adjust the terms of all outstanding Stock Options to provide
that, at the Effective Time, each Stock Option outstanding immediately prior
to the acceptance for payment of Shares pursuant to the Offer shall be
canceled in exchange for a cash payment by the Company of, or can only be
exercised for net cash equal to, an amount equal to (i) the excess, if any,
of (A) the price per Share to be paid pursuant to the Offer over (B) the
exercise price per Share subject to such Stock Option, multiplied by (ii) the
number of Shares for which such Stock Option shall not theretofore have been
exercised.
The Merger Agreement provides further that all Stock Plans shall terminate
as of the Effective Time and the provisions in any other benefit plan of the
Company providing for the issuance, transfer or grant of any capital stock of
the Company or any interest in respect of any capital stock of the Company
shall be deleted as of the Effective Time, and the Company shall ensure that
following the Effective Time no holder of a Stock Option or any participant
in any Stock Plan or any other benefit plan of the Company shall have any
right thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
Indemnification. The Purchaser and Tomkins Corporation have agreed in the
Merger Agreement that all rights to indemnification for acts or omissions
occurring prior to the Effective Time existing on the date of the Merger
Agreement in favor of the current or former directors or officers of the
Company and its subsidiaries as provided in their respective certificates of
incorporation or by-laws shall survive the
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Merger and shall continue in full force and effect in accordance with their
terms for a period of not less than six years from the Effective Time, and
Tomkins Corporation shall ensure that all such rights to indemnification are
honored on a timely basis. The Merger Agreement provides further that Tomkins
Corporation shall cause to be maintained for a period of not less than three
years from the Effective Time the Company's current directors' and officers'
insurance and indemnification policy to the extent that it provides coverage
for events occurring prior to the Effective Time (the "D&O Insurance") for
all persons who are directors and officers of the Company on the date of the
Merger Agreement, so long as the annual premium therefor would not be in
excess of 150% of the last annual premium paid prior to the date of the
Merger Agreement (such 150% amount, the "Maximum Premium"); provided,
however, that Tomkins Corporation may substitute therefor policies of
substantially equivalent coverage and amounts containing terms no less
favorable to such directors or officers. If the existing D&O Insurance
expires, is terminated or canceled during such three-year period, the Merger
Agreement provides that Tomkins Corporation shall use its best efforts to
cause to be obtained as much D&O Insurance as can be obtained for the
remainder of such period for an annualized premium not in excess of the
Maximum Premium, on terms and conditions no less advantageous than the
existing D&O Insurance. The Company has represented to Tomkins Corporation in
the Merger Agreement that the Maximum Premium is $462,000. Following the date
of the Merger Agreement, the Company will not amend or modify the D&O
Insurance.
Benefit Plans. Parent has agreed in the Merger Agreement to cause the
Surviving Corporation for a period of six months after the Effective Time, to
provide benefits to employees of the Company and its subsidiaries that are no
less favorable in the aggregate to such employees than those in effect on the
date of the Merger Agreement except for the treatment of Stock Options as
described under "Stock Options."
Reasonable Notification. The Merger Agreement provides that, on the terms
and subject to the conditions of the Merger Agreement, each of the parties
shall use its best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer and the
Merger and the other transactions contemplated by the Operative Agreements.
Procedure for Termination, Amendment, Extension or Waiver. The Merger
Agreement provides that in the event the Purchaser's designees are appointed
or elected to the Board of Directors of the Company as described above under
"Board of Directors", after the acceptance for payment of Shares pursuant to
the Offer and prior to the Effective Time, the affirmative vote of a majority
of the Independent Directors shall be required for the Company to amend or
terminate the Merger Agreement, exercise or waive any of its rights or
remedies under the Merger Agreement or extend the time for performance of the
Purchaser's and Tomkins Corporation's respective obligations under the
Operative Agreements.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Tomkins Corporation and the
Purchaser with respect to, among other things, its organization,
capitalization, financial statements, public filings, conduct of business,
employee benefit plans, labor relations and employment matters, compliance
with laws, subsidiaries, tax matters, litigation, vote required to approve
the Merger Agreement, undisclosed liabilities, information supplied, the
absence of any material adverse changes in the Company since December 31,
1996, absence of excess parachute payments, inapplicability of state takeover
statutes, the opinion of the Company's financial advisor, brokers, fees and
expenses, intellectual property, environmental protection, transactions with
affiliates, contracts, customers and product liability.
Stockholder Agreement. The following is a summary of the material terms of
the Stockholder Agreement. This summary is qualified in its entirety by
reference to the Stockholder Agreement which is incorporated herein by
reference and a copy of which has been filed with the SEC as an exhibit to
the Schedule 14D-1. The Stockholder Agreement may be examined and a copy of
it may be obtained at the place and in the manner set forth under the heading
"Available Information" in Section 8.
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Tender of Shares. In connection with the execution of the Merger
Agreement, Tomkins Corporation and the Purchaser entered into a Stockholder
Agreement with the Selling Stockholder. Upon the terms and subject to the
conditions of such agreement, the Selling Stockholder has agreed to validly
tender (and not withdraw) pursuant to and in accordance with the terms of the
Offer, not later than the fifth business day after commencement of the Offer,
the number of Shares owned beneficially by the Selling Stockholder.
Stock Option. In order to induce Tomkins Corporation and the Purchaser to
enter into the Merger Agreement, the Selling Stockholder has granted to the
Purchaser an irrevocable option (a "Stock Option") to purchase its Shares
(the "Option Shares") at an amount (the "Purchase Price") equal to $21.50 per
share. Pursuant to the Stockholder Agreement, if (i) the Merger Agreement is
terminated in accordance with (3) or (4) under "Termination of the Merger
Agreement" above or (ii) the Merger Agreement is terminated in accordance
with (2)(a) under "Termination of the Merger Agreement" above and (x) the
Selling Stockholder shall have breached the agreement to tender its Shares
pursuant to the Offer or (y) at the time of such termination, the Minimum
Condition shall not have been satisfied, the Stock Option shall, in any such
case, become exercisable, in whole or in part, upon the first to occur of any
such event and remain exercisable in whole or in part until the date which is
120 days after the date of the occurrence of such event (the "120 Day
Period"), so long as: (i) all waiting periods under the HSR Act required for
the purchase of the Option Shares upon such exercise, shall have expired or
been waived, and (ii) there shall not be in effect any preliminary injunction
or other order issued by any Governmental Entity prohibiting the exercise of
the Stock Option pursuant to the Stockholder Agreement. The Stockholder
Agreement provides that if (i) all HSR Act waiting periods have not expired
or been waived, or (ii) there shall be in effect any such injunction or
order, in each case on the expiration of the 120 Day Period, the 120 Day
Period shall be extended until five business days after the later of (A) the
date of expiration or waiver of all HSR Act waiting periods, and (B) the date
of removal or lifting of such injunction or order.
Provisions Concerning the Shares. The Selling Stockholder has agreed that
during the period commencing on the date of the Stockholder Agreement and
continuing until the first to occur of the Effective Time or the termination
of the Merger Agreement in accordance with its terms, at any meeting of the
holders of Shares or in connection with any written consent of the holders of
Shares, the Selling Stockholder will vote (or cause to be voted) the Shares
held of record or beneficially owned by the Selling Stockholder: (i) in favor
of the Merger, the execution and delivery by the Company of the Merger
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and the Stockholder Agreement and any
actions required in furtherance thereof; and (ii) against any takeover
proposal and against any action or agreement that would impede, frustrate,
prevent or nullify the Stockholder Agreement or result in a breach in any
respect of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Operative Agreements or which would
result in any of the conditions set forth under "Conditions to the Offer"
below or "Conditions to the Merger" above not being fulfilled. In addition,
the Selling Stockholder has appointed representatives of Tomkins Corporation
as proxies to vote its Shares or grant a consent or approval in respect of
such Shares in favor of the various transactions contemplated by the Merger
Agreement and against any takeover proposal. The Selling Stockholder has also
agreed not to transfer its Shares and has agreed that neither it nor any of
its subsidiaries or affiliates shall, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or other
entity or group (other than Tomkins Corporation, any of its affiliates or
representatives) concerning any takeover proposal.
Other Covenants, Representations, Warranties. In connection with the
Stockholder Agreement, the Selling Stockholder made certain customary
representations and warranties, including with respect to (i) ownership of
the Shares, (ii) the Selling Stockholder's authority to enter into and
perform its obligations under the Stockholder Agreement, (iii) the absence of
conflicts, (iv) requisite governmental consents and approvals, and (v) the
absence of encumbrances on and in respect of the Selling Stockholder's
Shares. Tomkins Corporation and the Purchaser have made certain
representations and warranties with respect to Tomkins Corporation and the
Purchaser's authority to enter into the Stockholder Agreement and the absence
of conflicts and applicable governmental consents and approvals.
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Letter Agreement. In connection with the execution of the Merger
Agreement, W. Thomas Margetts, the Senior Vice President--Corporate
Development of the Company and the beneficial owner of 204,099 Shares (or
approximately 1% of the outstanding Shares on a fully diluted basis), of
which 202,299 are Shares issuable upon exercise of Stock Options, agreed that
if he were to exercise any of his Stock Options during the pendency of the
Offer, he would validly tender (or cause the record owner of such Shares to
validly tender), and not withdraw, pursuant to and in accordance with the
terms of the Offer, all of the Shares issued upon such exercise. In addition,
Mr. Margetts also agreed not to exercise his Stock Options following
consummation of the Offer.
Confidentiality Agreement. Pursuant to the Confidentiality Agreement
entered into as of March 12, 1997 by Tomkins Corporation, the Company and
Bessemer Partners & Co., an affiliate of the Selling Stockholder (the
"Confidentiality Agreement"), the parties agreed to provide, among other
things, for the confidential treatment of their discussions regarding the
Offer and the Merger and the exchange of certain confidential information
concerning the Company. The Confidentiality Agreement is incorporated herein
by reference and a copy of it has been filed with the SEC as an exhibit to
the Schedule 14D-1. The Confidentiality Agreement may be examined and copies
may be obtained at the places and in the manner set forth under the heading
"Available Information" in Section 8 of this Offer to Purchase.
Other Matters. Under Delaware law, the affirmative vote of holders of a
majority of the outstanding Shares entitled to vote, including any Shares
owned by the Purchaser, would be required to adopt the Merger. If the
Purchaser acquires, through the Offer or otherwise, voting power with respect
to at least a majority of the outstanding Shares, which would be the case if
the Minimum Condition were satisfied, it would have sufficient voting power
to effect the Merger without the vote of any other stockholder of the
Company. Delaware law also provides that if a parent company owns at least
90% of each class of stock of a subsidiary, the parent company can effect a
merger with the subsidiary without the authorization of the other
stockholders of the subsidiary. Accordingly, if, as a result of the Offer,
the Stockholder Agreements or otherwise, the Purchaser acquires at least 90%
of the outstanding Shares, the Purchaser could, and intends to, effect the
Merger without approval of any other stockholder of the Company.
No appraisal rights are available in connection with the Offer. However,
if the Merger is consummated, stockholders of the Company may have certain
rights under Delaware law to dissent and demand appraisal of, and payment in
cash of the fair value of, their Shares. Such rights, if the statutory
procedures were complied with, could lead to a judicial determination of the
fair value (excluding any element of value arising from the accomplishment or
expectation of the Merger) required to be paid in cash to such dissenting
holders for their Shares. Any such judicial determination of the fair value
of Shares could be based upon considerations other than or in addition to the
price paid in the Offer and the market value of the Shares, including asset
values and the investment value of the Shares. The value so determined could
be more or less than the purchase price per Share pursuant to the Offer or
the consideration per Share to be paid in the Merger.
In addition, several decisions by Delaware courts have held that, in
certain instances, a controlling stockholder of a corporation involved in a
merger has a fiduciary duty to the other stockholders that requires the
merger to be fair to such other stockholders. In determining whether a merger
is fair to minority stockholders, the Delaware courts have considered, among
other things, the type and amount of consideration to be received by the
stockholders and whether there were fair dealings among the parties. The
Delaware Supreme Court has indicated in recent decisions that in most cases
the remedy available in a merger that is found not to be "fair" to minority
stockholders is the right to appraisal described above or a damages remedy
based on essentially the same principles.
Section 203 of the DGCL prohibits business combination transactions
involving a Delaware corporation and an "interested stockholder" (defined
generally as any person that directly or indirectly beneficially owns 15% or
more of the outstanding voting stock of the subject corporation) for three
years following the date such person became an "interested stockholder,"
unless certain exceptions apply, including the subject corporation having
adopted an amendment to its by-laws providing that Section 203 is
inapplicable to such corporation. Pursuant to the terms of the Company's
Amended and Restated By-laws, Section 203 of the DGCL is inapplicable to the
Company.
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The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable
to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which the Purchaser
seeks to acquire the remaining Shares not held by it. The Purchaser believes,
however, that Rule 13e-3 will not be applicable to the Merger because it is
anticipated that the Merger will be effected within one year following
consummation of the Offer. Rule 13e-3 requires, among other things, that
certain financial information concerning the Company and certain information
relating to the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the SEC
and disclosed to stockholders prior to consummation of the transaction.
The Purchaser or an affiliate of the Purchaser may, following the
consummation or termination of the Offer, seek to acquire additional Shares
through open market purchases, privately negotiated transactions, a tender
offer or exchange offer or otherwise, upon such terms and at such prices as
it shall determine, which may be more or less than the price to be paid
pursuant to the Offer. The Purchaser and its affiliates also reserve the
right to dispose of any or all Shares acquired by them.
Upon the completion of the Offer, Parent intends to conduct a detailed
review of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel
and consider what, if any, changes would be desirable in light of the
circumstances which then exist. Such changes could include changes in the
Company's business, corporate structure, charter, by-laws, capitalization,
Board of Directors, management or dividend policy, although Parent has no
current plans with respect to any of such matters.
Except as noted in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets,
involving the Company or any of its subsidiaries, or any material changes in
the Company's corporate structure, business or composition of its management
or personnel.
13. DIVIDENDS AND DISTRIBUTIONS
As described above, the Merger Agreement provides that, prior to the
Effective Time, the Company will not, except as explicitly permitted by the
Merger Agreement, (i) declare, set aside or pay any dividend or make any
other distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned subsidiary
of the Company to its parent, (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(iii) purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities.
14. CONDITIONS TO THE OFFER
Notwithstanding any other terms of the Offer or the Merger Agreement, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares after the termination or withdrawal of the Offer), to pay for
any Shares tendered pursuant to the Offer, unless (i) there shall have been
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Shares which would represent at least a majority of the Shares
outstanding on a fully diluted basis and (ii) any waiting period under the
HSR Act applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated. Furthermore, notwithstanding any other term of
the Offer or the Merger Agreement, the Purchaser shall not be required to
accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may terminate the Offer if,
at any time on or after the date of the Merger Agreement and before the
acceptance of such shares for payment or the payment therefor, any of the
following conditions exists:
(a) there shall be threatened or pending any suit, action or proceeding
by any Governmental Entity or any other person (in the case of any suit,
action or proceeding by a person other than a
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Governmental Entity, such suit, action or proceeding having a reasonable
likelihood of success) (i) challenging the acquisition by Tomkins
Corporation or the Purchaser of any Shares, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Operative
Agreements, or seeking to obtain from the Company, Tomkins Corporation or
the Purchaser any damages that are material in relation to the Company and
its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Tomkins Corporation or any of their
respective subsidiaries of any material portion of the business or assets
of the Company, Tomkins Corporation or any of their respective
subsidiaries, or to compel the Company, Tomkins Corporation or any of
their respective subsidiaries to dispose of or hold separate any material
portion of the business or assets of the Company, Tomkins Corporation or
any of their respective subsidiaries, as a result of the Offer or any of
the other transactions contemplated by the Operative Agreements, (iii)
seeking to impose limitations on the ability of Tomkins Corporation or the
Purchaser to acquire or hold or exercise full rights of ownership of, any
Shares, including the right to vote the Shares purchased by it on all
matters properly presented to the stockholders of the Company, (iv)
seeking to prohibit Tomkins Corporation or any of its subsidiaries from
effectively controlling in any material respect the business or operations
of the Company or its subsidiaries, or (v) which otherwise is reasonably
likely to have a material adverse effect on the business, properties,
assets, condition (financial or otherwise), results of operations or
prospects of the Company and its subsidiaries taken as a whole;
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction threatened, proposed,
sought, enacted, entered, enforced, promulgated, amended or issued with
respect to, or deemed applicable to, or any consent or approval withheld
with respect to, (i) Tomkins Corporation, the Company or any of their
respective subsidiaries or (ii) the Offer, the Merger or any of the other
transactions contemplated by the Operative Agreements by any Governmental
Entity or before any court or governmental authority, agency or tribunal,
domestic or foreign, that has a substantial likelihood of resulting,
directly or indirectly, in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) since the date of the Merger Agreement there shall have occurred any
material adverse change or any development that, insofar as reasonably can
be foreseen, is reasonably likely to result in a material adverse change
in the businesses, properties, assets, condition (financial or otherwise),
results of operations or prospects of the Company and its subsidiaries
taken as a whole, other than changes relating to the economy in general or
to the Company's industry in general and not specifically relating to the
Company or any of its subsidiaries;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Tomkins
Corporation or the Purchaser its approval or recommendation of the Offer,
the Merger or the Merger Agreement, or approved or recommended any
takeover proposal or (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing;
(e) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange or
on the London Stock Exchange, for a period in excess of 24 hours
(excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States or involving the United Kingdom and, in the case of armed
hostilities involving the United Kingdom, having, or which could
reasonably be expected to have, a substantial continuing general effect on
business and financial conditions in the United Kingdom, (iv) any
limitation (whether or not mandatory) by any United States or the United
Kingdom governmental authority on the extension of credit generally by
banks or other financial institutions, or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
24
<PAGE>
(f) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall not be
true and correct and any such representations and warranties that are not
so qualified shall not be true and correct in any material respect, in
each case as if such representations and warranties were made as of such
time;
(g) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms,
which, in the reasonable judgment of the Purchaser, in any such case, giving
rise to any such condition, makes it inadvisable to proceed with the Offer
and/or with such acceptance for payment of or payment for any of the Shares.
Subject to the provisions of the Merger Agreement set forth under "The
Offer" above, the foregoing conditions (i) may be asserted by Tomkins
Corporation and the Purchaser regardless of the circumstances giving rise to
such condition and (ii) are for the sole benefit of Tomkins Corporation and
the Purchaser and may be waived by Tomkins Corporation or the Purchaser, in
whole or in part at any time and from time to time in the sole discretion of
Tomkins Corporation or the Purchaser. The failure by Tomkins Corporation or
the Purchaser at any time to exercise any of the foregoing rights shall not
be deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings by the Company with the SEC and other publicly available
information concerning the Company, the Purchaser is not aware of any
regulatory license or permit that appears to be material to the business of
the Company and its subsidiaries, taken as a whole, that might be adversely
affected by the acquisition of Shares by the Purchaser pursuant to the Offer
or, except as set forth below, of any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required prior to the acquisition of Shares by the
Purchaser pursuant to the Offer. Should any such approval or other action be
required, the Purchaser currently contemplates that it will be sought. While
the Purchaser does not currently intend 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 adverse consequences might not result to the Company's business or
that certain parts of the Company's business might not have to be disposed of
in the event that such approvals were not obtained or any other actions were
not taken. The Purchaser's obligation under the Offer to accept for payment
and pay for Shares is subject to certain conditions, including conditions
relating to the legal matters discussed in this Section 15. See Section 14.
State Takeover Statutes. A number of states have adopted "takeover"
statutes that purport to apply to attempts to acquire corporations that are
incorporated in such states, or whose business operations have substantial
economic effects in such states, or which have substantial assets, security
holders, employees, principal executive offices or principal places of
business in such states.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
"takeover" statutes. The Purchaser does not know whether any of these
statutes will, by their terms, apply to the Offer, and has not complied with
any such statutes. To the extent that certain provisions of these statutes
purport to apply to the Offer, the Purchaser believes that there are
reasonable bases for contesting such statutes. Pursuant to the Company's
Amended and Restated By-laws, Section 203 of the DGCL is not applicable to
the Company. See Section 12. If any person should seek to apply any state
takeover statute, the Purchaser would take such action as then appears
desirable, which action may include challenging the validity or applicability
of any such statute in appropriate court proceedings. If it is asserted that
one or more takeover statutes apply to the Offer, and it is not determined by
an appropriate court that such statute or statutes do not apply or are
invalid
25
<PAGE>
as applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities,
and the Purchaser might be unable to purchase or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment or pay
for Shares tendered. See Section 14.
United States Antitrust. The Offer, the Merger and the acquisition of
Shares pursuant to the Stockholder Agreements are subject to the HSR Act,
which provides that certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the Federal Trade
Commission ("FTC") and certain waiting period requirements have been
satisfied. Tomkins Corporation intends to promptly file a Notification and
Report Form with respect to the Offer, the Merger and the purchase of Shares
pursuant to the Stockholder Agreement.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent, unless Parent
receives a request for additional information or documentary material, or the
Antitrust Division and the FTC terminate the waiting period prior thereto.
If, within such 15-day period, either the Antitrust Division or the FTC
requests additional information or material from Parent concerning the Offer,
the waiting period will be extended and would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance
by Parent with such request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR
Act. Thereafter, such waiting period may be extended only by court order or
with the consent of Parent. The Purchaser will not accept for payment Shares
tendered pursuant to the Offer unless and until the waiting period
requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 14.
The provisions of the HSR Act would similarly apply to any purchase of the
Shares subject to the Stockholder Agreement pursuant to the Stockholder
Agreement (other than purchases effected through a tender pursuant to the
Offer or purchases pursuant to the Stockholder Agreement occurring after the
expiration of the 15-day waiting period connected to the Offer). If, as is
expected, the purchase of Shares permitted by the Stockholder Agreement is
effected through a tender of such Shares pursuant to the Offer or pursuant to
the Stockholder Agreement after the expiration of the 15-day waiting period
connected to the Offer, the HSR requirements applicable to the Offer
described in the prior paragraph would apply.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the
Merger or if the Merger occurs within one year after the HSR Act waiting
period applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality
under the antitrust laws of transactions such as the Purchaser's acquisition
of Shares pursuant to the Offer, the Merger and the Stockholder Agreement. At
any time before or after the Purchaser's acquisition of Shares, the Antitrust
Division or the FTC could take such action under the antitrust laws as it
deems necessary or desirable in the public interest, including seeking to
enjoin the acquisition of Shares pursuant to the Offer or otherwise or
seeking divestiture of Shares acquired by the Purchaser or divestiture of
substantial assets of Parent or its subsidiaries. Private parties and state
attorneys general may also bring legal action under the antitrust laws under
certain circumstances. Based upon an examination of publicly available
information relating to the businesses in which Parent and the Company are
engaged, Parent and the Purchaser believe that the acquisition of Shares by
the Purchaser will not violate the antitrust laws. Nevertheless, there can be
no assurance that a challenge to the Offer or other acquisition of Shares by
the Purchaser on antitrust grounds will not be made or, if such a challenge
is made, of the result. See Section 14 for certain conditions to the Offer,
including conditions with respect to litigation and certain governmental
actions.
16. FEES AND EXPENSES
The Purchaser has retained BZW to act as the Dealer Manager, MacKenzie
Partners, Inc. to act as the Information Agent and Citibank, N.A. to act as
the Depositary in connection with the Offer. The
26
<PAGE>
Dealer Manager and the Information Agent may contact holders of Shares by
mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers, commercial banks, trust companies and other nominees to
forward the Offer material to beneficial owners. The Dealer Manager, the
Information Agent and the Depositary each will receive reasonable and
customary compensation for their services and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the federal securities laws. The Information Agent and the
Depositary will be reimbursed for certain reasonable out-of-pocket expenses.
None of the Dealer Manager, the Information Agent or the Depositary has been
retained to make solicitations or recommendations in connection with the
Offer. Neither Parent nor the Purchaser will pay any fees or commissions to
any broker or dealer or other person (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will be reimbursed by the Purchaser for
reasonable expenses incurred by them in forwarding material to their
customers.
17. MISCELLANEOUS
The Purchaser is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser becomes
aware of any jurisdiction in which the making of the Offer would not be in
compliance with applicable law, the Purchaser will make a good faith effort
to comply with any such law. If, after such good faith effort, the Purchaser
cannot comply with any 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 those jurisdictions whose securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by the Dealer Manager or by one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Purchaser has filed with the SEC the Schedule 14D-1 pursuant to Rule
14d-3 under the Exchange Act, furnishing certain additional information with
respect to the Offer, and may file amendments thereto. The Schedule 14D-1 and
any amendments thereto, including exhibits, may be inspected and copies may
be obtained at the same places and in the same manner as set forth under the
heading "Available Information" in Section 8 (except that they will not be
available at the regional offices of the SEC).
E&W Acquisition Corp.
April 11, 1997
27
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER
1. Directors and Executive Officers of Parent. The following table sets
forth the name, age and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five
years of each director and executive officer of Parent. Each such person is a
citizen of the United Kingdom, unless otherwise indicated, and, except as
otherwise noted, the business address of each such person is c/o Tomkins PLC,
<F1>
East Putney House 84 Upper Richmond Road, London SW15 2ST, England.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ----------------------------------- ------------------------------------------------------------------------
<S> <C>
Gregory F. Hutchings (50) Director of Parent since 1983, Chief Executive Officer since 1984 and Executive
Chairman since January 1995.
Ian A. Duncan (50) Finance Director of Parent since 1984, Managing Director-Finance since 1992
and Deputy Chairman since January 1995.
Robert M. Muddimer (64) Director of Parent since 1990. Deputy Chairman since February 1996. From 1992
through 1996 he was Chairman of Ranks Hovis McDougall. Between February 1996
and February 1997 he was Chairman of The Gates Corporation and now acts as
the Gates link Director for the Parent Board in London.
Richard N. Marchant (50) Director of Parent since 1982 and Company Secretary since 1979.
Anthony J. Reading (53) Director of Parent since 1992. Chairman of Tomkins Corporation since 1996.
David J. Snowdon (52) Director of Parent and Chief Operating Officer since April 1996. Prior to
joining he was a senior executive and Associate Director of Hanson PLC. Mr.
Snowdon was with Hanson for over 20 years, during which time he held a number
of leading operating positions, the most recent being Chief Executive of ARC.
J. David S. Stark (57) Director of Parent since 1986.
Charles C. Gates* (75) Non-Executive Director of Parent since 1996. Chairman and Chief Executive
Cody Company Officer of The Gates Corporation from 1961 until the completion of its sale
3773 Cherry Creek North Drive, to Parent in July 1996. Mr. Gates is Chairman of Cody Energy, Inc. and is
Suite 680 a Director of the Denver Art Museum Foundation, BHP Petroleum Corporation
Denver of Australia, Hamilton Petroleum Corporation and the Tejas Gas Corporation.
Colorado 80209 Citizen of the United States of America.
</TABLE>
- ------------
* Member of Audit Committee and of Remuneration Committee.
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ----------------------------------- ------------------------------------------------------------------------
<S> <C>
Roger M. Holland* (54) Non-Executive Director of Parent since January 1995. In 1990 Mr. Holland became
a Director of Cray Electronics Holdings plc and became Chairman in 1993. He
resigned from Cray Electronics Holdings plc in March 1996.
Ali E. Wambold* (43) Non-Executive Director of Parent since January 1995. Managing Director of
Lazard Freres & Co. LLC Lazard Freres & Co. LLC in New York and Managing Director of Lazard Brothers
30 Rockefeller Plaza & Co. Ltd. in London. Mr. Wambold has been a Non-Executive Director of the
New York, NY 10020 Albert Fisher Group PLC since 1990.
Citizen of the United States of America.
</TABLE>
2. Directors and Executive Officers of the Purchaser. The following table
sets forth the name, age and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five
years of each director and executive officer of the Purchaser. Each such
person is a citizen of the United Kingdom, unless otherwise indicated, and
the business address of each such person is c/o Tomkins Corporation, 4801
Springfield Street, Dayton, Ohio 45431.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------- ---------------------------------------------------------------------
<S> <C>
Geoffrey D. Eaton (38) President and Chief Executive Officer of the Purchaser. Executive Vice
President of Gates since 1996. Director-Corporate Development (North America)
of Parent from 1995 to 1996. From 1992 to 1995 he was Executive Director
of RHM.
Simon M. Webber (34) Senior Vice President and Corporate Secretary of the Purchaser. Executive
Officer in Parent's Corporate Development Unit since 1989 and Parent Legal
Counsel since 1993.
Dan Disser (40) Vice President of Finance of the Purchaser. Chief Financial Officer of Tomkins
Corporation since March 1995. Comptroller of Tomkins Corporation and Vice
President-Finance of Redwing Co. Inc. ("Redwing") from December 1993 to
March 1995. Vice President and Comptroller of Redwing from August 1991
to December 1993.
Citizen of the United States.
</TABLE>
- ------------
* Member of Audit Committee and of Remuneration Committee
I-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 his broker, dealer, commercial bank or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand: By Mail: Citibank, N.A. By Overnight Carrier: Citibank, N.A.
Citibank, N.A. c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distibution, Inc.
Corporate Trust Window P.O. Box 7072 404 Sette Drive
111 Wall Street, 5th Floor Paramus, New Jersey 07653 Paramus, New Jersey 07652
New York, New York 10043
</TABLE>
Facsimile for Eligible Institutions:
(201) 262-3240
To confirm fax only:
(800) 422-2077
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
locations listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained
from the Information Agent at its address and telephone numbers set forth
below. You may also contact your broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Offer.
The Dealer Manager for the Offer is:
BZW [LOGO]
222 Broadway
New York, New York 10038
(212) 412-1443 (Call Collect)
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC. [LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL FREE (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
STANT CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 11, 1997
BY
E&W ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
TOMKINS PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CITIBANK, N.A.
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc.
111 Wall Street, 5th Floor P.O. Box 7072 404 Sette Drive
New York, New York 10043 Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions:
(201) 262-3240
To confirm fax only:
(800) 422-2077
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
THIS LETTER OF TRANSMITTAL IS TO BE COMPLETED BY STOCKHOLDERS EITHER IF
CERTIFICATES EVIDENCING SHARES (AS DEFINED BELOW) ARE TO BE FORWARDED
HEREWITH OR IF DELIVERY OF SHARES IS TO BE MADE BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY ("DTC") OR THE
PHILADELPHIA DEPOSITORY TRUST COMPANY ("PDTC") (EACH A "BOOK-ENTRY TRANSFER
FACILITY" AND COLLECTIVELY, THE "BOOK-ENTRY TRANSFER FACILITIES") PURSUANT TO
THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN SECTION 3 OF THE OFFER TO
PURCHASE (AS DEFINED BELOW). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates evidencing Shares ("Stock Certificates")
are not immediately available or who cannot deliver their Stock Certificates
and all other documents required hereby to the Depositary prior to the
Expiration Date (as defined in Section l of the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis and who wish to tender their Shares must do so pursuant to the
guaranteed delivery procedure described in Section 3 of the Offer to
Purchase. See Instruction 2.
<PAGE>
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Institution: ___________________________________
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [ ] DTC [ ] PDTC
Account Number: ______________________________________________
Transaction Code Number: ______________________________________________
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s): ____________________________________
Window Ticket Number (if any): ______________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________
Name of Institution which Guaranteed Delivery: ______________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
(CHECK ONE) [ ] DTC [ ] PDTC
Account Number: ______________________________________________
Transaction Code Number: ______________________________________________
2
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S)
ON STOCK CERTIFICATE(S)) STOCK CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
STOCK TOTAL NUMBER OF NUMBER OF
CERTIFICATE(S) SHARES EVIDENCED SHARES
NUMBER(S)* BY STOCK CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------ -------------------------- --------------
------------------ -------------------------- --------------
------------------ -------------------------- --------------
------------------ -------------------------- --------------
------------------ -------------------------- --------------
------------------ -------------------------- --------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Stock Certificate delivered
to the Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to E&W Acquisition Corporation, a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Tomkins PLC, a corporation organized under the laws of England, the
above-described shares of common stock, par value $.01 per share (the
"Shares"), of Stant Corporation, a Delaware corporation (the "Company"),
pursuant to the Purchaser's offer to purchase all outstanding Shares, at
$21.50 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated April 11, 1997 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer"). The undersigned understands that the
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to 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 and conditions of such extension
or amendment), the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Purchaser all right, title and interest in and to all
the Shares that are being tendered hereby and all dividends, distributions
(including, without limitation, distributions of additional Shares) and
rights declared, paid or distributed in respect of such Shares on or after
April 9, 1997, (collectively, "Distributions"), and irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Distributions, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Stock Certificates evidencing such
Shares and all Distributions, or transfer ownership of such Shares and all
Distributions on the account books maintained by a Book-Entry Transfer
Facility, together, in either case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Purchaser, (ii)
present such Shares and all Distributions for transfer on the books of the
Company and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares and all Distributions, all in accordance
with the terms of the Offer.
The undersigned hereby irrevocably appoints Gregory F. Hutchings and Dan
Disser, and each of them, as the attorneys and proxies of the undersigned,
each with full power of substitution, to vote in such manner as each such
attorney and proxy or his substitute shall, in his sole discretion, deem
proper and otherwise act (by written consent or otherwise) with respect to
all the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of such vote or other action and all Shares and
other securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned or postponed
meeting) or consent in lieu of any such meeting or otherwise. This proxy and
power of attorney is coupled with an interest in the Shares tendered hereby,
is irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke all other
proxies and powers of attorney granted by the undersigned at any time with
respect to such Shares (and all Shares and other securities issued in
Distributions in respect of such Shares), and no subsequent proxy or power of
attorney shall be given or written consent executed (and if given or
executed, shall not be effective) by the undersigned with respect thereto.
The undersigned understands that, in order for Shares to be deemed validly
tendered, immediately upon the Purchaser's acceptance of such Shares for
payment, the Purchaser must be able to exercise full voting and other rights
with respect to such Shares, including, without limitation, voting at any
meeting of the Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances (other than those resulting
from action of the Purchaser, Tomkins PLC or any of its subsidiaries), and
that none of such Shares and Distributions will be subject to any adverse
claim (other than those resulting from action of the Purchaser, Tomkins PLC
or any of its subsidiaries). The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or the Purchaser to
be necessary or desirable to complete the sale, assignment and transfer of
the Shares tendered hereby and all Distributions. In addition, the
undersigned shall remit and transfer promptly to the Depositary for the
account of the Purchaser all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and, pending
such remittance and
4
<PAGE>
transfer or appropriate assurance thereof, the Purchaser shall be entitled to
all rights and privileges as owner of each such Distribution and may withhold
the entire purchase price of the Shares tendered hereby or deduct from such
purchase price the amount or value of such Distribution as determined by the
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Stock Certificates evidencing Shares not purchased
or not tendered, in the name(s) of the registered holder(s) appearing above
under "Description of Shares Tendered." Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions," please mail the check
for the purchase price of all Shares purchased and all Stock Certificates
evidencing Shares not tendered or not purchased (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing
above under "Description of Shares Tendered." In the event that the boxes
entitled "Special Payment Instructions" and "Special Delivery Instructions"
are both completed, please issue the check for the purchase price of all
Shares purchased and return all Stock Certificates evidencing Shares not
purchased or not tendered in the name(s) of, and mail such check and Stock
Certificates to, the person(s) so indicated. Unless otherwise indicated
herein in the box entitled "Special Payment Instructions," please credit any
Shares tendered hereby and delivered by book-entry transfer, but which are
not purchased, by crediting the account at the Book-Entry Transfer Facility
designated above. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any
Shares from the name of the registered holder(s) thereof if the Purchaser
does not purchase any of the Shares tendered hereby.
5
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Stock Certificates evidencing Shares not tendered or not purchased are to
be issued in the name of someone other than the undersigned, or if Shares
tendered hereby and delivered by book-entry transfer which are not purchased
are to be returned by credit to an account at one of the Book-Entry Transfer
Facilities other than that designated above.
Issue [ ] check [ ] Stock Certificate(s) to:
Name: _______________________________________________________________________
(PRINT)
Address: ____________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
_____________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
[ ] Credit Shares delivered by book-entry transfer and not purchased to the
account set forth below:
Check appropriate box:
[ ] DTC [ ] PDTC
________________________________________________________________________
ACCOUNT NUMBER
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Stock Certificates evidencing 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 under "Description of Shares Tendered."
Mail [ ] check [ ] Stock Certificate(s) to:
Name: _______________________________________________________________________
(PRINT)
Address: ____________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
6
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
_____________________________________________________________________________
_____________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated:_________, 199 __
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Stock Certificates or on a security position listing or by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s): _____________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _______________________________________________________
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ______________________________________________
Tax Identification or Social Security Number: ________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized Signature: ________________________________________________________
Name: ________________________________________________________________________
(PLEASE PRINT)
Name of Firm: ________________________________________________________________
Address: _____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ______________________________________________
Dated:___________, 199 __
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 loans associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each an "Eligible
Institution"). No signature guarantee is required on this Letter of
Transmittal (a) if this Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered
herewith, unless such holder(s) has completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the reverse hereof, or (b) if such Shares are tendered for
the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Stock Certificates. This Letter
of Transmittal is to be used either if Stock Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to
the procedure set forth in Section 3 of the Offer to Purchase. Stock
Certificates evidencing all physically tendered Shares, or a confirmation of
a book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer,
an Agent's Message, as defined below) 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 reverse hereof prior to the Expiration Date (as
defined in Section l of the Offer to Purchase). If Stock Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Stockholders whose Stock Certificates are not immediately available, who
cannot deliver their Stock Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis may tender
their Shares pursuant to the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form made available by the Purchaser, must be received by the Depositary
prior to the Expiration Date; and (iii) the Stock Certificates evidencing all
physically delivered Shares in proper form for transfer by delivery, or a
confirmation of a book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer,
in each case together with a Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message), and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market System trading days after the
date of execution of such Notice of Guaranteed Delivery, all as described in
Section 3 of the Offer to Purchase. The term "Agent's Message" means a
message, transmitted by a Book-Entry Transfer Facility to, and received by
the Depositary and forming a part of the Book-Entry Confirmation, which
states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Shares that such participant has received and agrees to be
bound by the terms of this Letter of Transmittal and that the Purchaser may
enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, STOCK CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Stock Certificate numbers, the number of
Shares evidenced by such Stock Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by any Stock
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new Stock Certificate(s)
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<PAGE>
evidencing the remainder of the Shares that were evidenced by the Stock
Certificates delivered to the Depositary herewith will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided in
the box entitled "Special Delivery Instructions" on the reverse hereof, as
soon as practicable after the expiration or termination of the Offer. All
Shares evidenced by Stock Certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the Stock Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever. If any Share tendered
hereby is owned of record by two or more persons, all such persons must sign
this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Stock Certificates or separate
stock powers are required, unless payment is to be made to, or Stock
Certificates evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case
the Stock Certificate(s) evidencing the Shares tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Stock
Certificate(s). Signatures on such Stock Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Stock Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Stock Certificate(s). Signatures on
such Stock Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Stock Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of such person's authority so
to act must be submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the sale
and transfer of any Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price of any Shares purchased is to be made
to, or Stock Certificate(s) evidencing Shares not tendered or not purchased
are to be issued in the name of, a person other than the registered
holder(s), the amount of any stock transfer taxes (whether imposed on the
registered holder(s), such other person or otherwise) payable on account of
the transfer to such other person will be deducted from the purchase price of
such Shares purchased, unless evidence satisfactory to the Purchaser of the
payment of such taxes, or exemption therefrom, is submitted. Except as
provided in this Instruction 6, it will not be necessary for transfer tax
stamps to be affixed to the Stock Certificates evidencing the Shares tendered
hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Stock Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Stock Certificate is to be sent to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the
appropriate boxes on the reverse of this Letter of Transmittal must be
completed. Stockholders delivering Shares tendered hereby by book-entry
transfer may request that Shares not purchased be credited to such account
maintained at a Book-Entry Transfer Facility as such stockholder may
designate in the box entitled "Special Payment Instructions" on the reverse
hereof. If no such instructions are given, all such Shares not purchased will
be returned by crediting the account at the Book-Entry Transfer Facility
designated on the reverse hereof as the account from which such Shares were
delivered.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set
forth below. Additional copies of the Offer to Purchase, this Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust
companies.
9. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information"
below, and to certify, under penalties of perjury, that such number is
correct and that such stockholder is not subject to backup
9
<PAGE>
withholding of federal income tax. If a tendering stockholder has been
notified by the Internal Revenue Service that such stockholder is subject to
backup withholding, such stockholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such stockholder has
since been notified by the Internal Revenue Service that such stockholder is
no longer subject to backup withholding. Failure to provide the information
on the Substitute Form W-9 may subject the tendering stockholder to 31%
federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9 and complete the Certificate of Awaiting Taxpayer
Identification Number below. Notwithstanding that "Applied For" is written in
Part I and the Certificate of Awaiting Taxpayer Identification Number is
completed, the Depositary will withhold 31% of all payments of the purchase
price to such stockholder until a TIN is provided to the Depositary. Such
amounts will be refunded to such stockholder if a TIN is provided to the
Depositary within 60 days.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the tendering
stockholder should promptly notify the Depositary. The tendering stockholder
will then be instructed as to the steps that must be taken in order to
replace the certificate(s). This Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost or destroyed
certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND STOCK CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the
stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect
to Shares purchased pursuant to the Offer may be subject to backup
withholding at a rate of 31%.
Certain stockholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the
Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)
that such stockholder is not subject to backup withholding because (i) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends, (ii) the Internal Revenue Service has
notified such stockholder that such stockholder is no longer subject to
backup withholding or (iii) such stockholder is exempt from backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual
10
<PAGE>
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report. If the tendering stockholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future,
the stockholder should write "Applied For" in the space provided for the TIN
in Part I, sign and date the Substitute Form W-9 and complete the Certificate
of Awaiting Taxpayer Identification Number below. Notwithstanding that
"Applied For" is written in Part I and the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% of all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary. Such amounts will be refunded to such surrendering
stockholder if a TIN is provided to the Depositary within 60 days.
<TABLE>
<CAPTION>
<S> <C> <C>
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
- ----------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--Taxpayer Identification Number-- ---------------------
FORM W-9 For all accounts, enter taxpayer identification number in the box at right. Social Security
Department of the Treasury (For most individuals, this is your social security number. If you do not Number OR
Internal Revenue Service have a number, see Obtaining a Number in the enclosed Guidelines.) Certify ---------------------
by signing and dating below. Note: If the account is in more than one name, Employer
see the chart in the enclosed Guidelines to determine which number Identification
to give the payer. Number
(If awaiting TIN
write "Applied For")
- ----------------------------------------------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR PART II-- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete as
TAXPAYER IDENTIFICATION instructed therein.
NUMBER (TIN)
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or 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 Internal Revenue Service
Center ("IRS") or Social Security Administration Office or (b) I intend to mail or deliver an
application in the near future. I understand that, notwithstanding that I have written "Applied
For" in Part I and have completed the Certificate of Awaiting Taxpayer Identification Number, 31%
of all reportable payments made to me thereafter will be withheld until I provide a correct
Taxpayer Identification Number), and
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b)
I have not been notified by the IRS that I am subject to backup withholding as a result of failure
to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) 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 were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup withholding, do not cross out
item (2). (Also see instructions in the enclosed Guidelines.)
SIGNATURE:___________________________________________________________________________ DATE:________________________ , 199 _____
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that, notwithstanding that I have written "Applied For" in Part I
and have completed the Certificate of Awaiting Taxpayer Identification
Number, 31% of all reportable payments made to me prior to the time I provide
a properly certified Taxpayer Identification Number will be withheld.
Signature_____________________________________ Date ____________
12
<PAGE>
Any questions or requests for assistance may be directed to the Dealer
Manager (as defined in the Offer to Purchase) or the Information Agent at
their respective telephone numbers and addresses listed below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent at its address
and telephone numbers set forth below. You may also contact your broker,
dealer, commercial bank or trust company or nominee for assistance concerning
the Offer.
The Dealer Manager for the Offer is:
BZW [LOGO]
222 Broadway
New York, New York 10038
(212) 412-1443 (Call Collect)
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC. [LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL FREE (800) 322-2885
13
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
STANT CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if
certificates ("Stock Certificates") evidencing shares of common stock, par
value $.01 per share (the "Shares"), of Stant Corporation, a Delaware
corporation (the "Company"), are not immediately available, (ii) if Stock
Certificates and all other required documents cannot be delivered to
Citibank, N.A., as Depositary (the "Depositary"), prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or
(iii) if the procedure for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or mail or transmitted by telegram or facsimile
transmission to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution,Inc. c/o Citicorp Data Distibution, Inc.
111 Wall Street, 5th Floor P.O. Box 7072 404 Sette Drive
New York, New York 10043 Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions:
(201) 262-3240
To confirm fax only:
(800) 422-2077
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE
INSTITUTION" UNDER THE INSTRUCTIONS THERETO, 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 E&W Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of Tomkins PLC, a
corporation organized under the laws of England, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated April 11, 1997
(the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the
"Offer"), receipt of each of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedures
described in Section 3 of the Offer to Purchase.
Number of Shares: ______________________________________________________________
Name(s) of Record Holder(s): ___________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Address(es): ___________________________________________________________________
________________________________________________________________________________
(ZIP CODE)
Area Code and Tel. No: _________________________________________________________
Certificate Nos. (if available): _______________________________________________
________________________________________________________________________________
Check ONE box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Signature(s): __________________________________________________________________
________________________________________________________________________________
Account Number: ________________________________________________________________
Dated:________________ , 199__
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program
or the Stock Exchange Medallion Program, hereby guarantees to deliver to
the Depositary either the certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) of a transfer of such
Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal, or a manually signed facsimile thereof,
with any required signature guarantees, or an Agent's Message (as defined
in "Acceptance for Payment and Payment for Shares" of the Offer to
Purchase), and any other documents required by the Letter of Transmittal
within three Nasdaq National Market System trading days after the date of
execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown
herein. Failure to do so could result in financial loss to such Eligible
Institution.
Name of Firm:______________________________________________________________
___________________________________________________________________________
(AUTHORIZED SIGNATURE)
Address: __________________________________________________________________
___________________________________________________________________________
(ZIP CODE)
Area Code and
Tel. No.: _________________________________________________________________
Name: _____________________________________________________________________
Title: ____________________________________________________________________
Date:________________ , 199__
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. STOCK
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
STANT CORPORATION
AT
$21.50 NET PER SHARE
BY
E&W ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TOMKINS PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by E&W Acquisition Corp., a Delaware corporation
(the "Purchaser") and an indirect wholly owned subsidiary of Tomkins PLC, a
corporation organized under the laws of England ("Parent"), to act as Dealer
Manager in connection with the Purchaser's offer to purchase all outstanding
shares of common stock, par value $.01 per share (the "Shares"), of Stant
Corporation, a Delaware corporation (the "Company"), at a price of $21.50 per
Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 11, 1997 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer")
enclosed herewith. Please furnish copies of the enclosed materials to those
of your clients for whose accounts you hold Shares registered in your name or
in the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which constitutes at least a majority of the Shares outstanding on a
fully diluted basis. The Offer is also subject to other terms and conditions
contained in the Offer to Purchase.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to Citibank, N.A. (the "Depositary") by the expiration
of the Offer or if the procedure for book-entry transfer cannot be
completed by the expiration of the Offer;
4. A letter to stockholders of the Company from John P. Reilly, President
and Chief Executive Officer, of the Company, together with a Solicitation/
Recommendation Statement on Schedule 14D-9 filed with the Securities and
Exchange Commission by the Company;
5. A letter 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 clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
<PAGE>
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 9, 1997, (the "Merger Agreement"), by and among the Company,
Tomkins Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent, and the Purchaser. The Merger Agreement provides that, among other
things, following the consummation of the Offer and the satisfaction or
waiver of the other conditions set forth in the Merger Agreement, the
Purchaser will be merged with and into the Company (the "Merger"). At the
effective time of the Merger, each outstanding Share (other than Shares held
in the treasury of the Company or by any subsidiary of the Company and Shares
owned by Tomkins Corporation, the Purchaser or any other wholly owned
subsidiary of Tomkins Corporation or held by stockholders who perfect their
appraisal rights under Delaware law) will be converted into the right to
receive the per Share price paid in the Offer, without interest.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of
certificates evidencing such Shares or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities (as defined in the Offer to Purchase), a
Letter of Transmittal (or facsimile thereof) properly completed and duly
executed, or an Agent's Message (as defined in the Offer to Purchase), and
any other required documents in accordance with the instructions contained in
the Letter of Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker, dealer
or other person (other than the Dealer Manager or the Information Agent as
described in the Offer) in connection with the solicitation of tenders of
Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of
the enclosed materials to your clients. The Purchaser will pay or cause to be
paid any stock transfer taxes payable with respect to the transfer of Shares
to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
addresses set forth on the back cover of the Offer to Purchase. Additional
copies of the enclosed material may be obtained from the Information Agent at
its address and telephone numbers set forth on the back cover of the Offer
to Purchase.
Very truly yours,
BZW, the investment banking
division of Barclays Bank PLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY
OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
STANT CORPORATION
AT
$21.50 NET PER SHARE
BY
E&W ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TOMKINS PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated April 11,
1997 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
as amended or supplemented from time to time, together constitute the
"Offer") in connection with the offer by E&W Acquisition Corp., a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Tomkins PLC, a corporation organized under the laws of England ("Parent"), to
purchase all outstanding shares of common stock, par value $.01 per share
(the "Shares"), of Stant Corporation, a Delaware corporation (the "Company"),
at a price of $ 21.50 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer. Also enclosed is the
Letter to Stockholders of the Company from the President and Chief Executive
Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY
US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms
and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $21.50 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has approved the Offer and the
Merger (as defined in the Offer to Purchase) and has determined that the
terms of the Offer and the Merger are fair to and in the best interests of
the stockholders of the Company, and recommends that stockholders accept
the Offer and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, May 8, 1997, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer a number
of Shares which constitutes at least a majority of the Shares outstanding
on a fully diluted basis.
<PAGE>
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase
of Shares by the Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified in your instructions. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter
of Transmittal and is being made to all holders of Shares. The Offer is not
being made to (nor will tenders be accepted from or on behalf of) the holders
of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of the Purchaser by the Dealer Manager
or 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 ALL OUTSTANDING SHARES OF COMMON STOCK
OF STANT CORPORATION BY E&W ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated April 11, 1997, and the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer"), in connection with the offer by E&W Acquisition
Corp., a Delaware corporation and an indirect wholly owned subsidiary of
Tomkins PLC, a corporation organized under the laws of England, to purchase
all outstanding shares of common stock, par value $.01 per share (the
"Shares"), of Stant Corporation, a Delaware corporation.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares) that
are held for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer.
NUMBER OF SHARES SIGN HERE
TO BE TENDERED:
_______________________________
________________ Shares*
_______________________________
Signature(s)
Dated:____________________ , 199__
_______________________________
_______________________________
Please Type or Print Name(s)
_______________________________
_______________________________
Please Type or Print Address
_______________________________
Area Code and Telephone Number
_______________________________
Taxpayer Identification or
Social Security Number
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
GIVE THE GIVE THE
TAXPAYER TAXPAYER
FOR THIS TYPE OF ACCOUNT IDENTIFICATION FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF-- NUMBER OF--
- -------------------------- ----------------- -------------------------- -----------------
<S> <C>
1. An individual's account The individual 9. A valid trust, estate The legal entity (Do not
2. Two or more individuals The actual owner of or pension trust furnish the identifying
(joint account) the account or, if number of the personal
combined funds, the first representative or trustee
individual on the account(1) unless the legal entity itself
3. Husband and wife The actual owner of is not designated in the
(joint account) the account or, if joint account title.)(5)
funds, either person(1) 10. Corporate account The corporation
4. Custodian account of a minor The minor(2) 11. Religious, charitable, or The organization
(Uniform Gift to Minors Act) educational organization
5. Adult and minor The adult, or if the account
(joint account) minor is the only 12. Partnership account held The partnership
contributor, the in the name of the business
minor(1)
6. Account in the name of The ward, minor, or 13. Association, club, or other The organization
guardian or committee for a incompetent(3) tax-exempt organization
designated ward, minor, or 14. A broker or registered The broker or nominee
incompetent person(3) nominee
7. a. The usual revocable savings The grantor-trustee(1) 15. Account with the Department The public entity
trust account (grantor is of Agriculture in the name of
also trustee) a public entity (such as a State
b. So-called trust account that The actual owner(1) or local government, school
is not a legal or valid trust district, or prison) that
under State law receives agricultural program
8. Sole proprietorship account The owner(4) 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 or employer identification number.
(4) Show your individual name. You may also enter your business name. You
may use your social security number or employer identification number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social
Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a) of the Code.
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
o A futures commission merchant registered with the Commodity Futures
Trading Commission.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441
of the Code.
o Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to an appropriate nominee.
o Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and
you have not provided your correct taxpayer identification number to the
payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852 of the Code).
o Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
o Payments on tax-free covenant bonds under section 1451 of the Code.
o Payments made by certain foreign organizations.
o Payments of mortgage interest to you.
o Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT
ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER
A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend,
interest, or other payments to give correct taxpayer identification numbers
to payers who must report the payments to the IRS. The IRS uses the numbers
for identification purposes. Payers must be given the numbers whether or not
recipients are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a correct taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 20% on any portion of
an underpayment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis that results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
April 11, 1997 and the related Letter of Transmittal and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
STANT CORPORATION
AT
$21.50 NET PER SHARE
BY
E&W ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TOMKINS PLC
E&W Acquisition Corp., a Delaware corporation (the "Purchaser") and an indirect
wholly owned subsidiary of Tomkins PLC, a corporation organized under the laws
of England ("Parent"), is offering to purchase all outstanding shares of common
stock, par value $.01 per share (the "Shares"), of Stant Corporation, a
Delaware corporation (the "Company"), at a price of $21.50 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated April 11, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, as amended or supplemented from time
to time, together constitute the "Offer"). Following the Offer, the Purchaser
intends to effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly tendered
and not withdrawn prior to the expiration of the Offer a number of Shares which
constitutes at least a majority of the Shares outstanding on a fully diluted
basis. The Offer is also subject to other terms and conditions.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as
of April 9, 1997 (the "Merger Agreement"), by and among Tomkins Corporation, a
Delaware corporation ("Tomkins Corporation") and a wholly owned subsidiary of
Parent, the Purchaser and the Company. The Merger Agreement provides that,
among other things, as soon as practicable after the purchase of Shares
pursuant to the Offer and the satisfaction of the other conditions set forth in
the Merger Agreement and in accordance with the relevant provisions of the
General Corporation Law of the State of Delaware ("DGCL"), the Purchaser will
be merged with and into the Company (the "Merger"). Following consummation of
the Merger, the Company will continue as the surviving corporation and will be
a wholly owned subsidiary of Tomkins Corporation. At the effective time of the
Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company, owned by any subsidiary of the Company or owned by Tomkins
Corporation, the Purchaser or any other subsidiary of Tomkins Corporation, and
any Shares held by stockholders exercising appraisal rights pursuant to Section
262 of the DGCL) will be cancelled and converted into the right to receive
$21.50 in cash, without interest.
In connection with the Merger Agreement, Tomkins Corporation and the Purchaser
have entered into a Stockholder Agreement dated as of April 9, 1997 with
Bessemer Capital Partners, L.P. (the "Selling Stockholder"), who beneficially
owns an aggregate of 9,229,595 Shares, pursuant to which, among other things,
the Selling Stockholder has agreed to tender its Shares in the Offer, and has
granted Purchaser an option to acquire its Shares at $21.50 per Share, upon the
terms and subject to the conditions thereof in the event of certain
terminations of the Merger Agreement.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE TERMS OF THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS
OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to
Citibank, N.A. (the "Depositary") of the Purchaser's acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Shares accepted for payment pursuant to the Offer
will be made by deposit of the purchase price therefor with the Depositary,
which will act as agent for tendering stockholders for the purpose of receiving
payments from the Purchaser and transmitting such payments to tendering
stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price for Shares be paid,
regardless of any delay in making such payment. 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 (i) the certificates evidencing
such Shares or timely confirmation of a book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer, and (iii) any other
documents required under the Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any of the conditions specified in Section 14
of the Offer to Purchase, by giving oral or written notice of such extension to
the Depositary. Any such extension will be followed as promptly as practicable
by public announcement thereof, such announcement to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date of the Offer. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the rights of a tendering stockholder to withdraw such stockholder's Shares.
Tenders of Shares made pursuant to the Offer are irrevocable except that such
Shares may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Thursday, May 8, 1997 (or the latest time and date at which the Offer,
if extended by the Purchaser, shall expire) and, unless theretofore accepted
for payment by the Purchaser pursuant to the Offer, may also be withdrawn at
any time after June 10, 1997. For a withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at its address set forth on the back cover page of
the Offer to Purchase. Any such notice of withdrawal must specify the name of
the person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of such Shares, if different
from that of the person who tendered such Shares. If share certificates
evidencing Shares to be withdrawn have been delivered or otherwise identified
to the Depositary, then, prior to the physical release of such Share
certificates, the serial numbers shown on such Share certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in the Offer to
Purchase), unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO
THE OFFER.
Questions and requests for assistance may be directed to the Dealer Manager or
the Information Agent at their addresses and telephone numbers as set forth
below. Additional copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below. Such copies will be furnished promptly at
the Purchaser's expense. No fees or commissions will be paid to brokers,
dealers or other persons (other than the Information Agent) for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[MacKenzie Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
BZW
222 Broadway
New York, New York 10038
(212) 412-1443 (Call Collect)
April 11, 1997
<PAGE>
[TOMKINS LETTERHEAD]
FOR IMMEDIATE RELEASE
Contact: Greg Hutchings
Tomkins PLC
011-44-181-871-4544
- or -
Anthony Spiro
Tomkins PLC
513-476-0416
- or -
Thomas K. Erwin
Stant Corporation
317-962-6655
- or -
Brian J. Rafferty
Taylor Rafferty Associates
212-889-4350
TOMKINS PLC ACQUISITION OF STANT CORPORATION FOR $606 MILLION
((pounds sterling)372 MILLION)
London, April 9, 1997 - Tomkins PLC (NYSE:TKS), is pleased to announce that it
has signed a Merger Agreement with Stant Corporation, a US company quoted on
NASDAQ (symbol: STNT). A tender offer for all Stant's shares will be launched
at $21.50 per share in cash which values the total equity of Stant at $406
million ((pounds sterling)249 million) and will be satisfied from Tomkins'
existing cash resources. In addition, Tomkins will assume Stant's estimated
debt, net of option proceeds receivable, of approximately $200 million ((pounds
sterling)123 million). The transaction is subject to normal regulatory approval
and closing is expected to take place in mid-May 1997.
Tomkins has also signed a Stockholder Agreement with Bessemer Capital Partners,
L.P. of New York, which owns 56.9 percent of Stant's issued shares, by which
Bessemer has committed to tender its shares to Tomkins.
Stant employs over 7,000 people in 20 manufacturing sites located in the US,
Mexico, the UK and Australia. It is one of the world's leading manufacturers of
automotive windshield wiping systems, wiper blades (Trico), closure caps and
engine thermostats. The company is also a leading North American manufacturer
of a variety of other automotive products including hose clamps, heaters,
grease guns and tools. In the year ended December 31, 1996, Stant had total
sales of $657 million ((pounds sterling)403 million). Approximately half of
Stant's sales are to the
-more-
<PAGE>
-2-
automotive original equipment market, a significant proportion to the
automotive aftermarket with the balance to industrial customers.
Under US Generally Accepted Accounting Principles, for the year ended
December 31, 1996, Stant's operating profit was $56.6 million ((pounds sterling)
34.7 million) and profit before tax was $38.8 million ((pounds sterling)23.8
million), resulting in basic earnings per share of $1.28. Net assets at
December 31, 1996 were $201 million ((pounds sterling)123 million), which
include intangibles of $164 million ((pounds sterling)101 million) and net debt
of $220 million ((pounds sterling) 135 million).
Stant's budget for the year ending December 31, 1997, prepared independent of
and prior to Tomkins' approach, shows sales of $706 million ((pounds sterling)
433 million) and operating profit of $62.2 million ((pounds sterling)38.2
million) under US GAAP.
Greg Hutchings, Tomkins' Executive Chairman, said:
"Stant is an excellent acquisition for Tomkins and will complement The Gates
Rubber Company, one of the world's largest manufacturers of power transmission
belts, hose and connectors. Stant expands our product offering to the
automotive original equipment market and increases the range and volume of
products we can distribute through Gates' established channels to the
aftermarket. Stant will also benefit from Gates' extensive global reach and
broad distribution to industrial customers. The combination of these two fine
companies will bring considerable marketing benefits.
We are delighted with this acquisition. Cash availability has enabled this
transaction, which will utilize approximately $606 million ((pounds sterling)
372 million) of our net cash resources, to take place and demonstrates the
effectiveness of our strategy of maintaining cash as a strategic asset in
readiness for suitable acquisition opportunities. We are confident that this
purchase will be earnings enhancing, is beneficial for Tomkins and will add
value for its shareholders."
In connection with the execution of the Merger Agreement, the Board of
Directors of Stant Corporation has postponed its annual stockholders meeting,
which was originally scheduled for April 30, 1997.
All dollar translations at (pounds sterling)1 = $1.63
###
<PAGE>
[TOMKINS PLC LETTERHEAD]
FOR IMMEDIATE RELEASE
- ---------------------
TOMKINS PLC COMMENCES TENDER OFFER FOR STANT CORPORATION
- --------------------------------------------------------
Contact: Anthony Spiro
Tomkins PLC
011-44-181-871-4544
-or-
Brian J. Rafferty
Taylor Rafferty Associates
212-889-4350
London, April 11, 1997--Tomkins PLC (NYSE:TKS), today announced that it has
commenced a cash tender offer for all outstanding shares of common stock of
Stant Corporation (NASDAQ:STNT) at $21.50 per share.
The Offer is being made pursuant to the previously announced Merger Agreement
between Tomkins Corporation, a wholly owned subsidiary of Tomkins, and Stant.
The offer is conditioned upon, among other things, the tender of a majority of
the fully diluted shares.
Bessemer Capital Partners, L.P., the beneficial owner of approximately 56.9
percent of the outstanding Stant shares, being 50.1 percent of the fully
diluted shares, has agreed to tender such shares pursuant to the offer.
The offer and withdrawal rights are scheduled to expire at 12:00 midnight
(NYC time) on Thursday, May 8, 1997.
<PAGE>
EXECUTION COPY
==============================================================================
AGREEMENT AND PLAN OF MERGER
Dated as of April 9, 1997
Among
TOMKINS CORPORATION,
E&W ACQUISITION CORP.
And
STANT CORPORATION
=============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE I
The Offer
SECTION 1.01. The Offer.............................................................................. 2
SECTION 1.02. Company Actions........................................................................ 4
ARTICLE II
The Merger
SECTION 2.01. The Merger............................................................................. 6
SECTION 2.02. Closing................................................................................ 6
SECTION 2.03. Effective Time......................................................................... 6
SECTION 2.04. Effects of the Merger.................................................................. 6
SECTION 2.05. Certificate of Incorporation and By-laws............................................... 6
SECTION 2.06. Directors.............................................................................. 7
SECTION 2.07. Officers............................................................................... 7
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock................................................................ 7
SECTION 3.02. Exchange of Certificates............................................................... 9
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Company.......................................... 11
SECTION 4.02. Representations and Warranties of Parent and Sub...................................... 27
<PAGE>
3
Page
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business.................................................... 30
SECTION 5.02. No Solicitation........................................................ 33
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation of Proxy Statement................... 35
SECTION 6.02. Access to Information; Confidentiality................................. 36
SECTION 6.03. Best Efforts; Notification............................................. 37
SECTION 6.04. Stock Options.......................................................... 38
SECTION 6.05. Benefit Plans.......................................................... 39
SECTION 6.06. Indemnification........................................................ 39
SECTION 6.07. Directors.............................................................. 40
SECTION 6.08. Fees and Expenses...................................................... 41
SECTION 6.09. Public Announcements................................................... 41
SECTION 6.10. Transfer Taxes......................................................... 42
ARTICLE VII
Conditions Precedent
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination............................................................ 43
SECTION 8.02. Effect of Termination.................................................. 44
SECTION 8.03. Amendment.............................................................. 44
SECTION 8.04. Extension; Waiver...................................................... 44
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver.............. 44
<PAGE>
4
Page
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties............................... 45
SECTION 9.02. Notices..................................................................... 45
SECTION 9.03. Definitions................................................................. 46
SECTION 9.04. Interpretation.............................................................. 47
SECTION 9.05. Counterparts................................................................ 47
SECTION 9.06. Entire Agreement; No Third-Party Beneficiaries.............................. 47
SECTION 9.07. Governing Law............................................................... 47
SECTION 9.08. Assignment.................................................................. 48
SECTION 9.09. Enforcement................................................................. 48
Exhibit A Conditions of the Offer
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
dated as of April 9, 1997, among TOMKINS
CORPORATION, a Delaware corporation
("Parent"), E&W ACQUISITION CORP., a
Delaware corporation ("Sub") and a wholly
owned subsidiary of Parent, and STANT
CORPORATION, a Delaware corporation (the
"Company").
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the acquisition of the Company by
Parent on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition,
Parent proposes to cause Sub to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to purchase all
the issued and outstanding shares of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock"), at a price per share of Common Stock of
$21.50, net to the seller in cash, upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, concurrently with the execution and
delivery of this Agreement, Parent, Sub and Bessemer Capital Partners, L.P.
("BCP"), are entering into a stockholder agreement, and Parent, Sub and an
officer of the Company are entering into a stockholder agreement (collectively,
the "Stockholder Agreement" and, together with this Agreement, the "Operative
Agreements") pursuant to which BCP and such officer shall agree to take certain
actions to support the transactions contemplated by this Agreement;
WHEREAS the Board of Directors of the Company has
(a) determined that the Offer and the Merger (as defined below) are fair to and
in the best interests of the stockholders of the Company, (b) approved (i) the
acquisition of the Company by Parent on the terms and subject to the conditions
set forth in this Agreement and (ii) the transactions contemplated by the
Operative Agreements (collectively, the "Transactions"), (c) approved this
Agreement and (d) resolved to recommend acceptance of the Offer and adoption of
this Agreement by such stockholders;
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the merger of Sub into the Company
(the "Merger"), on the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of Common Stock not owned
directly or indirectly by Parent or the Company, except
<PAGE>
2
shares of Common Stock held by persons who object to the Merger and comply with
all the provisions of Delaware law concerning the right of holders of Common
Stock to dissent from the Merger and require appraisal of their shares of
Common Stock ("Dissenting Stockholders"), shall be converted into the right to
receive the per share consideration paid pursuant to the Offer; and
WHEREAS Parent, Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Offer and the Merger and also to prescribe various conditions to the
Offer and the Merger.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained in this
Agreement, the parties agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Subject to the
provisions of this Agreement, as promptly as practicable but in no event later
than five business days after the announcement of the execution of this
Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer. The
obligation of Sub to, and of Parent to cause Sub to, accept for payment, and
pay for, any shares of Common Stock tendered pursuant to the Offer shall be
subject to the conditions set forth in Exhibit A and to the other conditions of
this Agreement. Sub expressly reserves the right to modify the terms of the
Offer and to waive any condition of the Offer, except that, without the consent
of the Company, Sub shall not (i) reduce the number of shares of Common Stock
subject to the Offer, (ii) reduce the price per share of Common Stock to be
paid pursuant to the Offer, (iii) modify or add to the conditions set forth in
Exhibit A or otherwise amend the Offer in any manner materially adverse to the
Company's stockholders, (iv) except as provided in the next two sentences,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) waive or modify the Minimum Tender Condition (as defined in Exhibit A).
Notwithstanding the foregoing, Sub may, without the consent of the Company, (i)
extend the Offer for a period of not more than 10 business days beyond the
initial expiration date of the Offer (which initial expiration date shall be 20
business days following
<PAGE>
3
commencement of the Offer), if on the date of such extension less than 90% of
the outstanding shares of Common Stock have been validly tendered and not
properly withdrawn pursuant to the Offer, (ii) extend the Offer from time to
time if at the initial expiration date or any extension thereof the Minimum
Tender Condition or any of the other conditions to Sub's obligation to purchase
shares of Common Stock set forth in paragraphs (a), (b) and (e) of Exhibit A
shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (iii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer and (iv)
extend the Offer for any reason for a period of not more than 10 business days
beyond the latest expiration date that would otherwise be permitted under
clause (i), (ii) or (iii) of this sentence. In addition, Sub shall at the
request of the Company extend the Offer for five business days if at any
scheduled expiration date of the Offer any of the conditions to Sub's
obligation to purchase shares of Common Stock shall not be satisfied; provided,
however, that Sub shall not be required to extend the Offer beyond December 31,
1997. On the terms and subject to the conditions of the Offer and this
Agreement, Sub shall, and Parent shall cause Sub to, pay for all shares of
Common Stock validly tendered and not withdrawn pursuant to the Offer that Sub
becomes obligated to purchase pursuant to the Offer as soon as practicable
after the expiration of the Offer.
(b) On the date of commencement of the Offer,
Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule
14D-1 with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1
and the documents included therein pursuant to which the Offer shall be made,
together with any supplements or amendments thereto, the "Offer Documents").
The Offer Documents shall comply as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to information supplied by
the Company for inclusion in the
<PAGE>
4
Offer Documents. Each of Parent, Sub and the Company shall promptly correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect, and each of Parent and Sub shall take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as so amended
or supplemented to be filed with the SEC and to be disseminated to the
Company's stockholders, in each case as and to the extent required by
applicable Federal securities laws. Parent and Sub shall provide the Company
and its counsel in writing with any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
(c) Parent shall provide or cause to be provided
to Sub on a timely basis the funds necessary to purchase any shares of Common
Stock that Sub becomes obligated to purchase pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company
hereby approves of and consents to the Offer and represents that the Board of
Directors of the Company (the "Company Board"), at a meeting duly called and
held, has unanimously duly adopted resolutions (i) determining that the Offer,
the Merger and the other Transactions are fair to and in the best interests of
the stockholders of the Company, (ii) approving (A) the acquisition of the
Company by Parent on the terms and subject to the conditions set forth in this
Agreement and (B) the Offer, the Merger and the other Transactions, (iii)
approving this Agreement and (iv) recommending that the stockholders of the
Company accept the Offer, tender their shares of Common Stock pursuant to the
Offer and adopt this Agreement. The Company represents that the Company Board
has received the opinion of Morgan Stanley & Co. Incorporated ("Morgan
Stanley") that the proposed consideration to be received by the holders of
shares of Common Stock pursuant to the Offer and the Merger is fair to such
holders from a financial point of view, and a complete and correct signed copy
of such opinion has been delivered by the Company to Parent. The Company has
been advised by each of its directors and executive officers that each such
person intends to tender all shares of Common Stock owned by such person
pursuant to the Offer, except to the extent of any restrictions created by
Section 16(b) of the Exchange Act.
(b) On the date the Offer Documents are filed
with the SEC, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
<PAGE>
5
respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D-9") containing the recommendations described in Section 1.02(a)
and shall as promptly as practicable thereafter mail the Schedule 14D-9 to the
stockholders of the Company. The Schedule 14D-9 shall comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Sub for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub shall promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company shall take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. The Company shall provide Parent and its counsel in writing
with any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company
shall cause its transfer agent to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Common Stock as of
a recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Common Stock, and
shall furnish to Sub such information and assistance (including updated lists
of stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger
<PAGE>
6
and, if this Agreement shall be terminated, shall, upon request, promptly
deliver to the Company all copies of such information then in their possession.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance with
the Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and
into the Company at the Effective Time of the Merger (as hereinafter defined).
Following the Merger, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the DGCL. At the election of Parent, any direct or
indirect wholly owned subsidiary (as defined in Section 9.03) of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement in
order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger
(the "Closing") shall take place at 10:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (the "Closing
Date"), at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth
Avenue, New York, NY 10019, unless another date or place is agreed to in
writing by the parties hereto.
SECTION 2.03. Effective Time. On the Closing
Date, the parties shall file a certificate of merger or other appropriate
documents (in any such case, the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Delaware Secretary of State, or at such other time as Sub and the Company shall
agree and shall specify in the Certificate of Merger (the time the Merger
becomes effective being the "Effective Time of the Merger").
SECTION 2.04. Effects of the Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
<PAGE>
7
SECTION 2.05. Certificate of Incorporation and
By-laws. (a) The Restated Certificate of Incorporation of the Company, as in
effect immediately prior to the Effective Time of the Merger, shall be amended
as of the Effective Time of the Merger so that Article Fourth of such Restated
Certificate of Incorporation reads in its entirety as follows: "The total
number of shares of all classes of stock which the corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $0.01 per share."
and, as so amended, such Restated Certificate of Incorporation shall be the
Restated Certificate of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The By-laws of Sub as in effect at the
Effective Time of the Merger shall be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub at
the Effective Time of the Merger shall be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 2.07. Officers. The officers of the
Company at the Effective Time of the Merger shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the
Effective Time of the Merger, by virtue of the Merger and without any action on
the part of the holder of any shares of Common Stock or any shares of capital
stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding
share of the capital stock of Sub shall be converted into and
become one fully paid and nonassessable share of Common Stock, par
value $0.01 per share, of the Surviving Corporation.
<PAGE>
8
(b) Cancellation of Treasury Stock and Parent Owned
Stock. Each share of Common Stock that is owned by the Company or
by any subsidiary of the Company and each share of Common Stock
that is owned by Parent, Sub or any other subsidiary of Parent
shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Common Stock. Subject to Section
3.01(d), each issued and outstanding share of Common Stock (other
than shares to be canceled in accordance with Section 3.01(b))
shall be converted into the right to receive from the Surviving
Corporation in cash, without interest, the price per share of
Common Stock paid pursuant to the Offer (the "Merger
Consideration"). As of the Effective Time of the Merger, all such
shares of Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares of Common
Stock shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, any issued and
outstanding shares of Common Stock held by a Dissenting Stockholder
shall not be converted as described in Section 3.01(c) but, as of
the Effective Time of the Merger, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to
exist and shall become the right to receive such consideration as
may be determined to be due to such Dissenting Stockholder pursuant
to the laws of the State of Delaware; provided, however, that the
shares of Common Stock outstanding immediately prior to the
Effective Time of the Merger and held by a Dissenting Stockholder
who shall, after the Effective Time of the Merger, withdraw his
demand for appraisal or lose his right of appraisal, in either case
pursuant to the DGCL, shall be deemed to be converted as of the
Effective Time of the Merger, into the right to receive the Merger
Consideration. The Company shall give Parent (i) prompt notice of
any written demands for appraisal of shares of Common Stock
received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to any such demands. The
Company shall not, without the prior written consent of
<PAGE>
9
Parent, voluntarily make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands.
SECTION 3.02. Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company reasonably
acceptable to the Company to act as paying agent (the "Paying Agent") for the
payment of the Merger Consideration upon surrender of certificates representing
Common Stock.
(b) Parent To Provide Funds. Parent shall take
all steps necessary to enable and cause the Surviving Corporation to provide to
the Paying Agent on a timely basis, as and when needed after the Effective Time
of the Merger, funds necessary to pay for the shares of Common Stock pursuant
to Section 3.01, it being understood that any and all interest earned on funds
made available to the Paying Agent in accordance with this Agreement shall be
turned over to Parent.
(c) Exchange Procedure. As soon as reasonably
practicable after the Effective Time of the Merger, the Paying Agent shall mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time of the Merger represented outstanding shares of
Common Stock (the "Certificates") whose shares were converted into the right to
receive the Merger Consideration pursuant to Section 3.01 (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancelation to the Paying
Agent or to such other agent or agents as may be appointed by the Parent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of
cash into which the shares of Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 3.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Common Stock which is not registered in the transfer
records of the Company, payment may be made to a person other than the person
in whose name the Certificate so surrendered is registered, if such Certificate
shall be
<PAGE>
10
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 3.02, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Common
Stock theretofore represented by such Certificate shall have been converted
pursuant to Section 3.01. No interest shall be paid or accrue on the cash
payable upon the surrender of any Certificate.
(d) No Further Ownership Rights in Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms
of this Article III shall be deemed to have been paid in full satisfaction of
all rights pertaining to the shares of Common Stock theretofore represented by
such Certificates, and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the shares of Common
Stock which were outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article III.
(e) No Liability. None of Parent, Sub, the
Company or the Paying Agent shall be liable to any person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates shall not have been
surrendered prior to seven years after the Effective Time of the Merger (or
immediately prior to such earlier date on which any payment pursuant to this
Article III would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.01(d))), the payment in respect of
such Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
<PAGE>
11
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of
the Company. The Company represents and warrants to Parent
and Sub as follows:
(a) Standing and Corporate Power. Except as set forth
in the letter (the "Company Disclosure Letter") from the Company to
Parent dated the date of this Agreement, each of the Company and
each of its subsidiaries is a corporation validly existing and in
good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted. Each of the Company
and each of its subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a
material adverse effect on the Company and its subsidiaries taken
as a whole. The Company has delivered to Parent complete and
correct copies of its Restated Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws of its
Significant Subsidiaries, in each case as amended to the date of
this Agreement. For purposes of this Agreement, a "Significant
Subsidiary" means any subsidiary of the Company that constitutes a
significant subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
(b) Subsidiaries. The Company Disclosure Letter lists
each subsidiary of the Company. All the outstanding shares of
capital stock of, or other equity interests in, each such
subsidiary have been validly issued and are fully paid and
nonassessable and, except as set forth in the Company Disclosure
Letter, are owned by the Company, by another wholly owned
subsidiary of the Company or by the Company and another such wholly
owned subsidiary, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). Except for the capital stock of
its subsidiaries and except for the ownership interests set forth
in the Company Disclosure Letter,
<PAGE>
12
the Company does not own, directly or indirectly, any capital stock
or other ownership interest in any corporation, partnership, joint
venture or other entity.
(c) Capital Structure. The authorized capital stock of
the Company consists of 21,000,000 shares of Common Stock and
820,000 shares of preferred stock, par value $0.01 per share, of
which 53,572 shares are Class A Preferred Stock, par value $0.01
per share, 21,786 shares are Class B Preferred Stock, par value
$0.01 per share, 100,000 shares are Class C Preferred Stock, par
value $0.01 per share, and 644,642 shares are of such series as the
Company Board may determine from time to time. As of the date of
this Agreement, (i) 16,226,815 shares of Common Stock and no shares
of preferred stock were issued and outstanding, (ii) no shares of
Common Stock were held by the Company in its treasury, (iii)
1,217,481 shares of Common Stock were reserved for issuance
pursuant to the outstanding employee stock options ("Plan Options")
granted pursuant to the Stock Plans (as defined in Section 6.04),
of which (x) Plan Options covering 700,863 shares of Common Stock
are currently exercisable and (y) Plan Options covering 516,618
shares of Common Stock are currently not exercisable, of which Plan
Options covering 485,400 shares of Common Stock have been granted
subject to obtaining approval of the Company's stockholders and
(absent such approval, which is subject to the last sentence of
Section 5.01(b)) will not become exercisable as a result of the
Transactions, and (iv) 1,457,602 shares of Common Stock were
reserved for issuance pursuant to other options ("Other Options"
and, together with the Plan Options, the "Stock Options") granted
to employees and former employees of the Company. Except as set
forth above, as of the date of this Agreement, no shares of capital
stock or other voting securities of the Company were issued,
reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all shares which may be
issued pursuant to the Stock Plans or pursuant to the agreements
representing outstanding Other Options described in clause (iv)
above shall be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There
are not any bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any
matters on which
<PAGE>
13
stockholders of the Company may vote. Except as set forth above, as
of the date of this Agreement, there are not any securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or
any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company
or of any of its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there
are not any outstanding contractual obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its
subsidiaries or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any
subsidiary or any other entity.
(d) Authority; Noncontravention. The Company has the
requisite corporate power and authority to enter into this
Agreement and, subject to adoption of this Agreement by the holders
of a majority of the outstanding shares of Common Stock, to
consummate the Transactions. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
Transactions have been duly authorized by all necessary corporate
action on the part of the Company, subject to adoption of this
Agreement by the holders of a majority of the outstanding shares of
Common Stock. This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms. The execution and delivery of the Operative Agreements do
not, and the consummation of the Transactions and compliance with
the provisions of the Operative Agreements will not, conflict with,
or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of
its subsidiaries under, (i) the Restated Certificate of
Incorporation or By-laws of the Company or the
<PAGE>
14
comparable charter or organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Company or any
of its subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the
Company or any of its subsidiaries or their respective properties
or assets, other than, in the case of clause (ii), any such
conflicts, violations, defaults, rights or Liens that individually
or in the aggregate would not (x) have a material adverse effect on
the Company and its subsidiaries taken as a whole, (y) impair the
ability of the Company to perform its obligations under this
Agreement or (z) prevent the consummation of any of the
Transactions (a "Company Material Adverse Effect"). No consent,
approval, order or authorization of, or registration, declaration
or filing with, any Federal, state or local government or any
court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution
and delivery of this Agreement by the Company or the consummation
by the Company of the Transactions, except for (i) the filing of a
premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), (ii) the filing with the SEC of (x) the Schedule 14D-9, (y)
a proxy or information statement relating to the adoption by the
Company's stockholders of this Agreement, if such adoption is
required by law (as amended or supplemented from time to time, the
"Proxy Statement"), and (z) such reports under Section 13(a) of the
Exchange Act as may be required in connection with the Operative
Agreements and the Transactions, (iii) the filing of the
Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business and (iv) such
other consents, approvals, orders, authorizations, registrations,
declarations and filings (x) as may be required under the laws of
any foreign country in which the Company or any of its subsidiaries
conducts any business or owns any property or assets, the failure
to obtain or make would not have a Company Material
<PAGE>
15
Adverse Effect, or (y) as are set forth in the Company Disclosure
Letter.
(e) SEC Documents; Undisclosed Liabilities. The
Company has filed all required reports, schedules,
forms, statements and other documents with the SEC
since January 1, 1995 (the "SEC Documents"). As of
their respective dates, the SEC Documents complied in
all material respects with the requirements of the
Securities Act of 1933 (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Except to the
extent that information contained in any SEC Document
has been revised or superseded by a later filed SEC
Document, none of the SEC Documents contains any untrue
statement of a material fact or omits to state any
material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading. The financial statements of the
Company included in the SEC Documents comply as to form
in all material respects with applicable accounting
requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting
principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods
involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial
position of the Company and its consolidated
subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed SEC
Documents (as defined in Section 4.01(g)) or in the
Company Disclosure Letter, neither the Company nor any
of its subsidiaries has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or
otherwise), other than for taxes (as defined in
Section 4.01(k)), required by generally accepted
accounting principles to be set forth on a consolidated
balance sheet of the Company and its consolidated
<PAGE>
16
subsidiaries or in the notes thereto, except for liabilities and
obligations incurred in the ordinary course of business consistent
with past practice since the date of the most recent consolidated
balance sheet included in the Filed SEC Documents which,
individually or in the aggregate, could not reasonably be expected
to have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents, the Schedule
14D-9, the information statement to be filed by the Company in
connection with the Offer pursuant to Rule 14f-1 promulgated under
the Exchange Act (the "Information Statement") or the Proxy
Statement will, in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times the
Offer Documents, the Schedule 14D-9 and the Information Statement
are filed with the SEC or first published, sent or given to the
Company's stockholders, or, in the case of the Proxy Statement, at
the time the Proxy Statement is first mailed to the Company's
stockholders or at the time of the meeting of the Company's
stockholders held to vote on adoption of this Agreement, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Schedule 14D-9, the
Information Statement and the Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on
information supplied by Parent or Sub for inclusion or
incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior
to the date of this Agreement (the "Filed SEC Documents") or as set
forth in the Company Disclosure Letter, from December 31, 1996, to
the date of this Agreement, the Company has conducted its business
only in the ordinary course, and there has not been (i) any
material adverse change in the Company and its subsidiaries taken
as a whole, (ii) except for the regular quarterly dividend paid on
March 31, 1997, to
<PAGE>
17
holders of record on March 14, 1997, any declaration, setting aside
or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any of the Company's capital
stock, (iii) any split, combination or reclassification of any of
its capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv) (A) any granting
by the Company or any of its subsidiaries to any executive officer
of the Company or any of its subsidiaries of any increase in
compensation, except as was required under employment agreements in
effect as of the date of the most recent audited financial
statements included in the Filed SEC Documents, (B) any granting by
the Company or any of its subsidiaries to any such executive
officer of any increase in severance or termination pay, except as
was required under employment, severance or termination agreements
in effect as of the date of the most recent audited financial
statements included in the Filed SEC Documents or (C) any entry by
the Company or any of its subsidiaries into any employment,
severance or termination agreement with any such executive officer,
(v) any damage, destruction or loss, whether or not covered by
insurance, that has or could have a material adverse effect on the
Company and its subsidiaries taken as a whole, (vi) any change in
accounting methods, principles or practices by the Company
materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in generally accepted
accounting principles or (vii) any action which would have been
prohibited without Parent's approval under Section 5.01(a)(vi) if
taken between the date of this Agreement and the Effective Time of
the Merger.
(h) Litigation. Except as disclosed in the Filed SEC
Documents or in the Company Disclosure Letter, as of the date of
this Agreement (i) there is no single or series of related suits,
actions or proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any
unsatisfied judgment against the Company or any of its
subsidiaries, relating to or involving an amount greater than
$100,000 and (ii) there is not any judgment, decree, injunction or
similar order of any Governmental Entity or arbitrator outstanding
against the Company or any of its subsidiaries or other single or
series of related suits, actions or proceedings
<PAGE>
18
pending or, to the knowledge of the Company, threatened that,
individually or in the aggregate, could reasonably be expected to
have a Company Material Adverse Effect.
(i) Absence of Changes in Benefit Plans. Except as
disclosed in the Filed SEC Documents or as set forth in the Company
Disclosure Letter, from December 31, 1996, to the date of this
Agreement, there has not been any adoption or amendment in any
material respect by the Company or any of its subsidiaries of any
collective bargaining agreement or any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former
employee, officer or director of the Company or any of its
subsidiaries (collectively, "Benefit Plans"). Except as disclosed
in the Filed SEC Documents or as set forth in the Company
Disclosure Letter, there are no employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings between the Company or any of its subsidiaries and
any current or former employee, officer or director of the Company
or any of its subsidiaries.
(j) ERISA Compliance. (i) The Company Disclosure Letter
contains a list of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (sometimes referred to herein as
"Pension Plans"), "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA) and all other Benefit Plans maintained, or
contributed to, by the Company or any of its subsidiaries for the
benefit of any current or former employees, officers or directors
of the Company or any of its subsidiaries. The Company has made
available to Parent true, complete and correct copies of (A) each
Benefit Plan (or, in the case of any unwritten Benefit Plans,
descriptions thereof), (B) the most recent annual report on Form
5500 filed with the Internal Revenue Service with respect to each
Benefit Plan (if any such report was required), (C) the most recent
summary plan description for each Benefit Plan for which such
summary plan description is required and (D) each trust agreement
and group annuity contract relating to any Benefit Plan.
<PAGE>
19
(ii) Except as disclosed in the Company Disclosure
Letter, all Pension Plans have been the subject of determination
letters from the Internal Revenue Service to the effect that such
Pension Plans are qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"), and no such
determination letter has been revoked nor, to the knowledge of the
Company, has revocation been threatened, nor has any such Pension
Plan been amended since the date of its most recent determination
letter or application therefor in any respect that would adversely
affect its qualification or materially increase its costs.
(iii) Each Benefit Plan has been administered in
compliance with its terms and applicable provisions of ERISA and
the Code except for any instances of non-compliance that,
individually or in the aggregate, are not reasonably expected to
have a Company Material Adverse Effect. No conditions exist in
connection with any Benefit Plan (other than claims for benefits or
contributions in the ordinary course) that could give rise to
liability under ERISA or the Code that would reasonably be expected
to have a Company Material Adverse Effect. None of the Pension
Plans has an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA or Section 412 of the Code),
whether or not waived. Neither any of such Benefit Plans nor any of
such trusts has been terminated, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) with
respect thereto, during the last five years which could give rise
to liability that would reasonably be expected to have a Company
Material Adverse Effect. Neither the Company, any of its
subsidiaries nor any entity required to be aggregated with the
Company under Section 414 of the Code has incurred any material
liability under Title IV of ERISA (other than insurance premiums)
that has not been satisfied as of the date hereof.
(iv) With respect to any Benefit Plan that is an
employee welfare benefit plan, except as disclosed in the Company
Disclosure Letter, each such Benefit Plan (including any such Plan
covering retirees or other former employees) may be amended or
terminated without material liability to the Company or any of its
subsidiaries on or at any time after the consummation of the Offer.
<PAGE>
20
(k) Taxes. Each of the Company and each of its
subsidiaries has filed all Federal income tax returns and all other
tax returns and reports required to be filed by it, except to the
extent that a failure to file, in the individual or in the
aggregate, would not result in a Company Material Adverse Effect.
All such returns are complete and correct in all respects, other
than any inaccuracy or incompleteness that, in the individual or in
the aggregate, would not result in a Company Material Adverse
Effect. The Company and each of its subsidiaries has paid (or the
Company has paid on its subsidiaries' behalf) all taxes shown to be
due on such returns and reports. The Company and each of its
subsidiaries has paid (or the Company has paid on its subsidiaries'
behalf) all taxes for which no return was required to be filed,
except to the extent that a failure to pay, in the individual or in
the aggregate, would not result in a Company Material Adverse
Effect. All taxes not previously paid do not exceed the reserve in
the most recent financial statements contained in the Filed SEC
Documents for taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof through the date of such
financial statements by an amount that would result in a Company
Material Adverse Effect. All liabilities for taxes incurred by the
Company or any of its subsidiaries since the date of the most
recent consolidated balance sheet included in the Filed SEC
Documents have been incurred in the ordinary course of business
consistent with past practice, other than any liabilities for taxes
that, individually or in the aggregate, would not result in a
Company Material Adverse Effect. No deficiencies for any taxes have
been proposed, asserted or assessed against the Company or any of
its subsidiaries in writing that would have a Company Material
Adverse Effect, and no requests for waivers of the time to assess
any such taxes are pending. The Federal income tax returns of the
Company and each of its subsidiaries consolidated in such returns
have been examined by and settled with the United States Internal
Revenue Service for all years through 1992. As used in this
Agreement, "taxes" shall include all Federal, state, local and
foreign income, franchise, property, sales, excise and other taxes,
tariffs or governmental charges of any nature whatsoever.
(l) No Excess Parachute Payments. Other than
payments that may be made to the persons previously
discussed with counsel for Parent, any amount that
could be received (whether in cash or property or the
<PAGE>
21
vesting of property) as a result of any of the Transactions by any
employee, officer or director of the Company or any of its
affiliates who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation
arrangement or Benefit Plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Code).
(m) Voting Requirements. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock
adopting this Agreement is the only vote of the holders of any
class or series of the Company's capital stock necessary to approve
this Agreement and the Transactions.
(n) State Takeover Statutes. Section 203 of the DGCL is
inapplicable to the Offer, the Merger, this Agreement, the
Stockholder Agreement and the Transactions, and the Company has
taken all necessary action in accordance with the provisions of
Section 203 to effect a valid election not to be governed by
Section 203. To the best of the Company's knowledge, no other state
takeover statute or similar statute or regulation applies or
purports to apply to the Offer, the Merger, this Agreement or any
of the Transactions.
(o) Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other
person, other than Morgan Stanley, the fees and
expenses of which shall be paid by the Company, is
entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with
the Transactions based upon arrangements made by or on
behalf of the Company. The Company's current estimate
of fees and expenses incurred and to be incurred by the
Company in connection with this Agreement and the
Transactions (including the fees of the Company's legal
counsel) are set forth in the Company Disclosure
Letter. A true and complete copy of the engagement
letter between Company and Morgan Stanley has been
provided to Parent.
(p) Opinion of Financial Advisor. The Company
has received the opinion of Morgan Stanley, dated the
date of this Agreement, to the effect that, as of such
date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair to the
<PAGE>
22
Company's stockholders from a financial point of view, and a signed
copy of such opinion has been delivered to Parent.
(q) Intellectual Property. Except as set forth
in the Company Disclosure Letter:
(i) The Company and its subsidiaries own and have the
right to use all copyrights, trade names, trademarks, service
marks, trade secrets, know-how, designs, software, patents,
licenses and other intellectual property rights (collectively, the
"Intellectual Property") that are necessary to provide, produce,
market and sell the products currently provided, produced, marketed
and sold by the Company and its subsidiaries and to conduct the
business of the Company and its subsidiaries as presently conducted
free and clear of all Liens, other than those rights the absence of
which individually or in the aggregate would not have a Company
Material Adverse Effect. The Company Disclosure Letter contains an
accurate and complete list setting forth all material registered
patents and trademarks and applications therefor that are owned by
the Company or any of its subsidiaries. There are no material trade
names, trademarks or service marks owned by the Company or any of
its subsidiaries that are not registered or the subject of
applications therefor.
(ii) As of the date of this Agreement, there is no
suit, action or proceeding pending or, to the Company's knowledge,
threatened against or affecting the Company or any of its
subsidiaries, which challenges the legality, validity,
enforceability of, or the Company's or any of its subsidiaries' use
or ownership of any of the Intellectual Property owned by the
Company or any of its subsidiaries or, to the Company's knowledge,
licensed to the Company or to any of its subsidiaries, other than
any such suit, action or proceeding that individually or in the
aggregate would not have a Company Material Adverse Effect.
(iii) The conduct of the Company's and its
subsidiaries' business, the Intellectual Property owned or used by
the Company and its subsidiaries, and the products or services
produced, sold or licensed by the Company and its subsidiaries do
not infringe, violate or misappropriate any Intellectual Property
right or any other proprietary right of any person or give rise to
any obligations to any person as a result of co-
<PAGE>
23
authorship, co-inventorship, or any express or implied contract
for any use or transfer, other than any such infringement,
violation or appropriation that individually or in the aggregate
would not have a Company Material Adverse Effect.
(r) Compliance with Laws. The Company and its
subsidiaries are in compliance with, and have not violated any
applicable law, rule or regulation of any United States federal,
state, local, or foreign government or agency thereof (except for
Environmental Laws (as defined in Section 4.01(s), which are
addressed by the representations and warranties in Section 4.01(s))
which materially affects the business, properties or assets of the
Company and its subsidiaries, and no notice, charge, claim, action
or assertion has been received by the Company or any of its
subsidiaries or has been filed, commenced or, to the Company's
knowledge, threatened against the Company or any of its
subsidiaries alleging any such violation, except for any matter
which does not have a Company Material Adverse Effect. All
licenses, permits and authorizations which are required under such
laws, rules and regulations are in full force and effect, no appeal
nor any other action is pending to revoke any such permit, license
or authorization, and the Company and its subsidiaries are in full
compliance with all terms and conditions of all such permits,
licenses and authorizations, except where the failure to have all
such permits, licenses and other authorizations, the failure to be
in full force and effect and in compliance therewith or the
existence of any such appeal or other action would not have a
Company Material Adverse Effect.
(s) Environmental Protection. Except as
disclosed in the Filed SEC Documents or as set forth in
the Company Disclosure Letter:
(i) The Company and its subsidiaries have obtained all
permits, licenses and other authorizations which are required under
the Environmental Laws (as defined below) for the ownership, use
and operation of each property owned, operated or leased by the
Company and its subsidiaries (the "Property"), all such permits,
licenses and authorizations are in full force and effect, no appeal
nor any other action is pending to revoke any such permit, license
or authorization, and the Company and its subsidiaries are in full
compliance with all terms and conditions of all such
<PAGE>
24
permits, licenses and authorizations, except where the failure to
have all such permits, licenses and other authorizations, the
failure to be in full force and effect and in compliance therewith
or the existence of any such appeal or other action would not have
a Company Material Adverse Effect.
(ii) The Company and its subsidiaries are in compliance
in all respects with all Environmental Laws, except where the
failure to be in compliance therewith is not reasonably expected to
individually or in any series of related occurrences result in
liability to the Company and its subsidiaries involving an amount
greater than $100,000; provided, however, that all instances of
noncompliance, in the aggregate, do not and will not have a Company
Material Adverse Effect.
(iii) There is no suit, action, notice, demand, claim
or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries nor, to
the knowledge of the Company, is there any investigation by any
Governmental Entity under way, in any case relating in any way to
alleged noncompliance by the Company or any of its subsidiaries
with, or liability of the Company or any of its subsidiaries under,
Environmental Laws.
(iv) The Company and its subsidiaries have not, and to
the Company's knowledge, no other person has, Released (as defined
below), placed, stored, buried or dumped any material quantities of
Hazardous Substances (as defined below) on, beneath or adjacent to
the Property or, to the knowledge of the Company, any property
formerly owned, operated or leased by the Company or its
subsidiaries, except for the presence of such Hazardous Substances
as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(v) Neither the Company nor any of its subsidiaries has
entered into any agreement that requires them to pay to, reimburse,
guarantee, pledge, defend, indemnify or hold harmless any person
for or against any liabilities or costs in connection with any
pending or threatened suit, action, notice, proceeding or
investigation relating to alleged noncompliance with, or liability
under, Environmental Laws.
(vi) The Company and its subsidiaries have not
received any written notice or written order from any
<PAGE>
25
Governmental Entity or private entity advising them that they are
responsible for or potentially responsible for Cleanup or paying
for the cost of Cleanup of any Hazardous Substances and neither the
Company nor any subsidiary has entered into any agreements
concerning such Cleanup, nor is the Company aware of any material
facts which the Company has specific grounds to believe will give
rise to such notice, order or agreement.
(vii) As used in this Agreement: "Cleanup" shall mean
all actions required to (a) cleanup, remove, treat or remediate
Hazardous Substances in the indoor or outdoor environment, (b)
prevent the Release of Hazardous Substances so that they do not
migrate, endanger or threaten to endanger public health or welfare
or the indoor or outdoor environment, (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care,
(d) respond to any government requests for information or documents
in any way relating to cleanup, removal, treatment or remediation
or potential cleanup, removal, treatment or remediation of
Hazardous Substances in the indoor or outdoor environment or (e)
any administrative, judicial, or other proceedings related to the
above. "Environmental Laws" shall mean all applicable foreign,
federal, state and local laws, regulations, rules and ordinances
relating to pollution or protection of the environment or human
health and safety, including laws relating to Releases or
threatened Releases of Hazardous Substances into the indoor or
outdoor environment (including ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of Hazardous
Substances and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Substances, and all laws relating to
endangered or threatened species of fish, wildlife and plants and
the management or use of natural resources; "Hazardous Substance"
means: (a) any petrochemical or petroleum products, radioactive
materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated
biphenyls and radon gas; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous
<PAGE>
26
materials", "restricted hazardous materials", "extremely hazardous
substances", "toxic substances", "contaminants" or "pollutants" or
words of similar meaning and regulatory effect; or (c) any other
chemical, material or substance exposure to which is prohibited,
limited or regulated by any Environmental Law; and "Release" shall
mean any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or
migration into the indoor or outdoor environment (including ambient
air, surface water, groundwater and surface or subsurface strata)
or into or out of any property, including the movement of Hazardous
Substances through or in the air, soil, surface water, groundwater
or property.
(t) Labor Relations and Employment. Except as disclosed
in the Filed SEC Documents or set forth in the Company Disclosure
Letter, as of the date of this Agreement: (i) there is no labor
strike, dispute, slowdown, stoppage or lockout actually pending, or
to the knowledge of the Company, threatened against or affecting
the business of the Company and its subsidiaries and during the
past two years there has not been any such action that was material
to the Company; (ii) to the knowledge of the Company, no union
claims to represent the employees of the Company and its
subsidiaries; (iii) neither the Company nor any subsidiary of the
Company is a party to or bound by any collective bargaining or
similar agreement with any labor organization, and no work rules or
practices agreed to with any labor organization or employee
association are applicable to employees of the Company or any
subsidiary; (iv) to the knowledge of the Company, none of the
employees of the Company or any subsidiary is represented by any
labor organization; (v) there is no unfair labor practice charge or
complaint against the Company or any subsidiary pending or, to the
knowledge of the Company, threatened before the National Labor
Relations Board or any similar state or foreign agency which, if
adversely determined, would have a Company Material Adverse Effect;
(vi) there is no grievance arising out of any collective bargaining
agreement or other grievance procedure which, if adversely
determined, would have a Company Material Adverse Effect; (vii) to
the knowledge of the Company, no charges with respect to or
relating to the Company or any subsidiary are pending before the
Equal Employment Opportunity Commission or any other agency
responsible for the prevention of unlawful employment
<PAGE>
27
practices which, if adversely determined, would have a Company
Material Adverse Effect; and (viii) the Company has not received
notice of the intent of any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws to
conduct an investigation with respect to or relating to the Company
or any subsidiary and, to the knowledge of the Company, no such
investigation is in progress.
(u) Transactions with Affiliates. As of the date
hereof, except as disclosed in the Filed SEC Documents or in the
Company Disclosure Letter, (i) there are no outstanding amounts
payable to or receivable from, or advances by the Company or any of
its subsidiaries to, and neither the Company nor any subsidiary is
otherwise a creditor of or debtor to, BCP or any of its affiliates
or any officer, director or employee of the Company and (ii)
neither the Company nor any subsidiary is a party to any
transaction, agreement, arrangement or understanding with BCP or
any of its affiliates or any officer, director or employee of the
Company, other than, with respect to clauses (i) and (ii), items
arising out of the ordinary course of employment with the Company.
(v) Contracts. Each material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument
or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets
may be bound (the "Material Contracts") is valid and binding and in
full force and effect, except where failure to be valid and binding
and in full force and effect would not have a Company Material
Adverse Effect, and there are no defaults by the Company or any of
its subsidiaries or, to the Company's knowledge, any other party
thereto, thereunder, except those defaults that would not have a
Company Material Adverse Effect.
(w) Customers. Except for customary competitive factors
and the possible impact of the Transactions, as of the date of this
Agreement the Company does not know of any reason why any of its
top ten customers for 1996 may in the immediate future materially
reduce its purchase of products from the Company and its
subsidiaries.
(x) Product Liability. (1) Except as set forth
in the Company Disclosure Letter, there are no known
defects in design or methods of construction or
<PAGE>
28
manufacture of Products (as defined below) which would adversely
affect performance or create an unusual risk of injury to persons
or property or which would require replacement, field fix,
retrofit, modification or recall and, to the Company's knowledge,
no facts or conditions exist which could reasonably be expected to
result in such a recall requirement. The Products have been
designed, manufactured and labeled so as to meet and comply in all
material respects with all applicable governmental standards and
specifications. As used in this Agreement, the term "Products"
means any and all products distributed or sold by the Company and
its subsidiaries, or by any predecessor of the Company and its
subsidiaries.
(2) Except as set forth in the Company Disclosure
Letter (A) there is no suit, action or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any
of its subsidiaries concerning any Product which is alleged to have
been manufactured, shipped, sold, marketed, distributed, processed
or merchandised by the Company or any of its subsidiaries and
alleged to have a defect or impurity of any kind, in manufacture,
processing, design or otherwise, including any failure to warn of
the defect or impurity, nor to the knowledge of the Company is
there any valid basis for any such suit, action or proceeding,
specifically relating to any Product that could, individually or in
the aggregate, have a Company Material Adverse Effect and (B) there
has not been any product recall or post-sale warning by the Company
or any of its subsidiaries or any of their customers since December
31, 1993 concerning any Product that was manufactured, shipped,
sold, marketed, distributed, processed or merchandised by the
Company or any of its subsidiaries.
SECTION 4.02. Representations and Warranties of
Parent and Sub. Parent and Sub jointly and severally
represent and warrant to the Company as follows:
(a) Standing and Corporate Power. Each of Parent and
Sub is a corporation validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its
business as now being conducted.
(b) Authority; Noncontravention. Parent and Sub
have all the requisite corporate power and authority to
<PAGE>
29
enter into this Agreement and to consummate the Transactions. The
execution and delivery of this Agreement and the consummation of
the Transactions have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has
been duly executed and delivered by Parent and Sub and constitutes
a valid and binding obligation of such party, enforceable against
such party in accordance with its terms. The execution and delivery
of the Operative Agreements do not, and the consummation of the
Transactions and compliance with the provisions of the Operative
Agreements will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or
acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the
properties or assets of Parent or any of its subsidiaries under,
(i) the certificate of incorporation or by-laws of Parent or Sub or
the comparable charter or organizational documents of any other
subsidiary of Parent, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Parent or
Sub or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent, Sub or any
other subsidiary of Parent or their respective properties or
assets, other than, in the case of clause (ii), any such conflicts,
violations, defaults, rights or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Parent
and its subsidiaries taken as a whole, (y) impair the ability of
Parent and Sub to perform their respective obligations under this
Agreement or (z) prevent the consummation of any of the
Transactions. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
is required by or with respect to Parent, Sub or any other
subsidiary of Parent in connection with the execution and delivery
of this Agreement or the consummation by Parent or Sub, as the case
may be, of any of the Transactions, except for (i) the filing of a
premerger notification and report form under the HSR Act, (ii) the
filing with the SEC of the Offer Documents and such reports under
Sections 13 and 16(a) of the Exchange Act as may be required in
connection with the Operative Agreements and the
<PAGE>
30
Transactions, (iii) the filing of the Certificate of Merger with
the Delaware Secretary of State and appropriate documents with the
relevant authorities of other states in which the Company is
qualified to do business and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as
may be required under (x) the laws of any foreign country in which
the Company or any of its subsidiaries conducts any business or
owns any property or assets or (y) the "takeover" or "blue sky"
laws of various states.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Sub for inclusion or
incorporation by reference in the Offer Documents, the Schedule
14D-9, the Information Statement or the Proxy Statement will, in
the case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times the Offer Documents,
the Schedule 14D-9 and the Information Statement are filed with the
SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the date
the Proxy Statement is first mailed to the Company's stockholders
or at the time of the meeting of the Company's stockholders held to
vote on approval and adoption of this Agreement, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
are made, not misleading. The Offer Documents will comply as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder, except
that no representation or warranty is made by Parent or Sub with
respect to statements made or incorporated by reference therein
based on information supplied by the Company for inclusion or
incorporation by reference therein.
(d) Brokers. No broker, investment banker, financial
advisor or other person, other than Merlis Automotive
International, Inc., the fees and expenses of which shall be paid
by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent
or Sub.
<PAGE>
31
(e) Financing. Parent and Sub have funds available
sufficient to consummate the Offer and the Merger on the terms
contemplated by the Operative Agreements, and, at the expiration of
the Offer and the Effective Time of the Merger, Parent and Sub
shall have available all of the funds necessary for the acquisition
of all shares of Common Stock pursuant to the Offer and the Merger,
as the case may be, and to perform their respective obligations
under this Agreement.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Ordinary
Course. During the period from the date of this Agreement to the earlier of the
Effective Time of the Merger and the appointment or election of Sub's designees
to the Company Board pursuant to Section 6.07 (such earlier time, the "Control
Time"), the Company shall, and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time of the Merger. Without limiting the
generality of the foregoing, except as contemplated by this Agreement or
otherwise approved in writing by Parent, during the period from the date of
this Agreement to the Control Time, the Company shall not, and shall not permit
any of its subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital
stock, other than dividends and distributions by any direct or
indirect wholly owned subsidiary of the Company to its parent, (B)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its subsidiaries or any other securities
thereof
<PAGE>
32
or any rights, warrants or options to acquire any such shares or
other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber
any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible
securities, other than the issuance of Common Stock upon the
exercise of Stock Options outstanding on the date of this Agreement
in accordance with their present terms;
(iii) amend its certificate of incorporation, by-
laws or other comparable charter or organizational
documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business
organization or division thereof or (B) any assets that are
material, individually or in the aggregate, to the Company and its
subsidiaries taken as a whole, except purchases of inventory in the
ordinary course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets, except sales of inventory in the ordinary
course of business consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell
any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic
effect of any of the foregoing, except for short-term borrowings
incurred in the ordinary course of business consistent with past
practice and pursuant to existing agreements, or (B) make any
loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect
wholly owned subsidiary of the Company;
<PAGE>
33
(vii) make or agree to make any new capital expenditure
or expenditures which, individually, is in excess of $30,000 or, in
the aggregate, are in excess of $250,000;
(viii) (A) grant to any officer of the Company or any
of its subsidiaries any increase in compensation, except as was
required under employment agreements in effect as of December 31,
1996, (B) grant to any officer of the Company or any of its
subsidiaries any increase in severance or termination pay, except
as was required under employment, severance or termination
agreements in effect as of December 31, 1996, (C) enter into any
employment, severance or termination agreement with any officer of
the Company or any of its subsidiaries or (D) amend any Benefit
Plan in any respect;
(ix) make any change in accounting methods, principles
or practices materially affecting the Company's assets, liabilities
or business, except insofar as may have been required by a change
in generally accepted accounting principles;
(x) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their
terms;
(xi) except in the ordinary course of business, modify,
amend or terminate any Material Contract or waive or release or
assign any material rights or claims;
(xii) make any material tax election or settle or
compromise any material income tax liability; or
(xiii) authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Other Actions. The Company shall not, and
shall not permit any of its subsidiaries to, take any action that would, or
that could reasonably be expected to, result in (i) any of the representations
and warranties of the Company set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified
<PAGE>
34
becoming untrue in any material respect or (iii) except as otherwise permitted
by Section 5.02, any of the conditions to the Offer set forth in Exhibit A, or
any of the conditions to the Merger set forth in Article VII, not being
satisfied. The Company shall take appropriate action to postpone the annual
meeting of stockholders of the Company originally scheduled to be held on April
30, 1997 until termination of this Agreement, and until such time the Company
shall take no further action with respect to the matters contemplated to be
considered by the stockholders at such meeting.
(c) Advice of Changes. The Company shall promptly
advise Parent orally and in writing of any change or event having, or which,
insofar as can reasonably be foreseen, would have, a material adverse effect
on the Company and its subsidiaries taken as a whole.
SECTION 5.02. No Solicitation. (a) The Company
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of, the Company or any of
its subsidiaries to, (i) solicit, initiate or encourage the submission of, any
takeover proposal (as defined below), (ii) except as provided in Section
5.02(b), enter into any agreement with respect to any takeover proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to
any person any non-public information with respect to the Company, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal;
provided, however, that prior to the acceptance for payment of shares of Common
Stock pursuant to the Offer, to the extent required by the fiduciary
obligations of the Company Board, as determined in good faith by a majority of
the members thereof based on the advice of outside counsel, the Company may, in
response to an unsolicited bona fide takeover proposal from a person that the
Company Board reasonably believes has the financial ability to make a superior
proposal (as defined in Section 5.02(b)), subject to compliance with Section
5.02(c), furnish non-public information with respect to the Company to such
person pursuant to a customary confidentiality agreement and participate in
discussions or negotiations (including the solicitation of revised takeover
proposals) with such person. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding sentence by
any executive officer of the Company or any of its subsidiaries or any
investment banker,
<PAGE>
35
attorney or other advisor or representative of the Company or any of its
subsidiaries shall be deemed to be a breach of this Section 5.02(a) by the
Company. For purposes of this Agreement, "takeover proposal" means any proposal
for a merger or other business combination involving the Company or any of its
subsidiaries or any proposal or offer to acquire in any manner, directly or
indirectly, more than 30% of the equity securities of the Company or more than
30% of the Company's consolidated total assets, other than the Transactions.
(b) Neither the Company Board nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent or Sub, the approval or recommendation by the Company
Board or any such committee of the Offer, this Agreement or the Merger or (ii)
approve or recommend, or propose to approve or recommend, any takeover
proposal. Notwithstanding the foregoing, the Company Board, to the extent
required by the fiduciary obligations thereof, as determined in good faith by a
majority of the members thereof based on the advice of outside counsel, may
approve or recommend (and, in connection therewith withdraw or modify its
approval or recommendation of the Offer, this Agreement or the Merger) a
superior proposal. For purposes of this Agreement, "superior proposal" means a
bona fide takeover proposal made by a third party on terms which the Company
Board determines in its good faith judgment to be more favorable to the
Company's stockholders than the Offer and the Merger.
(c) The Company promptly shall advise Parent
orally and in writing of any takeover proposal or any inquiry with respect to
or which could lead to any takeover proposal and the identity of the person
making any such takeover proposal or inquiry. The Company shall keep Parent
fully informed of the status and details of any such takeover proposal or
inquiry. Nothing in this Section 5.02(c) shall require the Company or the
Company Board to take any action that the Company Board determines in good
faith, based on the advice of outside counsel, would be inconsistent with the
fiduciary duties of the Company Board.
(d) Nothing in this Section 5.02 shall prevent
the Company and the Company Board from complying with Rule 14e-2 under the
Exchange Act, or issuing a communication meeting the requirements of Rule
14d-9(e) under the Exchange Act, with respect to any tender offer; provided,
however, that the Company may not, except as permitted by Section 5.02(b),
withdraw or modify its
<PAGE>
36
position with respect to the Offer or the Merger or approve or recommend, or
propose to approve or recommend, a takeover proposal.
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation
of Proxy Statement. (a) If stockholder adoption of this Agreement is required
by law, the Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Stockholders Meeting") for the purpose
of adopting this Agreement. The Company shall, through the Company Board,
recommend to its stockholders adoption of this Agreement, except to the extent
that the Company Board shall have withdrawn or modified its approval or
recommendation of the Offer, this Agreement or the Merger as permitted by
Section 5.02(b). Notwithstanding the foregoing, if Sub or any other subsidiary
of Parent shall acquire at least 90% of the outstanding shares of Common Stock,
the parties shall take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, the Company's obligations
pursuant to the first sentence of this Section 6.01(a) shall not be affected by
(i) the commencement, public proposal, public disclosure or communication to
the Company of any takeover proposal or (ii) the withdrawal or modification by
the Company Board of its approval or recommendation of the Offer, this
Agreement or the Merger.
(b) If stockholder adoption of this Agreement is
required by law, the Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, prepare and file a preliminary Proxy
Statement with the SEC and shall use its best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after such filing. The
Company shall notify Parent promptly of the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff,
<PAGE>
37
on the other hand, with respect to the Proxy Statement or the Merger. If at any
time prior to the adoption of this Agreement by the Company's stockholders
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and mail
to its stockholders such an amendment or supplement. The Company shall not mail
any Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
(c) Parent shall cause all shares of Common Stock
purchased pursuant to the Offer and all other shares of Common Stock owned by
Sub or any other subsidiary of Parent to be voted in favor of the adoption of
this Agreement.
SECTION 6.02. Access to Information;
Confidentiality. The Company shall, and shall cause each of its subsidiaries
to, afford to Parent, and to Parent's officers, employees, accountants,
counsel, financial advisers and other representatives, reasonable access during
normal business hours during the period prior to the Effective Time of the
Merger to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, the Company shall, and shall
cause each of its subsidiaries to, furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as Parent may reasonably request. All such information shall be held
in accordance with the confidentiality agreement (the "Confidentiality
Agreement") dated March 12, 1997.
SECTION 6.03. Best Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this Agreement,
unless, to the extent permitted by Section 5.02(b), the Company Board approves
or recommends a superior proposal, each of the parties shall use its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Offer, the Merger, and the other
Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval
<PAGE>
38
or waiver from, or to avoid an action or proceeding by, any Governmental
Entity, (ii) the obtaining of all necessary consents, approvals or waivers from
third parties, (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging any Operative Agreement or the
consummation of any of the Transactions, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the Transactions and to fully carry out the
purposes of the Operative Agreements. In connection with and without limiting
the foregoing, the Company and the Company Board shall (i) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger, any Operative
Agreement or any of the other Transactions and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Offer, the
Merger, any Operative Agreement or any other Transaction, take all action
necessary to ensure that the Offer, the Merger and the other Transactions may
be consummated as promptly as practicable on the terms contemplated by the
Operative Agreements and otherwise to minimize the effect of such statute or
regulation on the Offer, the Merger and the other Transactions. Notwithstanding
the foregoing, the Company Board shall not be prohibited from taking any action
permitted by Section 5.02(b).
(b) The Company shall give prompt notice to
Parent, and Parent or Sub shall give prompt notice to the Company, of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 6.04. Stock Options. (a) Either prior
to or as soon as practicable following the consummation of the Offer, the
Company Board (or, if appropriate, any committee administering the Stock Plans)
shall adopt such resolutions or take such other actions as are required to
<PAGE>
39
adjust the terms of all outstanding Stock Options heretofore granted under any
stock option program or arrangement of the Company (collectively, the "Stock
Plans") or any other stock option plan to provide that, at the Effective Time
of the Merger, each Stock Option outstanding immediately prior to the
acceptance for payment of shares of Common Stock pursuant to the Offer shall be
canceled in exchange for a cash payment by the Company of, or can only be
exercised for net cash equal to, an amount equal to (i) the excess, if any, of
(A) the price per share of Common Stock to be paid pursuant to the Offer over
(B) the exercise price per share of Common Stock subject to such Stock Option,
multiplied by (ii) the number of shares of Common Stock for which such Stock
Option shall not theretofore have been exercised. The Company represents and
warrants that no consents of the holders of the Stock Options are necessary to
effectuate the foregoing cash-out. After the date of this Agreement, neither
the Company Board nor any committee thereof shall cause any Stock Option to
become exercisable as a result of the execution of the Operative Agreements or
the consummation of the Transactions.
(b) All amounts payable pursuant to this Section 6.04
shall be subject to any required withholding of taxes and shall be
paid without interest.
(c) The Stock Plans shall terminate as of the
Effective Time of the Merger, and the provisions in any other Benefit Plan
providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company shall be
deleted as of the Effective Time of the Merger, and the Company shall ensure
that following the Effective Time of the Merger no holder of a Stock Option or
any participant in any Stock Plan or other Benefit Plan shall have any right
thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
SECTION 6.05. Benefit Plans. Except as provided
in Section 6.04(c), Parent shall cause the Surviving Corporation, for a period
of six months after the Effective Time of the Merger, to provide benefits to
employees of the Company and its subsidiaries that are no less favorable in the
aggregate to such employees than those in effect on the date of this Agreement.
SECTION 6.06. Indemnification. Parent and Sub
agree that all rights to indemnification for acts or omissions occurring prior
to the Effective Time of the Merger now existing in favor of the current or
former
<PAGE>
40
directors or officers of the Company and its subsidiaries as provided in their
respective certificates of incorporation or by-laws shall survive the Merger
and shall continue in full force and effect in accordance with their terms for
a period of not less than six years from the Effective Time of the Merger, and
Parent shall ensure that all such rights to indemnification are honored on a
timely basis. Parent shall cause to be maintained for a period of not less than
three years from the Effective Time of the Merger the Company's current
directors' and officers' insurance and indemnification policy to the extent
that it provides coverage for events occurring prior to the Effective Time of
the Merger (the "D&O Insurance") for all persons who are directors and officers
of the Company on the date of this Agreement, so long as the annual premium
therefor would not be in excess of 150% of the last annual premium paid prior
to the date of this Agreement (such 150% amount, the "Maximum Premium");
provided, however, that Parent may substitute therefor policies of
substantially equivalent coverage and amounts containing terms no less
favorable to such directors or officers. If the existing D&O Insurance expires,
is terminated or canceled during such three-year period, Parent shall use its
best efforts to cause to be obtained as much D&O Insurance as can be obtained
for the remainder of such period for an annualized premium not in excess of the
Maximum Premium, on terms and conditions no less advantageous than the existing
D&O Insurance. The Company represents to Parent that the Maximum Premium is
$462,000. Following the date hereof, the Company will not amend or modify the
D&O Insurance.
SECTION 6.07. Directors. Promptly upon the
acceptance for payment of, and payment by Sub for, any shares of Common Stock
pursuant to the Offer, Sub shall be entitled to designate such number of
directors on the Company Board as shall give Sub, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Company Board equal to
at least that number of directors, rounded up to the next whole number, which
is the product of (a) the total number of directors on the Company Board
(giving effect to the directors elected pursuant to this sentence) multiplied
by (b) the percentage that (i) such number of shares of Common Stock so
accepted for payment and paid for by Sub plus the number of shares of Common
Stock otherwise owned by Sub or any other subsidiary of Parent bears to (ii)
the number of such shares outstanding, and the Company shall, at such time,
cause Sub's designees to be so elected; provided, however, that in the event
that Sub's designees are appointed or elected to the Company Board, until the
Effective Time of the Merger such Board of
<PAGE>
41
Directors shall have at least two directors who are Directors on the date of
this Agreement and who are not officers of the Company (the "Independent
Directors") or shall have at least three Independent Directors in the event the
total number of directors on the Company Board is greater than six; and
provided further that, in such event, if the number of Independent Directors
shall be reduced below two for any reason whatsoever, any remaining Independent
Directors (or Independent Director, if there shall be only one remaining) shall
be entitled to designate persons to fill such vacancies who shall be deemed to
be Independent Directors for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate two persons to fill
such vacancies who shall not be officers, stockholders or affiliates of the
Company, Parent or Sub, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Subject to applicable law, the
Company shall take all action requested by Parent necessary to effect any such
election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company shall make such mailing with
the mailing of the Schedule 14D-9 (provided that Sub shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company shall promptly, at the option of Sub, either increase
the size of the Company Board or obtain the resignation of such number of its
current directors as is necessary to enable Sub's designees to be elected or
appointed to the Company Board as provided above. The provisions of this
Section 6.07 are in addition to and shall not limit any rights which Sub,
Parent or any of their affiliates may have as a holder or beneficial owner of
shares of Common Stock as a matter of law with respect to the election of
directors or otherwise.
SECTION 6.08. Fees and Expenses. (a) Except as
provided below and in Section 6.10, all fees and expenses incurred in
connection with the Offer, the Merger, this Agreement and the Transactions
shall be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated.
(b) The Company shall pay to Tomkins PLC, the
sole stockholder of Parent, upon demand a fee of $15,000,000 (the "Termination
Fee"), payable in same day funds, if:
<PAGE>
42
(i) this Agreement shall be terminated pursuant to
Section 8.01(b)(i) as a result of the failure of any condition set
forth in paragraph (d) of Exhibit A;
(ii) (A) after the date of this Agreement, any person
or "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) shall have publicly made a takeover proposal, (B) the Offer
shall have remained open until at least the scheduled expiration
date immediately following the date such takeover proposal is made
(and in any event for at least ten business days following the date
such takeover proposal is made), (C) the Minimum Tender Condition
shall not have been satisfied at the expiration of the Offer and
(D) this Agreement shall thereafter be terminated pursuant to
Section 8.01(b)(i); or
(iii) this Agreement shall be terminated pursuant to
Section 8.01(c) or 8.01(d).
SECTION 6.09. Public Announcements. Parent and
Sub, on the one hand, and the Company, on the other hand, shall consult with
each other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
Transactions, including the Offer and the Merger, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange.
SECTION 6.10. Transfer Taxes. Parent shall pay
or cause Sub to pay any state or local sales, use, transfer tax or similar tax
(including any real property transfer or gains tax) payable in connection with
the consummation of the Offer and/or the Merger (collectively, the "Transfer
Taxes"). The Company agrees to cooperate with Parent or Sub, as the case may
be, in the filing of any returns with respect to the Transfer Taxes, including
supplying in a timely manner a complete list of all real property interests
held by the Company and its subsidiaries and any information with respect to
such property that is reasonably necessary to complete such returns. The
portion of the consideration allocable to the assets giving rise to such
Transfer Taxes shall be agreed to by the Company and the Parent.
<PAGE>
43
ARTICLE VII
Conditions Precedent
The respective obligation of each party to effect
the Merger is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) Stockholder Approval. If required by applicable
law, this Agreement shall have been adopted by the affirmative vote
or consent of the holders of a majority of the outstanding shares
of Common Stock in accordance with applicable law and the Company's
Restated Certificate of Incorporation.
(b) HSR Act. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger
shall be in effect; provided, however, that each of the parties
shall have used its best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time of the Merger, whether
before or after approval of matters presented in connection with the Merger by
the stockholders of the Company:
(a) by mutual written consent of Parent and the
Company;
(b) by either Parent or the Company:
(i) if Sub shall not have purchased any
shares of Common Stock pursuant to the Offer prior
<PAGE>
44
to December 31, 1997; provided, however, that the
passage of such period shall be tolled for any part
thereof during which any party shall be subject to a
nonfinal order, decree, ruling or action restraining,
enjoining or otherwise prohibiting the purchase of
shares of Common Stock pursuant to the Offer or the
consummation of the Merger; and provided further that
the right to terminate this Agreement pursuant to this
Section 8.01(b)(i) shall not be available to any party
whose failure to fulfill any of its obligations under
any Operative Agreement results in the failure of any
such condition; or
(ii) if any Governmental Entity shall have
issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise
prohibiting the purchase of shares of Common Stock
pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final
and nonappealable;
(c) by the Company if (x) to the extent permitted by
Section 5.02(b), the Company Board approves or recommends a
superior proposal and (y) the Company has paid to Parent an amount
in cash equal to the sum of the Termination Fee; or
(d) by Parent or Sub if Sub terminates the Offer as a
result of the occurrence of any event set forth in paragraph (d) of
Exhibit A to this Agreement.
SECTION 8.02. Effect of Termination. In the event
of termination of this Agreement by either the Company or Parent as provided in
Section 8.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
other than the provisions of Section 4.01(o), Section 4.02(d), the last
sentence of Section 6.02, Section 6.08, this Section 8.02 and Article IX and
except to the extent that such termination results from the wilful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in the Operative Agreements.
SECTION 8.03. Amendment. This Agreement may be
amended by the parties at any time before or after any required approval of
matters presented in connection with the Merger by the stockholders of the
Company; provided, however, that after any such approval, there shall not be
<PAGE>
45
made any amendment that by law requires further approval by such stockholders
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 8.04. Extension; Waiver. At any time
prior to the Effective Time of the Merger, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 8.03, waive compliance with
any of the agreements or conditions contained in this Agreement. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those rights.
SECTION 8.05. Procedure for Termination,
Amendment, Extension or Waiver. A termination of this Agreement pursuant to
Section 8.01, an amendment of this Agreement pursuant to Section 8.03 or an
extension or waiver pursuant to Section 8.04 shall, in order to be effective,
require (a) in the case of Parent, Sub or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors and (b) in
the case of the Company, action by a majority of the members of the Company
Board who were members thereof on the date of this Agreement and remain as such
hereafter or the duly authorized designee of such members; provided, however,
that in the event that Sub's designees are appointed or elected to the Company
Board as provided in Section 6.07, after the acceptance for payment of shares
of Common Stock pursuant to the Offer and prior to the Effective Time of the
Merger, the affirmative vote of a majority of the Independent Directors, in
lieu of the vote required pursuant to clause (b) above, shall be required by
the Company to (i) amend or terminate this Agreement, (ii) exercise or waive
any of the Company's rights or remedies under this Agreement or (iii) extend
the time for performance of Parent's and Sub's respective obligations under
this Agreement.
<PAGE>
46
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time of the Merger. This Section 9.01 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Effective
Time of the Merger.
SECTION 9.02. Notices. All notices, requests,
claims, demands and other communications under this Agreement shall be in
writing and shall be deemed given if delivered personally or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Tomkins Corporation
4801 Springfield Street
Dayton, OH 45431
Attention: George S. Pappayliou
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attention: David Fox
(b) if to the Company, to
425 Commerce Drive
Richmond, Indiana 47374
Attention: John P. Reilly
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Richard Hall
<PAGE>
47
SECTION 9.03. Definitions. For purposes of this
Agreement:
An "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person. For the purposes of Section 4.01(u), BCP shall be
deemed not an affiliate of any portfolio company in which Bessemer
Holdings, L.P. has a controlling equity interest.
"material" means, when used in connection with the
Company or Parent, material to the business, financial condition or
results of operations of such party and its subsidiaries taken as a
whole, and the term "materially" has a correlative meaning.
"material adverse change" or "material adverse effect"
means, when used in connection with the Company or Parent, any
change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or
effect) that is materially adverse to the business, properties,
assets, condition (financial or otherwise), results of operations
or prospects of such party and its subsidiaries taken as a whole.
"person" means an individual, corporation, partnership,
company, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
A "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting Interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person and in the case of the Company shall include the Company's
joint venture with Jideco of Bardstown, Inc.
SECTION 9.04. Interpretation. When a reference
is made in this Agreement to a Section or Exhibit, such reference shall be to a
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
<PAGE>
48
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 9.05. Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.
SECTION 9.06. Entire Agreement; No Third-Party
Beneficiaries. The Operative Agreements and the Confidentiality Agreement (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of the Operative Agreements and (b) except for the provisions of
Article III and Section 6.06, are not intended to confer upon any person other
than the parties any rights or remedies hereunder.
SECTION 9.07. Governing Law. This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof.
SECTION 9.08. Assignment. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties, except that Sub
may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations under this Agreement. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
SECTION 9.09. Enforcement. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
court of the United States located in the State of New York, this being
<PAGE>
49
in addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of New York in
the event any dispute arises out of any Operative Agreement or any of the
Transactions, (b) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it shall not bring any action relating to any Operative
Agreement or any of the Transactions in any court other than a Federal or state
court sitting in the State of New York.
IN WITNESS WHEREOF, Parent, Sub and the Company
have caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
TOMKINS CORPORATION,
by
/s/ Simon M. Webber
---------------------
Name: Simon M. Webber
Title: Power of Attorney
E&W ACQUISITION CORP.,
by
/s/ Geoffrey D. Eaton
---------------------
Name: Geoffrey D. Eaton
Title: Chief Executive
Officer and
President
STANT CORPORATION,
by
/s/ John P. Reilly
---------------------
Name: John P. Reilly
Title: President and
Chief Executive
Officer
<PAGE>
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or
this Agreement, Sub shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-l(c) under
the Exchange Act (relating to Sub's obligation to pay for or return tendered
shares of Common Stock after the termination or withdrawal of the Offer), to
pay for any shares of Common Stock tendered pursuant to the Offer unless (i)
there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Common Stock which would
represent at least a majority of the Fully Diluted Shares (the "Minimum Tender
Condition") and (ii) any waiting period under the HSR Act applicable to the
purchase of shares of Common Stock pursuant to the Offer shall have expired or
been terminated. The term "Fully Diluted Shares" means all outstanding
securities entitled generally to vote in the election of directors of the
Company on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights and securities exercisable or convertible
into such voting securities. Furthermore, notwithstanding any other term of the
Offer or this Agreement, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any shares of Common Stock not theretofore
accepted for payment or paid for, and may terminate the Offer if, at any time
on or after the date of this Agreement and before the acceptance of such shares
for payment or the payment therefor, any of the following conditions exists:
(a) there shall be threatened or pending any suit,
action or proceeding by any Governmental Entity or any other person
(in the case of any suit, action or proceeding by a person other
than a Governmental Entity, such suit, action or proceeding having
a reasonable likelihood of success) (i) challenging the acquisition
by Parent or Sub of any shares of Common Stock, seeking to restrain
or prohibit the making or consummation of the Offer or the Merger
or the performance of any of the other Transactions, or seeking to
obtain from the Company, Parent or Sub any damages that are
material in relation to the Company and its subsidiaries taken as
whole, (ii) seeking to prohibit or limit the ownership or operation
by the Company, Parent or any of their respective subsidiaries of
any material portion of the business or assets of the Company,
Parent or any of their respective subsidiaries, or to compel the
Company, Parent or any of their respective subsidiaries to dispose
of or hold separate any material portion of the business or assets
<PAGE>
2
of the Company, Parent or any of their respective subsidiaries, as
a result of the Offer or any of the other Transactions, (iii)
seeking to impose limitations on the ability of Parent or Sub to
acquire or hold, or exercise full rights of ownership of, any
shares of Common Stock, including the right to vote the Common
Stock purchased by it on all matters properly presented to the
stockholders of the Company, (iv) seeking to prohibit Parent or any
of its subsidiaries from effectively controlling in any material
respect the business or operations of the Company or its
subsidiaries, or (v) which otherwise is reasonably likely to have a
material adverse effect on the business, properties, assets,
condition (financial or otherwise), results of operations or
prospects of the Company and its subsidiaries taken as a whole;
(b) there shall be any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction
threatened, proposed, sought, enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed
applicable to, or any consent or approval withheld with respect to,
(i) Parent, the Company or any of their respective subsidiaries or
(ii) the Offer, the Merger or any of the other Transactions by any
Governmental Entity or before any court or governmental authority,
agency or tribunal, domestic or foreign, that has a substantial
likelihood of resulting, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph
(a) above;
(c) since the date of this Agreement there shall have
occurred any material adverse change, or any development that,
insofar as reasonably can be foreseen, is reasonably likely to
result in a material adverse change, in the business, properties,
assets, condition (financial or otherwise), results of operations
or prospects of the Company and its subsidiaries taken as a whole,
other than changes relating to the economy in general or to the
Company's industry in general and not specifically relating to the
Company or any of its subsidiaries;
(d)(i) the Company Board or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or Sub its
approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any takeover proposal or (ii)
the Company
<PAGE>
3
Board or any committee thereof shall have resolved to do any of
the foregoing;
(e) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for, securities
on the New York Stock Exchange or in the London Stock Exchange, for
a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference
with such exchanges not related to market conditions), (ii) a
declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of war, armed hostilities or other
international or national calamity directly or indirectly involving
the United States or involving the United Kingdom and, in the case
of armed hostilities involving the United Kingdom, having, or which
could reasonably be expected to have, a substantial continuing
general effect on business and financial conditions in the United
Kingdom, (iv) any limitation (whether or not mandatory) by any
United States or the United Kingdom governmental authority on the
extension of credit generally by banks or other financial
institutions or (v) in the case of any of the foregoing existing at
the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(f) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to
materiality shall not be true and correct and any such
representations and warranties that are not so qualified shall not
be true and correct in any material respect, in each case as if
such representations and warranties were made as of such time;
(g) the Company shall have failed to perform in any
material respect any obligation or to comply in any material
respect with any agreement or covenant of the Company to be
performed or complied with by it under this Agreement; or
(h) this Agreement shall have been terminated in
accordance with its terms,
which, in the reasonable judgment of Sub, in any such case, giving rise to any
such condition, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment of or payment for any of the Shares.
<PAGE>
4
Subject to Section 1.01(a), the foregoing
conditions (i) may be asserted by Parent and Sub regardless of the
circumstances giving rise to such condition and (ii) are for the sole benefit
of Parent and Sub and may be waived by Parent or Sub, in whole or in part at
any time and from time to time in the sole discretion of Parent or Sub. The
failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
<PAGE>
STOCKHOLDER AGREEMENT
AGREEMENT, dated as of April 9, 1997, among
Tomkins Corporation, a Delaware corporation ("Parent"), E&W Acquisition Corp.,
a Delaware corporation and a wholly owned subsidiary of Parent (the "Sub"), and
Bessemer Capital Partners, L.P. (the "Stockholder").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and
delivery of this Agreement, Parent, Sub and Stant Corporation, a Delaware
corporation (the "Company"), have entered into an Agreement and Plan of Merger
(as such agreement may hereafter be amended from time to time, the "Merger
Agreement"), pursuant to which Sub will be merged with and into the Company
(the "Merger");
WHEREAS, in furtherance of the Merger, Parent
and the Company desire that as soon as practicable (and not later than five
business days) after the announcement of the execution of the Merger Agreement,
Sub shall commence a cash tender offer (the "Offer") to purchase at a price of
$21.50 per share all outstanding shares of Common Stock (as defined in Section
1 hereof) including all of the Shares (as defined in Section 2 hereof)
beneficially owned by the Stockholder; and
WHEREAS, as an inducement and a condition to
entering into the Merger Agreement, Parent has required that the Stockholder
agree, and the Stockholder has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the forego-
ing and the mutual representations, warranties, covenants and agreements
contained herein, the parties hereto agree as follows:
1. Definitions. For purposes of this Agree-
ment:
(a) "Beneficially Own" or "Beneficial Owner-
ship" with respect to any securities shall mean having "beneficial ownership"
of such securities (as determined pursuant to Rule 13d-3 under the Securities
Exchange Act
<PAGE>
of 1934, as amended (the "Exchange Act")), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities Beneficially
Owned by a Person shall include securities Beneficially Owned by all other
Persons with whom such Person would constitute a "group" as within the meaning
of Section 13(d)(3) of the Exchange Act.
(b) "Common Stock" shall mean at any time the
Common Stock, $.01 par value, of the Company.
(c) "Person" shall mean an individual, corpo-
ration, partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
(d) Capitalized terms used and not defined
herein, and the term "takeover proposal," have the respective meanings ascribed
to them in the Merger Agreement.
2. Tender of Shares.
(a) In order to induce Parent and Sub to enter
into the Merger Agreement, the Stockholder hereby agrees to validly tender (or
cause the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
fifth business day after commencement of the Offer pursuant to Section 1.01 of
the Merger Agreement and Rule 14d-2 under the Exchange Act, the number of
shares of Common Stock set forth opposite the Stockholder's name on Schedule I
hereto (the "Existing Shares", and together with any shares acquired by the
Stockholder in any capacity after the date hereof and prior to the termination
of this Agreement by means of purchase, dividend, distribution or in any other
way, the "Shares"), all of which are Beneficially Owned by the Stockholder. The
Stockholder hereby acknowledges and agrees that Parent's and Sub's obligation
to accept for payment and pay for the Shares in the Offer, including the Shares
Beneficially Owned by the Stockholder, is subject to the terms and conditions
of the Offer.
(b) The Stockholder hereby permits Parent and
Sub to publish and disclose in the Offer Documents and,
2
<PAGE>
if approval of the Company's stockholders is required under applicable law, the
Proxy Statement (including all documents and schedules filed with the SEC) its
identity and ownership of the Common Stock and the nature of its commitments,
arrangements and understandings under this Agreement.
3. Option. In order to induce Parent and Sub
to enter into the Merger Agreement, the Stockholder hereby grants to Sub an
irrevocable option (a "Stock Option") to purchase the Shares (the "Option
Shares") at an amount (the "Purchase Price") equal to $21.50 per Share. If (i)
the Merger Agreement is terminated in accordance with Section 8.01(c) or
Section 8.01(d) or (ii) the Merger Agreement is terminated in accordance with
Section 8.01(b)(i) and (x) the Stockholder shall have breached the agreements
set forth in Section 2(a) hereof or (y) at the time of such termination, the
Minimum Tender Condition shall not have been satisfied, the Stock Option shall,
in any such case, become exercisable, in whole or in part, upon the first to
occur of any such event and remain exercisable in whole or in part until the
date which is 120 days after the date of the occurrence of such event (the "120
Day Period"), so long as: (i) all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), required for
the purchase of the Option Shares upon such exercise shall have expired or been
waived and (ii) there shall not be in effect any preliminary injunction or
other order issued by any Governmental Entity prohibiting the exercise of the
Stock Option pursuant to this Agreement; provided that if (i) all HSR Act
waiting periods shall not have expired or been waived or (ii) there shall be in
effect any such injunction or order, in each case on the expiration of the 120
Day Period, the 120 Day Period shall be extended until 5 business days after
the later of (A) the date of expiration or waiver of all HSR Act waiting
periods, and (B) the date of removal or lifting of such injunction or order. In
the event that Sub wishes to exercise the Stock Option, Sub shall send a
written notice (the "Notice") to the Stockholder identifying the place and date
(not less than two nor more than 10 business days from the date of the Notice)
for the closing of such purchase.
3
<PAGE>
4. Additional Agreements.
(a) Voting Agreement. The Stockholder shall,
at any meeting of the holders of Common Stock, however called, or in connection
with any written consent of the holders of Common Stock, vote (or cause to be
voted) the Shares (if any) then held of record or Beneficially Owned by the
Stockholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement
and any actions required in furtherance thereof and hereof; and (ii) against
any takeover proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this Agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in
any of the conditions set forth in Exhibit A to the Merger Agreement or set
forth in Article VII of the Merger Agreement not being fulfilled.
(b) No Inconsistent Arrangements. The Stock-
holder hereby covenants and agrees that, except as contemplated by this
Agreement and the Merger Agreement, it shall not (i) transfer (which term shall
include, without limitation, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of the Shares or any interest therein,
(ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of the Shares or any interest therein,
(iii) grant any proxy, power-of-attorney or other authorization in or with
respect to the Shares, (iv) deposit the Shares into a voting trust or enter
into a voting agreement or arrangement with respect to the Shares or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated
hereby or by the Merger Agreement.
(c) Grant of Irrevocable Proxy; Appointment of
Proxy.
(i) The Stockholder hereby irrevocably grants to, and
appoints, Parent and George S. Pappayliou and Anthony J. Reading, or either of
them, in their respective capacities as officers of Parent, and any individual
4
<PAGE>
who shall hereafter succeed to any such office of Parent, and each of them
individually, the Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Stockholder, to vote
the Shares, or grant a consent or approval in respect of the Shares in favor of
the various transactions contemplated by the Merger Agreement (the
"Transactions") and against any takeover proposal.
(ii) The Stockholder represents that any
proxies heretofore given in respect of the Stockholder's Shares are not
irrevocable, and that any such proxies are hereby revoked.
(iii) The Stockholder understands and acknowl-
edges that Parent is entering into the Merger Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement. The Stockholder hereby
affirms that the irrevocable proxy set forth in this Section 4(c) is given in
connection with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the duties of the
Stockholder under this Agreement. The Stockholder hereby further affirms that
the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. The Stockholder hereby ratifies and confirms all that
such irrevocable proxy may lawfully do or cause to be done by virtue hereof.
Such irrevocable proxy is executed and intended to be irrevocable in accordance
with the provisions of Section 212(e) of the Delaware General Corporation Law.
(d) No Solicitation. The Stockholder hereby
agrees, in its capacity as a stockholder of the Company, that neither the
Stockholder nor any of its subsidiaries or affiliates shall (and the
Stockholder shall cause its officers, directors, partners, employees,
representatives and agents, including, but not limited to, investment bankers,
attorneys and accountants, not to), directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Parent, any of its affiliates or representatives) concerning any
takeover proposal. The Stockholder will immediately cease any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any takeover
5
<PAGE>
proposal. The Stockholder will immediately communicate to Parent the terms of
any proposal, discussion, negotiation or inquiry (and will disclose any written
materials received by the Stockholder in connection with such proposal,
discussion, negotiation or inquiry) and the identity of the party making such
proposal or inquiry which it may receive in respect of any such transaction.
Any action taken by the Company or any member of the Board of Directors of the
Company in accordance with Section 5.02 of the Merger Agreement shall be deemed
not to violate this Section 4(d).
(e) Best Efforts. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement. Each party shall promptly consult with
the other and provide any necessary information and material with respect to
all filings made by such party with any Governmental Entity in connection with
this Agreement and the Merger Agreement and the transactions contemplated
hereby and thereby.
(f) Waiver of Appraisal Rights. The Stock-
holder hereby waives any rights of appraisal or rights to dissent from the
Merger that it may have.
(g) Management Agreement. The Stockholder
represents and warrants that it has the power to cause Bessemer Partners & Co.
to terminate the Management Advisory Services Agreement, dated July 1, 1993, as
amended (the "Management Agreement"), between the Company and Bessemer Partners
& Co., as assignee, and agrees that upon and as of the earlier of the
consummation of the Offer or the purchase of the Shares by Parent pursuant to
the terms of this Agreement (the earlier of such events, the "Termination
Date"), it will take all necessary action and execute all necessary documents,
and cause its affiliates, including without limitation Bessemer Partners & Co.,
to take such actions and execute such documents as may be requested by Parent
to terminate the Management Agreement. Upon termination of the Management
Agreement, the Stockholder agrees that Bessemer Partners & Co. shall only be
entitled to receive the pro rata por-
6
<PAGE>
tion through the Termination Date of the quarterly installment which would be
payable to Bessemer Partners & Co. at the end of the calendar quarter in which
the Termination Date occurs, any unpaid fees in respect of complete fiscal
quarters ended prior to the Termination Date and no other fees thereunder.
5. Representations and Warranties of the
Stockholder. The Stockholder hereby represents and warrants to Parent
as follows:
(a) Ownership of Shares. The Stockholder is
the record and Beneficial Owner of the Existing Shares, as set forth on
Schedule I. On the date hereof, the Existing Shares constitute all of the
Shares owned of record or Beneficially Owned by the Stockholder. The
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 2, 3 and 4 hereof, sole power of
disposition, sole power to demand appraisal rights and sole power to agree to
all of the matters set forth in this Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws and the terms of this
Agreement.
(b) Power; Binding Agreement. The Stockholder
has the corporate power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party including, without limitation, any voting agreement,
proxy arrangement, pledge agreement, shareholders agreement or voting trust.
This Agreement has been duly and validly executed and delivered by the
Stockholder and constitutes a valid and binding agreement of the Stockholder,
enforceable against the Stockholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which the Stockholder is a trustee whose consent is required for the
execution and delivery of this Agreement or the consummation by the Stockholder
of the transactions contemplated hereby.
(c) No Conflicts. Except for filings under
the HSR Act and the Exchange Act (i) no filing with, and no permit,
authorization, consent or approval of, any
7
<PAGE>
Governmental Entity for the execution of this Agreement by the Stockholder and
the consummation by the Stockholder of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by the Stockholder,
the consummation by the Stockholder of the transactions contemplated hereby or
compliance by the Stockholder with any of the provisions hereof shall (A)
conflict with or result in any breach of any organizational documents
applicable to the Stockholder, (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which the Stockholder is a party or by which the
Stockholder or any of its properties or assets may be bound, or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of its properties or assets.
(d) No Liens. Except as permitted by this
Agreement, the Existing Shares and the certificates representing such Shares
are now, and at all times during the term hereof will be, held by the
Stockholder, or by a nominee or custodian for the benefit of the Stockholder,
free and clear of all Liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such Liens or proxies arising hereunder.
(e) No Finder's Fees. No broker, investment
banker, financial advisor or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Stockholder.
(f) Reliance by Parent. The Stockholder
understands and acknowledges that Parent is entering into, and causing Sub to
enter into, the Merger Agreement in reliance upon the Stockholder's execution
and delivery of this Agreement.
8
<PAGE>
6. Representations and Warranties of Parent
and Sub. Each of Parent and Sub hereby represents and warrants to the
Stockholder as follows:
(a) Power; Binding Agreement. Parent and Sub
each has the corporate power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by each of Parent and Sub will not violate any other agreement
to which either of them is a party. This Agreement has been duly and validly
executed and delivered by each of Parent and Sub and constitutes a valid and
binding agreement of each of Parent and Sub, enforceable against each of Parent
and Sub in accordance with its terms.
(b) No Conflicts. Except for filings under
the HSR Act and the Exchange Act, (i) no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution of this Agreement by each of Parent and Sub and the consummation
by each of Parent and Sub of the transactions contemplated hereby and (ii) none
of the execution and delivery of this Agreement by each of Parent and Sub, the
consummation by each of Parent and Sub of the transactions contemplated hereby
or compliance by each of Parent and Sub with any of the provisions hereof shall
(A) conflict with or result in any breach of any organizational documents
applicable to either of Parent or Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either of Parent or Sub is a party or by which
either of Parent or Sub or any of their properties or assets may be bound, or
(C) violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to either of Parent or Sub or any of their properties
or assets.
7. Further Assurances. From time to time, at
the other party's request and without further consideration, each party hereto
shall execute and deliver such
9
<PAGE>
additional documents and take all such further lawful action as may be
necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
8. Stop Transfer. The Stockholder shall not
request that the Company register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of the Shares, unless
such transfer is made in compliance with this Agreement. In the event of a
stock dividend or distribution, or any change in the Common Stock by reason of
any stock dividend, split-up, recapitalization, combination, exchange of shares
or the like, the term "Shares" shall refer to and include the Shares as well as
all such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
9. Termination. Except as provided in Sec-
tion 3 hereof, the covenants, agreements and proxy contained herein with
respect to the Shares shall terminate upon the termination of the Merger
Agreement in accordance with its terms.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the
Merger Agreement constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(b) Binding Agreement. This Agreement and the
obligations hereunder shall attach to the Shares and shall be binding upon any
person or entity to which legal or beneficial ownership of the Shares shall
pass, whether by operation of law or otherwise, including, without limitation,
the Stockholder's administrators or successors. Notwithstanding any transfer of
Shares, the transferor shall remain liable for the performance of all
obligations of the transferor under this Agreement.
(c) Assignment. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent of
Parent and Sub, provided that
10
<PAGE>
Parent or Sub may assign, in its sole discretion, its rights and obligations
hereunder to any direct or indirect wholly owned subsidiary of Parent, but no
such assignment shall relieve Parent or Sub of its obligations hereunder if
such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified or
terminated, except upon the execution and delivery of a written agreement
executed by the parties hereto.
(e) Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if given) by hand
delivery or telecopy (with a confirmation copy sent for next day delivery via
courier service, such as Federal Express), or by any courier service, such as
Federal Express, providing proof of delivery. All communications hereunder
shall be delivered to the respective parties at the following addresses:
If to the
Stockholder: Bessemer Capital Partners, L.P.
630 Fifth Avenue
New York, NY 10111
Attention: Robert D. Lindsay
Telephone No.: (212) 708-9217
Telecopy No.: (212) 969-9032
Copy to: Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Richard Hall
Telephone No.: (212) 474-1293
Telecopy No.: (212) 474-3700
If to Parent
or Sub: Tomkins Corporation
4801 Springfield Street
Dayton, Ohio 45431
Attention: George S. Pappayliou
Telephone No.: (937) 253-7171
Telecopy No.: (937) 253-6436
11
<PAGE>
Copy to: Tomkins PLC
East Putney House
84 Upper Richmond Road
London SW15 2ST, England
Attention: Richard N. Marchant
Telephone No.: 44-181-877-4544
Telecopy No.:44-181-877-9700
and
Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: David Fox
Telephone No.: (212) 735-3000
Telecopy No.: (212) 735-2000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each
provision or portion of any provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law but if any
provision or portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision
had never been contained herein.
(g) Specific Performance. Each of the parties
hereto recognizes and acknowledges that a breach by it of any covenants or
agreements contained in this Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for money
damages, and therefore in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any
12
<PAGE>
other remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers
and remedies provided under this Agreement or otherwise available in respect
hereof at law or in equity shall be cumulative and not alternative, and the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party
hereto to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
(j) No Third Party Beneficiaries. This Agree-
ment is not intended to be for the benefit of, and shall not be enforceable by,
any person or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof.
(l) Waiver of Jury Trial. Each party hereto
hereby waives any right to a trial by jury in connection with any action, suit
or proceeding brought in connection with this Agreement.
(m) Descriptive Headings. The descriptive
headings used herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
(n) Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original, but
all of which, taken together, shall constitute one and the same Agreement.
13
<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Stockholder
have caused this Agreement to be duly executed as of the day and year first
above written.
TOMKINS CORPORATION
By: /s/ Simon M. Webber
-----------------------------
Name: Simon Webber
Title: Power-of-Attorney
E&W ACQUISITION CORP.
By: /s/ Geoffrey D. Eaton
-----------------------------
Name: Geoffrey D. Eaton
Title: Chief Executive Officer
and President
BESSEMER CAPITAL PARTNERS, L.P.
By: KYLIX PARTNERS, L.P.,
its general partner
By: BELISARIUS CORPORATION,
a general partner
By: /s/ Robert D. Lindsay
-----------------------------
Name: Robert D. Lindsay
Title: President
14
<PAGE>
Schedule I
Number of Shares
Name of Stockholder Beneficially Owned
------------------- ------------------
Bessemer Capital Partners, L.P. 9,229,595 Shares
15
<PAGE>
April 9, 1997
Tomkins Corporation
801 Springfield Street
Dayton, OH 45431
E&W Acquisition Corp.
801 Springfield Street
Dayton, OH 45431
Dear Sirs,
This letter is delivered in connection with the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of April 9,
1997, among Tomkins Corporation ("Parent"), E&W Acquisition Corp. ("Sub") and
Stant Corporation (the "Company") and the Offer and the Merger contemplated
under the Merger Agreement. All terms used but not defined herein shall have
the meanings assigned to such terms in the Merger Agreement or the Stockholder
Agreement.
The undersigned, Mr. W. Thomas Margetts, is the
Beneficial Owner of 204,099 shares of common stock, par value $.01 per share
("Common Stock"), of the Company of which 202,299 are shares of Common Stock
issuable upon exercise of stock options held by the undersigned (the "Stock
Options").
In order to induce Parent and Sub to enter into the
Merger Agreement, the undersigned hereby agrees and undertakes that if and to
the extent that the undersigned exercises any of the Stock Options, the
undersigned will validly tender (or cause the record owner of such shares to
validly tender), and not withdraw, pursuant to and in accordance with the terms
of the Offer, no later than the second business day following such exercise,
all of the shares of Common Stock issued upon such exercise. The undersigned
hereby acknowledges and agrees that Parent's and Sub's obligation to accept for
payment and pay for any of the shares of Common Stock in the Offer, including
the shares of Common Stock Beneficially Owned by the undersigned, is subject to
the terms and conditions of the Offer. The undersigned further agrees that in
the event the undersigned does not exercise any or all of the Stock Options
prior to the expiration of the Offer, the undersgined will not exercise the
Stock Options after the expiration of the Offer, and the Stock Options will be
cancelled in consideration of a cash payment as set forth in the Merger
Agreement. The undersigned acknowledges that his consent for the cancellation
of the Stock Options for a cash payment as set forth in the Merger Agreement is
not required.
<PAGE>
The undersigned hereby permits Parent and Sub to
publish and disclose in the Offer Documents and, if approval of the Company's
stockholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC) his identity and ownership of
the shares of Common Stock and the nature of his commitments, arrangements and
understandings under this letter agreement.
The undersigned agrees to use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the agreements contemplated by this letter
agreement.
This letter agreement and the covenants hereunder
shall attach to the shares of Common Stock Beneficially Owned by the
undersigned and shall be binding upon any person or entity to which legal or
beneficial ownership of such shares shall pass, whether by operation of law or
otherwise. This letter agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
Sincerely
/s/ W. Thomas Margetts
-----------------------------
W. Thomas Margetts
Accepted and agreed to by:
TOMKINS CORPORATION
By: /s/ Simon M. Webber
-----------------------------
Name: Simon M. Webber
Title: Power-of-Attorney
E&W ACQUISITION CORP.
By: /s/ Geoffrey D. Eaton
-----------------------------
Name: Geoffrey D. Eaton
Title: Chief Executive Officer
and President
2
<PAGE>
March 12, 1997
Stant Corporation
425 Commerce Drive
Richmond, IN 47374
Bessemer Partners & Co.
630 Fifth Avenue, 39th Floor
New York, NY 10111
Confidentiality Agreement
We hereby confirm to Stant Corporation (the "Company") and Bessemer
Partners & Co. ("Bessemer Partners") that we are exploring the possible
purchase by us (a "Transaction") of all or a significant portion of the stock
of the Company. In connection with our analysis of a possible Transaction, we
have requested certain oral and written information concerning the Company
(collectively, the "Evaluation Material"). In consideration of furnishing the
Evaluation Material, the Company and Bessemer Partners request our agreement to
the following (it being understood that we are also agreeing to cause our
affiliates to comply with the provisions hereof):
1. The Evaluation Material will be used solely for the purpose of
evaluating a possible Transaction and, unless and until we have completed a
Transaction pursuant to definitive agreements ("Sale Agreements") between us
and the Company and between us and Bessemer Capital Partners ("BCP"), such
information will be kept confidential by us and our advisors, except that we
may disclose the Evaluation Material or portions thereof to those of our
directors, officers and employees and representatives of our advisors (the
persons to whom such disclosure is permissible being collectively called
"Representatives") who need to know such information for the purpose of
evaluating our possible Transaction (it being understood that, before
disclosing the Evaluation Material or any portion thereof to such
Representatives, we will inform them of the confidential nature of the
Evaluation Material and obtain their agreement to be bound by this agreement
and not to disclose such information to any other person). We agree to be
responsible for any breach of this agreement by our Representatives. In the
event that we or any of our Representatives become legally compelled (by
deposition,
<PAGE>
2
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose any of the Evaluation Material, we shall provide
Bessemer Partners with prompt prior written notice of such requirement so that
Bessemer Partners or the Company may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this agreement. In
the event that such protective order or other remedy is not obtained, or that
Bessemer Partners or the Company waives compliance with the provisions hereof,
we agree to furnish only that portion of the Evaluation Material which we are
advised by written opinion of counsel is legally required and to exercise best
efforts to obtain assurance that confidential treatment will be accorded such
Evaluation Material.
2. The term "Evaluation Material" does not include any information
that (a) at the time of disclosure or thereafter is generally available to and
known by the public (other than as a result of a disclosure in violation of
this Agreement directly or indirectly by us or our Representatives), (b) was
available to us on a nonconfidential basis from a source other than the Company
or Bessemer Partners, provided that such source is not and was not known to us
to be bound by a confidentiality agreement with Bessemer Partners or the
Company, or (c) has been independently acquired or developed by us without
violating any of our obligations under this agreement.
3. If a Transaction is not consummated by us or if the Company or
Bessemer Partners so requests, we will promptly return to the Company or
Bessemer Partners all copies of the Evaluation Material in our possession or in
the possession of our Representatives, and we will promptly destroy all copies
of any analyses, compilations, studies or other documents prepared by us or for
our use containing or reflecting any Evaluation Material.
4. Subject to Section 1 above and except as may be legally required or
as may be required by applicable stock exchange regulation, (x) without the
prior written consent of the Company, we will not, and will direct our
Representatives not to, disclose to any person (including the Company and its
directors, officers and employees and representatives of the Company's advisors
with the exception of Bessemer Partners), and (y) without our prior written
consent, each of the Company and Bessemer Partners will not, and will direct
their respective directors, officers, employees and representatives of their
advisors not to, disclose to any person, (a) the fact that any investigations,
discussions or negotiations are taking place concerning a possible Transaction,
(b) that we have
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3
requested or received Evaluation Material, or (c) any of the terms, conditions
or other facts with respect to any possible Transaction, including the status
thereof. In the event any party concludes that such disclosure may be so
required, such party will give the other party as much notice of the proposed
disclosure as is reasonably practicable and an opportunity to comment thereon.
The term "person" as used in this agreement will be interpreted broadly to
include, without limitation, any corporation, company, partnership or
individual.
5. Until the earliest to occur of (a) the execution by us of a
definitive Sale Agreements, (b) an acquisition of the Company by a third party
or (c) two years from the date of this agreement, we agree not to initiate or
maintain contact (except for those contacts made in the ordinary course of
business) with any officer, director or employee or agent of the Company or its
subsidiaries regarding its business, operations, prospects or finances, except
with the express permission of the Company or Bessemer Partners. It is
understood that Bessemer Partners will arrange for appropriate contacts for due
diligence purposes. It is further understood that all (i) communications
regarding this possible Transaction, (ii) requests for additional information,
(iii) requests for facility tours or management meetings and (iv) discussions
or questions regarding procedures, will be submitted or directed to Bessemer
Partners.
6. We understand and acknowledge that neither the Company nor Bessemer
Partners is making any representation or warranty, express or implied, as to
the accuracy or completeness of the Evaluation Material, and none of the
Company, Bessemer Partners, or any of their respective officers, directors,
employees, stockholders, owners, affiliates or agents, will have any liability
to us or any other person resulting from our use of the Evaluation Material.
Only those representations and warranties that are made to us in definitive
Sale Agreements when, as, and if they are executed, and subject to such
limitations and restrictions as may be specified in such Sale Agreements, will
have any legal effect.
7. We agree that until the earliest to occur of (x) the execution by
us of definitive Sale Agreements or (y) the expiration of one year from the
date of this agreement, we shall not (a) except with the express permission of
the Company or Bessemer Partners in any manner acquire, agree to acquire or
make any proposal to acquire, directly or indirectly, any securities or
property of the Company or any of its subsidiaries, (b) except at the
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4
specific written request or written permission of the Company, as the case may
be, propose to enter into, directly or indirectly, any merger or business
combination involving the Company or any of its subsidiaries or to purchase,
directly or indirectly, a material portion of the assets of the Company or any
of its subsidiaries, (c) make, or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the Securities and Exchange Commission) to vote, or seek to
advise or influence any person with respect to the voting or, any voting
securities of the Company or any of its subsidiaries, (d) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) with respect to any voting securities of the
Company or any of its subsidiaries, (e) otherwise act, alone or in concert with
others, to seek to control or influence the management, Board of Directors or
policies of the Company, (f) disclose any intention, plan or arrangement
inconsistent with the foregoing or (g) advise, assist or encourage any other
persons in connection with any of the foregoing. We also agree during such
period not to request the Company or Bessemer Partners, directly or indirectly,
to amend or waive any provision of this paragraph (including this sentence).
We, the Company and Bessemer Partners agrees during such period not to take any
action which might require any of the parties to make a public announcement
regarding the possibility of a business combination or merger.
8. We also understand and agree that no contract or agreement
providing for a Transaction shall be deemed to exist between us and the Company
and/or any of its stockholders unless and until definitive Sale Agreements have
been executed and delivered, and we hereby waive, in advance, any claims
(including, without limitation, claims for breach of contract) in connection
with any possible Transaction unless and until we shall have entered into a
definitive Sale Agreements. We also agree that unless and until definitive Sale
Agreements between the Company, BCP and us with respect to the acquisition of
the Company have been executed and delivered, neither the Company nor any of
its stockholders has any legal obligation of any kind whatsoever with respect
to any such transaction by virtue of this agreement of any other written or
oral expression with respect to such transaction except, in the case of this
agreement, for the matters specifically agreed to herein. For purposes of this
paragraph, the term "definitive Sale Agreements" does not include an executed
letter of intent or any other preliminary written agreement, nor does it
include any written or oral acceptance of any offer or bid on our part.
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5
9. We agree that, in the event of any breach of the provisions of this
agreement, each of the Company and Bessemer Partners shall be entitled to
equitable relief, including in the form of injunctions and orders for specific
performance, in addition to all other remedies available to the Company or
Bessemer Partners at law or in equity. We also hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America located in the
City of New York for any actions, suits or proceedings arising out of or
relating to this agreement and the transactions contemplated hereby (and we
agree not to commence any action, suit or proceeding relating thereto except in
such courts), and further agree that service of any process, summons, notice or
document by U.S. registered mail to your address set forth above shall be
effective service of process for any action, suit or proceeding brought against
us in any such court. We hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this agreement or the transactions contemplated hereby in the courts of the
State of New York or the United States of America located in the City of New
York, and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
This agreement is for the benefit of the parties hereto and will be
governed by and construed in accordance
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6
with the laws of the State of New York. Our obligations under this agreement
will expire two years from the date of this agreement.
Very truly yours,
TOMKINS CORPORATION,
by /s/ Geoffrey Eaton
-------------------------------
Title: Director
Corporate Development
Accepted and agreed as of
the date written above:
STANT CORPORATION,
by /s/ Ward W. Woods
----------------------------
Title: Chairman
BESSEMER PARTNERS & CO.,
by LA HOYA CORPORATION,
----------------------------
its managing general
partner,
by /s/ Ward W. Woods
----------------------------
Title: President
<PAGE>
April 2, 1997
John P. Reilly
President and CEO
Stant Corporation
425 Commerce Drive
Richmond, Indiana 47374
Dear Mr. Reilly:
We are pleased to submit for consideration a proposal under which
Tomkins would be interested in pursuing the acquisition of Stant Corporation.
Our valuation for each share of common stock of Stant, based on our
knowledge to date and assuming an average level of indebtedness of $210
million, is $21.50. This valuation is based on 16,226,815 shares of common
stock outstanding and 2,676,583 options with an average exercise price of
$11.26154.
We appreciate the co-operation provided by Tom Erwin and you during
our initial review process. We wish to work toward retaining your services if
we are to complete a transaction with Stant. Should Stant determine to proceed
in negotiating exclusively with us with respect to a possible transaction, we
would direct our legal and accounting professionals to undertake confirmatory
due diligence. Concurrently with this confirmatory due diligence process, which
we expect to complete within 1 week, we would also hope to negotiate definitive
agreements to implement the proposed transaction. Accordingly, assuming
agreement is reached, a transaction would be announced during the second week
of April.
While we have not reached a binding proposal, in order to continue the
process, we request that Stant countersign this letter to indicate our legally
binding agreement that until April 30, 1997 neither Stant nor any of its
affiliates, nor any of such persons' officers, directors or representatives
will, directly or indirectly, solicit, initiate or encourage the submission of
any proposal or offer from any person other than Tomkins, enter into or
continue any discussions or negotiations with, or provide any information to,
any persons other than Tomkins, relating to any merger, consolidation or other
business combinations involving Stant or the acquisition of a material amount
of Stant's stock or assets.
<PAGE>
John P. Reilly
April 2, 1997
Page 2
Tomkins' willingness to continue this process is conditioned on no
public disclosure being made of this letter or any matters relating hereto or
of the fact that discussions are being conducted between us.
Yours sincerely,
By: /s/ Ian A. Duncan
-------------------------
DEPUTY CHAIRMAN
---------------
Accepted and Agreed:
STANT CORPORATION
By: /s/ John P. Reilly
-------------------------
Name: John P. Reilly
Title: President and Chief Executive Officer
