<PAGE> 1
-------------------------------------------------------
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
RELIANCE ELECTRIC COMPANY
(NAME OF SUBJECT COMPANY)
ROCKWELL INTERNATIONAL CORPORATION
ROK ACQUISITION CORPORATION
(BIDDER)
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
759458102
(CUSIP NUMBER OF CLASS OF SECURITIES)
Charles H. Harff, Esq.
Senior Vice President, General Counsel & Secretary
Rockwell International Corporation
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3123
(412) 565-4004
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
Copies to:
Martin Lipton, Esq. William J. Calise, Jr., Esq.
Wachtell, Lipton, Rosen & Katz Chadbourne & Parke
51 West 52nd Street 30 Rockefeller Plaza
New York, New York 10019 New York, New York 10112
(212) 403-1000 (212) 408-5100
(Calculation of Filing Fee)
Transaction Valuation* Amount of Filing Fee**
---------------------- ----------------------
$1,546,420,080 $309,284.02
* For purposes of calculating the filing fee only. This calculation assumes
the purchase of 51,547,336 shares of Class A Common Stock of Reliance
Electric Company at $30 net per share in cash (including Class A Common
Stock issuable upon conversion of Reliance Electric Company's outstanding
Class B Common Stock and Class C Common Stock and upon exercise of
Reliance Electric Company's outstanding stock options).
** 1/50 of one percentum of the Transaction Valuation.
/ / 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 date of its filing.
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
-------------------------------------------------------
(Page 1 of 7 Pages)
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This Schedule 14D-1 relates to the offer by ROK Acquisition Corporation
(the "Purchaser"), a Delaware corporation and a wholly-owned subsidiary of
Rockwell International Corporation, a Delaware corporation ("Rockwell"), to
purchase (i) all of the outstanding shares of Class A Common Stock, par value
$.01 per share (the "Class A Shares"), of Reliance Electric Company, a
Delaware corporation (the "Company"), and the associated Series A preferred
stock purchase rights (the "Class A Rights") issued pursuant to the Rights
Agreement (as defined in the Offer to Purchase) at a purchase price of $30
per Class A Share (and associated Class A Right), net to the seller in cash,
without interest thereon, (ii) all of the outstanding shares of Class B Common
Stock, par value $.01 per share (the "Class B Shares"), of the Company and the
associated Series B preferred stock purchase rights (the "Class B Rights")
issued pursuant to the Rights Agreement at a purchase price of $30 per Class
B Share (and associated Class B Right), net to the seller in cash, without
interest thereon and (iii) all of the outstanding shares of Class C Common
Stock, par value $.01 per share (the "Class C Shares"), of the Company and the
associated Series C preferred stock purchase rights (the "Class C Rights")
issued pursuant to the Rights Agreement at a purchase price of $81.24 per Class
C Share (and associated Class C Right), net to the seller in cash, without
interest thereon, in each case upon the terms and subject to the conditions
set forth in the Offer to Purchase and the related Letters of Transmittal
(which together constitute the "Offer"), which are annexed to and filed with
this Schedule 14D-1 as Exhibits (a)(1) to (a)(4). Only the Class A Shares and
the Class A Rights are registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Reliance Electric Company.
The address of its principal executive offices is 6065 Parkland Boulevard,
Cleveland, Ohio 44124-6106.
(b) The equity securities to which this Schedule 14D-1 relates are
the Class A Shares, Class A Rights, Class B Shares, Class B Rights, Class C
Shares and Class C Rights. Reference is hereby made to the information set
forth in the "Introduction" and Section 1 ("Terms of the Offer") of the Offer
to Purchase, which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in Section
6 ("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
(Page 2 of 7 Pages)
<PAGE> 3
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) Reference is hereby made to the information set forth
in the "Introduction," Section 9 ("Certain Information Concerning Rockwell and
the Purchaser") and Schedule I ("Directors and Executive Officers of Rockwell
and the Purchaser") of the Offer to Purchase, which is incorporated herein by
reference.
(e)-(f) During the last five years, neither Rockwell nor the
Purchaser, nor, to the best of their knowledge, any of their respective
executive officers and directors listed in Schedule I ("Directors and Executive
Officers of Rockwell and the Purchaser") of the Offer to Purchase has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(g) Reference is hereby made to the information set forth
in Schedule I ("Directors and Executive Officers of Rockwell and the
Purchaser") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Rockwell and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer and the Proposed Rockwell Merger; Plans
for the Company") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to the information set forth in
Section 12 ("Source and Amount of Funds") of the Offer to Purchase, which is
incorporated herein by reference.
(c) Not applicable.
(Page 3 of 7 Pages)
<PAGE> 4
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Stock Exchange Listing; Exchange Act Registration; Margin
Regulations"), Section 10 ("Background of the Offer; Contacts with the
Company"), Section 11 ("Purpose of the Offer and the Proposed Rockwell Merger;
Plans for the Company") and Section 13 ("Dividends and Distributions") of the
Offer to Purchase, which is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in
Section 9 ("Certain Information Concerning Rockwell and the Purchaser") and
Schedule I ("Directors and Executive Officers of Rockwell and the Purchaser")
of the Offer to Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Rockwell and the
Purchaser") and Section 10 ("Background of the Offer; Contacts with the
Company") of the Offer to Purchase, which is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16
("Certain Fees and Expenses") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Rockwell and the Purchaser") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer and the Proposed Rockwell
Merger; Plans for the Company") and Section 15 ("Certain Legal Matters;
(Page 4 of 7 Pages)
<PAGE> 5
Required Regulatory Approvals") of the Offer to Purchase, which is incorporated
herein by reference.
(d) Reference is hereby made to the information set forth in
Section 7 ("Possible Effects of the Offer on the Market for the Shares; Stock
Exchange Listing; Exchange Act Registration; Margin Regulations") and Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase, which is incorporated herein by reference.
(e) To the best knowledge of Rockwell and the Purchaser, no such
proceedings are pending or have been instituted.
(f) Reference is hereby made to the entire text of the Offer to
Purchase and the related Letters of Transmittal, which is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) -- Offer to Purchase, dated October 21, 1994.
(a)(2) -- Class A Letter of Transmittal.
(a)(3) -- Class B Letter of Transmittal.
(a)(4) -- Class C Letter of Transmittal.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(7) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(8) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(9) -- Press release issued by Rockwell on October 20, 1994.
(a)(10) -- Form of Summary Advertisement, dated October 21, 1994.
(a)(11) -- Press release issued by Rockwell on October 21, 1994.
(b) -- Not applicable.
(c) -- Not applicable.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
(Page 5 of 7 Pages)
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
ROCKWELL INTERNATIONAL CORPORATION
By: CHARLES H. HARFF
--------------------------------
Charles H. Harff
Senior Vice President,
General Counsel & Secretary
ROK ACQUISITION CORPORATION
By: CHARLES H. HARFF
--------------------------------
Charles H. Harff
Vice President
Dated: October 21, 1994
(Page 6 of 7 Pages)
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NUMBER
- ------- ----------- -----------
<S> <C>
(a)(1) -- Offer to Purchase, dated October 21, 1994.
(a)(2) -- Class A Letter of Transmittal.
(a)(3) -- Class B Letter of Transmittal.
(a)(4) -- Class C Letter of Transmittal.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(7) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(8) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(9) -- Press release issued by Rockwell on October 20, 1994.
(a)(10) -- Form of Summary Advertisement, dated October 21, 1994.
(a)(11) -- Press release issued by Rockwell on October 21, 1994.
(b) -- Not applicable.
(c) -- Not applicable.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
(Page 7 of 7 Pages)
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING SHARES OF CLASS B COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES B PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$30 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF CLASS C COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES C PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$81.24 NET PER SHARE
BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 18, 1994, UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) SHARES (AS
HEREINAFTER DEFINED) REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES OF CLASS A COMMON STOCK OF RELIANCE ELECTRIC COMPANY (THE
"COMPANY") ON A FULLY DILUTED BASIS (ASSUMING CONVERSION OF ALL OUTSTANDING
SHARES OF CLASS B COMMON STOCK AND CLASS C COMMON STOCK OF THE COMPANY INTO
SHARES OF CLASS A COMMON STOCK OF THE COMPANY AND THE EXERCISE OF ALL
OUTSTANDING OPTIONS) BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"), (2) THE AGREEMENT AND PLAN OF
MERGER, DATED AS OF AUGUST 30, 1994 (THE "GENERAL SIGNAL MERGER AGREEMENT"),
BETWEEN THE COMPANY AND GENERAL SIGNAL CORPORATION ("GENERAL SIGNAL") HAVING
BEEN TERMINATED WITHOUT ANY PAYMENTS BY OR PENALTIES TO THE COMPANY (OTHER THAN
ANY APPLICABLE PAYMENTS PURSUANT TO SECTION 9.05(B) OF THE GENERAL SIGNAL MERGER
AGREEMENT) AND THE COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY NEW OR
AMENDED AGREEMENTS WITH GENERAL SIGNAL OR ANY OTHER PERSON OR ENTITY HAVING THE
EFFECT OF IMPAIRING THE ABILITY OF ROK ACQUISITION CORPORATION (THE "PURCHASER")
TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE EXPECTED ECONOMIC VALUE TO
THE PURCHASER OF THE ACQUISITION OF THE COMPANY (THE "NO IMPEDIMENTS
CONDITION"), (3) THE SERIES A, SERIES B AND SERIES C PREFERRED STOCK PURCHASE
RIGHTS (COLLECTIVELY, THE "RIGHTS") OF THE COMPANY HAVING BEEN REDEEMED BY THE
BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR OTHERWISE ARE INAPPLICABLE
TO THE OFFER AND THE PROPOSED ROCKWELL MERGER (AS HEREINAFTER DEFINED) (THE
"RIGHTS CONDITION") AND (4) THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW HAS BEEN
COMPLIED WITH IN CONNECTION WITH THE PURCHASER'S ACQUISITION OF THE COMPANY OR
IS INVALID OR OTHERWISE INAPPLICABLE TO THE PURCHASER IN CONNECTION WITH THE
OFFER AND THE PROPOSED ROCKWELL MERGER (THE "SECTION 203 CONDITION"). THE OFFER
IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15.
THE OFFER IS NOT CONDITIONED ON OBTAINING FINANCING.
------------------------
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
October 21, 1994
<PAGE> 2
IMPORTANT
The Purchaser reserves the right to amend the Offer (including amending the
purchase price) upon entry into a merger agreement with the Company or otherwise
or to negotiate a merger agreement with the Company not involving a tender
offer. The Purchaser and Rockwell International Corporation also reserve the
right to solicit the votes of the stockholders of the Company at any annual or
special meeting of such stockholders.
Any stockholder desiring to tender all or any portion of his Shares, and
the associated Rights, should either (a) complete and sign the appropriate
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) representing tendered Shares and, if separate, the
certificate(s) representing the associated Rights, and any other required
documents, to the Depositary or, in the case of Class A Shares, tender such
Shares (and associated Rights, if applicable) pursuant to the procedures for
book-entry transfer set forth in Section 3 or (b) request his broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
him. A stockholder whose Shares and, if applicable, associated Rights 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 he desires to tender such Shares and, if applicable, the
associated Rights. Unless and until the Purchaser declares that the Rights
Condition is satisfied, stockholders will be required to tender one associated
Right for each Share tendered in order to effect a valid tender of such Share.
A stockholder who desires to tender his Shares and associated Rights, and
whose certificates representing such Shares (and, if applicable, associated
Rights) are not immediately available or, in the case of Class A Shares, who
cannot comply with the procedures for book-entry transfer on a timely basis may
tender such Shares (and, if applicable, associated Rights) by following the
procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letters of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION.......................................................................... 1
THE TENDER OFFER...................................................................... 6
1. Terms of the Offer................................................................ 6
2. Acceptance for Payment and Payment................................................ 7
3. Procedures for Accepting the Offer and Tendering Shares and Rights................ 9
4. Withdrawal Rights................................................................. 13
5. Certain Tax Consequences.......................................................... 13
6. Price Range of the Shares; Dividends.............................................. 14
7. Possible Effects of the Offer on the Market for the Shares; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations............................ 15
8. Certain Information Concerning the Company........................................ 16
9. Certain Information Concerning Rockwell and the Purchaser......................... 20
10. Background of the Offer; Contacts with the Company................................ 22
11. Purpose of the Offer and the Proposed Rockwell Merger; Plans for the Company...... 25
12. Source and Amount of Funds........................................................ 30
13. Dividends and Distributions....................................................... 30
14. Certain Conditions of the Offer................................................... 31
15. Certain Legal Matters; Required Regulatory Approvals.............................. 35
16. Certain Fees and Expenses......................................................... 39
17. Miscellaneous..................................................................... 40
Schedule I -- Directors and Executive Officers of Rockwell and the Purchaser.......... 41
</TABLE>
i
<PAGE> 4
To: All Holders of Shares of Class A Common Stock (Including the
Associated Series A Preferred Stock Purchase Rights), Class B
Common Stock (Including the Associated Series B Preferred
Stock Purchase Rights) and Class C Common Stock (Including the
Associated Series C Preferred Stock Purchase Rights) of
Reliance Electric Company:
INTRODUCTION
ROK Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Rockwell International Corporation, a Delaware
corporation ("Rockwell"), hereby offers to purchase (i) all outstanding shares
of Class A Common Stock, par value $.01 per share (the "Class A Shares"), of
Reliance Electric Company, a Delaware corporation (the "Company"), and (unless
and until the Purchaser declares that the Rights Condition (as defined below)
has been satisfied) the associated Series A preferred stock purchase rights (the
"Class A Rights") issued pursuant to the Rights Agreement, dated as of August
29, 1994, between the Company and Society National Bank, as Rights Agent (as the
same may be amended, the "Rights Agreement"), at a purchase price of $30 per
Class A Share (and associated Class A Right), net to the seller in cash, without
interest thereon, (ii) all outstanding shares of Class B Common Stock, par value
$.01 per share (the "Class B Shares"), of the Company and (unless and until the
Purchaser declares that the Rights Condition has been satisfied) the associated
Series B preferred stock purchase rights (the "Class B Rights") issued pursuant
to the Rights Agreement at a purchase price of $30 per Class B Share (and
associated Class B Right), net to the seller in cash, without interest thereon
and (iii) all outstanding shares of Class C Common Stock, par value $.01 per
share (the "Class C Shares" and, together with the Class A Shares and the Class
B Shares, the "Shares"), of the Company and (unless and until the Purchaser
declares that the Rights Condition has been satisfied) the associated Series C
preferred stock purchase rights (the "Class C Rights" and, together with the
Class A Rights and the Class B Rights, the "Rights") issued pursuant to the
Rights Agreement at a purchase price of $81.24 per Class C Share (and associated
Class C Right), net to the seller in cash, without interest thereon, in each
case upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letters of Transmittal (which together constitute
the "Offer"). Unless the context otherwise requires, all references to Shares
shall include the associated Rights and all references to the Rights shall
include all benefits that may inure to holders of the Rights pursuant to the
Rights Agreement.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letters of
Transmittal, stock transfer taxes on the purchase of Shares or Rights by the
Purchaser pursuant to the Offer. However, any tendering stockholder or other
payee who fails to complete and sign the Substitute Form W-9 that is included in
the Letters of Transmittal may be subject to a required backup federal income
tax withholding of 31% of the gross proceeds payable to such stockholder or
other payee pursuant to the Offer. See Section 3. The Purchaser will pay all
charges and expenses of Dillon, Read & Co. Inc., as Dealer Manager (the "Dealer
Manager"), First Chicago Trust Company of New York, as Depositary (the
"Depositary"), and Georgeson & Company Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 16.
The purpose of the Offer and the Proposed Rockwell Merger (as defined
below) is to acquire control of, and the entire equity interest in, the Company.
The Purchaser currently intends, as soon as practicable following consummation
of the Offer, to seek to have the Company consummate a merger or similar
business combination with the Purchaser (the "Proposed Rockwell Merger")
pursuant to which each then outstanding Share (other than Shares owned by
Rockwell or any of its wholly-owned subsidiaries, Shares held in the treasury of
the Company and Shares held by stockholders who perfect appraisal rights under
the Delaware General Corporation Law (the "Delaware Law")) would be converted
into the right to receive cash in the same amount as received per applicable
Share in the Offer, and the Company would become a wholly-owned subsidiary of
Rockwell. The Purchaser and Rockwell also reserve the right to solicit the votes
of the stockholders of the Company at any annual or special meeting of such
stockholders.
The Offer is conditioned upon the fulfillment of certain conditions
described herein. The Offer will expire at 12:00 midnight, New York City time,
on Friday, November 18, 1994, unless extended.
<PAGE> 5
In the summer of 1991, the Company explored with Rockwell a sale of the
Company. In connection therewith, Rockwell and the Company entered into an
agreement dated August 13, 1991 which provided, among other things, that
Rockwell would not, for a period of two years from the date of such agreement
(until August 13, 1993), engage in certain actions involving the Company,
including actions such as those contemplated by the Offer and the Proposed
Rockwell Merger. After reviewing certain preliminary information provided by the
Company, in late September 1991 Rockwell terminated activities in connection
with its consideration of a possible acquisition of the Company.
Beginning in 1992, Rockwell, through its wholly-owned subsidiary
Allen-Bradley Company, Inc. ("Allen-Bradley"), began discussing and developing
various cooperative activities between Allen-Bradley and the Company, including
joint development of new products and reciprocal product branding. In the course
of such activities on October 27, 1993, John C. Morley, President and Chief
Executive Officer of the Company, met with Don H. Davis, Jr., at that time
President of Allen-Bradley, and appeared to be inviting Rockwell to "go beyond"
their existing cooperative efforts. On May 12, 1994, Mr. Davis, who then was
Executive Vice President and Chief Operating Officer of Rockwell, advised Mr.
Morley that Rockwell was interested in acquiring the Company. On July 12, 1994,
Mr. Davis and Donald R. Beall, Chairman of the Board and Chief Executive Officer
of Rockwell, met with Mr. Morley. At that time Mr. Beall informed Mr. Morley
that Rockwell was extremely interested in acquiring the Company. Mr. Morley said
that he would raise the matter with the Company's Board of Directors and would
respond promptly. On August 11, 1994, Mr. Morley advised Mr. Davis that he had
discussed Rockwell's interest in a proposed acquisition of the Company with the
Company's Board of Directors, but that he could not give Rockwell a definitive
response at that time.
On August 30, 1994, the Company announced that it had entered into the
Agreement and Plan of Merger, dated as of August 30, 1994 (the "General Signal
Merger Agreement"), with General Signal Corporation ("General Signal"),
contemplating the merger of the Company with and into General Signal, with
General Signal being the surviving corporation (the "Proposed General Signal
Merger"). In the Proposed General Signal Merger, each Class A Share would be
converted into the right to receive 0.739 of one share of General Signal Common
Stock, par value $1.00 per share ("General Signal Common Stock"), each Class B
Share would be converted into the right to receive 0.739 of one share of General
Signal Class B Common Stock, par value $1.00 per share ("General Signal Class B
Common Stock") (or, at the election of the holder of Class B Shares, into 0.739
of one share of General Signal Common Stock), and each Class C Share would be
converted into the right to receive 2.001 shares of General Signal Class B
Common Stock (or, at the election of the holder of Class C Shares, into 2.001
shares of General Signal Common Stock). The General Signal Merger Agreement also
provides that for each share of General Signal Common Stock or General Signal
Class B Common Stock issued in the Proposed General Signal Merger, one General
Signal Common Stock purchase right or one General Signal Class B Common Stock
purchase right (as applicable) would be issued pursuant to the Rights Agreement
dated as of March 7, 1986, as amended, between General Signal and the rights
agent named therein (the "General Signal Rights Agreement"). Based on the
closing price of the General Signal Common Stock on the New York Stock Exchange
on August 29, 1994, the last trading day preceding the date of the announcement
of the General Signal Merger Agreement, of $37.25 per share, the Proposed
General Signal Merger would have had a value of approximately $1.4 billion or
$27.53 per Class A Share and Class B Share and $74.54 per Class C Share. Based
on the closing price of General Signal Common Stock on the New York Stock
Exchange on October 19, 1994 of $34.125 per share, the Proposed General Signal
Merger would have had a value of approximately $1.3 billion or $25.22 per Class
A Share and Class B Share and $68.28 per Class C Share. The Proposed General
Signal Merger is subject to certain conditions, including approval by the
stockholders of General Signal and the Company.
The General Signal Merger Agreement provides that, among other things, the
Company and its subsidiaries, and their directors, officers, employees, agents
and representatives, will not solicit or encourage (including by way of
furnishing non-public information) any inquiry or proposal with respect to a
merger or other acquisition of the Company (a "Company Acquisition Transaction")
or communicate with any third party with respect to any Company Acquisition
Transaction or enter into any agreement requiring the Company to abandon the
Proposed General Signal Merger; provided that, in response to an unsolicited
written proposal with respect to a Company Acquisition Transaction from a
financially capable third party that
2
<PAGE> 6
contains no financing condition, the Company may furnish non-public information
and negotiate or otherwise communicate with such third party if the Company's
Board of Directors determines that taking such action is reasonably likely to
lead to a Company Acquisition Transaction more favorable than the Proposed
General Signal Merger and determines (and the Company's outside counsel opines
in writing) that failing to take such action would constitute a breach of its
fiduciary duties.
Rockwell believes that the Offer will permit the Company to furnish
Rockwell with non-public information pursuant to these provisions. The General
Signal Merger Agreement further provides that General Signal may terminate the
General Signal Merger Agreement in the event the Company's Board of Directors
(i) withdraws or adversely changes its recommendation with respect to the
Proposed General Signal Merger, (ii) recommends any proposal in respect of a
Company Acquisition Transaction or (iii) furnishes non-public information to or
negotiates or communicates with a third party with respect to any Company
Acquisition Transaction or publicly discloses a resolution to do any of the
foregoing. Under Section 9.05(b) of the General Signal Merger Agreement, if
General Signal terminates the General Signal Merger Agreement under such
circumstances, the Company will be required to reimburse General Signal for up
to $2.5 million of documented fees and expenses and to pay General Signal an
additional fee of $50 million.
On October 19, 1994, the Board of Directors of Rockwell approved the
commencement of the Offer. On October 20, 1994 Rockwell sent a letter to the
Company and issued a press release stating that Rockwell's Board of Directors
had authorized the acquisition of the Company at a price of $30 per Class A
Share and an equivalent price for convertible shares (i.e., the Class B Shares
and Class C Shares, based on their respective conversion ratios of 1 to 1 and
2.708 to 1). See Section 10.
The making of the Offer will enable the Purchaser to commence the process
of seeking regulatory approvals for its acquisition of the Company. See Section
15. In addition, by tendering Shares into the Offer, the Company's stockholders
effectively will be given the opportunity to express to the Company's Board of
Directors that they wish to be able to accept the Offer and to approve the
Proposed Rockwell Merger or a similar transaction with Rockwell.
The Purchaser reserves the right to amend the Offer (including amending the
purchase price) upon entry into a merger agreement with the Company or otherwise
or to negotiate a merger agreement with the Company not involving a tender
offer. See Section 14. In the event that Rockwell is unable to negotiate a
definitive merger agreement with the Company, Rockwell will make a determination
whether to seek through a proxy contest at an annual meeting of stockholders or
a special meeting called for that purpose sufficient representation on the
Company's Board of Directors to cause the Board of Directors to approve the
Proposed Rockwell Merger and satisfy the Rights Condition and the Section 203
Condition (as defined below) and thereby permit the Offer and the Proposed
Rockwell Merger to be consummated. In connection therewith, Rockwell may solicit
calls for a special meeting of stockholders of the Company pursuant to Section
1.2 of the Company's By-Laws, which permits the holders of a majority of the
Company's voting stock (as well as the Chairman of the Board, the President or
the Board of Directors of the Company) to call such a special meeting.
The Purchaser reserves the right to acquire additional Shares after
consummation of the Offer in open market purchases, through a tender offer, in
privately negotiated transactions or otherwise in order to obtain a sufficient
number of Shares to approve the transactions contemplated hereby. In addition,
after consummation of the Offer, whether or not the Purchaser acquires
additional Shares, the Purchaser currently intends to seek to enter into the
Proposed Rockwell Merger with the Company.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OR
A SOLICITATION OF CALLS FOR A SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS. ANY
SUCH SOLICITATION WHICH ROCKWELL OR THE PURCHASER MIGHT MAKE WOULD BE MADE ONLY
PURSUANT TO SEPARATE PROXY OR SOLICITATION MATERIALS COMPLYING WITH ALL
APPLICABLE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE "EXCHANGE ACT"), AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
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<PAGE> 7
CERTAIN CONDITIONS TO THE OFFER
The Offer is subject to the fulfillment of certain conditions, including
the following:
Minimum Condition. CONSUMMATION OF THE OFFER IS CONDITIONED (THE "MINIMUM
CONDITION") UPON THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN SECTION 1) SHARES REPRESENTING AT LEAST A
MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING CLASS A SHARES ON A FULLY DILUTED
BASIS (ASSUMING CONVERSION OF ALL OUTSTANDING CLASS B SHARES AND CLASS C SHARES
INTO CLASS A SHARES AND THE EXERCISE OF ALL OUTSTANDING OPTIONS).
According to the Company's Registration Statement under the Exchange Act on
Form 8-A dated September 15, 1994 (the "Company 8-A"), as of August 30, 1994,
there were outstanding 32,909,939 Class A Shares, 3,161,032 Class B Shares and
5,250,000 Class C Shares. In addition, there were 1,259,365 Class A Shares
subject to issuance pursuant to outstanding stock options or options which may
be granted upon achievement of certain performance goals under various of the
Company's stock-based incentive plans. According to the Company's Restated
Certificate of Incorporation, as amended through September 21, 1994 (the
"Company Certificate of Incorporation"), and other publicly available
information, each Class B Share is convertible into one Class A Share and each
Class C Share is convertible into 2.708 Class A Shares upon the satisfaction of
certain conditions. As a result, the Purchaser believes that the Minimum
Condition would be satisfied if at least 25,773,669 Class A Equivalent Shares
(as defined below) were validly tendered and not withdrawn prior to the
Expiration Date. For purposes hereof, "Class A Equivalent Shares" shall mean
Class A Shares, Class B Shares and Class C Shares, where each Class A Share and
Class B Share shall be deemed to equal one Class A Equivalent Share and each
Class C Share shall be deemed to equal 2.708 Class A Equivalent Shares.
The No Impediments Condition. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE GENERAL SIGNAL MERGER AGREEMENT HAVING BEEN TERMINATED WITHOUT ANY
PAYMENTS BY OR PENALTIES TO THE COMPANY (OTHER THAN ANY APPLICABLE PAYMENTS
PURSUANT TO SECTION 9.05(b) OF THE GENERAL SIGNAL MERGER AGREEMENT) AND THE
COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY NEW OR AMENDED AGREEMENTS
WITH GENERAL SIGNAL OR ANY OTHER PERSON OR ENTITY HAVING THE EFFECT OF IMPAIRING
THE ABILITY OF THE PURCHASER TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE
EXPECTED ECONOMIC VALUE TO THE PURCHASER OF THE ACQUISITION OF THE COMPANY (THE
"NO IMPEDIMENTS CONDITION").
Rights Condition. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE RIGHTS
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED
OR OTHERWISE ARE INAPPLICABLE TO THE OFFER AND THE PROPOSED ROCKWELL MERGER (THE
"RIGHTS CONDITION"). THE RIGHTS ARE DESCRIBED IN THE COMPANY 8-A, AND SUCH
DESCRIPTION IS SUMMARIZED IN SECTION 11.
According to the Company 8-A, at any time until any person or entity
becomes an Acquiring Person (as defined in the Rights Agreement), the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment. According to the Company 8-A, until the close of business
on the Distribution Date (as defined in Section 11), the Rights will be
represented by and transferred with, and only with, the associated Shares and
the surrender for transfer of any of the certificates representing Shares (the
"Share Certificates") will also constitute the transfer of the Rights associated
with the Shares represented by such Share Certificates. According to the Company
8-A, the Rights Agreement provides that, as soon as practicable following the
Distribution Date, separate certificates representing Rights ("Rights
Certificates") will be mailed to holders of record of Shares as of the close of
business on the Distribution Date, and thereafter the Rights Certificates alone
will evidence the Rights.
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<PAGE> 8
Based on publicly available information, the Purchaser believes that as of
October 20, 1994, the Rights were not exercisable, Rights Certificates had not
been issued and the Rights were evidenced by the Share Certificates. Under the
Rights Agreement, as a result of the announcement of the Offer, the Distribution
Date will be November 3, 1994, unless prior to such date the Company's Board of
Directors redeems the Rights or takes action to delay the Distribution Date. The
Distribution Date may also occur sooner. See Section 11.
According to the Company 8-A, the Rights, if still outstanding, will expire
immediately prior to the effective time of the Proposed General Signal Merger.
The Purchaser believes that, in order to place the Purchaser on a level playing
field with General Signal and to satisfy its fiduciary duties to stockholders,
the Company's Board of Directors must take action to exclude the Purchaser from
the constraints imposed by the Rights Agreement.
Section 203 Condition. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SECTION 203 OF THE
DELAWARE LAW HAS BEEN COMPLIED WITH IN CONNECTION WITH THE PURCHASER'S
ACQUISITION OF THE COMPANY OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE
PURCHASER IN CONNECTION WITH THE OFFER AND THE PROPOSED ROCKWELL MERGER (THE
"SECTION 203 CONDITION").
The Proposed Rockwell Merger, including the timing and details thereof, is
subject to, among other things, the provisions of the Delaware Law, including
Section 203 thereof. In general, Section 203 of the Delaware Law provides that a
Delaware corporation such as the Company may not engage in any "Business
Combination" (defined to include a variety of transactions, including a merger)
with any "Interested Stockholder" (defined generally as a person that directly
or indirectly beneficially owns 15% or more of the corporation's outstanding
voting stock), or any affiliate of an Interested Stockholder, for three years
after the date on which the Interested Stockholder became an Interested
Stockholder, unless (i) prior to the date such Interested Stockholder became an
Interested Stockholder, the board of directors of such corporation approved
either the Business Combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
for purposes of determining the number of shares outstanding those shares held
by persons who are directors and also officers of the corporation and employee
stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer) or (iii) on or subsequent to the date the stockholder
becomes an Interested Stockholder, the Business Combination is (a) approved by
the board of directors of the corporation and (b) authorized at an annual or
special meeting of stockholders by the affirmative vote of the holders of at
least 66 2/3% of the outstanding voting stock of the corporation which is not
owned by the Interested Stockholder.
Section 203(b)(6) of the Delaware Law provides that the restrictions
contained in Section 203 of the Delaware Law do not apply to a Business
Combination that is proposed prior to the consummation or abandonment of and
following the announcement or notification of one of certain extraordinary
transactions (including a merger) involving the corporation which transaction
(i) is with or by a person who either was not an Interested Stockholder during
the previous three years or who became an Interested Stockholder with the
approval of the corporation's board of directors and (ii) has been approved or
has not been opposed by a majority of the members of the board of directors then
in office who were directors prior to any person becoming an Interested
Stockholder during the previous three years or were recommended for election or
elected to succeed such directors by a majority of such directors. Accordingly,
the Purchaser believes that, because the General Signal Merger Agreement was
approved by the Board of Directors of the Company, the restrictions on Business
Combinations contained in Section 203 are inapplicable to the Proposed Rockwell
Merger pursuant to Section 203(b)(6).
The Section 203 Condition would be satisfied if the Board of Directors of
the Company approved the Offer and the Proposed Rockwell Merger prior to
consummation of the Offer, or if, upon consummation of the Offer, the Purchaser
owned at least 85% of the total voting stock of the Company outstanding at the
time the
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<PAGE> 9
transaction commenced (excluding Shares owned by persons who are directors and
also officers of the Company and possibly excluding Shares held in certain
employee stock plans), or if the Purchaser, in its sole discretion, were
satisfied that Section 203 was invalid or its restrictions were otherwise
inapplicable to the Purchaser in connection with the Proposed Rockwell Merger
for any reason, including, without limitation, those specified in Section 203.
Certain other conditions to the consummation of the Offer are described in
Section 14. The Purchaser expressly reserves the right to waive any one or more
of the conditions to the Offer. See Sections 14 and 15.
THIS OFFER TO PURCHASE AND THE LETTERS OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER 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 such extension or amendment), the Purchaser will accept for payment and
thereby purchase all Shares validly tendered and not withdrawn in accordance
with the procedures set forth in Section 4 on or prior to the Expiration Date
(as hereinafter defined). The term "Expiration Date" means 12:00 midnight, New
York City time, on Friday, November 18, 1994, unless and until the Purchaser, in
its sole discretion, shall have extended the period of time for which the Offer
is open, in which event the term "Expiration Date" shall mean the time and date
at which the Offer, as so extended by the Purchaser, shall expire.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period during which the Offer is open
for any reason, including the occurrence of any of the events specified in
Section 14, by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering stockholder to withdraw such stockholder's Shares. See Section 4.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), the Purchaser also expressly reserves the right,
in its sole discretion, at any time or from time to time, to (i) delay
acceptance for payment of or, regardless of whether such Shares were theretofore
accepted for payment, payment for any Shares pending receipt of any regulatory
or governmental approvals specified in Section 15, (ii) terminate the Offer
(whether or not any Shares have theretofore been accepted for payment) if any
condition referred to in Section 14 has not been satisfied or upon the
occurrence of any event specified in Section 14 and (iii) waive any condition or
otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such delay, termination, waiver or amendment to the Depositary
and, other than in the case of any such waiver, by making a public announcement
thereof. The Purchaser acknowledges (i) that Rule 14e-1(c) under the Exchange
Act requires the Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer and (ii) that
the Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (i) of the preceding sentence), any Shares upon the
occurrence of any event specified in Section 14 without extending the period of
time during which the Offer is open.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 14. Any such extension,
delay, termination or amendment will be followed as promptly as practicable by
public announcement thereof, and such announcement in the case of an extension
will be made no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date. Without limiting the manner
in which the Purchaser may choose to make any public announcement, subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to holders of
Shares), the Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
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<PAGE> 10
If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer, other than a change in price or a change in percentage of securities
sought or a change in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality, of the changes. In the
Commission's view, an offer should remain open for a minimum of five business
days from the date the material change is first published, sent or given to
stockholders, and, if material changes are made with respect to information that
approaches the significance of price and the percentage of securities sought, a
minimum of ten business days may be required to allow for adequate dissemination
and investor response. With respect to a change in price or, subject to certain
limitations, a change in the percentage of securities sought or a change in any
dealer's soliciting fee, a minimum ten business day period from the date of such
change is generally required to allow for adequate dissemination to
stockholders. Accordingly, if prior to the Expiration Date, the Purchaser
decreases the number of Shares being sought, or increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day from
the date that notice of such increase or decrease is first published, sent or
given to holders of Shares, the Offer will be extended at least until the
expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, stockholders will be required to tender one associated Right for each
Share tendered to effect a valid tender of such Share. See Sections 3 and 11.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE NO IMPEDIMENTS CONDITION, THE RIGHTS CONDITION AND THE
SECTION 203 CONDITION. SEE SECTION 14. The Purchaser reserves the right (but
shall not be obligated), in accordance with applicable rules and regulations of
the Commission, to waive any or all of such conditions. If, by the Expiration
Date, any or all of such conditions have not been satisfied, the Purchaser may,
in its sole discretion, elect to (i) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the Offer,
as extended, subject to the terms of the Offer, (ii) waive all of the
unsatisfied conditions and, subject to complying with applicable rules and
regulations of the Commission, accept for payment all Shares so tendered and not
extend the Offer or (iii) terminate the Offer and not accept for payment any
Shares and return all tendered Shares to tendering stockholders. In the event
that the Purchaser waives any condition set forth in Section 14, the Commission
may, if the waiver is deemed to constitute a material change to the information
previously provided to the stockholders, require that the Offer remain open for
an additional period of time and/or that the Purchaser disseminate information
concerning such waiver.
A request is being made to the Company pursuant to Rule 14d-5 under the
Exchange Act for the use of the Company's stockholder list, its list of holders
of Rights and security position listings for the purpose of disseminating the
Offer to holders of Shares. Upon compliance by the Company with such request,
this Offer to Purchase and the appropriate related Letter of Transmittal and, if
required, other relevant materials will be mailed to record holders of Shares
and Rights 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 and list of holders of Rights, if applicable, or
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares and Rights.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of the Offer as so extended or amended), the Purchaser will
purchase, by accepting for payment, and will pay for, all Shares validly
tendered and not withdrawn (as permitted by Section 4) prior to the Expiration
Date promptly after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions to the Offer set forth in Section 14.
In addition, subject to applicable rules of the Commission, the Purchaser
expressly reserves the
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<PAGE> 11
right to delay acceptance for payment of, or payment for, Shares pending receipt
of any regulatory or governmental approvals specified in Section 15.
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), European Community
Regulation 4064/89 (the "EC Merger Regulation") and the Competition Act (Canada)
(the "Competition Act"), see Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) Share Certificates for
such Shares and, if applicable, Rights Certificates for the associated Rights,
or, in the case of Class A Shares, timely confirmation (a "Book-Entry
Confirmation") of the book-entry transfer of such Shares and, if applicable,
Rights into the Depositary's account at The Depository Trust Company, Midwest
Securities Trust Company or Philadelphia Depository Trust Company (collectively,
the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3, (ii) the appropriate Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or, in the case of Class A Shares, an Agent's Message (as defined below) in
connection with a book-entry transfer and (iii) any other documents required by
the appropriate 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 Class A Shares and, if applicable, the Class A
Rights which are the subject of such Book-Entry Confirmation that such
participant has received and agrees to be bound by the terms of the appropriate
Letter of Transmittal and that the Purchaser may enforce such agreement against
such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased 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 payment from the Purchaser
and transmitting payment to validly tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE
PURCHASER.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Class A Shares delivered 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 within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer. In the event separate Rights
Certificates are issued, similar action will be taken with respect to
unpurchased and untendered Rights.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE PURCHASED PURSUANT
TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN
CONSIDERATION.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of the Purchaser's subsidiaries or
affiliates the right to purchase all or any portion of the Shares and Rights
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
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<PAGE> 12
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES AND RIGHTS.
VALID TENDER OF SHARES AND RIGHTS
Except as set forth below, in order for Shares and (prior to the
Distribution Date) Rights to be validly tendered pursuant to the Offer, the
appropriate Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or, in the
case of Class A Shares, an Agent's Message in connection with a book-entry
delivery of Class A Shares and (prior to the Distribution Date) Class A Rights,
and any other documents required by the appropriate Letter of Transmittal must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date and either
(i) Share Certificates and, if applicable, Rights Certificates representing
tendered Shares and Rights must be received by the Depositary, or, in the case
of Class A Shares, such Class A Shares and Class A Rights must be tendered
pursuant to the procedure for book-entry transfer set forth below and Book-Entry
Confirmation must be received by the Depositary, in each case on or prior to the
Expiration Date, or (ii) the guaranteed delivery procedures set forth below must
be complied with.
A Class A Letter of Transmittal should be used to tender Class A Shares, a
Class B Letter of Transmittal should be used to tender Class B Shares and a
Class C Letter of Transmittal should be used to tender Class C Shares.
IF THE PURCHASER DECLARES THAT THE RIGHTS CONDITION IS SATISFIED, THE
PURCHASER WILL NOT REQUIRE DELIVERY OF RIGHTS. UNLESS AND UNTIL THE PURCHASER
DECLARES THAT THE RIGHTS CONDITION IS SATISFIED, HOLDERS OF SHARES WILL BE
REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE TENDERED IN ORDER TO
EFFECT A VALID TENDER OF SUCH SHARE.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THE APPROPRIATE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND SOLE 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.
SEPARATE DELIVERY OF RIGHTS CERTIFICATES
If the Distribution Date does not occur prior to the Expiration Date, a
tender of Shares will also constitute a tender of the associated Rights. If the
Distribution Date occurs and Rights Certificates are distributed by the Company
to holders of Shares prior to the time a holder's Shares are tendered pursuant
to the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number (and the series) of Rights
equal to the number (and class) of Shares tendered must be delivered to the
Depositary or, if available in the case of Class A Rights, a Book-Entry
Confirmation received by the Depositary with respect thereto. If the
Distribution Date occurs and Rights Certificates are not distributed prior to
the time Shares are tendered pursuant to the Offer, Rights may be tendered prior
to a stockholder receiving Rights Certificates by use of the guaranteed delivery
procedure described below. In any case, a tender of Shares constitutes an
agreement by the tendering stockholder to deliver Rights Certificates
representing a number (and the series) of Rights equal to the number (and class)
of Shares tendered pursuant to the Offer to the Depositary within five business
days after the date Rights Certificates are distributed. The Purchaser reserves
the right to require that the Depositary receive Rights Certificates, or a
Book-Entry Confirmation, if available in the case of Class A Rights, with
respect to such Rights, prior to accepting the related Shares for payment
pursuant to the Offer if the Distribution Date occurs prior to the Expiration
Date.
BOOK-ENTRY TRANSFER
The Depositary will make a request to establish accounts with respect to
the Class A Shares at each of the Book-Entry Transfer Facilities for purposes of
the Offer within two business days after the date of this
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<PAGE> 13
Offer to Purchase. Any financial institution that is a participant in the system
of any Book-Entry Transfer Facility may make Book-Entry delivery of Class A
Shares by causing such Book-Entry Transfer Facility to transfer such Class A
Shares into the Depositary's account at such Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Class A Shares may be effected through
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility, the appropriate Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other required
documents must, in any case, be transmitted to and received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date, or the guaranteed delivery procedure set forth
below must be complied with.
If the Distribution Date occurs, the Depositary will also make a request to
establish an account with respect to the Class A Rights at each of the
Book-Entry Transfer Facilities, but no assurance can be given that book-entry
delivery of Class A Rights will be available. If book-entry delivery of Class A
Rights is available, the foregoing book-entry transfer procedures will also
apply to Class A Rights. Otherwise, if Rights Certificates have been issued, a
tendering stockholder will be required to tender Rights by means of physical
delivery to the Depositary of Rights Certificates (in which event references in
this Offer to Purchase to Book-Entry Confirmations with respect to Class A
Rights will be inapplicable) or pursuant to the guaranteed delivery procedure
set forth below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH 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 firm that
is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agents Medallion
Program (an "Eligible Institution"), unless the Shares and Rights tendered
thereby are tendered (i) by a registered holder of Shares and Rights who has not
completed either the box labeled "Special Payment Instructions" or the box
labeled "Special Delivery Instructions" on the appropriate Letter of Transmittal
or (ii) for the account of an Eligible Institution. See Instruction 1 of the
appropriate Letter of Transmittal.
If the Share Certificates or Rights Certificates are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made to, or Share Certificates or Rights Certificates for unpurchased
Shares or Rights are to be issued or returned to, a person other than the
registered holder, then the tendered certificates must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holder or holders appear on the certificates, with the signatures
on the certificates or stock powers guaranteed by an Eligible Institution as
provided in the appropriate Letter of Transmittal. See Instructions 1 and 5 of
the appropriate Letter of Transmittal.
If the Share Certificates and Rights Certificates are forwarded separately
to the Depositary, a properly completed and duly executed appropriate Letter of
Transmittal (or facsimile thereof) must accompany each such delivery.
GUARANTEED DELIVERY
If a stockholder desires to tender Shares and Rights pursuant to the Offer
and such stockholder's Share Certificates or, if applicable, Rights Certificates
are not immediately available (including, if the Distribution Date has occurred,
because Rights Certificates have not yet been distributed by the Company) or
time will not permit all required documents to reach the Depositary on or prior
to the Expiration Date, or, in the case of Class A Shares, the procedures for
book-entry transfer cannot be completed on a timely basis, such Shares or
10
<PAGE> 14
Rights may nevertheless be tendered if all of the following guaranteed delivery
procedures are duly complied with:
(i) such tender is 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, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the Share Certificates and Rights Certificates (or, in the case
of Class A Shares and, if available, Class A Rights, a Book-Entry
Confirmation) representing all tendered Shares and Rights, in proper form
for transfer together with a properly completed and duly executed
appropriate Letter of Transmittal (or facsimile thereof), with any required
signature guarantees (or, in the case of a book-entry transfer of Class A
Shares and, if available, Class A Rights, an Agent's Message) and any other
documents required by the appropriate Letter of Transmittal are received by
the Depositary within (x) in the case of Shares, five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such
Notice of Guaranteed Delivery or (y) in the case of Rights, a period ending
on the later of (1) five NYSE trading days after the date of execution of
such Notice of Guaranteed Delivery and (2) five business days after the
date Rights Certificates are distributed to stockholders by the Company.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares and, if applicable, Rights
being tendered within the meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or, in the case of Class A
Shares, of Book-Entry Confirmation with respect to, such Shares, and if the
Distribution Date has occurred, Rights Certificates for, or, in the case of
Class A Rights, a Book-Entry Confirmation, if available, with respect to, the
associated Rights (unless the Purchaser elects, in its sole discretion, to make
payment for such Shares pending receipt of the Rights Certificates for, or, in
the case of Class A Rights, a Book-Entry Confirmation, if available, with
respect to, such Rights), a properly completed and duly executed appropriate
Letter of Transmittal (or facsimile thereof), together with any required
signature guarantees (or, in the case of a book-entry transfer of Class A Shares
or, if available, Class A Rights, an Agent's Message) and any other documents
required by the appropriate Letter of Transmittal. Accordingly, payment might
not be made to all tendering stockholders at the same time, and will depend upon
when Share Certificates (or Rights Certificates) are received by the Depositary
or, in the case of Class A Shares or Class A Rights, Book-Entry Confirmations of
such Shares (or Rights, if available) are received into the Depositary's account
at a Book-Entry Transfer Facility.
If the Rights Condition is satisfied, the guaranteed delivery procedure
with respect to Rights Certificates and the requirement for the tender of Rights
will no longer apply.
BACKUP FEDERAL INCOME TAX WITHHOLDING
UNDER THE BACKUP FEDERAL INCOME TAX LAWS APPLICABLE TO CERTAIN STOCKHOLDERS
(OTHER THAN CERTAIN EXEMPT STOCKHOLDERS, INCLUDING, AMONG OTHERS, ALL
CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS), THE DEPOSITARY MAY BE REQUIRED TO
WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS MADE TO SUCH STOCKHOLDERS PURSUANT TO
THE OFFER OR THE PROPOSED ROCKWELL MERGER. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
11
<PAGE> 15
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTERS OF TRANSMITTAL. SEE
INSTRUCTION 9 OF THE LETTERS OF TRANSMITTAL.
CONVERSION OF CLASS B SHARES AND CLASS C SHARES INTO CLASS A SHARES
By executing the appropriate Letter of Transmittal, a tendering holder of
Class B Shares or Class C Shares irrevocably appoints the Depositary as such
holder's agent, attorney-in-fact and proxy to present all Class B Shares or
Class C Shares tendered by such holder and accepted for payment and paid for by
the Purchaser, together with any required notice, for conversion, on behalf of
the holder, into Class A Shares and then to transfer to the Purchaser the Class
A Shares into which such Class B Shares or Class C Shares were converted.
APPOINTMENT AS PROXY
By executing the appropriate Letter of Transmittal, a tendering stockholder
irrevocably appoints designees of the Purchaser, and each of them, as such
stockholder's attorneys-in-fact and proxies, with full power of substitution, in
the manner set forth in the Letters of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares and, if applicable, Rights
tendered by such stockholder and accepted for payment by the Purchaser and with
respect to any and all other Shares or Rights and other securities or rights
issued or issuable in respect of such Shares and Rights on or after the date of
this Offer to Purchase. All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest in the tendered Shares and
Rights. Such appointment will be effective upon the acceptance for payment of
such Shares and Rights by the Purchaser in accordance with the terms of the
Offer. Upon such acceptance for payment, all other powers of attorney and
proxies given by such stockholder with respect to such Shares, Rights, and such
other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given by
such stockholder (and, if given, will not be deemed effective). The designees of
the Purchaser will, with respect to the Shares and Rights and such other
securities and rights for which such appointment is effective, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders, or any adjournment or postponement thereof, or by consent in lieu
of any such meeting or otherwise. In order for Shares and Rights to be deemed
validly tendered, immediately upon the acceptance for payment of such Shares and
Rights, the Purchaser or its designee must be able to exercise full voting
rights with respect to such Shares, Rights and other securities, including
voting at any meeting of stockholders.
DETERMINATION OF VALIDITY
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
or Rights will be determined by the Purchaser, in its sole discretion, whose
determination shall be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in any
tender of Shares or Rights of any particular stockholder whether or not similar
defects or irregularities are waived in the case of other stockholders.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letters of Transmittal and the instructions thereto) will be
final and binding. No tender of Shares or Rights will be deemed to have been
validly made until all defects and irregularities with respect to such tender
have been cured or waived by the Purchaser. None of Rockwell, the Purchaser or
any of their respective affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person or entity will be under
any duty to give any notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification.
12
<PAGE> 16
The Purchaser's acceptance for payment of Shares and, if applicable, Rights
tendered pursuant to any of the procedures described above 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 and Rights made pursuant to the Offer are irrevocable. Shares and
Rights tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment as provided
herein, may also be withdrawn at any time after December 19, 1994 (or such later
date as may apply in case the Offer is extended). A withdrawal of Shares will
also constitute a withdrawal of the associated Rights. Rights may not be
withdrawn unless the associated Shares are also withdrawn.
If, for any reason whatsoever, acceptance for payment of any Shares and
Rights tendered pursuant to the Offer is delayed, or the Purchaser is unable to
accept for payment or pay for Shares and Rights tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights set forth herein, the
Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares
and Rights and such Shares and Rights may not be withdrawn except to the extent
that the tendering stockholder is entitled to and duly exercises withdrawal
rights as described in this Section 4. Any such delay will be by an extension of
the Offer to the extent required by law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses 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 and Rights to be withdrawn, the number of Shares and Rights to be
withdrawn, and (if Share Certificates and Rights Certificates have been
tendered) the name of the registered holder of the Shares and Rights as set
forth in the Share Certificate and Rights Certificate, if different from that of
the person who tendered such Shares and Rights. If Share Certificates and Rights
Certificates have been delivered or otherwise identified to the Depositary, then
prior to the physical release of such certificates, the tendering stockholder
must submit the serial numbers shown on the particular certificates evidencing
the Shares and Rights to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Shares and Rights tendered for the account of an Eligible Institution. If Class
A Shares and Class A Rights have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Class A Shares and Class A
Rights, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in the first sentence of this
paragraph. Withdrawals of Shares and Rights may not be rescinded. Any Shares and
Rights properly withdrawn will be deemed not validly tendered for purposes of
the Offer, but may be retendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in Section 3.
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 shall be final and binding. None of Rockwell,
the Purchaser or any of their respective affiliates or assigns, the Dealer
Manager, the Depositary, the Information Agent or any other person or entity
will be under any duty to give any notification of any defects or irregularities
in any notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the
Offer or the Proposed Rockwell Merger will be a taxable transaction for federal
income tax purposes and may also be a taxable transaction under applicable
state, local, foreign and other tax laws. For federal income tax purposes, each
selling or exchanging stockholder would generally recognize gain or loss equal
to the difference between the amount of cash received and such stockholder's tax
basis for the sold or exchanged Shares. Such gain or loss will be capital gain
or loss (assuming the Shares are held as a capital asset) and any such capital
gain or loss will be long term if, as of the date of sale or exchange, the
Shares were held for more than one year or will be short term if, as of such
date, the Shares were held for one year or less.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation,
13
<PAGE> 17
individuals who are not citizens or residents of the United States and foreign
corporations, or entities that are otherwise subject to special tax treatment
under the Internal Revenue Code of 1986, as amended (such as insurance
companies, tax-exempt entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE OFFER
AND PROPOSED ROCKWELL MERGER, INCLUDING FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS. According to the Company's 1993
Annual Report, the Class A Shares are listed and traded on the NYSE and have
been so listed and traded since May 6, 1992. The Class A Shares are traded on
the NYSE under the symbol "REE." The following table sets forth, for the periods
indicated, the reported high and low sale prices for the Class A Shares on the
NYSE Composite Tape and the amount of cash dividends paid per Class A Share, as
reported in the Company's 1993 Annual Report with respect to periods occurring
in 1992 and 1993, and as reported thereafter by published financial sources,
with respect to periods occurring in 1994.
RELIANCE ELECTRIC COMPANY
<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
----- ----- ---------
<S> <C> <C> <C>
1992
Second Quarter (beginning May 6).................................. $20 5/8 $16 3/8 --
Third Quarter..................................................... 19 1/2 16 3/8 --
Fourth Quarter.................................................... 20 7/8 15 1/4 --
1993
First Quarter..................................................... 23 7/8 19 3/4 --
Second Quarter.................................................... 21 7/8 18 3/4 --
Third Quarter..................................................... 20 3/4 16 3/4 --
Fourth Quarter.................................................... 18 1/2 16 3/8 --
1994
First Quarter..................................................... 20 16 1/2 --
Second Quarter.................................................... 19 5/8 16 1/4 --
Third Quarter..................................................... 25 5/8 17 7/8 --
Fourth Quarter (through October 19)............................... 25 1/4 24 1/8 --
</TABLE>
According to the Company's 1993 Annual Report, there is no public trading
market for the Class B Shares and the Class C Shares and, at December 31, 1993,
there were eleven stockholders of record and one stockholder of record for the
Class B Shares and the Class C Shares, respectively. According to the Company
Certificate of Incorporation and other publicly available information, each
Class B Share may be converted into one Class A Share and each Class C Share may
be converted into 2.708 Class A Shares upon the satisfaction of certain
conditions. According to the Company Certificate of Incorporation, holders of
Class C Shares are entitled to convert Class C Shares into Class A Shares, inter
alia, in connection with the Company's merger into, consolidation with or
acquisition by, another entity or to the extent such holder intends to tender
Class A Shares upon conversion of Class C Shares, upon the commencement of any
tender offer made to all holders of the Company's voting common stock for at
least a majority of the Company's outstanding voting common stock.
On August 29, 1994, the last full day of trading prior to the announcement
of the execution of the General Signal Merger Agreement, according to published
sources, the reported closing price on the NYSE Composite Tape for the Class A
Shares was $19 7/8 per Class A Share. On October 19, 1994, the last full day of
trading prior to the announcement of the Offer, according to published sources,
the reported closing price on
14
<PAGE> 18
the NYSE Composite Tape for the Class A Shares was $24 1/2 per Class A Share.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE CLASS A
SHARES.
The Purchaser believes, based upon publicly available information, that as
of the date of this Offer to Purchase, the Class A Rights are listed on the NYSE
and all Rights are attached to the associated Shares and are not traded
separately. As a result, the sale prices per Class A Share set forth above are
also the high and low sale prices per Class A Share and associated Class A Right
during all such periods after September 15, 1994, the date of issuance of the
Class A Rights. Upon the occurrence of the Distribution Date, the Rights are to
detach, and may trade separately, from the Shares. See Section 11. As a result
of the announcement by the Purchaser of the Offer, the Distribution Date will be
November 3, 1994, unless prior to such date the Company's Board of Directors
redeems the Rights or takes action to delay the Distribution Date. The
Distribution Date may also occur sooner. See Section 11. IF THE DISTRIBUTION
DATE OCCURS AND THE CLASS A RIGHTS BEGIN TO TRADE SEPARATELY FROM THE CLASS A
SHARES, STOCKHOLDERS ARE ALSO URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
CLASS A RIGHTS.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE
LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES
The purchase of Class A Shares pursuant to the Offer will reduce the number
of Class A Shares that might otherwise trade publicly and could adversely affect
the liquidity and market value of the remaining Class A Shares held by the
public. The purchase of Class A Shares pursuant to the Offer can also be
expected to reduce the number of holders of Class A Shares. The Purchaser cannot
predict whether the reduction in the number of Class A Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Class A Shares or whether it would
cause future market prices to be greater or less than the Offer price therefor.
STOCK EXCHANGE LISTING
According to the NYSE's published guidelines, the NYSE would consider
delisting the Class A Shares if, among other things, the number of record
holders of at least 100 Class A Shares should fall below 1,200, the number of
publicly held Class A Shares (exclusive of holdings of officers, directors,
their immediate families and other concentrated holdings of 10% or more ("NYSE
Excluded Holdings")) should fall below 600,000 or the aggregate market value of
publicly held Class A Shares (exclusive of NYSE Excluded Holdings) should fall
below $5,000,000.
Depending upon the number of Class A Shares acquired pursuant to the Offer,
the Class A Shares may no longer meet the requirements for continued listing on
the NYSE. If as a result of the purchase of Class A Shares pursuant to the
Offer, Class A Shares no longer meet the requirements of the NYSE for continued
listing and the listing of the Class A Shares is discontinued, the market for
the Class A Shares could be adversely affected.
In the event that the Class A Shares were no longer listed or traded on the
NYSE, it is possible that the Class A Shares would trade on another securities
exchange or in the over-the-counter market and that price quotations would be
reported by such exchange, through the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or other sources. Such trading and
the availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of the Class A Shares remaining
at such time, the interest in maintaining a market in the Class A Shares on the
part of securities firms, the possible termination of registration of the Class
A Shares under the Exchange Act as described below and other factors.
EXCHANGE ACT REGISTRATION
The Class A Shares are currently registered under the Exchange Act. The
purchase of the Class A Shares pursuant to the Offer may result in the Class A
Shares becoming eligible for deregistration under the
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<PAGE> 19
Exchange Act. Registration of the Class A Shares may be terminated upon
application by the Company to the Commission if the Class A Shares are not
listed on a "national securities exchange" and there are fewer than 300 record
holders of Class A Shares. Termination of registration of the Class A Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and the Commission and would make
certain provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b) and the requirements of furnishing a proxy statement
in connection with stockholders' meetings pursuant to Section 14(a) or 14(c) and
the related requirement of an annual report, no longer applicable to the
Company. If the Class A Shares are no longer registered under the Exchange Act,
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions would no longer be applicable to the Company. Furthermore,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, may be impaired or,
with respect to certain persons, eliminated. If registration of the Class A
Shares under the Exchange Act were terminated, the Class A Shares would no
longer be "margin securities" or eligible for stock exchange listing or NASDAQ
reporting. The Purchaser believes that the purchase of the Class A Shares
pursuant to the Offer may result in the Class A Shares becoming eligible for
deregistration under the Exchange Act and it would be the intention of the
Purchaser to cause the Company to make an application for termination of
registration of the Class A Shares as soon as possible after successful
completion of the Offer, if the Class A Shares are then eligible for such
termination.
Based upon publicly available information, the Purchaser believes that, as
of the date of this Offer to Purchase, the Class A Rights are registered under
the Exchange Act and are listed on the NYSE, but are attached to the Class A
Shares and are not separately transferable. As a result of the announcement by
the Purchaser of the Offer, the Distribution Date will be November 3, 1994
unless, prior to such date, the Company's Board of Directors redeems the Rights
or takes action to delay the Distribution Date. The Distribution Date may also
occur sooner. See Section 11. According to the Company 8-A, as soon as
practicable after the occurrence of the Distribution Date, Rights Certificates
will be sent to all holders of Rights and Rights will become transferable apart
from the Shares. See Section 11. If the Distribution Date occurs and the Rights
separate from the Shares, the foregoing discussion with respect to the effect of
the Offer on the market for the Class A Shares, stock exchange listings and
Exchange Act registration would apply to the Class A Rights in a similar manner.
If registration of the Class A Shares and the Class A Rights is not
terminated prior to the Proposed Rockwell Merger, then the Class A Shares and
the Class A Rights will be delisted from the NYSE and the registration of the
Class A Shares and the Class A Rights under the Exchange Act will be terminated
following the consummation of the Proposed Rockwell Merger.
MARGIN REGULATIONS
The Class A Shares are currently "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which have the effect, among other things, of allowing brokers to
extend credit on the collateral of such Class A Shares for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors such as the number of record holders of the Class A Shares and the
number and market value of publicly held Class A Shares, following the purchase
of Class A Shares pursuant to the Offer, the Class A Shares might no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations and, therefore, could no longer be used as collateral for
Purpose Loans made by brokers. In addition, if registration of the Class A
Shares under the Exchange Act were terminated, the Class A Shares would no
longer constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 6065 Parkland
Boulevard, Cleveland, Ohio 44124-6106. The following description of the
Company's business has been taken from the Company's 1993 Annual Report on Form
10-K and Annual Report:
The Company is a U.S.-based manufacturer of industrial motors and
related controls, generators, transformers, mechanical power transmission
products and systems, and telecommunications equipment.
16
<PAGE> 20
The Company is organized into two business segments: Industrial and
Telecommunications. Industrial segment business units develop, manufacture,
market and service motors, electrical drives, mechanical power transmission
products, and utility transformers. Telecommunications segment business
units develop, manufacture, market and service specialty telecommunications
products.
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993 and the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
More comprehensive financial and other information is included in such reports
(including management's discussion and analysis of results of operations and
financial position) and in other reports and documents filed by the Company with
the Commission and the financial information set forth below is qualified in its
entirety by reference to such reports and documents filed with the Commission
and all of the financial statements and related notes contained therein. These
reports and other documents may be examined and copies thereof may be obtained
in the manner set forth below.
17
<PAGE> 21
SELECTED FINANCIAL DATA OF THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30, JUNE 30,
DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994 1993
1993 1992 1991 (UNAUDITED) (UNAUDITED)
------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
NET SALES........................... $1,608 $1,553 $1,516 $ 831 $ 801
Costs and expenses:
Cost of sales..................... 1,223 1,156 1,110 618 606
Selling, general and
administrative................. 272 263 251 142 135
Restructure....................... 16 1 1 0 4
Other expense, net................ 5 2 6 3 2
------ ------ ------ ------- -------
EARNINGS BEFORE INTEREST AND
TAXES............................. 92 131 148 68 54
Interest expense.................... 27 45 84 12 14
------ ------ ------ ------- -------
EARNINGS BEFORE TAXES............... 65 86 64 56 40
Provision for income taxes.......... 33 39 30 26 19
------ ------ ------ ------- -------
EARNINGS BEFORE EXTRAORDINARY ITEMS
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE................. 32 47 34 30 21
Extraordinary items................. (7) (22) -- -- (7)
Cumulative effect of accounting
change (net of income tax
effect)........................... -- -- -- (2) --
------ ------ ------ ------- -------
NET EARNINGS........................ 25 25 34 28 14
Less preferred stock dividends and
accretion...................... -- 16 19 -- --
------ ------ ------ ------- -------
Net earnings available for common
stock............................. $ 25 $ 9 $ 15 $ 28 $ 14
====== ====== ====== ======= =======
Net earnings per equivalent share of
common stock (after preferred
stock dividends and accretion):
Earnings before extraordinary
items and cumulative effect of
accounting change.............. $ .64 $ .73 $ .44 $ .59 $ .42
Extraordinary items............... (.14) (.51) -- -- (.14)
Cumulative effect of accounting
change......................... -- -- -- (.05) --
------ ------ ------ ------- -------
Net Earnings...................... $ .50 $ .22 $ .44 $ .54 $ .28
====== ====== ====== ======= =======
</TABLE>
18
<PAGE> 22
CONSOLIDATED BALANCE SHEET
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30,
DECEMBER 31, DECEMBER 31, 1994
1993 1992 (UNAUDITED)
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents........................... $ 41 $ 32 $ 37
Accounts receivable, net............................ 217 210 242
Inventories......................................... 328 320 353
Other............................................... 29 17 24
------ ------ ------
TOTAL CURRENT ASSETS................................ 615 579 656
Goodwill, net....................................... 209 216 206
Property, plant and equipment, net.................. 298 287 308
Deferred income taxes, investments and other........ 73 69 87
------ ------ ------
TOTAL ASSETS........................................ $1,195 $1,151 $1,257
====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current maturities of long-term
debt.............................................. $ -- $ 5 $ --
Accounts payable.................................... 78 72 74
Other............................................... 186 160 188
------ ------ -------
TOTAL CURRENT LIABILITIES........................... 264 237 262
Long-term debt...................................... 351 369 361
Other............................................... 199 187 224
Stockholders' equity
Common stock (convertible, $.01 par value):
Class A........................................ 339 337 339
Class B........................................ 1 1 1
Class C........................................ 4 4 4
Retained earnings................................... 37 12 65
Minimum pension liability and currency translation
adjustments....................................... -- 4 1
------ ------ -------
TOTAL STOCKHOLDERS' EQUITY.......................... 381 358 410
------ ------ -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......... $1,195 $1,151 $ 1,257
====== ====== =======
</TABLE>
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's business, principal physical
properties, capital structure, material pending legal proceedings, operating
results, financial condition, directors and officers (including their
remuneration and the stock options granted to them), the principal holders of
the Company's securities, any material interests of such persons in transactions
with the Company and certain other matters is required to be disclosed in proxy
statements and annual reports distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
may be inspected and copied at the Commission's public reference facilities at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should also
be available for inspection at the following regional offices of the Commission:
7 World Trade Center, New York, New York 10048; and 500 West Madison Street,
Chicago, Illinois 60661-2511; and copies may be obtained by mail at prescribed
rates from the principal office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Reports, proxy statements and other information
concerning the Company also should be available for inspection at the NYSE, 20
Broad Street, New York, New York 10005.
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<PAGE> 23
Although each of Rockwell and the Purchaser has no knowledge that any such
information is untrue, neither Rockwell nor the Purchaser takes responsibility
for the accuracy or completeness of information contained in this Offer to
Purchase with respect to the Company or any of its subsidiaries or affiliates 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.
9. CERTAIN INFORMATION CONCERNING ROCKWELL AND THE PURCHASER. Rockwell is a
Delaware corporation with its principal executive offices located at 2201 Seal
Beach Boulevard, Seal Beach, California 90740-8250.
Rockwell is a multi-industry company applying advanced technology to a wide
range of products in its electronics, aerospace, automotive and graphics
businesses. Rockwell operates in four business segments, which are engaged in
research, development and manufacture of diversified products as follows:
Electronics -- industrial automation equipment and systems; avionics
products and systems and related communications technologies primarily used
in commercial and military aircraft; commercial telecommunications systems
and products; and defense electronics systems and products for precision
guidance and control, for tactical weapons, and for command, control,
communications and intelligence.
Aerospace -- manned and unmanned space systems, rocket engines,
military aircraft, advanced space-based surveillance systems and
high-energy laser and other directed energy programs.
Automotive -- components and systems for heavy-and medium-duty trucks,
buses, trailers, heavy-duty off-highway vehicles, light trucks and
passenger cars.
Graphics -- high-speed printing presses and related graphic arts
equipment.
The Purchaser's principal executive offices are located at 2201 Seal Beach
Boulevard, Seal Beach, California 90740-8250. The Purchaser is a newly formed
Delaware corporation and a wholly-owned subsidiary of Rockwell. The Purchaser
has not conducted any business other than in connection with the Offer and the
Proposed Rockwell Merger.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Rockwell and the Purchaser are set forth in Schedule I of
this Offer to Purchase.
Rockwell is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Rockwell's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Rockwell's securities,
any material interests of such persons in transactions with Rockwell and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to Rockwell's shareowners and filed with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
the Commission's public reference facilities and should also be available for
inspection in the same manner as set forth with respect to the Company in
Section 8.
Set forth below is certain consolidated financial information with respect
to Rockwell and its consolidated subsidiaries for its fiscal years ended and as
of September 30, 1993, 1992 and 1991 and for the nine months ended and as of
June 30, 1994 and 1993. More comprehensive financial and other information is
included in Rockwell's Annual Report on Form 10-K for its fiscal year ended
September 30, 1993 and Rockwell's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994 (including management's discussion and analysis of results
of operations and financial position) and in other reports and documents filed
by Rockwell with the Commission. The financial information set forth below is
qualified in its entirety by reference to such reports and documents filed with
the Commission and all the financial statements and related notes contained
therein. These reports and other documents may be examined and copies thereof
may be obtained in the
20
<PAGE> 24
manner set forth above. Information as of June 30, 1994 and 1993 and for the
nine-month periods then ended is unaudited, but in the opinion of management of
Rockwell includes all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the financial position and the results of
operations for such interim periods. The results of operations for the
nine-month period ended June 30, 1994 are not necessarily indicative of the
operating results that may be expected for the fiscal year ending September 30,
1994.
ROCKWELL INTERNATIONAL CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30
FISCAL YEAR ENDED SEPTEMBER 30 (UNAUDITED)
-------------------------------- --------------------
1993 1992 1991 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales of ongoing businesses
Electronics............................. $ 4,666 $ 4,620 $ 4,645 $ 3,717 $ 3,439
Aerospace............................... 3,006 3,169 3,535 1,917 2,189
Automotive.............................. 2,536 2,433 2,295 2,145 1,925
Graphics................................ 632 688 962 456 443
------- -------- -------- -------- --------
Total........................... $ 10,840 $ 10,910 $ 11,437 $ 8,235 $ 7,996
======= ======== ======== ======== ========
Operating earnings of ongoing businesses
Electronics............................. $ 598.1 $ 485.4 $ 547.7 $ 521.5 $ 450.9
Aerospace............................... 369.2 327.9 408.9 263.2 275.2
Automotive.............................. 126.1 96.0 53.0 115.0 102.1
Graphics................................ 14.8 21.5 121.0 23.8 7.1
-------- -------- -------- -------- --------
Total........................... $1,108.2 $ 930.8 $1,130.6 $ 923.5 $ 835.3
======== ======== ======== ======== ========
Interest expense.......................... $ 104.1 $ 107.4 $ 135.1 $ 74.6 $ 81.5
Income before change in accounting*....... $ 561.9 $ 483.0 $ 600.5 $ 469.1 $ 411.9
Earnings per common share*
Primary................................. $ 2.55 $ 2.16 $ 2.57 $ 2.12 $ 1.87
Fully diluted........................... $ 2.51 $ 2.14 $ 2.54 $ 2.08 $ 1.84
BALANCE SHEET DATA:
Working capital......................... $1,955.5 $1,726.8 $1,501.1 $1,899.7 $1,933.1
Total assets............................ 9,885.1 9,731.0 9,375.5 9,968.9 9,726.1
Long-term debt.......................... 1,028.2 1,035.4 740.3 846.0 1,023.0
Shareowners' equity..................... 2,956.0 2,778.0 4,223.7 3,195.2 2,927.3
</TABLE>
- ---------------
* Total earnings for 1992 exclude the $1,519.0 one-time charge related to a
change in accounting for retirement medical benefits. Including the effect of
this accounting change Rockwell had a net loss for 1992 of $1,036 million, or
$4.62 per share.
Except as set forth elsewhere in this Offer to Purchase: (i) neither
Rockwell nor the Purchaser nor, to the knowledge of Rockwell or the Purchaser,
any of the persons listed in Schedule I hereto or any associate or
majority-owned subsidiary of Rockwell or the Purchaser or any of the persons so
listed, beneficially owns or has a right to acquire any Shares or any other
equity securities of the Company; (ii) neither Rockwell nor the Purchaser nor,
to the knowledge of Rockwell or the Purchaser, any of the persons or entities
referred to in clause (i) above or any of their executive officers, directors or
subsidiaries has effected any transaction in the Shares or any other equity
securities of the Company during the past 60 days; (iii) neither Rockwell nor
the
21
<PAGE> 25
Purchaser nor, to the knowledge of Rockwell or the Purchaser, any of the persons
listed in Schedule I hereto, 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 such securities, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations); (iv) since January 1, 1991, there have been no transactions
which would require reporting under the rules and regulations of the Commission
between Rockwell or the Purchaser or any of their respective subsidiaries or, to
the knowledge of Rockwell or the Purchaser, any of the persons listed in
Schedule I hereto, on the one hand, and the Company or any of its executive
officers, directors or affiliates, on the other hand; and (v) since January 1,
1991, there have been no contacts, negotiations or transactions between Rockwell
or the Purchaser or any of their respective subsidiaries or, to the knowledge of
Rockwell or the Purchaser, any of the persons listed in Schedule I hereto, on
the one hand, and the Company or any of its subsidiaries or affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
On October 14, 1994, the Purchaser purchased 100 Class A Shares at a price
of $24.75 per Class A Share. Such purchase was effected on the NYSE in an open
market transaction. Such 100 Class A Shares represent less than one
one-thousandth of one percent of the outstanding Class A Shares on a fully
diluted basis.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. In the summer of 1991,
the Company explored with Rockwell a sale of the Company. In connection
therewith, Rockwell and the Company entered into an agreement dated August 13,
1991 which provided, among other things, that Rockwell would not, for a period
of two years from the date of such agreement (until August 13, 1993), engage in
certain actions involving the Company, including actions such as those
contemplated by the Offer and the Proposed Rockwell Merger. After reviewing
certain preliminary information provided by the Company, in late September 1991
Rockwell terminated activities in connection with its consideration of a
possible acquisition of the Company.
Beginning in 1992, Rockwell, through its wholly-owned subsidiary
Allen-Bradley, began discussing and developing various cooperative activities
between Allen-Bradley and the Company, including joint development of new
products and reciprocal product branding. In the course of such activities on
October 27, 1993, John C. Morley, President and Chief Executive Officer of the
Company, met with Don H. Davis, Jr., at that time President of Allen-Bradley,
and appeared to be inviting Rockwell to "go beyond" their existing cooperative
efforts. On May 12, 1994, Mr. Davis, who then was Executive Vice President and
Chief Operating Officer of Rockwell, advised Mr. Morley that Rockwell was
interested in acquiring the Company. On July 12, 1994, Mr. Davis and Donald R.
Beall, Chairman of the Board and Chief Executive Officer of Rockwell, met with
Mr. Morley. At that time Mr. Beall informed Mr. Morley that Rockwell was
extremely interested in acquiring the Company. Mr. Morley said that he would
raise the matter with the Company's Board of Directors and would respond
promptly. On August 11, 1994, Mr. Morley advised Mr. Davis that he had discussed
Rockwell's interest in a proposed acquisition of the Company with the Company's
Board of Directors, but that he could not give Rockwell a definitive response at
that time.
According to the Company 8-A, on August 29, 1994, the Board of Directors of
the Company declared a dividend distribution of one Right for each outstanding
Class A Share, Class B Share and Class C Share to purchase one one-hundredth of
a share of a new Series A, Series B or Series C Preferred Stock, respectively,
pursuant to the Rights Agreement. See Section 11 for a description of the
Rights.
On August 30, 1994, the Company announced that it had entered into the
General Signal Merger Agreement. The General Signal Merger Agreement provides,
subject to the conditions set forth therein (including approval by the
stockholders of General Signal and the Company), for the Proposed General Signal
Merger in which each Class A Share would be converted into the right to receive
0.739 of one share of General Signal Common Stock, each Class B Share would be
converted into the right to receive 0.739 of one share of General Signal Class B
Common Stock (or, at the election of the holder of Class B Shares, into 0.739 of
one share of General Signal Common Stock) and each Class C Share would be
converted into the right to
22
<PAGE> 26
receive 2.001 shares of General Signal Class B Common Stock (or at the election
of the holder of Class C Shares, into 2.001 shares of General Signal Common
Stock). The General Signal Merger Agreement also provides that for each share of
General Signal Common Stock or General Signal Class B Common Stock issued in the
Proposed General Signal Merger, one General Signal Common Stock purchase right
or one General Signal Class B Common Stock purchase right (as applicable) would
be issued pursuant to the General Signal Rights Agreement. According to the
Company 8-A, the Rights, if still outstanding, will expire immediately prior to
the effective time of the Proposed General Signal Merger.
The General Signal Merger Agreement provides that, among other things, the
Company and its subsidiaries, and their directors, officers, employees, agents
and representatives, will not solicit or encourage (including by way of
furnishing non-public information) any inquiry or proposal with respect to a
Company Acquisition Transaction or communicate with any third party with respect
to any Company Acquisition Transaction or enter into any agreement requiring the
Company to abandon the Proposed General Signal Merger; provided that, in
response to an unsolicited written proposal with respect to a Company
Acquisition Transaction from a financially capable third party that contains no
financing condition, the Company may furnish non-public information and
negotiate or otherwise communicate with such third party if the Company's Board
of Directors determines that taking such action is reasonably likely to lead to
a Company Acquisition Transaction more favorable than the Proposed General
Signal Merger and determines (and the Company's outside counsel opines in
writing) that failing to take such action would constitute a breach of its
fiduciary duties.
Rockwell believes that the Offer will permit the Company to furnish
Rockwell with non-public information pursuant to these provisions. The General
Signal Merger Agreement further provides that General Signal may terminate the
General Signal Merger Agreement in the event the Company's Board of Directors
(i) withdraws or adversely changes its recommendation with respect to the
Proposed General Signal Merger, (ii) recommends any proposal in respect of a
Company Acquisition Transaction, or (iii) furnishes non-public information to or
negotiates or communicates with a third party with respect to any Company
Acquisition Transaction or publicly discloses a resolution to do any of the
foregoing. Under Section 9.05(b) of the General Signal Merger Agreement, if
General Signal terminates the General Signal Merger Agreement under such
circumstances, the Company will be required to reimburse General Signal for up
to $2.5 million of documented fees and expenses and to pay General Signal an
additional fee of $50 million.
On October 19, 1994, the Board of Directors of Rockwell approved the
commencement of the Offer, and on October 20, 1994, Rockwell sent a letter to
the Company and issued a press release stating that its directors had authorized
the acquisition of the Company at a price of $30 per Class A Share and an
equivalent price for convertible shares (i.e., the Class B Shares and the Class
C Shares, based on their respective conversion ratios of 1 to 1 and 2.708 to 1).
The following is the text of Rockwell's October 20 letter:
Mr. H. Virgil Sherrill
Chairman of the Board
and
Mr. John C. Morley
President and Chief Executive Officer
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, Ohio 44124
Gentlemen:
As you know, Rockwell and Reliance Electric over the years have worked
together closely and cordially on a number of projects and, during this time,
have discussed a business combination of our two companies. As recently as this
past July, Rockwell expressed its interest in acquiring Reliance Electric, and
we urged you, John, to communicate our interest to the Reliance Electric board,
which you indicated you would do. We were therefore surprised and disappointed
that Rockwell was not afforded an opportunity to further pursue those
discussions before Reliance Electric and General Signal Corporation announced a
definitive merger agreement at the end of August.
23
<PAGE> 27
After an intensive strategic review, including a detailed evaluation of
publicly available information concerning Reliance Electric, we have concluded
that the strategic and financial advantages of combining our two companies are
too compelling to ignore.
Accordingly, I am writing to inform you of our intention to acquire
Reliance Electric through a cash tender offer of $30 per share for all shares of
Reliance Electric's Class A common stock and an equivalent price for its
convertible shares. This represents an exceptionally attractive opportunity for
your shareowners -- specifically, an all-cash offer at a premium of 22.4% over
yesterday's closing market price of $24.50 per Class A share and 50.9% over the
closing market price on August 29, the day before Reliance Electric's merger
agreement with General Signal was announced.
The transaction we propose also represents a particularly attractive
opportunity to build a combined enterprise uniquely positioned for continued
leadership in both the control and power segments of the industrial automation
business, in North America and around the world.
Combining the operations of our Allen-Bradley automation business and
Reliance Electric will establish a global industrial automation enterprise with
combined annual sales of about $3.5 billion. It will have a broad range of
man-machine interface, sensor, control logic, mechanical transmission, motor and
motor controller products, drive systems capabilities, and global support
services. As such, the combined business can better capitalize on an important,
long-term technological trend in industrial automation: the convergence of the
control and power functions in increasingly intelligent automation products.
We have enormous respect for Reliance Electric, a major manufacturer of
industrial products and telecommunications equipment. As you know,
Allen-Bradley, which we acquired in 1985 as part of our continuing strategic
program to grow the commercial side of our company, has established Rockwell as
a leading worldwide manufacturer of automation control products. Since the
acquisition, Allen-Bradley has more than doubled its sales, and expects to
report sales of more than $2.1 billion for fiscal 1994.
Allen-Bradley has many strengths in control logic, man-machine interfaces
and sensors. Reliance Electric has complementary strengths in motors and drives.
Supported by Rockwell's financial resources and advanced technology, the
combined entity will be a formidable U.S. - based global industrial automation
enterprise, well-positioned to compete with its international competitors.
Our offer is not subject to any financing contingencies. In addition, we
are advised by our legal counsel that there are no significant antitrust or
other issues associated with a combination of our two companies.
While Rockwell is and will continue to be actively engaged in various
telecommunications markets, we have determined to sell Reliance Electric's
telecommunications operations because they do not fit into Rockwell's strategic
plans.
We are convinced that a combination of Allen-Bradley and Reliance Electric
makes compelling strategic and financial sense for both our companies and our
respective constituents. I stand ready to meet with your board to present our
plans.
Sincerely,
/s/ Donald R. Beall
Donald R. Beall
On October 21, 1994, the Purchaser commenced the Offer.
24
<PAGE> 28
11. PURPOSE OF THE OFFER AND THE PROPOSED ROCKWELL MERGER; PLANS FOR THE
COMPANY.
PURPOSE OF THE OFFER AND THE PROPOSED ROCKWELL MERGER
The purpose of the Offer and the Proposed Rockwell Merger is to acquire
control of, and the entire equity interest in, the Company. The Purchaser
currently intends, as soon as practicable following completion of the Offer, to
seek the maximum representation obtainable on the Company's Board of Directors
and to consummate the Proposed Rockwell Merger. The purpose of the Proposed
Rockwell Merger is to acquire all Shares not tendered and purchased pursuant to
the Offer or otherwise. Pursuant to the Proposed Rockwell Merger, each then
outstanding Share (other than Shares owned by Rockwell or any of its
wholly-owned subsidiaries, Shares held in the treasury of the Company, and
Shares held by stockholders who perfect appraisal rights under the Delaware Law)
would be converted into the right to receive cash in the same amount as received
per the applicable Share in the Offer, and the Company would become a
wholly-owned subsidiary of Rockwell.
The Purchaser reserves the right to amend the Offer (including amending the
purchase price) upon entry into a merger agreement with the Company or otherwise
or to negotiate a merger agreement with the Company not involving a tender
offer. See Section 14. In the event that Rockwell is unable to negotiate a
definitive merger agreement with the Company, Rockwell will make a determination
whether to seek through a proxy contest sufficient representation on the
Company's Board of Directors to cause the Board of Directors to approve the
Proposed Rockwell Merger and satisfy the Rights Condition and the Section 203
Condition and thereby permit the Offer and the Proposed Rockwell Merger to be
consummated. In connection therewith, Rockwell may solicit calls for a special
meeting of stockholders of the Company pursuant to Section 1.2 of the Company's
By-Laws, which permits the holders of a majority of the Company's voting stock
(as well as the Chairman of the Board, the President, or the Board of Directors
of the Company) to call such a special meeting.
The Purchaser reserves the right to acquire additional Shares after
consummation of the Offer in open market purchases, through a tender offer, in
privately negotiated transactions or otherwise in order to obtain a sufficient
number of Shares to approve the transactions contemplated hereby. In addition,
after consummation of the Offer, whether or not the Purchaser acquires
additional Shares, the Purchaser currently intends to seek to enter into the
Proposed Rockwell Merger with the Company.
Consummation of the Proposed Rockwell Merger would require the adoption of
a resolution by the Company's Board of Directors approving the Proposed Rockwell
Merger and a related agreement and the affirmative vote of the holders of a
majority of the Class A Shares (according to the Company Certificate of
Incorporation, the Class B Shares and Class C Shares are not entitled to voting
rights). Assuming that the Offer is consummated and that the Minimum Condition
and the other conditions to the Offer are satisfied, the Purchaser will hold a
majority of the Class A Equivalent Shares outstanding and, upon conversion of
Class B Shares and Class C Shares held by the Purchaser into Class A Shares, the
Purchaser will hold sufficient Class A Shares to approve the Proposed Rockwell
Merger.
The making of the Offer will enable the Purchaser to commence the process
of seeking regulatory approvals for its acquisition of the Company. See Section
15. In addition, by tendering Shares into the Offer, the Company's stockholders
effectively will be given the opportunity to express to the Company's Board of
Directors that they wish to be able to accept the Offer and to approve the
Proposed Rockwell Merger or a similar transaction with Rockwell.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OR
A SOLICITATION OF CALLS FOR A SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS. ANY
SUCH SOLICITATION WHICH ROCKWELL OR THE PURCHASER MIGHT MAKE WOULD BE MADE ONLY
PURSUANT TO SEPARATE PROXY OR SOLICITATION MATERIALS COMPLYING WITH ALL
APPLICABLE REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
25
<PAGE> 29
PLANS FOR THE COMPANY
If Rockwell acquires control of the Company, it intends to conduct a
further review of the Company and its subsidiaries and their respective assets,
businesses, corporate structure, capitalization, operations, properties,
policies, management and personnel. After such review, Rockwell will determine
what actions or changes, if any, would be desirable in light of the
circumstances which then exist, and reserves the right to effect such actions or
changes. Rockwell's decisions could be affected by information hereafter
obtained, changes in general economic or market conditions or in the business of
the Company or its subsidiaries, actions by the Company or its subsidiaries and
other factors. However, Rockwell has determined to sell, following completion of
the Offer and the Proposed Rockwell Merger, Reliance Comm/Tec Corporation, a
wholly-owned subsidiary of the Company.
Except as described in this Offer to Purchase, neither Rockwell nor the
Purchaser has any present plans or proposals that would relate to or would
result in (i) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries,
(ii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries, (iii) any change in the present Board of Directors or
management of the Company, (iv) any material changes in the present
capitalization or dividend policy of the Company, (v) any other material change
in the Company's corporate structure or business, (vi) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association or (vii) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act.
If the Offer is consummated, the Purchaser will hold a majority of the
Class A Equivalent Shares outstanding and, upon conversion of Class B Shares and
Class C Shares held by the Purchaser into Class A Shares, the Purchaser will
hold sufficient Class A Shares to approve the Proposed Rockwell Merger. However,
in light of the restrictions described below, there can be no assurance that the
Proposed Rockwell Merger will be proposed to stockholders of the Company or be
consummated or as to the timing thereof. Nonetheless, if the Board of Directors
of the Company votes to redeem the Rights and approve the Offer and the Proposed
Rockwell Merger, the Rights Condition and the Section 203 Condition will be
satisfied.
Neither Rockwell nor the Purchaser can give any assurance as to whether, as
a result of information hereafter obtained by either Rockwell or the Purchaser,
changes in general economic or market conditions or in the business of the
Company, or other presently unforeseen factors, the Proposed Rockwell Merger
will be proposed to the Company's stockholders or whether the Proposed Rockwell
Merger will be delayed or abandoned. If for any reason the Proposed Rockwell
Merger is not consummated, Rockwell and the Purchaser reserve the right to
acquire additional Shares following the expiration of the Offer through private
purchases, market transactions, tender or exchange offers or otherwise on terms
and at prices that may be more or less favorable than those of the Offer or,
subject to any applicable legal restrictions, to dispose of any or all Shares
acquired by Rockwell and the Purchaser.
STATUTORY REQUIREMENTS
In general, under the Delaware Law, a merger of two Delaware corporations
requires the adoption of a resolution by the Board of Directors of each of the
corporations desiring to merge approving an agreement of merger containing
provisions with respect to certain statutorily specified matters and the
approval of such agreement of merger by the stockholders of each corporation by
the affirmative vote of the holders of a majority of all the outstanding shares
of stock entitled to vote on such merger. According to the Company Certificate
of Incorporation, only Class A Shares of the Company entitle the holders thereof
to voting rights.
Assuming that the Offer is consummated and that the Minimum Condition and
the other conditions to the Offer are satisfied, the Purchaser will hold a
majority of the Class A Equivalent Shares outstanding and, upon conversion of
Class B Shares and Class C Shares held by the Purchaser into Class A Shares, the
Purchaser will hold sufficient Class A Shares to approve the Proposed Rockwell
Merger. However, the 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 short-form merger with that subsidiary without the action of the other
26
<PAGE> 30
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 each class of the Shares, the Purchaser could, and intends to, effect the
Proposed Rockwell Merger without prior notice to, or any action by, any other
stockholder of the Company.
Delaware Business Combination Law. In general, Section 203 of the Delaware
Law provides that a Delaware corporation such as the Company may not engage in
any Business Combination (defined to include a variety of transactions,
including a merger) with any Interested Stockholder (defined generally as a
person that, directly or indirectly, beneficially owns 15% or more of the
corporation's outstanding voting stock), or any affiliate of an Interested
Stockholder, for three years after the date on which the Interested Stockholder
becomes an Interested Stockholder. The three-year prohibition on Business
Combinations with Interested Stockholders (the "Business Combination
Prohibition") does not apply if certain conditions, described below, are
satisfied. Section 203 of the Delaware Law provides that a "beneficial owner" of
voting stock includes any person who, individually or together with any of its
affiliates or associates, has (i) the right to acquire voting stock (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options or otherwise, (ii) the
right to vote such stock pursuant to any agreement, arrangement or
understanding, or (iii) any agreement, arrangement or understanding for the
purposes of acquiring, holding, voting or disposing of such stock with any other
person that beneficially owns, directly or indirectly, such stock.
The Business Combination Prohibition does not apply to a particular
Business Combination between a corporation and a particular Interested
Stockholder if (i) prior to the date such Interested Stockholder became an
Interested Stockholder, the board of directors of such corporation approved
either the Business Combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, or (ii) upon consummation of the
transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares held
by (x) persons who are directors and also officers of the corporation and (y)
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer, or (iii) on or subsequent to the date
the stockholder becomes an Interested Stockholder, the Business Combination is
(a) approved by the board of directors of the corporation and (b) authorized at
an annual or special meeting of stockholders by the affirmative vote of at least
66 2/3% of the outstanding voting stock of the corporation which is not owned by
the Interested Stockholder.
Section 203(b)(6) of the Delaware Law provides that the restrictions
contained in Section 203 of the Delaware Law do not apply to a Business
Combination that is proposed prior to the consummation or abandonment of and
following the announcement or notification of one of certain extraordinary
transactions (including a merger) involving the corporation which transaction
(i) is with or by a person who either was not an Interested Stockholder during
the previous three years or who became an Interested Stockholder with the
approval of the corporation's board of directors and (ii) has been approved or
has not been opposed by a majority of the members of the board of directors then
in office who were directors prior to any person becoming an Interested
Stockholder during the previous three years or were recommended for election or
elected to succeed such directors by a majority of such directors. Accordingly,
the Purchaser believes that, because the General Signal Merger Agreement was
approved by the Board of Directors of the Company, the restrictions on Business
Combinations contained in Section 203 are inapplicable to the Proposed Rockwell
Merger pursuant to Section 203(b)(6).
The foregoing summary of Section 203 of the Delaware Law does not purport
to be complete and is qualified in its entirety by reference to the provisions
of Section 203 of the Delaware Law.
APPRAISAL RIGHTS
No appraisal rights are available in connection with the Offer. However, if
the Proposed Rockwell Merger is consummated, stockholders of the Company will
have certain rights under Section 262 of the Delaware Law
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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 Proposed Rockwell
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 the applicable Share pursuant to the Offer or the consideration per
the applicable Share to be paid in the Proposed Rockwell 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. Although the remedies of
rescission or other damages are possible in an action challenging a merger as a
breach of fiduciary duty, decisions of the Delaware courts have indicated that
in most cases the remedy available in a merger that is found not to be "fair" to
minority stockholders is a damages remedy based on essentially the same
principles as an appraisal.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. The
preservation and exercise of dissenters' rights require strict adherence to the
applicable provisions of the Delaware Law.
THE RIGHTS
According to the Company 8-A, on August 29, 1994, the Board of Directors of
the Company declared a dividend distribution of one Right for each outstanding
Class A Share, Class B Share and Class C Share to purchase one one-hundredth of
a share of a new Series A, Series B or Series C Preferred Stock, respectively.
The distribution was paid on September 15, 1994 to stockholders of record on
that date. Each Right entitles the registered holder of Class A Shares or Class
B Shares to purchase from the Company one one-hundredth of a share of Series A
or Series B Preferred Stock, respectively, at an exercise price of $60.00,
subject to adjustment, and the registered holder of Class C Shares to purchase
from the Company one one-hundredth of a share of Series C Preferred Stock at an
exercise price of $162.48, subject to adjustment.
According to the Company 8-A, until the close of business on the
Distribution Date (which will occur on the earlier of (i) the tenth day
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 10% or more of the outstanding Class A
Shares or (ii) the tenth business day (or such later date as may be determined
by action of the Company's Board of Directors prior to the time any person or
group becomes an Acquiring Person) after the commencement of, or announcement of
intention to make, a tender offer or exchange offer which would result in the
beneficial ownership by a person or group of 10% or more of the outstanding
Class A Shares), the Rights will be evidenced by and transferred with, and only
with, the associated Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Share Certificates will contain a legend
incorporating the Rights Agreement by reference, and the surrender for transfer
of any Share Certificate representing Shares outstanding on September 15, 1994
will also constitute the transfer of the Rights associated with the Shares
represented by such Share Certificate. As soon as practicable following the
Distribution Date, separate Rights Certificates will be mailed to holders of
record of the Shares as of the close of business on the Distribution Date, and
thereafter the separate Rights Certificates alone will evidence the Rights.
According to the Company 8-A, the Rights are not exercisable until the
Distribution Date. The Rights will expire at the earliest of (i) the close of
business on August 29, 2004, (ii) the time at which the Rights are
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redeemed by the Company as described below, (iii) immediately prior to the
effective time of the Proposed General Signal Merger or (iv) the time at which
such Rights are exchanged.
According to the Company 8-A, in the event that the Company is acquired in
a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
According to the Company 8-A, in the event that any person or group becomes
an Acquiring Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Shares (of the same class as the series of preferred stock
associated with such Right) having a market value of two times the exercise
price of the Right.
According to the Company 8-A, at any time until the time a person or group
becomes an Acquiring Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right, subject to
adjustment (the "Redemption Price"). Immediately upon the action of the Board of
Directors of the Company ordering redemption of the Rights, the right to
exercise the Rights will terminate, and the holders of Rights will only be
entitled to receive the Redemption Price.
According to the Company 8-A, until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
According to the Company 8-A, the terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, except that from and after such time as any person becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Company 8-A and
the text of the Rights Agreement as set forth as an exhibit thereto, filed with
the Commission, copies of which may be obtained in the manner set forth in
Section 8.
If the Rights Condition is not satisfied and the Purchaser elects, in its
sole discretion, to waive the Rights Condition and consummate the Offer, and if
there are outstanding Rights which have not been acquired by the Purchaser, the
Purchaser will evaluate its alternatives. Such alternatives could include
purchasing additional Rights in the open market, in privately negotiated
transactions, in another tender or exchange offer or otherwise. Any such
additional purchase of Rights could be for cash or other consideration. Under
such circumstances, the Proposed Rockwell Merger might be delayed or abandoned
as impracticable. The form and amount of consideration to be received by the
holders of Shares in the Proposed Rockwell Merger, if consummated, might be
subject to adjustment to compensate the Purchaser for, among other things, the
costs of acquiring Rights and a portion of the potential dilution cost to the
Purchaser of Rights not owned by the Purchaser and its wholly owned subsidiaries
at the time of the Proposed Rockwell Merger. In such event, the consideration
paid for Shares in the Proposed Rockwell Merger could be substantially less than
the consideration paid in the Offer. In addition, the Purchaser may elect under
such circumstances not to consummate the Proposed Rockwell Merger.
UNLESS AND UNTIL THE PURCHASER DECLARES THAT THE RIGHTS CONDITION IS
SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH
SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. IF THE
DISTRIBUTION DATE DOES NOT OCCUR PRIOR TO THE EXPIRATION DATE, A TENDER OF
SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. SEE SECTIONS 1
AND 3.
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"GOING PRIVATE" TRANSACTIONS
The Commission 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 Proposed Rockwell Merger. However, Rule 13e-3
would be inapplicable if (i) the Class A Shares are deregistered under the
Exchange Act prior to the Proposed Rockwell Merger or other business combination
or (ii) the Proposed Rockwell Merger or other business combination is
consummated within one year after the purchase of the Shares pursuant to the
Offer and the amount paid per Share for each class of Share in the Proposed
Rockwell Merger or other business combination is at least equal to the amount
paid per Share for such class of Share in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the Commission and disclosed to
stockholders prior to the consummation of the transaction.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all outstanding Shares pursuant to the Offer and to pay
fees and expenses related to the Offer and the Proposed Rockwell Merger is
estimated to be approximately $1.6 billion. The Purchaser plans to obtain all
funds needed for the Offer and the Proposed Rockwell Merger through a capital
contribution which will be made by Rockwell to the Purchaser. Rockwell plans to
use funds it has available in its cash accounts and by borrowing under a
revolving credit agreement to be negotiated by Rockwell with a group of banks
for such capital contribution. Although there are no commitments by such banks
at this time, Rockwell believes such credit agreement will be in effect prior to
the initial Expiration Date. Rockwell expects that such borrowings would be
repaid from the net proceeds of the sale of the Company's wholly-owned
subsidiary, Reliance Comm/Tec Corporation, and from cash flow from the normal
operations of Rockwell's businesses. The Offer is not conditioned on obtaining
financing.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after August 30, 1994, the Company
(i) splits, combines or otherwise changes the Shares or its capitalization, (ii)
acquires Shares or otherwise causes a reduction in the number of Shares, (iii)
issues or sells additional Shares (other than the issuance of Shares reserved
for issuance as of August 30, 1994 under option and employee stock purchase
plans in accordance with their terms as publicly disclosed as of August 30,
1994) or any shares of any other class of capital stock, other voting securities
or any securities convertible into or exchangeable for, or rights (other than
the Rights), warrants or options, conditional or otherwise, to acquire, any of
the foregoing or (iv) discloses that it has taken such action, then, without
prejudice to the Purchaser's rights under Section 14, the Purchaser, in its sole
discretion, may make such adjustments in the purchase price and other terms of
the Offer and the Proposed Rockwell Merger as it deems appropriate to reflect
such split, combination or other change or action, including, without
limitation, the Minimum Condition or the number or type of securities offered to
be purchased.
If on or after August 30, 1994, the Company declares or pays any dividend
on the Shares or any distribution (including, without limitation, the issuance
of additional Shares pursuant to a stock dividend or stock split, the issuance
of other securities or the issuance of rights (other than the separation of the
Rights from the Shares) for the purchase of any securities) with respect to the
Shares or Rights (other than the Redemption Price) that is payable or
distributable to stockholders of record on a date prior to the transfer into the
name of the Purchaser or its nominees or transferees on the Company's stock
transfer records of the Shares and Rights purchased pursuant to the Offer
(except that if the Rights are redeemed by the Company's Board of Directors,
tendering stockholders who are holders of record as of the applicable record
date will be entitled to receive and retain the Redemption Price), and if Shares
are purchased in the Offer, then, without prejudice to the Purchaser's rights
under Section 14, (i) the purchase price per Share payable by the Purchaser
pursuant to the Offer shall be reduced by the amount of any such cash dividend
or cash distribution and (ii) any such non-cash dividend, distribution,
issuance, proceeds or rights to be received by the tendering stockholders shall
(a) be received and held by the tendering stockholders for the account of the
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer or (b) at the direction of
the Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will
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promptly be remitted to the Purchaser. Pending such remittance and subject to
applicable law, the Purchaser will be entitled to all rights and privileges as
owner of any such non-cash dividend, distribution, issuance, proceeds or rights
and may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer, the Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after expiration or termination of the Offer),
to pay for any Shares tendered, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered,
and may amend or terminate the Offer (whether or not any Shares have theretofore
been purchased or paid for) if, in the sole judgment of the Purchaser, (i) any
condition to consummation of the Offer set forth in the Introduction to this
Offer to Purchase (relating to the Minimum Condition, the No Impediments
Condition, the Rights Condition or the Section 203 Condition) has not been
satisfied or (ii) at any time on or after October 19, 1994 and before acceptance
for payment of, or payment for, such Shares any of the following events shall
occur or shall be deemed by the Purchaser to have occurred or Rockwell or the
Purchaser shall have learned about any such events applicable to or affecting
the Company or any of its affiliates which shall not have been previously
publicly disclosed by the Company:
(a) there shall have been threatened, instituted or pending any
action, proceeding, application, claim or counterclaim by or before any
court, government or governmental, regulatory or administrative agency,
authority or tribunal, domestic, foreign or supranational (whether brought
by the Company, an affiliate of the Company or any other person or entity),
which (i) challenges or seeks to challenge the acquisition by the Purchaser
of the Shares or Rights (or any of them), restrains, prohibits or delays or
seeks to restrain, prohibit or delay the making or consummation of the
Offer or the Proposed Rockwell Merger or any other merger or business
combination involving the Purchaser or any of its affiliates and the
Company or any of its subsidiaries, restrains or prohibits or seeks to
restrain or prohibit the performance of any of the contracts or other
agreements or arrangements entered into by the Purchaser or any of its
affiliates in connection with the acquisition of the Company or the Shares
or Rights (or any of them), or seeks to obtain any damages in connection
with any of the foregoing, (ii) makes or seeks to make the purchase of or
payment for, some or all of the Shares or Rights pursuant to the Offer, the
Proposed Rockwell Merger or otherwise, illegal, or results in or may result
in a delay in the ability of the Purchaser to accept for payment or pay for
some or all of the Shares or Rights or to consummate the Proposed Rockwell
Merger, (iii) imposes or seeks to impose limitations on the ability of
Rockwell, the Purchaser or the Company or any of their respective
affiliates or subsidiaries effectively to acquire or hold, or requiring
Rockwell, the Purchaser, the Company or any of their respective affiliates
or subsidiaries to dispose of or hold separate, any portion of the assets
or the business of Rockwell, the Purchaser, the Company or any of their
respective affiliates or subsidiaries or imposes or seeks to impose
limitations on the ability of Rockwell, the Purchaser, the Company or any
of their respective affiliates or subsidiaries to continue to conduct, own
or operate all or any portion of their businesses and assets as heretofore
conducted, owned or operated, (iv) imposes or seeks to impose or results in
or may result in material limitations on the ability of Rockwell, the
Purchaser or any of their affiliates to exercise full rights of ownership
of the Shares or Rights purchased by them, including, but not limited to,
the right to vote the Shares purchased by them on all matters properly
presented to the stockholders of the Company, or the right to vote any
shares of capital stock of any subsidiary directly or indirectly owned by
the Company, (v) results in or may result in a material limitation or
diminution in the benefits expected to be derived by Rockwell and the
Purchaser as a result of the transactions contemplated by the Offer and the
Proposed Rockwell Merger, (vi) imposes or seeks to impose voting,
procedural, price or other requirements in addition to those under the
Delaware Law and federal securities laws (each as in effect on the date of
this Offer to Purchase) in connection with the transactions contemplated by
the Offer and the Proposed Rockwell Merger or any material condition to the
Offer that is unacceptable to the Purchaser or (vii) otherwise directly or
indirectly relates to the Offer, the Proposed Rockwell Merger or any other
business combination with the Company or which otherwise, in the sole
judgment of the
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Purchaser, might adversely affect the Company or any of its subsidiaries or
Rockwell, the Purchaser or any of their respective affiliates or the value
of the Shares; or
(b) other than the application of any waiting periods under the HSR
Act or the Competition Act, the determination or deemed determination
pursuant to the EC Merger Regulation and the necessity for approvals and
other actions by any domestic, foreign or supranational governmental,
administrative or regulatory agency, authority or tribunal described in
paragraph (k) below, any statute, rule, regulation, judgment, decree, order
or injunction shall have been proposed, sought, promulgated, enacted,
entered, enforced or deemed applicable to the Offer or the Proposed
Rockwell Merger or other business combination between Rockwell, the
Purchaser or any of their respective affiliates and the Company, or any
other action shall have been taken, by any domestic, foreign or
supranational government or any governmental, administrative or regulatory
authority or agency or by any court or tribunal, domestic, foreign or
supranational, that might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (vii) of paragraph (a)
above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or be threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
condition (financial or otherwise), operations, licenses, franchises,
results of operations or prospects of the Company or any of its
subsidiaries, or in general political, market, economic or financial
conditions in the United States or abroad, which, in the sole judgment of
the Purchaser, is or may be materially adverse to the Company or any of its
subsidiaries or its stockholders, or the market price of, or trading in,
the Shares, or Rockwell or the Purchaser shall have become aware of any
facts which are or may be materially adverse with respect to the value of
the Company or any of its subsidiaries or the value of the Shares to
Rockwell or the Purchaser or any of their respective affiliates; or
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter securities market in the United States
or quotations for shares traded thereon, (ii) the declaration of any
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any material adverse change (or any existing or
threatened condition, event or development involving a prospective material
adverse change) in United States or any other currency exchange rates or a
suspension of, or a limitation on, the markets therefor, (iv) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (v) any
limitations (whether or not mandatory) imposed by any governmental
authority on, or any event which might have material adverse significance
with respect to, the nature or extension of credit or further extension of
credit by banks or other lending institutions, (vi) any significant adverse
change in the market price of the Shares or in securities or financial
markets in the United States or abroad, including, without limitation, a
decline of at least 15 percent in either the Dow Jones Average of
Industrial Stocks or the Standard & Poor's 500 Index from that existing at
the close of business on October 19, 1994 or (vii) in the case of any of
the foregoing, a material acceleration or worsening thereof; or
(e) the Company or any of its subsidiaries shall have (i) issued,
distributed, pledged or sold, or authorized, proposed or announced the
issuance, distribution, pledge or sale of (A) any shares of capital stock
of any class (including, without limitation, the Shares), or securities
convertible into or exchangeable for any such shares, or any rights (other
than the Rights), warrants, or options to acquire any such shares or
convertible or exchangeable securities, other than the issuance of Shares
reserved for issuance on August 30, 1994 pursuant to the exercise of then
outstanding stock options or any employee stock purchase plan of the
Company or pursuant to any conversion of Class B Shares or Class C Shares
outstanding on August 30, 1994 into Class A Shares (in each case in
accordance with the publicly disclosed terms thereof on such date) or (B)
any other securities or rights in respect of, in lieu of, or in
substitution for, capital stock of the Company, (ii) purchased or otherwise
acquired or caused a reduction in, or proposed or offered to purchase or
otherwise acquire, any Shares or other securities of the Company (except
for redemption of the Rights in accordance with the terms of the Rights
Agreement), (iii) declared or paid, or proposed to be declared or paid, any
dividend or distribution on any shares of capital stock (other than a
distribution of the Rights Certificates in accordance with the terms of the
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Rights Agreement and, in the event the Rights are redeemed, the Redemption
Price), or issued, or authorized, recommended or proposed the issuance of,
any other distribution in respect of any shares of capital stock, whether
payable in cash, securities or other property, or altered or proposed to
alter any material term of any outstanding security, (iv) issued,
distributed or sold, or authorized, announced or proposed the issuance,
distribution or sale of, any debt securities or any securities convertible
into or exchangeable for debt securities or any rights, warrants or options
entitling the holder thereof to purchase or otherwise acquire any debt
securities, or incurred, or authorized or proposed the incurrence of, any
debt other than in the ordinary course of business and consistent with past
practice, or any debt containing burdensome covenants, (v) entered into any
agreement for, or authorized, recommended, proposed, effected or publicly
announced its intention to authorize, recommend, propose, enter into or
cause (A) any merger (other than the Proposed Rockwell Merger),
consolidation, liquidation, dissolution, business combination, joint
venture, acquisition of assets or securities (other than a redemption of
the Rights in accordance with the Rights Agreement) or disposition of
assets or securities other than in the ordinary course of business, (B) any
material change in its capitalization, (C) any release or relinquishment of
any material contract rights or (D) any comparable event not in the
ordinary course of business, (vi) entered into any agreement for, or
authorized, recommended, proposed, effected or announced its intention to
authorize, recommend, propose, enter into or cause, any transaction or
arrangement which could adversely affect the value of the Shares, (vii)
proposed, adopted or authorized or announced its intention to propose,
adopt or authorize any amendment to the Company Certificate of
Incorporation or By-Laws or similar organization documents or (other than
any amendment which delays the Distribution Date) the Rights Agreement or
(viii) agreed in writing or otherwise to take any of the foregoing actions;
or
(f) a tender or exchange offer for some portion or all of any
outstanding securities of the Company or any of its subsidiaries (including
the Shares or Rights) shall have been publicly proposed to be made or shall
have been made by another person (including the Company or any of its
subsidiaries or affiliates), or it shall have been publicly disclosed or
the Purchaser shall have learned that (i) any person (including the Company
or any of its subsidiaries or affiliates), entity or "group" (as defined in
Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to
acquire more than 5% of any class or series of capital stock of the Company
(including the Shares or Rights) or its subsidiaries or shall have been
granted any option or right to acquire more than 5% of any class or series
of capital stock of the Company (including the Shares or Rights) or its
subsidiaries, other than acquisitions of Shares for bona fide arbitrage
positions, or (ii) any such person, entity or group which has publicly
disclosed any such ownership of or right to acquire more than 5% of any
class or series of capital stock of the Company (including the Shares or
Rights) or its subsidiaries prior to October 20, 1994 shall have acquired
or proposed to acquire additional shares of any class or series of capital
stock of the Company (including the Shares or Rights) or its subsidiaries
constituting more than 1% of such class or series or shall have been
granted any option or right to acquire more than 1% of such class or series
of capital stock of the Company (including the Shares or Rights) or its
subsidiaries, (iii) any group shall have been formed which beneficially
owns more than 5% of any class or series of capital stock of the Company
(including the Shares or Rights) or its subsidiaries, (iv) any person,
entity or group shall have entered into a definitive agreement or an
agreement in principle or made a proposal with respect to a tender offer or
exchange offer for the Shares or Rights or a merger, consolidation or other
business combination with or involving the Company or its subsidiaries or
(v) any person, entity or group shall have filed a Premerger Notification
and Report Form under the HSR Act in order to, or made a public
announcement reflecting an intent to, acquire the Company or assets or
securities of the Company or its subsidiaries; or
(g)(i) the Company and Rockwell shall have reached an agreement or
understanding that the Offer be terminated or amended or the purchase or
payment for Shares be postponed pursuant thereto or (ii) Rockwell, the
Purchaser or any of their respective affiliates shall have entered into a
definitive agreement or announced an agreement in principle with respect to
the Proposed Rockwell Merger or any other business combination with the
Company or any of its affiliates or the purchase of any material portion of
the securities or assets of the Company or any of its subsidiaries; or
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(h) the Company or any of its subsidiaries shall have entered into any
employment, severance or similar agreement, arrangement or plan with or for
the benefit of any of its employees or entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated compensation or payment or funding of the benefits to any such
employees as a result of or in connection with the transactions
contemplated by the Offer or the Proposed Rockwell Merger or any other
business combination involving the Company or any of its subsidiaries or
otherwise amended any such agreement, arrangement or plan to make the same
more favorable to any such employee; or
(i) the Purchaser shall become aware (i) that any material contractual
right of the Company or any of its subsidiaries shall be impaired or
otherwise adversely affected or that any material amount of indebtedness of
the Company or any of its subsidiaries (other than indebtedness pursuant to
term or revolving credit arrangements provided by banks) shall become
accelerated or otherwise become due or become subject to acceleration prior
to its stated due date, in any case with or without notice or the lapse of
time or both as a result of or in connection with the transactions
contemplated by the Offer or the Proposed Rockwell Merger or any other
business combination involving the Company, (ii) of any covenant, term or
condition in any of the Company's or any of its subsidiaries' instruments
or agreements that has or may have (whether considered alone or in the
aggregate with other covenants, terms or conditions), a material adverse
effect on (x) the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses, franchises, results of operations or prospects of the
Company or any of its subsidiaries (including, but not limited to, any
event of default that may result from the consummation of the Offer, the
acquisition of control of the Company or any of its subsidiaries or the
Proposed Rockwell Merger or any other business combination involving the
Company) or (y) the value of the Shares in the hands of Rockwell, the
Purchaser or any of their respective affiliates or (z) the consummation by
Rockwell, the Purchaser or any of their respective affiliates of the
Proposed Rockwell Merger or any other business combination involving the
Company or (iii) that any report, document, instrument, financial statement
or schedule of the Company or any of its subsidiaries filed with the
Commission contained, when filed, an 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 made therein, in light of the circumstances
under which they were made, not misleading; or
(j) except as may be required by law, the Company or any of its
subsidiaries shall have taken any action to terminate or amend any employee
benefit plan (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended) of the Company or any of its
subsidiaries; or
(k) any waiting periods under the HSR Act applicable to the purchase
of the Shares pursuant to the Offer shall not have expired or been
terminated, there shall not have been a determination or a deemed
determination pursuant to the EC Merger Regulation that the purchase of the
Shares pursuant to the Offer is compatible with the common market, any
waiting periods under the Competition Act applicable to the purchase of the
Shares pursuant to the Offer shall not have expired or been terminated, or
any other approval, permit, authorization, consent or other action of any
domestic, foreign or supranational governmental, administrative or
regulatory agency, authority or tribunal (including those described in
Section 15) shall not have been obtained on terms satisfactory to the
Purchaser in its sole discretion.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
(including, without limitation, any action or inaction by the Purchaser or any
of its affiliates) giving rise to any such condition or may be waived by the
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such rights and each such right shall be
deemed an ongoing right and may be asserted at any time and from time to time.
Any determination by the Purchaser concerning any of the events described in
this Section 14 shall be final and binding.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
The Purchaser acknowledges that the Commission believes that (a) if the
Purchaser is delayed in accepting the Shares it must either extend the Offer or
terminate the Offer and promptly return the Shares
34
<PAGE> 38
and (b) the circumstances in which a delay in payment is permitted are limited
and do not include unsatisfied conditions of the Offer, except with respect to
any approval required under the HSR Act and most other regulatory approvals.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set forth
in this Offer to Purchase, based on its review of publicly available filings by
the Company with the Commission and other publicly available information
regarding the Company, neither Rockwell nor the Purchaser is aware of any
licenses or regulatory permits that appear to be material to the business of the
Company and its subsidiaries, taken as a whole, and that might be adversely
affected by the Purchaser's acquisition of Shares (and the indirect acquisition
of the stock of the Company's subsidiaries) as contemplated herein, or any
filings, approvals or other actions by or with any domestic, foreign or
supranational governmental authority or administrative or regulatory agency that
would be required for the acquisition or ownership of the Shares (or the
indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser pursuant to the Offer as contemplated herein. Should any such approval
or other action be required, it is presently contemplated that such approval or
action would be sought except as described below under "State Takeover Laws."
Should any such approval or other action be required, there can be no assurance
that any such approval or action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
Company's or its subsidiaries' businesses, or that certain parts of the
Company's, Rockwell's, the Purchaser's or any of their respective subsidiaries'
businesses might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or action
or in the event that such approvals were not obtained or such actions were not
taken. The Purchaser's obligation to purchase and pay for Shares is subject to
certain conditions, including conditions with respect to litigation and
governmental actions. See the Introduction and Section 14 for a description
thereof.
State Takeover Laws. A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Proposed Rockwell
Merger, the Purchaser believes that such laws conflict with federal law and
constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Statute, which as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult, and the reasoning in such decision is likely to
apply to certain other state takeover statutes. In 1987, however, in CTS Corp.
v. Dynamics Corp. of America, the Supreme Court of the United States held that
the State of Indiana could, as a matter of corporate law and, in particular,
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders, provided
that such laws were applicable only under certain conditions. Subsequently, in
TLX Acquisition Corp. v. Telex Corp., a Federal district court in Oklahoma ruled
that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma in that they would subject such
corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v.
McReynolds, a Federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit. In December 1988, a Federal district court in
Florida held in Grand Metropolitan PLC v. Butterworth that the provisions of the
Florida Affiliated Transactions Act and Florida Control Share Acquisition Act
were unconstitutional as applied to corporations incorporated outside of
Florida.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Proposed Rockwell Merger. The Purchaser
reserves the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer or the Proposed Rockwell Merger and nothing in
this Offer to Purchase nor any action taken in connection herewith is intended
as a waiver of that right. In the event that it is asserted that one or more
takeover statutes apply to the Offer or the Proposed Rockwell Merger, and it is
not determined by an appropriate court that such statute or statutes do not
apply or are invalid as applied to the
35
<PAGE> 39
Offer or the Proposed Rockwell Merger, as applicable, the Purchaser may be
required to file certain documents with, or receive approvals from, the relevant
state authorities, and the Purchaser might be unable to accept for payment or
purchase 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 purchase, or pay for, any Shares tendered. See Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The acquisition of Shares
pursuant to the Offer and the Proposed Rockwell Merger is subject to such
requirements.
Under the provisions of the HSR Act applicable to the Offer and the
Proposed Rockwell Merger, the purchase of Shares pursuant to the Offer and the
Proposed Rockwell Merger may not be consummated until the expiration of a
15-calendar-day waiting period following the filing of certain required
information and documentary material with respect to the Offer with the FTC and
the Antitrust Division, unless such waiting period is earlier terminated by the
FTC and the Antitrust Division. The Purchaser expects to file a Premerger
Notification and Report Form with the Antitrust Division and the FTC in
connection with the purchase of Shares pursuant to the Offer and the Proposed
Rockwell Merger under the HSR Act on October 21, 1994, and, in such event, the
required waiting period with respect to the Offer and the Proposed Rockwell
Merger will expire at 11:59 p.m., New York City time, on November 5, 1994,
unless earlier terminated by the Antitrust Division or the FTC or the Purchaser
receives a request for additional information or documentary material prior
thereto. If, within such 15-calendar-day waiting period, either the FTC or the
Antitrust Division were to request additional information or documentary
material from the Purchaser, the waiting period with respect to the Offer and
the Proposed Rockwell Merger would be extended for an additional period of 10
calendar days following the date of substantial compliance with such request by
the Purchaser. Only one extension of the waiting period pursuant to a request
for additional information is authorized by the rules promulgated under the HSR
Act. Thereafter, the waiting period could be extended only by court order or
with the consent of the Purchaser. The additional 10-calendar-day waiting period
may be terminated sooner by the FTC or the Antitrust Division. Although the
Company is required to file certain information and documentary material with
the Antitrust Division and the FTC in connection with the Offer, neither the
Company's failure to make such filings nor a request made to the Company from
the Antitrust Division or the FTC for additional information or documentary
material will extend the waiting period with respect to the purchase of Shares
pursuant to the Offer and the Proposed Rockwell Merger.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Proposed Rockwell Merger. At any time
before or after the Purchaser's purchase of Shares, the Antitrust Division or
the FTC could take such action under the antitrust laws as either deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer and the Proposed Rockwell Merger, the
divestiture of Shares purchased pursuant to the Offer or the divestiture of
substantial assets of Rockwell, the Purchaser, the Company or any of their
respective subsidiaries or affiliates. Private parties as well as state
attorneys general may also bring legal actions under the antitrust laws under
certain circumstances. See Section 14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser believes that the
acquisition of Shares pursuant to the Offer and the Proposed Rockwell Merger
should not violate the applicable antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer and the Proposed Rockwell Merger on
antitrust grounds will not be made, or, if such challenge is made, what the
result will be. See Section 14.
EC Merger Regulation. According to publicly available information, the
Company may conduct substantial operations within the European Community (the
"EC") and certain of the individual member states of the EC. The EC Merger
Regulation requires that notices of concentrations with a "community
36
<PAGE> 40
dimension" be provided to the EC Commission for review and approval prior to
being put into effect. The Offer will be deemed to have a "community dimension"
if the combined aggregate worldwide annual revenues of both the Company and
Rockwell exceeds ECU 5 billion, if the community-wide annual revenues of each of
the Company and Rockwell exceed ECU 250 million and if both the Company and
Rockwell do not receive more than two-thirds of their respective community-wide
revenues from one and the same member state. Based upon publicly available
information, the Purchaser believes that the Offer may be considered to have a
"community dimension." If the Offer falls within the EC Merger Regulation, the
EC Commission, as opposed to individual member states, has exclusive
jurisdiction to review it, subject to certain exceptions.
Under the EC Merger Regulation, a concentration that meets the foregoing
guidelines requires the filing of a notice in a prescribed form with the EC
Commission. This filing must normally be made within seven days of the earlier
of the announcement of a public bid, the conclusion of the relevant agreement or
the acquisition of a controlling interest, although extensions of time are
sometimes granted. Transactions subject to the filing requirements of the EC
Merger Regulation are suspended automatically until three weeks after receipt of
the notice. The EC Commission may extend the suspension period for such period
as it finds necessary to make a final decision on the legality of the
transaction. In the case of a public bid, the bidder may acquire shares of the
target company during the suspension period, but may not vote such shares until
after the end of the period unless the EC Commission grants permission to do so
in order to maintain the full value of the bidder's investment.
The EC Commission must decide whether to initiate proceedings within one
month after the receipt of the notice, subject to certain extensions for EC
holidays or if an individual member state has requested a referral of the
transaction. If proceedings are initiated, the EC Commission must reach a
decision in the proceedings within four months of the commencement of the
proceedings. If the EC Commission fails to reach a decision within either of
these time periods the transaction will be deemed to be compatible with the
common market.
If the EC Commission declares the Offer and the Proposed Rockwell Merger to
be not compatible with the common market, it may prevent the consummation of the
transaction, order a divestiture if the transaction has already been consummated
or impose conditions or other obligations. In the event that the transaction is
found not to be subject to the EC Merger Regulation, various national merger
control regimes of the member states may apply, resulting in the possibility
that approvals may be necessary from the various national authorities.
There can be no assurance that a challenge to the Offer and the Proposed
Rockwell Merger will not be made pursuant to the EC Merger Regulation or,
alternatively, pursuant to the merger regulations of one or more of the various
member states, or, if such a challenge is made, what the outcome will be. See
Section 14.
Investment Canada Act. According to publicly available information, the
Company conducts certain operations in Canada. The Investment Canada Act
(Canada) (the "ICA") may require that a notice of the acquisition of "control"
(as defined in the ICA) by a "non-Canadian" (as defined in the ICA) of any
"Canadian business" (as defined in the ICA) be furnished to Investment Canada, a
Canadian governmental agency (the "Agency"), and that certain of these
investments to acquire control of a Canadian business be reviewed and approved
by the Minister of the federal cabinet responsible for the ICA (the "Minister")
as an investment that is "likely to be of net benefit" to Canada based upon
criteria set forth in the ICA. An acquisition of control of a corporation
incorporated outside Canada that controls, directly or indirectly, an entity in
Canada carrying on a Canadian business (an "indirect acquisition") does not
require approval under the ICA before the acquisition is implemented, although
some indirect acquisitions may require approval after implementation. Direct
acquisitions may require the Minister's approval before they can be implemented.
Under the ICA, the acquisition of more than a majority of the voting shares of a
corporation is deemed to be an acquisition of control.
Most indirect acquisitions of control of a Canadian business by an
"American" (as defined in the ICA) are not reviewable under the ICA provided
that the value of the assets of all the acquired entities carrying on a Canadian
business is not more than 50% of the value of the assets of all entities
acquired in the transaction, wherever located. Where the value of the assets of
entities carrying on a Canadian business exceeds that
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<PAGE> 41
amount, and in the case of most direct acquisitions of control of a Canadian
business by or from an "American," the transaction is reviewable under the ICA
if the value of the assets of all the acquired entities carrying on a Canadian
business is Cdn. $153 million or more (for transactions implemented at any time
in 1994).
The Purchaser intends to file within the prescribed time period a notice
with respect to the Offer and the Proposed Rockwell Merger with the Agency and
to seek approval of the Minister, if required. If the Purchaser were to acquire
control of a Canadian business in a transaction reviewable under the ICA and,
within certain specified periods of time provided in the ICA, the Minister
decides that he is not satisfied that the acquisition is "likely to be of net
benefit" to Canada, the Minister could issue a notice the effect of which would
be to prohibit the acquisition of "control" of all or part of the Company's
Canadian businesses by the Purchaser, or, where such acquisition has already
been made, to compel divestiture of control of all or part of the Company's
Canadian businesses. In assessing whether a transaction is likely to be of net
benefit to Canada, the ICA requires that the Minister consider any
representations and undertakings that are submitted by an acquiror.
Competition Act (Canada). Certain provisions of the Competition Act
require pre-merger notification to the Director of Investigation and Research
(the "Canadian Director") of significant transactions, which may include the
acquisition of a large percentage of the stock of a public company which has
Canadian operations, or a merger or amalgamation involving such an entity.
Pre-merger notification is generally required with respect to transactions in
which the parties to the transaction and their affiliates have assets in Canada,
or annual gross revenues from sales in, from or into Canada, in excess of Cdn.
$400 million and which involve the direct or indirect acquisition of an
operating business in Canada of which the value of the Canadian assets, or the
annual gross revenues from sales in or from Canada generated from such assets,
exceed Cdn. $35 million (or, in the case of an amalgamation of two or more
corporations one or more of which carries on an operating business in Canada,
the Canadian assets or the annual gross revenues from sales in or from Canada of
the entity resulting from such amalgamation or the entities controlled by such
entity exceed Cdn. $70 million). In the case of an acquisition of shares of a
public company, the transaction must also result in the acquiror holding voting
shares which carry more than 20% of the outstanding votes (or more than 50% if
the acquiror already holds 20% or more) attached to all the voting shares of the
public company. If a transaction is subject to the pre-merger notification
requirements, notice must be given either 7 or 21 days (depending on the
information required by the Canadian Director) prior to the completion of the
transaction. The Canadian Director may waive or seek an extension of the waiting
period. After the applicable waiting period expires or is waived, the
transaction may be completed.
The Canadian Director may apply to the Competition Tribunal, a specialized
tribunal empowered to deal with certain matters governed by the Competition Act
with respect to a "merger" (as defined in the Competition Act) and, if the
Competition Tribunal finds that the merger prevents or lessens or is likely to
prevent or lessen competition substantially, it may order that the merger not
proceed or, in the event that the merger has been completed, order its
dissolution or the disposition of some or all the assets or shares involved. A
merger may be subjected to an order of the Competition Tribunal whether or not
it is a notifiable transaction. In some instances, the Canadian Director may
issue an "advance ruling certificate" to the effect that he would not have
sufficient grounds on which to apply to the Competition Tribunal under the
merger provisions of the Competition Act or a "no-action" advisory opinion
following a notification or voluntary submission. If the Canadian Director
issues an advance ruling certificate in respect of a proposed transaction, that
transaction is exempt from the pre-merger notification provisions.
The Purchaser intends to file any required notice with respect to the Offer
and the Proposed Rockwell Merger with the Canadian Director and, to the extent
necessary, observe any applicable waiting period.
Other Foreign Approvals. According to publicly available information, the
Company also owns property and conducts business in a number of other foreign
countries and jurisdictions. In connection with the acquisition of the Shares
pursuant to the Offer or the Proposed Rockwell Merger, the laws of certain of
those foreign countries and jurisdictions may require the filing of information
with, or the obtaining of the approval of, governmental authorities in such
countries and jurisdictions. The governments in such countries and jurisdictions
might attempt to impose additional conditions on the Company's operations
conducted in such
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<PAGE> 42
countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Proposed Rockwell Merger. There can be no assurance
that the Purchaser will be able to cause the Company or its subsidiaries to
satisfy or comply with such laws or that compliance or noncompliance will not
have adverse consequences for the Company or any subsidiary after purchase of
the Shares pursuant to the Offer or the Proposed Rockwell Merger.
Connecticut Environmental Transfer Law. The Connecticut Transfer Act,
Conn. Gen. Stat. Sec. 22a-134 et seq. ("CTA"), requires that prior to the
transfer of ownership of an establishment subject to the CTA, the transferor
must submit a "Negative Declaration" to the transferee stating (i) that there
has been no spillage or discharge of hazardous waste on the property or that any
such spillage or discharge has been cleaned up according to the procedures and
requirements of the state Department of Environmental Protection (the "DEP") and
(ii) that any hazardous waste remaining on-site is being managed in accordance
with all applicable regulations. If the transferor cannot submit a "Negative
Declaration," one of the parties to the transfer must certify to the
Commissioner of the DEP that such party will contain or otherwise mitigate the
effects of any spillage or discharge in accordance with the procedures and
timetable approved by the Commissioner pursuant to an order or consent decree.
Based on publicly available information, the Purchaser understands that the
Company operates a facility in Connecticut. The Purchaser will seek to determine
whether any of the Company's properties are establishments subject to the CTA
and, if so, the Purchaser will comply, or seek to cause the Company to comply,
with the CTA as promptly as practicable following consummation of the Offer. See
Section 14.
16. CERTAIN FEES AND EXPENSES. Dillon, Read & Co. Inc. ("Dillon Read") is
acting as Dealer Manager in connection with the Offer and as financial advisor
to Rockwell and the Purchaser in connection with the proposed acquisition of the
Company. Rockwell has paid or is obligated to pay to Dillon Read a fee of
$1,000,000 and has agreed to pay Dillon Read an additional fee of $5,000,000
upon consummation of the Offer or certain other business combination
transactions involving the Company during the term of Rockwell's arrangement
with Dillon Read or 10% of any termination fee (subject to a maximum of
$5,000,000) payable by or on behalf of the Company to Rockwell or any of its
affiliates in connection with the termination of any agreement to enter into any
such business combination transaction involving the Company entered into by
Rockwell or any of its affiliates during the term of Rockwell's arrangement with
Dillon Read. In addition, Rockwell has agreed to reimburse Dillon Read for its
reasonable expenses, including reasonable fees and disbursements of its counsel,
incurred in rendering its services under its engagement agreement with Rockwell
and has agreed to indemnify Dillon Read against certain liabilities and expenses
in connection with the Offer and the Proposed Rockwell Merger, including certain
liabilities under the federal securities laws. Dillon Read from time to time
renders various investment banking services to Rockwell and its affiliates for
which it is paid customary fees.
Georgeson & Company Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares and Rights by mail, telephone, telex, telegraph and personal interview
and may request brokers, dealers and other nominee stockholders to forward
material relating to the Offer to beneficial owners of Shares and Rights. The
Purchaser will pay the Information Agent reasonable and customary compensation
for all such services in addition to reimbursing the Information Agent for
reasonable out-of-pocket expenses in connection therewith. The Purchaser has
agreed to indemnify the Information Agent against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
federal securities laws.
In addition, First Chicago Trust Company of New York has been retained as
the Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under the federal securities
laws.
Except as set forth above, neither Rockwell nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person (other than the
Information Agent and the Dealer Manager) for soliciting tenders of Shares and
Rights pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies
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<PAGE> 43
and other nominees will, upon request, be reimbursed by Rockwell or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares or Rights residing in any jurisdiction
in which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
However, the Purchaser may, in its discretion, take such action as it may deem
necessary to make the Offer in any jurisdiction and extend the Offer to holders
of Shares in 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 will be deemed to
be made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
Rockwell and the Purchaser have filed with the Commission a Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company, except that they
will not be available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF ROCKWELL OR THE PURCHASER NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTERS OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. Neither the delivery of the Offer to Purchase nor any purchase
pursuant to the Offer shall, under any circumstances, create any implication
that there has been no change in the affairs of Rockwell, the Purchaser, the
Company or any of their respective subsidiaries since the date as of which
information is furnished or the date of this Offer to Purchase.
ROK ACQUISITION CORPORATION
October 21, 1994
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF ROCKWELL AND THE PURCHASER
ROCKWELL
Set forth below are the name, business address 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
Rockwell. Except as otherwise noted, the business address of each such person is
Rockwell International Corporation, 2201 Seal Beach Boulevard, Seal Beach,
California 90740-8250, and such person is a United States citizen. In addition,
except as otherwise noted, each director and executive officer of Rockwell has
been employed in his or her present principal occupation listed below during the
last five years. Directors of Rockwell are indicated by an asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS EMPLOYMENTS FOR THE PAST FIVE YEARS
- ------------------------- -----------------------------------
<S> <C>
Donald R. Beall*................... Chairman of the Board and Chief Executive Officer of
Rockwell; Director of Amoco Corporation, The Procter &
Gamble Company and The Times Mirror Company.
Lew Allen, Jr.*.................... Chairman of the Board of the Charles Stark Draper
1040 South Arroyo Boulevard Laboratory, Inc. (space and defense research) since
Pasadena, CA 91105 January 1991; Vice President of the California Institute
of Technology and Director of its Jet Propulsion
Laboratory prior thereto; Director of the W. M. Keck
Foundation.
W. Michael Barnes.................. Senior Vice President, Finance & Planning and Chief
Financial Officer of Rockwell since July 1991; Vice
President, Business Development and Planning of Rockwell
prior thereto.
Kent M. Black...................... Executive Vice President and Chief Operating Officer of
Rockwell.
Richard M. Bressler*............... Retired; Chairman of the Board of El Paso Natural Gas
999 Third Avenue Company (natural gas operations) from October 1990
Suite 2300 through December 1993; Chairman of both Burlington
Seattle, WA 98104 Northern Inc. (transportation) and Burlington Resources
Inc. (natural resources) prior thereto; Chairman of the
Plum Creek Management Company (forest products) from
April 1989 to January 1993; Director of H.F. Ahmanson
and Company, Baker Hughes Incorporated and General
Mills, Inc.
Robert L. Cattoi................... Senior Vice President and Technical Advisor to the
3200 East Renner Road Office of the Chairman of Rockwell since March 1994;
Richardson, TX 75082-2402 Senior Vice President, Research and Engineering of
Rockwell from November 1993 to March 1994 and prior to
June 1991; Senior Vice President, Research, Engineering
& Manufacturing Processes of Rockwell from June 1991
through October 1993.
Lee H. Cramer...................... Vice President and Treasurer of Rockwell.
625 Liberty Avenue
Pittsburgh, PA 15222-3123
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS EMPLOYMENTS FOR THE PAST FIVE YEARS
- ------------------------- -----------------------------------
<S> <C>
John J. Creedon*................... Consultant; Chairman of the Executive Committee of
200 Park Avenue Metropolitan Life Insurance Company (insurance,
Suite 5700 investment and financial products and services) from
New York, NY 10166 August 1989 until April 1991; Chief Executive Officer of
Metropolitan Life Insurance Company prior thereto;
Director of Corporate Partners, Melville Corporation,
NYNEX Corporation, Praxis, Inc., Sonat, Inc. and Union
Carbide Corporation.
Don H. Davis, Jr................... Executive Vice President and Chief Operating Officer of
Rockwell since January 1994; Senior Vice President and
President, Automation of Rockwell from June 1993 to
January 1994; President of Allen-Bradley prior thereto.
Robin Chandler Duke*............... Chairman of Population Action International (formerly
435 East 52nd Street Population Crisis Committee/Draper Fund) since 1991;
New York, NY 10022 National Co-Chairman thereof prior thereto; Vice
Chairman, Institute of International Education from 1988
through 1992; Director of American Home Products
Corporation, International Flavors & Fragrances, Inc.
and River Bank America.
Judith L. Estrin*.................. Computer Industry Consultant since September 1994;
Suite 508 President and Chief Executive Officer of Network
101 First Street Computing Devices, Inc. (display stations and software
Los Altos, CA 94022 for network computing environments) from October 1993
into September 1994; Executive Vice President thereof
prior thereto; Director of Federal Express Corporation.
William H. Gray, III*.............. President of the United Negro College Fund (educational
8260 Willow Oaks Corporate Drive assistance) since September 1991; U.S. Congressman prior
P.O. Box 10444 thereto; Senior Minister, Bright Hope Baptist Church in
Fairfax, VA 22031 Philadelphia since 1972; Director of The Chase Manhattan
Corporation, N.A., Lotus Development Corporation, MBIA,
Inc., The Prudential Insurance Company of America, Union
Pacific Corporation, Warner-Lambert Company and
Westinghouse Electric Corporation.
Thomas L. Gunckel II............... Senior Vice President, Research, Engineering and
Operations of Rockwell since June 1994; Senior Vice
President, Research and Engineering of Rockwell from
March 1994 through June 1994; Vice President and General
Manager of Autonetics Electronics Systems of Rockwell
prior thereto.
Charles H. Harff................... Senior Vice President, General Counsel and Secretary of
625 Liberty Avenue Rockwell.
Pittsburgh, PA 15222-3123
Sam F. Iacobellis.................. Executive Vice President and Deputy Chairman for Major
Programs of Rockwell since June 1993; Executive Vice
President and Chief Operating Officer of Rockwell prior
thereto.
Lawrence J. Komatz................. Vice President and Controller of Rockwell.
625 Liberty Avenue
Pittsburgh, PA 15222-3123
</TABLE>
42
<PAGE> 46
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS EMPLOYMENTS FOR THE PAST FIVE YEARS
- ------------------------- -----------------------------------
<S> <C>
James Clayburn LaForce, Jr.*....... Dean Emeritus of the John E. Anderson Graduate School of
P.O. Box 1595 Management, University of California, Los Angeles since
Pauma Valley, CA 92061 June 1993; Dean of the John E. Anderson Graduate School
of Management, University of California, Los Angeles
prior thereto; Director of The BlackRock Funds, Eli
Lilly & Company, Imperial Credit Industries, Inc.,
Jacobs Engineering Group, Inc., Payden & Rygel
Investment Trust, Provident Investment Council Mutual
Funds, Shearson VIP Fund and the Timken Company.
Richard R. Mau..................... Senior Vice President, Communications of Rockwell.
William T. McCormick, Jr.*......... Chairman and Chief Executive Officer of CMS Energy
Fairlane Plaza South Corporation (diversified electric and gas company);
330 Town Center Drive Director of NBD Bancorp, Inc. and Schlumberger Ltd.
Suite 1100
Dearborn, MI 48126
James A. McDivitt.................. Senior Vice President, Government Operations and
1745 Jefferson Davis Highway International of Rockwell since November 1990; Senior
Arlington, VA 22202-3475 Vice President, Government Operations of Rockwell prior
thereto.
John A. McLuckey................... Senior Vice President and President, Defense Systems of
Rockwell since June 1993; President of Defense
Electronics of Rockwell from March 1990 through June
1993; President of Autonetics Electronics Systems of
Rockwell prior thereto.
Robert H. Murphy................... Senior Vice President, Organization and Human Resources
of Rockwell.
John D. Nichols*................... Chairman of the Board and Chief Executive Officer of
3600 West Lake Avenue Illinois Tool Works Inc. (engineered components and
Glenview, IL 60025-5811 industrial systems and consumables); Director of
Household International, Philip Morris Companies Inc.
and Stone Container Corporation.
Bruce M. Rockwell*................. Senior Vice President of First of Michigan Corporation
100 Renaissance Center (investment banking).
27th Floor
Detroit, MI 48243
William A. Sante, II............... General Auditor of Rockwell.
625 Liberty Avenue
Pittsburgh, PA 15222-3123
Ross D. Siragusa, Jr.*............. President of GameTime Inc. (park and playground
P.O. Box 121 equipment); affiliate Director of AmSouth
150 GameTime Drive Bancorporation.
Fort Payne, AL 35967
William S. Sneath*................. Retired Chairman of the Board and Chief Executive
41 Leeward Lane Officer of Union Carbide Corporation (chemicals and
Riverside, CT 06878 other products); Director of Union Carbide Corporation
and Metropolitan Life Insurance Company.
Charles C. Stoops, Jr.............. General Tax Counsel of Rockwell.
625 Liberty Avenue
Pittsburgh, PA 15222-3123
</TABLE>
43
<PAGE> 47
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS EMPLOYMENTS FOR THE PAST FIVE YEARS
- ------------------------- -----------------------------------
<S> <C>
Joseph F. Toot, Jr.*............... President and Chief Executive Officer and Director of
1835 Dueber Avenue, S.W. the Timken Company (tapered roller bearings and
Canton, OH 44706-2798 specialty steel) since 1992; President and Director of
the Timken Company prior thereto.
</TABLE>
44
<PAGE> 48
THE PURCHASER
Set forth below are the name, business address and present position with
the Purchaser, 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 United States citizen.
Except as otherwise noted, each executive officer of the Purchaser has been
employed in his present principal occupation listed below during the last five
years. Directors of the Purchaser are indicated by an asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS EMPLOYMENTS FOR THE PAST FIVE YEARS
- ------------------------- -----------------------------------
<S> <C>
William J. Calise, Jr.............. Secretary of the Purchaser; Partner of Chadbourne &
30 Rockefeller Plaza Parke (law firm).
New York, NY 10112
Jodie K. Glore*.................... President of the Purchaser; President and Chief
1201 South Second Street Executive Officer of Allen-Bradley since June 1994;
Milwaukee, WI 52304 Senior Vice President -- Automation Group of
Allen-Bradley from January 1992 through June 1994;
Corporate Vice President Sales of Square D Company from
October 1990 through December 1991; Vice President --
Power Equipment Group of Square D Company prior thereto.
Charles H. Harff*.................. Vice President of the Purchaser; Senior Vice President,
625 Liberty Avenue General Counsel and Secretary of Rockwell.
Pittsburgh, PA 15222-3123
John M. Schramek*.................. Treasurer of the Purchaser; Vice President, Acquisitions
625 Liberty Avenue and Divestitures of Rockwell.
Pittsburgh, PA 15222-3123
</TABLE>
45
<PAGE> 49
Facsimile copies of Letters of Transmittal, properly completed and duly
executed, will be accepted. The appropriate Letter of Transmittal, certificates
for Shares and Rights and any other required documents should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses
set forth below:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Facsimile By Hand or Overnight
By Mail: Transmission: Delivery:
Tenders & Exchanges (201) 222-4720 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey New York, New York 10005
07303-2563
Confirm Facsimile by Telephone:
(201) 222-4707
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letters of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, NY 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527
<PAGE> 1
CLASS A LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 21, 1994 BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 18, 1994,
UNLESS THE OFFER IS EXTENDED
------------------------
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Tenders & Exchanges (201) 222-4720 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey New York, New York
07303-2563 Confirm Facsimile 10005
by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER 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.
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders either if
certificates for Class A Shares and/or Class A Rights (each as defined in the
Offer to Purchase, dated October 21, 1994 (the "Offer to Purchase")) are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if tenders of Class A Shares and/or Class A Rights are to
be made by book-entry transfer to an account maintained by First Chicago Trust
Company of New York (the "Depositary") at The Depository Trust Company ("DTC"),
Midwest Securities Trust Company ("MSTC") or Philadelphia Depository Trust
Company ("PDTC") (each a "Book-Entry Transfer Facility" and collectively
referred to as the "Book-Entry Transfer Facilities"), pursuant to the procedures
set forth in Section 3 of the Offer to Purchase. Stockholders who tender Class A
Shares or Class A Rights by book-entry transfer are referred to herein as
"Book-Entry Stockholders". UNLESS AND UNTIL ROK ACQUISITION CORPORATION (THE
"PURCHASER"), A DELAWARE CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF ROCKWELL
INTERNATIONAL CORPORATION, A DELAWARE CORPORATION ("ROCKWELL"), DECLARES THAT
THE RIGHTS CONDITION (AS DEFINED IN THE OFFER TO PURCHASE) IS SATISFIED, HOLDERS
OF CLASS A SHARES WILL BE REQUIRED TO TENDER ONE CLASS A RIGHT FOR EACH CLASS A
SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH CLASS A SHARE. If the
Distribution Date (as defined in the Offer to Purchase) does not occur prior to
the Expiration Date (as defined in the Offer to Purchase), a tender of Class A
Shares will also constitute a tender of the associated Class A Rights. If the
Distribution Date occurs and the certificates representing Class A Rights
("Rights Certificates") are distributed by Reliance Electric Company, a Delaware
corporation, to holders of Class A Shares prior to the time a holder's Class A
Shares are tendered pursuant to the Offer (as defined in the Offer to Purchase),
in order for Class A Rights (and the corresponding Class A Shares) to be validly
tendered, Rights Certificates representing a number of Class A Rights equal to
the number of Class A Shares tendered must be delivered to the Depositary or, if
available, a Book-Entry Confirmation (as defined in the Offer to Purchase)
received by the Depositary with respect thereto. If the Distribution Date occurs
and Rights Certificates are not distributed prior to the time Class A Shares are
tendered pursuant to the Offer, Class A Rights may be tendered prior to a
stockholder receiving Rights Certificates by use of the guaranteed delivery
procedure described below. In any case, a tender of Class A Shares constitutes
an agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Class A Rights equal to the number of Class A Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date Rights Certificates are distributed. The Purchaser reserves the right
to require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if available, with respect to such Class A Rights, prior to
accepting the related Class A Shares for payment pursuant to the Offer if the
Distribution Date occurs prior to the Expiration Date. See Section 3 of the
Offer to Purchase.
Holders of Class A Shares and Class A Rights whose certificates for such
Class A Shares (the "Share Certificates") and, if applicable, Rights
Certificates, are not immediately available (including, if the Distribution Date
has occurred, because Rights Certificates have not yet been distributed) or who
cannot deliver their Share Certificates or, if applicable, their Rights
Certificates, and all other required documents to the Depositary on or prior to
the Expiration Date or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Class A Shares and Class A Rights
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE> 3
/ / CHECK HERE IF CLASS A SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number: __________________ Transaction Code Number:__________________
/ / CHECK HERE IF CLASS A SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
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:
/ / CHECK HERE IF CLASS A RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER (IF
AVAILABLE) MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number:___________________ Transaction Code Number:____________________
/ / CHECK HERE IF CLASS A RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
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:
3
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CLASS A SHARES TENDERED
---------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) (PLEASE FILL IN, IF BLANK, SHARE CERTIFICATE(S) AND
EXACTLY AS NAME(S) APPEAR(S) ON CLASS A SHARE(S) TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
CLASS A SHARES
SHARE REPRESENTED NUMBER OF
CERTIFICATE BY SHARE CLASS A SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
TOTAL CLASS A SHARES
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Class A Shares
Represented by certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CLASS A RIGHTS TENDERED*
---------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) (PLEASE FILL IN, IF BLANK, RIGHTS CERTIFICATE(S) AND
EXACTLY AS NAME(S) APPEAR(S) ON CLASS A RIGHTS TENDERED
RIGHTS CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
CLASS A RIGHTS
RIGHTS REPRESENTED NUMBER OF
CERTIFICATE BY RIGHTS CLASS A RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL CLASS A RIGHTS
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If the tendered Class A Rights are represented by separate
certificates, complete the certificate numbers of such Rights
Certificates. Stockholders tendering Class A Rights which are not
represented by separate certificates should retain a copy of this
Letter of Transmittal in order to accurately complete a Letter of
Transmittal if Rights Certificates are received.
** Need not be completed by Book-Entry Stockholders.
*** Unless otherwise indicated, it will be assumed that all Class A Rights
represented by certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
4
<PAGE> 5
Ladies and Gentlemen:
The undersigned hereby tenders to ROK Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Rockwell
International Corporation, a Delaware corporation ("Rockwell"), the above
described shares of Class A Common Stock, par value $.01 per share (the "Class A
Shares"), of Reliance Electric Company, a Delaware corporation (the "Company"),
and (unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) has been satisfied) the associated Series A
Preferred Stock purchase rights (the "Class A Rights") issued pursuant to the
Rights Agreement dated as of August 29, 1994 between the Company and Society
National Bank, as Rights Agent (as the same may be amended, the "Rights
Agreement"), at a price of $30 per Class A Share (and associated Class A Right),
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated October 21, 1994
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together with the Offer to Purchase constitute the
"Offer"). Unless the context otherwise requires, all references to Class A
Shares shall include the Class A Rights and all references to the Class A Rights
shall include all benefits that may inure to the holders of the Class A Rights
pursuant to the Rights Agreement. 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 subsidiaries or affiliates the right to purchase all or
any portion of the Class A Shares and Class A Rights tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Class A Shares and Class A Rights tendered herewith in accordance with the
terms and subject to the conditions of the Offer, the undersigned hereby sells,
assigns, and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to all of the Class A Shares and Class A Rights that are
being tendered hereby and any and all dividends on the Class A Shares or any
distribution (including, without limitation, the issuance of additional Class A
Shares pursuant to a stock dividend or stock split, the issuance of other
securities or the issuance of rights (other than the separation of the Class A
Rights from the Class A Shares) for the purchase of any securities) with respect
to the Class A Shares or Class A Rights (other than the Redemption Price (as
defined in the Offer to Purchase)) that is declared or paid by the Company on or
after August 30, 1994 and is payable or distributable to stockholders of record
on a date prior to the transfer into the name of the Purchaser or its nominees
or transferees on the Company's stock transfer records of the Class A Shares and
Class A Rights purchased pursuant to the Offer (except that if the Class A
Rights are redeemed by the Company's Board of Directors, tendering stockholders
who are holders of record as of the applicable record date will be entitled to
receive and retain the Redemption Price) (a "Distribution"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Class A Shares and Class A Rights (and any Distributions) with
full power of substitution (such power of attorney and proxy being deemed to be
an irrevocable power coupled with an interest), to (a) deliver Share
Certificates and Rights Certificates (and any Distributions), or transfer
ownership of such Class A Shares or Class A Rights on the account books
maintained by the Book-Entry Transfer Facilities, together in either such case
with all accompanying evidences of transfer and authenticity, to or upon the
order of the Purchaser upon receipt by the Depositary, as the undersigned's
agent, of the purchase price, (b) present such Class A Shares and Class A Rights
(and any Distributions) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Class A Shares and Class A Rights (and any Distributions), all in accordance
with the terms of the Offer.
The undersigned understands that if the Distribution Date (as defined in
the Offer to Purchase) has occurred and Rights Certificates have been
distributed by the Company to holders of Class A Shares prior to the time Class
A Shares are tendered herewith, in order for Class A Rights (and the
corresponding Class A Shares) to be validly tendered, Rights Certificates
representing a number of Class A Rights equal to the number of Class A Shares
being tendered herewith must be delivered to the Depositary or, if available, a
Book-Entry Confirmation (as defined in Instruction 2) must be received by the
Depositary with respect thereto. If the Distribution Date has occurred and
Rights Certificates have not been distributed prior to the time Class A Shares
and Class A Rights are tendered herewith, the undersigned agrees to deliver
Rights
5
<PAGE> 6
Certificates representing a number of Class A Rights equal to the number of
Class A Shares tendered herewith to the Depositary within five business days
after the date such Rights Certificates are distributed. The undersigned
understands that if the Rights Condition is not satisfied, the Purchaser
reserves the right to require that the Depositary receive Rights Certificates,
or a Book-Entry Confirmation, if available, with respect to such Class A Rights,
prior to accepting the related Class A Shares for payment, if the Distribution
Date occurs prior to the Expiration Date. In that event, payment for Class A
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of, among other things, such Rights
Certificates.
The undersigned hereby irrevocably appoints Charles H. Harff and William J.
Calise, Jr., and each of them, the attorneys-in-fact 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 (including pursuant to written consent) with
respect to all of the Class A Shares and Class A Rights tendered hereby which
have been accepted for payment by the Purchaser prior to the time of such vote
or action (and any Distributions) which the undersigned is entitled to vote at
any meeting of stockholders (whether annual or special and whether or not an
adjourned meeting) of the Company, or by written consent in lieu of such
meeting, or otherwise. This power of attorney and proxy is coupled with an
interest in the Company and in the Class A Shares and Class A Rights and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Class A Shares and Class A Rights by the
Purchaser in accordance with the terms of the Offer. Such acceptance for payment
shall revoke, without further action, any other power of attorney or proxy
granted by the undersigned at any time with respect to such Class A Shares and
Class A Rights (and any Distributions) and no subsequent powers of attorney or
proxies will be given (and if given will be deemed not to be effective) with
respect thereto by the undersigned. The undersigned understands that the
Purchaser reserves the right to require that, in order for Class A Shares and
Class A Rights to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Class A Shares and Class A Rights, the Purchaser
is able to exercise full voting rights with respect to such Class A Shares,
Class A Rights and other securities, including voting at any meeting of
stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Class A Shares
and Class A Rights tendered hereby (and any Distributions) and that, when the
same are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The undersigned, upon request, will execute and deliver any
additional documents deemed by the Depositary or the Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the Class A Shares
and Class A Rights tendered hereby (and any Distributions). In addition, the
undersigned shall promptly remit and transfer to the Depositary for the account
of the Purchaser any and all other Distributions in respect of the Class A
Shares and Class A Rights tendered hereby, accompanied by appropriate
documentation of transfer and, pending such remittance or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of any such Distributions, and may withhold the entire purchase price or deduct
from the purchase price of Class A Shares and Class A Rights tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal 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 Class A Shares and Class A
Rights pursuant to any one of the procedures described in Section 3 of the Offer
to Purchase and in the instructions hereto 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 under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or accepted for
6
<PAGE> 7
payment in the name(s) of the undersigned. Similarly, unless otherwise indicated
under "Special Delivery Instructions," please mail the check for the purchase
price and/or return any Share Certificates or Rights Certificates not tendered
or accepted for payment (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature. In the event
that both the "Special Delivery Instructions" and the "Special Payment
Instructions" are completed, please issue the check for the purchase price
and/or return any Share Certificates or Rights Certificates not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
certificates to, the person or persons so indicated. Stockholders tendering
Class A Shares or Class A Rights by book-entry transfer may request that any
Class A Shares or Class A Rights not accepted for payment be returned by
crediting such account maintained at such Book-Entry Transfer Facility as such
stockholder may designate by making an appropriate entry under "Special Payment
Instructions." The undersigned recognizes that the Purchaser has no obligation
pursuant to the "Special Payment Instructions" to transfer any Class A Shares
and Class A Rights from the name of the registered holder thereof if the
Purchaser does not accept for payment any of such Class A Shares and Class A
Rights.
7
<PAGE> 8
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class A
Shares and/or Class A Rights purchased are to be issued in the name of someone
other than the undersigned, or if Class A Shares and/or Class A Rights tendered
by book-entry transfer which are not purchased are to be returned by credit to
an account maintained at a Book-Entry Transfer Facility other than that
designated on the front cover.
Issue check and/or certificates to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
(INCLUDE ZIP CODE)
----------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON BACK COVER)
/ / Credit unpurchased Class A Shares and/or Class A Rights tendered by
book-entry transfer to the Book-Entry Transfer Facility account set forth
below:
/ / DTC / / MSTC / / PDTC
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class A
Shares and/or Class A Rights purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown on the
front cover.
Mail check and/or certificates to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
(INCLUDE ZIP CODE)
----------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
8
<PAGE> 9
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
------------------------
------------------------
SIGNATURE(S) OF OWNER(S)
DATED:
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or Rights Certificate(s) or on a security position listing
or by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the necessary
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 No.:
---------------------
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
-------------------------------
Name:
-----------------------------------------------
Name of Firm:
---------------------------------------
Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
---------------------
Dated:
---------------------
9
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder (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 Class A Shares or Class A Rights) of the Class
A Shares and Class A Rights tendered herewith, unless such holder has completed
either the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on the inside front cover hereof or (ii) if such
Class A Shares or Class A Rights are tendered for the account of a firm that is
a bank, broker, dealer, credit union, savings association or other entity which
is a member in good standing of the Securities Transfer Agents Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on this Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates or Rights Certificates
are to be forwarded herewith or, unless an Agent's Message is utilized, if
tenders are to be made pursuant to the procedures for tender by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Share Certificates, or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Class A Shares into the Depositary's account at a Book-Entry Transfer
Facility, as well as this Letter of Transmittal (or a facsimile hereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date and, unless and until the Purchaser
declares that the Rights Condition (as defined in the Offer to Purchase) is
satisfied, Rights Certificates, or Book-Entry Confirmation of a transfer of
Class A Rights into the Depositary's account at a Book-Entry Transfer Facility,
if available (together with, if Class A Rights are forwarded separately from
Class A Shares, a properly completed and duly executed Letter of Transmittal (or
a facsimile hereof) with any required signature guarantees, or an Agent's
Message in the case of a book-entry delivery, and any other documents required
by this Letter of Transmittal), must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date or, if later, within
five business days after the date such Rights Certificates are distributed.
Stockholders whose Share Certificates or Rights Certificates are not immediately
available (including, if the Distribution Date has occurred, because Rights
Certificates have not yet been distributed by the Company) or who cannot deliver
their Share Certificates or Rights Certificates and all other required documents
to the Depositary prior to the Expiration Date or who cannot complete the
procedures for delivery by book-entry transfer on a timely basis may tender
their Class A Shares and Class A Rights by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such
procedure: (i) such tender must be made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Purchaser, must be received by
the Depositary on or prior to the Expiration Date; and (iii) the Share
Certificates or Rights Certificates (or a Book-Entry Confirmation) representing
all tendered Class A Shares or Class A Rights, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), with any required signature guarantees (or, in the case of a
book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within (x) in the
case of Class A Shares, five New York Stock Exchange, Inc. ("NYSE") trading days
after the date of execution of such Notice of Guaranteed Delivery or (y) in the
case of Class A Rights, a period ending on the later of (1) five NYSE trading
days after the date of execution of such Notice of Guaranteed Delivery and (2)
five business days after the date Rights Certificates are distributed to
stockholders by the Company, all as provided in Section 3 of the Offer to
Purchase. If Share Certificates and Rights Certificates are forwarded separately
to the Depositary, a properly completed and duly executed Letter of Transmittal
(or facsimile hereof) must accompany each such delivery.
10
<PAGE> 11
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE 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 Class A Shares or Class A Rights will be purchased. All tendering
stockholders, by execution of this Letter of Transmittal or facsimile hereof,
waive any right to receive any notice of the acceptance of their Class A Shares
and Class A Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Class A Shares and Class A Rights and
any other required information should be listed on a separate schedule attached
hereto and separately signed on each page thereof in the same manner as this
Letter of Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER.) If fewer than all the Class A Shares or Class A Rights evidenced by
any certificate submitted are to be tendered, fill in the number of Class A
Shares or Class A Rights which are to be tendered in the box entitled "Number of
Class A Shares Tendered" or "Number of Class A Rights Tendered" as appropriate.
In such case, new certificate(s) for the remainder of the Class A Shares or
Class A Rights that were evidenced by your old certificate(s) will be sent to
you, unless otherwise provided in the appropriate box marked "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Class A
Shares and Class A Rights represented by 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 Class A
Shares and Class A Rights tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Class A Shares or Class A Rights tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Class A Shares or Class A Rights are registered in
different names on several certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Class A Shares or Class A Rights listed and transmitted hereby, no endorsements
of certificates or separate stock powers are required unless payment is to be
made to or certificates for Class A Shares or Class A Rights not tendered or
purchased are to be issued in the name of a person other than the registered
owner(s). Signatures on such certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Class A Shares or Class A Rights listed, the
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered owner(s)
appear(s) on the certificates. Signatures on such certificates or stock powers
must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Class A Shares to it or its order
11
<PAGE> 12
pursuant to the Offer. If, however, payment of the purchase price is to be made
to, or if certificates for Class A Shares not tendered or purchased are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such person) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence 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 CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of and/or certificates for unpurchased Class A Shares or Class A
Rights are to be returned to a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to someone other than the signer of this Letter of Transmittal or to an
address other than that shown on the front cover hereof, the appropriate boxes
on this Letter of Transmittal should be completed. Stockholders tendering Class
A Shares or Class A Rights by book-entry transfer may request that Class A
Shares or Class A Rights not purchased be credited to such account maintained at
such Book-Entry Transfer Facility as such stockholder may designate hereon. If
no such instructions are given, such Class A Shares or Class A Rights not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above. See Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Class A Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Class A Shares or Class A
Rights purchased pursuant to the Offer may be subject to 31% backup withholding.
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, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Class A Shares or Class A Rights or of the last transferee appearing on the
transfers attached to, or endorsed on, the Class A Shares or Class A Rights. If
the Class A
12
<PAGE> 13
Shares or Class A Rights are in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Class A Shares or Class A Rights has been lost, destroyed or
stolen, the stockholder should promptly notify the Depositary. The 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 A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
13
<PAGE> 14
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ---------------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN SOCIAL SECURITY NUMBER
SUBSTITUTE IN THE BOX AT RIGHT AND CERTIFY BY
FORM W-9 SIGNING AND DATING BELOW. OR EMPLOYER ID NUMBER
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER ____________________________
IDENTIFICATION NUMBER ("TIN")
- ------------------------------------------------------------------------------------------------------------
</TABLE>
PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out such item (2).
- --------------------------------------------------------------------------------
SIGNATURE_________________________________ DATE ____________ PART 3
AWAITING TIN / /
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
14
<PAGE> 15
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
<TABLE>
<S> <C>
Signature:________________________________________________________ Date:____________
</TABLE>
15
<PAGE> 16
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR CLASS A
SHARES AND CLASS A RIGHTS AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR
DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES
SET FORTH BELOW:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail:
Tenders & Exchanges
P.O. Box 2563
Suite 4660
Jersey City, New Jersey
07303-2563
By Facsimile
Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm Facsimile
by Telephone:
(201) 222-4707
By Hand or
Overnight Delivery:
14 Wall Street
8th Floor
Suite 4680
New York, New York
10005
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON LOGO]
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
(800) 223-2064 (Toll Free)
Banks and Brokers call
(212) 440-9800
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527
16
<PAGE> 1
CLASS B LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS B COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES B PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 21, 1994 BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON NOVEMBER 18, 1994,
UNLESS THE OFFER IS EXTENDED
------------------------
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Tenders & Exchanges (201) 222-4720 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey New York, New York
07303-2563 Confirm Facsimile 10005
by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER 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.
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders to tender
certificates for Class B Shares and/or Class B Rights (each as defined in the
Offer to Purchase, dated October 21, 1994 (the "Offer to Purchase")). UNLESS AND
UNTIL ROK ACQUISITION CORPORATION (THE "PURCHASER"), A DELAWARE CORPORATION AND
A WHOLLY-OWNED SUBSIDIARY OF ROCKWELL INTERNATIONAL CORPORATION, A DELAWARE
CORPORATION ("ROCKWELL"), DECLARES THAT THE RIGHTS CONDITION (AS DEFINED IN THE
OFFER TO PURCHASE) IS SATISFIED, HOLDERS OF CLASS B SHARES WILL BE REQUIRED TO
TENDER ONE CLASS B RIGHT FOR EACH CLASS B SHARE TENDERED IN ORDER TO EFFECT A
VALID TENDER OF SUCH CLASS B SHARE. If the Distribution Date (as defined in the
Offer to Purchase) does not occur prior to the Expiration Date (as defined in
the Offer to Purchase), a tender of Class B Shares will also constitute a tender
of the associated Class B Rights. If the Distribution Date occurs and the
certificates representing Class B Rights ("Rights Certificates") are distributed
by Reliance Electric Company, a Delaware corporation, to holders of Class B
Shares prior to the time a holder's Class B Shares are tendered pursuant to the
Offer (as defined in the Offer to Purchase), in order for Class B Rights (and
the corresponding Class B Shares) to be validly tendered, Rights Certificates
representing a number of Class B Rights equal to the number of Class B Shares
tendered must be delivered to the Depositary. If the Distribution Date occurs
and Rights Certificates are not distributed prior to the time Class B Shares are
tendered pursuant to the Offer, Class B Rights may be tendered prior to a
stockholder receiving Rights Certificates by use of the guaranteed delivery
procedure described below. In any case, a tender of Class B Shares constitutes
an agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Class B Rights equal to the number of Class B Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date Rights Certificates are distributed. The Purchaser reserves the right
to require that the Depositary receive Rights Certificates with respect to such
Class B Rights prior to accepting the related Class B Shares for payment
pursuant to the Offer if the Distribution Date occurs prior to the Expiration
Date. See Section 3 of the Offer to Purchase.
Holders of Class B Shares and Class B Rights whose certificates for such
Class B Shares (the "Share Certificates") and, if applicable, Rights
Certificates, are not immediately available (including, if the Distribution Date
has occurred, because Rights Certificates have not yet been distributed) or who
cannot deliver their Share Certificates or, if applicable, their Rights
Certificates, and all other required documents to the Depositary on or prior to
the Expiration Date, must tender their Class B Shares and Class B Rights
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE> 3
/ / CHECK HERE IF CLASS B SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
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:
/ / CHECK HERE IF CLASS B RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
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:
3
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CLASS B SHARES TENDERED
---------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Share Certificate(s) and
(Please fill in, if blank, exactly as Class B Share(s) Tendered
name(s) appear(s) on Share Certificate(s)) (Attach additional list, if necessary)
---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARE CLASS B SHARES NUMBER OF
CERTIFICATE REPRESENTED BY CLASS B SHARES
NUMBER(S) SHARE CERTIFICATE(S) TENDERED*
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL CLASS B SHARES
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Unless otherwise indicated, it will be assumed that all Class B Shares
represented by Certificates delivered to the Depositary are being tendered.
See Instruction 4.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CLASS B RIGHTS TENDERED*
---------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Rights Certificate(s) and
(Please fill in, if blank, exactly as Class B Rights tendered
name(s) appear(s) on Rights Certificate(s)) (Attach additional list, if necessary)
---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
CLASS B RIGHTS
RIGHTS REPRESENTED BY NUMBER OF
CERTIFICATE RIGHTS CLASS B RIGHTS
NUMBER(S) CERTIFICATE(S) TENDERED**
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL CLASS B RIGHTS
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If the Tendered Class B Rights are represented by separate certificates,
complete the certificate numbers of such Rights Certificates. Stockholders
tendering Class B Rights which are not represented by separate
certificates should retain a copy of this Letter of Transmittal in order
to accurately complete a Letter of Transmittal if Rights Certificates are
received.
** Unless otherwise indicated, it will be assumed that all Class B Rights
represented by certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
4
<PAGE> 5
Ladies and Gentlemen:
The undersigned hereby tenders to ROK Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Rockwell
International Corporation, a Delaware corporation ("Rockwell"), the above
described shares of Class B Common Stock, par value $.01 per share (the "Class B
Shares"), of Reliance Electric Company, a Delaware corporation (the "Company"),
and (unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) has been satisfied) the associated Series B
Preferred Stock purchase rights (the "Class B Rights") issued pursuant to the
Rights Agreement dated as of August 29, 1994 between the Company and Society
National Bank, as Rights Agent (as the same may be amended, the "Rights
Agreement"), at a price of $30 per Class B Share (and associated Class B Right),
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated October 21, 1994
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together with the Offer to Purchase constitute the
"Offer"). Unless the context otherwise requires, all references to Class B
Shares shall include the Class B Rights and all references to the Class B Rights
shall include all benefits that may inure to the holders of the Class B Rights
pursuant to the Rights Agreement. 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 subsidiaries or affiliates the right to purchase all or
any portion of the Class B Shares and Class B Rights tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Class B Shares and Class B Rights tendered herewith in accordance with the
terms and subject to the conditions of the Offer, the undersigned hereby sells,
assigns, and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to all of the Class B Shares and Class B Rights that are
being tendered hereby and any and all dividends on the Class B Shares or any
distribution (including, without limitation, the issuance of additional Class B
Shares pursuant to a stock dividend or stock split, the issuance of other
securities or the issuance of rights (other than the separation of the Class B
Rights from the Class B Shares) for the purchase of any securities) with respect
to the Class B Shares or Class B Rights (other than the Redemption Price (as
defined in the Offer to Purchase)) that is declared or paid by the Company on or
after August 30, 1994 and is payable or distributable to stockholders of record
on a date prior to the transfer into the name of the Purchaser or its nominees
or transferees on the Company's stock transfer records of the Class B Shares and
Class B Rights purchased pursuant to the Offer (except that if the Class B
Rights are redeemed by the Company's Board of Directors, tendering stockholders
who are holders of record as of the applicable record date will be entitled to
receive and retain the Redemption Price) (a "Distribution"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Class B Shares and Class B Rights (and any Distributions) with
full power of substitution (such power of attorney and proxy being deemed to be
an irrevocable power coupled with an interest), to (a) deliver Share
Certificates and Rights Certificates (and any Distributions), together with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser upon receipt by the Depositary, as the undersigned's agent, of the
purchase price, (b) present such Class B Shares and Class B Rights (and any
Distributions) for transfer on the books of the Company, (c) if directed by the
Purchaser, present Share Certificates (and any Distributions), together with any
required notice, for conversion on behalf of the undersigned into shares of
Class A Common Stock, par value $.01 per share ("Class A Shares"), of the
Company (and any dividends or distributions ("Class A Distributions") into which
a Distribution is convertible) and then to present the Class A Shares (and Class
A Distributions) into which such Class B Shares (and Distributions) were
converted for transfer on the books of the Company, and (d) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Class B Shares
and Class B Rights (and any Distributions) or the Class A Shares (and any Class
A Distributions) into which they were converted, all in accordance with the
terms of the Offer.
The undersigned understands that if the Distribution Date (as defined in
the Offer to Purchase) has occurred and Rights Certificates have been
distributed by the Company to holders of Class B Shares prior to the time Class
B Shares are tendered herewith, in order for Class B Rights (and the
corresponding Class B Shares) to be validly tendered, Rights Certificates
representing a number of Class B Rights equal to the
5
<PAGE> 6
number of Class B Shares being tendered herewith must be delivered to the
Depositary. If the Distribution Date has occurred and Rights Certificates have
not been distributed prior to the time Class B Shares and Class B Rights are
tendered herewith, the undersigned agrees to deliver Rights Certificates
representing a number of Class B Rights equal to the number of Class B Shares
tendered herewith to the Depositary within five business days after the date
such Rights Certificates are distributed. The undersigned understands that if
the Rights Condition is not satisfied, the Purchaser reserves the right to
require that the Depositary receive Rights Certificates with respect to such
Class B Rights prior to accepting the related Class B Shares for payment, if the
Distribution Date occurs prior to the Expiration Date. In that event, payment
for Class B Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of, among other things, such
Rights Certificates.
The undersigned hereby irrevocably appoints Charles H. Harff and William J.
Calise, Jr., and each of them, the attorneys-in-fact 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 (including pursuant to written consent) with
respect to all of the Class B Shares and Class B Rights tendered hereby which
have been accepted for payment by the Purchaser prior to the time of such vote
or action (and any Distributions) which the undersigned is entitled to vote at
any meeting of stockholders (whether annual or special and whether or not an
adjourned meeting) of the Company, or by written consent in lieu of such
meeting, or otherwise. This power of attorney and proxy is coupled with an
interest in the Company and in the Class B Shares and Class B Rights and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Class B Shares and Class B Rights by the
Purchaser in accordance with the terms of the Offer. Such acceptance for payment
shall revoke, without further action, any other power of attorney or proxy
granted by the undersigned at any time with respect to such Class B Shares and
Class B Rights (and any Distributions) and no subsequent powers of attorney or
proxies will be given (and if given will be deemed not to be effective) with
respect thereto by the undersigned. The undersigned understands that the
Purchaser reserves the right to require that, in order for Class B Shares and
Class B Rights to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Class B Shares and Class B Rights, the Purchaser
is able to exercise full voting rights with respect to such Class B Shares,
Class B Rights and other securities, including voting at any meeting of
stockholders. In addition, this power of attorney and proxy applies to any Class
A Shares (and Class A Distributions) into which Class B Shares (and
Distributions) have been converted.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Class B Shares
and Class B Rights tendered hereby (and any Distributions) and that, when the
same are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The undersigned, upon request, will execute and deliver any
additional documents deemed by the Depositary or the Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the Class B Shares
and Class B Rights tendered hereby (and any Distributions). In addition, the
undersigned shall promptly remit and transfer to the Depositary for the account
of the Purchaser any and all other Distributions in respect of the Class B
Shares and Class B Rights tendered hereby, accompanied by appropriate
documentation of transfer and, pending such remittance or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of any such Distributions, and may withhold the entire purchase price or deduct
from the purchase price of Class B Shares and Class B Rights tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal 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 Class B Shares and Class B
Rights pursuant to any one of the procedures described in Section 3 of the Offer
to Purchase and in the instructions hereto will constitute a
6
<PAGE> 7
binding agreement between the undersigned and the Purchaser upon the terms and
subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or accepted for payment in the
name(s) of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price and/or
return any Share Certificates or Rights Certificates not tendered or accepted
for payment (and accompanying documents, as appropriate) to the undersigned at
the address shown below the undersigned's signature. In the event that both the
"Special Delivery Instructions" and the "Special Payment Instructions" are
completed, please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or accepted for payment in the
name(s) of, and deliver said check and/or return certificates to, the person or
persons so indicated. The undersigned recognizes that the Purchaser has no
obligation pursuant to the "Special Payment Instructions" to transfer any Class
B Shares and Class B Rights from the name of the registered holder thereof if
the Purchaser does not accept for payment any of such Class B Shares and Class B
Rights.
7
<PAGE> 8
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class B
Shares and/or Class B Rights purchased are to be issued in the name of someone
other than the undersigned.
Issue check and/or certificates to:
Name: ____________________________________________________________________
(PLEASE PRINT)
Address: _________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(INCLUDE ZIP CODE)
_________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON BACK COVER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class B
Shares and/or Class B Rights purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown on the
front cover.
Mail check and/or certificates to:
Name: ________________________________________________________________________
(PLEASE PRINT)
Address: _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
_____________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
8
<PAGE> 9
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
_______________________________________________________________________________
_______________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
DATED:__________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or Rights Certificate(s) or on a security position listing
or by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the necessary
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 No.:_____________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:__________________________________________________________
Name:__________________________________________________________________________
Name of Firm:__________________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number:_____________________
Dated:______________
9
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of the Class B Shares and Class B Rights tendered herewith,
unless such holder has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the inside
front cover hereof or (ii) if such Class B Shares or Class B Rights are tendered
for the account of a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. Share Certificates,
as well as this Letter of Transmittal (or a facsimile hereof), properly
completed and duly executed, with any required signature guarantees, and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and, unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) is satisfied, Rights Certificates (together
with, if Class B Rights are forwarded separately from Class B Shares, a properly
completed and duly executed Letter of Transmittal (or a facsimile hereof) with
any required signature guarantees, and any other documents required by this
Letter of Transmittal), must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date or, if later, within
five business days after the date such Rights Certificates are distributed.
Stockholders whose Share Certificates or Rights Certificates are not immediately
available (including, if the Distribution Date has occurred, because Rights
Certificates have not yet been distributed by the Company) or who cannot deliver
their Share Certificates or Rights Certificates and all other required documents
to the Depositary prior to the Expiration Date may tender their Class B Shares
and Class B Rights by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution; (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by the Purchaser, must be received by the Depositary on or prior to
the Expiration Date; and (iii) the Share Certificates or Rights Certificates
representing all tendered Class B Shares or Class B Rights, in proper form for
transfer together with a properly completed and duly executed Letter of
Transmittal (or a facsimile hereof), with any required signature guarantees and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within (x) in the case of Class B Shares, five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice
of Guaranteed Delivery or (y) in the case of Class B Rights, a period ending on
the later of (1) five NYSE trading days after the date of execution of such
Notice of Guaranteed Delivery and (2) five business days after the date Rights
Certificates are distributed to stockholders by the Company, all as provided in
Section 3 of the Offer to Purchase. If Share Certificates and Rights
Certificates are forwarded separately to the Depositary, a properly completed
and duly executed Letter of Transmittal (or facsimile hereof) must accompany
each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE 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 Class B Shares or Class B Rights will be purchased. All tendering
stockholders, by execution of this Letter of Transmittal or facsimile hereof,
waive any right to receive any notice of the acceptance of their Class B Shares
and Class B Rights for payment.
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<PAGE> 11
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Class B Shares and Class B Rights and
any other required information should be listed on a separate schedule attached
hereto and separately signed on each page thereof in the same manner as this
Letter of Transmittal is signed.
4. PARTIAL TENDERS. If fewer than all the Class B Shares or Class B Rights
evidenced by any certificate submitted are to be tendered, fill in the number of
Class B Shares or Class B Rights which are to be tendered in the box entitled
"Number of Class B Shares Tendered" or "Number of Class B Rights Tendered" as
appropriate. In such case, new certificate(s) for the remainder of the Class B
Shares or Class B Rights that were evidenced by your old certificate(s) will be
sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Class B
Shares and Class B Rights represented by 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 Class B
Shares and Class B Rights tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Class B Shares or Class B Rights tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Class B Shares or Class B Rights are registered in
different names on several certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Class B Shares or Class B Rights listed and transmitted hereby, no endorsements
of certificates or separate stock powers are required unless payment is to be
made to or certificates for Class B Shares or Class B Rights not tendered or
purchased are to be issued in the name of a person other than the registered
owner(s). Signatures on such certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Class B Shares or Class B Rights listed, the
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered owner(s)
appear(s) on the certificates. Signatures on such certificates or stock powers
must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Class B Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Class B Shares not tendered or purchased are to be registered
in the name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price unless
satisfactory evidence 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 CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of and/or certificates for unpurchased Class B Shares or Class B
Rights are to be returned to a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to
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<PAGE> 12
someone other than the signer of this Letter of Transmittal or to an address
other than that shown on the front cover hereof, the appropriate boxes on this
Letter of Transmittal should be completed. See Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Class B Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Class B Shares or Class B
Rights purchased pursuant to the Offer may be subject to 31% backup withholding.
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, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Class B Shares or Class B Rights or of the last transferee appearing on the
transfers attached to, or endorsed on, the Class B Shares or Class B Rights. If
the Class B Shares or Class B Rights are in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Class B Shares or Class B Rights has been lost, destroyed or
stolen, the stockholder should promptly notify the Depositary. The 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 A FACSIMILE COPY HEREOF) TOGETHER
WITH CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
12
<PAGE> 13
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ---------------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN SOCIAL SECURITY NUMBER
SUBSTITUTE IN THE BOX AT RIGHT AND CERTIFY BY
FORM W-9 SIGNING AND DATING BELOW. OR EMPLOYER ID NUMBER
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER ________________________________
IDENTIFICATION NUMBER ("TIN")
- ------------------------------------------------------------------------------------------------------------
</TABLE>
PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out such item (2).
- --------------------------------------------------------------------------------
SIGNATURE ____________________________ DATE__________ PART 3
AWAITING TIN / /
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
13
<PAGE> 14
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
<TABLE>
<S> <C>
Signature:_________________________________________ Date: ______________
</TABLE>
14
<PAGE> 15
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR CLASS B
SHARES AND CLASS B RIGHTS AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR
DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES
SET FORTH BELOW:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail:
Tenders & Exchanges
P.O. Box 2563
Suite 4660
Jersey City, New Jersey
07303-2563
By Facsimile
Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm Facsimile
by Telephone:
(201) 222-4707
By Hand or
Overnight Delivery:
14 Wall Street
8th Floor
Suite 4680
New York, New York
10005
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON LOGO]
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
(800) 223-2064 (Toll Free)
Banks and Brokers call
(212) 440-9800
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527
15
<PAGE> 1
CLASS C LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS C COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES C PREFERRED
STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 21, 1994
BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
--------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON NOVEMBER 18, 1994,
UNLESS THE OFFER IS EXTENDED
--------------------
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Facsimile By Hand or
By Mail: Transmission: Overnight Delivery:
Tenders & Exchanges (201) 222-4720 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey New York, New York
07303-2563 Confirm Facsimile 10005
by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER 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.
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders to tender
certificates for Class C Shares and/or Class C Rights (each as defined in the
Offer to Purchase, dated October 21, 1994 (the "Offer to Purchase")). UNLESS AND
UNTIL ROK ACQUISITION CORPORATION (THE "PURCHASER"), A DELAWARE CORPORATION AND
A WHOLLY-OWNED SUBSIDIARY OF ROCKWELL INTERNATIONAL CORPORATION, A DELAWARE
CORPORATION ("ROCKWELL"), DECLARES THAT THE RIGHTS CONDITION (AS DEFINED IN THE
OFFER TO PURCHASE) IS SATISFIED, HOLDERS OF CLASS C SHARES WILL BE REQUIRED TO
TENDER ONE CLASS C RIGHT FOR EACH CLASS C SHARE TENDERED IN ORDER TO EFFECT A
VALID TENDER OF SUCH CLASS C SHARE. If the Distribution Date (as defined in the
Offer to Purchase) does not occur prior to the Expiration Date (as defined in
the Offer to Purchase), a tender of Class C Shares will also constitute a tender
of the associated Class C Rights. If the Distribution Date occurs and the
certificates representing Class C Rights ("Rights Certificates") are distributed
by Reliance Electric Company, a Delaware corporation, to holders of Class C
Shares prior to the time a holder's Class C Shares are tendered pursuant to the
Offer (as defined in the Offer to Purchase), in order for Class C Rights (and
the corresponding Class C Shares) to be validly tendered, Rights Certificates
representing a number of Class C Rights equal to the number of Class C Shares
tendered must be delivered to the Depositary. If the Distribution Date occurs
and Rights Certificates are not distributed prior to the time Class C Shares are
tendered pursuant to the Offer, Class C Rights may be tendered prior to a
stockholder receiving Rights Certificates by use of the guaranteed delivery
procedure described below. In any case, a tender of Class C Shares constitutes
an agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Class C Rights equal to the number of Class C Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date Rights Certificates are distributed. The Purchaser reserves the right
to require that the Depositary receive Rights Certificates with respect to such
Class C Rights prior to accepting the related Class C Shares for payment
pursuant to the Offer if the Distribution Date occurs prior to the Expiration
Date. See Section 3 of the Offer to Purchase.
Holders of Class C Shares and Class C Rights whose certificates
for such Class C Shares (the "Share Certificates") and, if applicable, Rights
Certificates, are not immediately available (including, if the Distribution
Date has occurred, because Rights Certificates have not yet been distributed)
or who cannot deliver their Share
2
<PAGE> 3
Certificates or, if applicable, their Rights Certificates, and all other
required documents to the Depositary on or prior to the Expiration Date, must
tender their Class C Shares and Class C Rights according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK
COVER. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
/ / CHECK HERE IF CLASS C SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY
AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH
NOTICE OF GUARANTEED DELIVERY.
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:
/ / CHECK HERE IF CLASS C RIGHTS ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY
AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH
NOTICE OF GUARANTEED DELIVERY.
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:
3
<PAGE> 4
- -------------------------------------------------------------------------------
DESCRIPTION OF CLASS C SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY SHARE CERTIFICATE(S) AND
AS NAME(S) APPEAR(S) ON SHARE CLASS C SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF CLASS C
SHARES NUMBER OF
SHARE REPRESENTED CLASS C
CERTIFICATE BY SHARE SHARES
NUMBER(S) CERTIFICATE(S) TENDERED*
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
TOTAL CLASS C SHARES
</TABLE>
- -------------------------------------------------------------------------------
* UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL CLASS C SHARES
REPRESENTED BY CERTIFICATES DELIVERED TO THE DEPOSITARY ARE BEING TENDERED.
SEE INSTRUCTION 4.
- -------------------------------------------------------------------------------
4
<PAGE> 5
- -------------------------------------------------------------------------------
DESCRIPTION OF CLASS C RIGHTS TENDERED*
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED RIGHTS CERTIFICATE(S) AND
HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY CLASS C RIGHTS TENDERED
AS NAME(S) APPEAR(S) ON RIGHTS CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF CLASS C
RIGHTS NUMBER OF
RIGHTS REPRESENTED CLASS C
CERTIFICATE BY RIGHTS RIGHTS
NUMBER(S) CERTIFICATE(S) TENDERED**
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
TOTAL CLASS C RIGHTS
</TABLE>
- -------------------------------------------------------------------------------
* IF THE TENDERED CLASS C RIGHTS ARE REPRESENTED BY SEPARATE CERTIFICATES,
COMPLETE THE CERTIFICATE NUMBERS OF SUCH RIGHTS CERTIFICATES. STOCKHOLDERS
TENDERING CLASS C RIGHTS WHICH ARE NOT REPRESENTED BY SEPARATE CERTIFICATES
SHOULD RETAIN A COPY OF THIS LETTER OF TRANSMITTAL IN ORDER TO ACCURATELY
COMPLETE A LETTER OF TRANSMITTAL IF RIGHTS CERTIFICATES ARE RECEIVED.
** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL CLASS
C RIGHTS REPRESENTED BY CERTIFICATES DELIVERED TO THE DEPOSITARY
ARE BEING TENDERED. SEE INSTRUCTION 4.
- -------------------------------------------------------------------------------
5
<PAGE> 6
Ladies and Gentlemen:
The undersigned hereby tenders to ROK Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Rockwell
International Corporation, a Delaware corporation ("Rockwell"), the above
described shares of Class C Common Stock, par value $.01 per share (the "Class
C Shares"), of Reliance Electric Company, a Delaware corporation (the
"Company"), and (unless and until the Purchaser declares that the Rights
Condition (as defined in the Offer to Purchase) has been satisfied) the
associated Series C Preferred Stock purchase rights (the "Class C Rights")
issued pursuant to the Rights Agreement dated as of August 29, 1994 between the
Company and Society National Bank, as Rights Agent (as the same may be amended,
the "Rights Agreement"), at a price of $81.24 per Class C Share (and associated
Class C Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 21, 1994 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together with the Offer
to Purchase constitute the "Offer"). Unless the context otherwise requires, all
references to Class C Shares shall include the Class C Rights and all
references to the Class C Rights shall include all benefits that may inure to
the holders of the Class C Rights pursuant to the Rights Agreement. 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
subsidiaries or affiliates the right to purchase all or any portion of the
Class C Shares and Class C Rights tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and
payment for the Class C Shares and Class C Rights tendered herewith in
accordance with the terms and subject to the conditions of the Offer, the
undersigned hereby sells, assigns, and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Class C Shares and
Class C Rights that are being tendered hereby and any and all dividends on the
Class C Shares or any distribution (including, without limitation, the issuance
of additional Class C Shares pursuant to a stock dividend or stock split, the
issuance of other securities or the issuance of rights (other than the
separation of the Class C Rights from the Class C Shares) for the purchase of
any securities) with respect to the Class C Shares or Class C Rights (other
than the Redemption Price (as defined in the Offer to Purchase)) that is
declared or paid by the Company on or after August 30, 1994 and is payable or
distributable to stockholders of record on
6
<PAGE> 7
a date prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Class C Shares and
Class C Rights purchased pursuant to the Offer (except that if the Class C
Rights are redeemed by the Company's Board of Directors, tendering stockholders
who are holders of record as of the applicable record date will be entitled to
receive and retain the Redemption Price) (a "Distribution"), and constitutes
and irrevocably appoints the Depositary the true and lawful agent,
attorney-in-fact and proxy of the undersigned to the full extent of the
undersigned's rights with respect to such Class C Shares and Class C Rights
(and any Distributions) with full power of substitution (such power of attorney
and proxy being deemed to be an irrevocable power coupled with an interest), to
(a) deliver Share Certificates and Rights Certificates (and any Distributions),
together with all accompanying evidences of transfer and authenticity, to or
upon the order of the Purchaser upon receipt by the Depositary, as the
undersigned's agent, of the purchase price, (b) present such Class C Shares and
Class C Rights (and any Distributions) for transfer on the books of the
Company, (c) if directed by the Purchaser, present Share Certificates (and any
Distributions), together with any required notice, for conversion on behalf of
the undersigned into shares of Class A Common Stock, par value $.01 per share
("Class A Shares"), of the Company (and any dividends or distributions ("Class
A Distributions") into which a Distribution is convertible) and then to present
the Class A Shares (and Class A Distributions) into which such Class C Shares
(and Distributions) were converted for transfer on the books of the Company,
and (d) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Class C Shares and Class C Rights (and any Distributions) or
the Class A Shares (and any Class A Distributions) into which they were
converted, all in accordance with the terms of the Offer.
The undersigned understands that if the Distribution Date (as
defined in the Offer to Purchase) has occurred and Rights Certificates have
been distributed by the Company to holders of Class C Shares prior to the time
Class C Shares are tendered herewith, in order for Class C Rights (and the
corresponding Class C Shares) to be validly tendered, Rights Certificates
representing a number of Class C Rights equal to the number of Class C Shares
being tendered herewith must be delivered to the Depositary. If the
Distribution Date has occurred and Rights Certificates have not been
distributed prior to the time Class C Shares and Class C Rights are tendered
herewith, the undersigned agrees to deliver Rights Certificates representing a
number
7
<PAGE> 8
of Class C Rights equal to the number of Class C Shares tendered herewith to
the Depositary within five business days after the date such Rights
Certificates are distributed. The undersigned understands that if the Rights
Condition is not satisfied, the Purchaser reserves the right to require that
the Depositary receive Rights Certificates with respect to such Class C Rights
prior to accepting the related Class C Shares for payment, if the Distribution
Date occurs prior to the Expiration Date. In that event, payment for Class C
Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of, among other things, such Rights
Certificates.
The undersigned hereby irrevocably appoints Charles H. Harff and
William J. Calise, Jr., and each of them, the attorneys-in-fact 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 (including pursuant to written
consent) with respect to all of the Class C Shares and Class C Rights tendered
hereby which have been accepted for payment by the Purchaser prior to the time
of such vote or action (and any Distributions) which the undersigned is
entitled to vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned meeting) of the Company, or by written consent in
lieu of such meeting, or otherwise. This power of attorney and proxy is
coupled with an interest in the Company and in the Class C Shares and Class C
Rights and is irrevocable and is granted in consideration of, and is effective
upon, the acceptance for payment of such Class C Shares and Class C Rights by
the Purchaser in accordance with the terms of the Offer. Such acceptance for
payment shall revoke, without further action, any other power of attorney or
proxy granted by the undersigned at any time with respect to such Class C
Shares and Class C Rights (and any Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned
understands that the Purchaser reserves the right to require that, in order for
Class C Shares and Class C Rights to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Class C Shares and Class C
Rights, the Purchaser is able to exercise full voting rights with respect to
such Class C Shares, Class C Rights and other securities, including voting at
any meeting of stockholders. In addition, this power of attorney and proxy
applies to any Class A Shares (and Class A Distributions) into which Class C
Shares (and Distributions) have been converted.
8
<PAGE> 9
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and transfer
the Class C Shares and Class C Rights tendered hereby (and any Distributions)
and that, when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good, marketable and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and the same
will not be subject to any adverse claim. The undersigned, upon request, will
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Class C Shares and Class C Rights tendered hereby (and any
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Class C Shares and Class C Rights tendered
hereby, accompanied by appropriate documentation of transfer and, pending such
remittance or appropriate assurance thereof, the Purchaser shall be entitled to
all rights and privileges as owner of any such Distributions, and may withhold
the entire purchase price or deduct from the purchase price of Class C Shares
and Class C Rights tendered hereby the amount or value thereof, as determined
by the Purchaser in its sole discretion.
All authority herein conferred or herein agreed to be conferred
shall not be affected by, and shall survive, the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, legal 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 Class C Shares and
Class C Rights pursuant to any one of the procedures described in Section 3 of
the Offer to Purchase and in the instructions hereto 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 under "Special Payment
Instructions," please issue the check for the purchase price and/or return any
Share Certificates or Rights Certificates not tendered or accepted for payment
in the name(s) of the undersigned. Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the purchase price
and/or return any Share Certificates or Rights Certificates not tendered or
accepted for payment (and accompanying documents, as appropriate) to
9
<PAGE> 10
the undersigned at the address shown below the undersigned's signature. In the
event that both the "Special Delivery Instructions" and the "Special Payment
Instructions" are completed, please issue the check for the purchase price
and/or return any Share Certificates or Rights Certificates not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
certificates to, the person or persons so indicated. The undersigned
recognizes that the Purchaser has no obligation pursuant to the "Special
Payment Instructions" to transfer any Class C Shares and Class C Rights from
the name of the registered holder thereof if the Purchaser does not accept for
payment any of such Class C Shares and Class C Rights.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class C
Shares and/or Class C Rights purchased are to be issued in the name of someone
other than the undersigned.
Issue check and/or certificates to:
Name:
-------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------
- ------------------------------------------------
- ------------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON BACK COVER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Class C
Shares and/or Class C Rights purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown on the
front cover.
10
<PAGE> 11
Mail check and/or certificates to:
Name:
-------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------
- ------------------------------------------------
- ------------------------------------------------
(INCLUDE ZIP CODE)
- ------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
DATED:
------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or Rights Certificate(s) or on a security position listing
or by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
necessary information. See Instruction 5.)
Name(s):
-------------------------------------------------------------------
- ---------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title):
-----------------------------------------------------
Address:
-------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
--------------------------------------------
11
<PAGE> 12
Tax Identification or Social Security No.:
-----------------
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
--------------------------------------
Name:
------------------------------------------------------
Name of Firm:
----------------------------------------------
Address:
---------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
----------------------------
Dated:
-----------------------------
12
<PAGE> 13
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of the Class C Shares and Class C Rights tendered herewith,
unless such holder has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the inside
front cover hereof or (ii) if such Class C Shares or Class C Rights are
tendered for the account of a firm that is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing
of the Securities Transfer Agents Medallion Program (an "Eligible
Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. Share
Certificates, as well as this Letter of Transmittal (or a facsimile hereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date and, unless and until the Purchaser declares that the
Rights Condition (as defined in the Offer to Purchase) is satisfied, Rights
Certificates (together with, if Class C Rights are forwarded separately from
Class C Shares, a properly completed and duly executed Letter of Transmittal
(or a facsimile hereof) with any required signature guarantees, and any other
documents required by this Letter of Transmittal), must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration
Date or, if later, within five business days after the date such Rights
Certificates are distributed. Stockholders whose Share Certificates or Rights
Certificates are not immediately available (including, if the Distribution Date
has occurred, because Rights Certificates have not yet been distributed by the
Company) or who cannot deliver their Share Certificates or Rights Certificates
and all other required documents to the Depositary prior to the Expiration Date
may tender their Class C Shares and Class C Rights by properly completing and
duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery,
13
<PAGE> 14
substantially in the form made available by the Purchaser, must be
received by the Depositary on or prior to the Expiration Date; and (iii) the
Share Certificates or Rights Certificates representing all tendered Class C
Shares or Class C Rights, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or a facsimile hereof), with
any required signature guarantees and any other documents required by this
Letter of Transmittal, must be received by the Depositary within (x) in the
case of Class C Shares, five New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of such Notice of Guaranteed Delivery or (y)
in the case of Class C Rights, a period ending on the later of (1) five NYSE
trading days after the date of execution of such Notice of Guaranteed Delivery
and (2) five business days after the date Rights Certificates are distributed
to stockholders by the Company, all as provided in Section 3 of the Offer to
Purchase. If Share Certificates and Rights Certificates are forwarded
separately to the Depositary, a properly completed and duly executed Letter of
Transmittal (or facsimile hereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE 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 Class C Shares or Class C Rights will be purchased. All tendering
stockholders, by execution of this Letter of Transmittal or facsimile hereof,
waive any right to receive any notice of the acceptance of their Class C Shares
and Class C Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Class C Shares and Class C Rights and
any other required information should be listed on a separate schedule attached
hereto and separately signed on each page thereof in the same manner as this
Letter of Transmittal is signed.
4. PARTIAL TENDERS. If fewer than all the Class C Shares or Class C
Rights evidenced by any certificate submitted are to be tendered, fill in the
number of Class C Shares or Class C Rights which are to be tendered in the box
entitled "Number of Class C Shares Tendered" or "Number of
14
<PAGE> 15
Class C Rights Tendered" as appropriate. In such case, new certificate(s) for
the remainder of the Class C Shares or Class C Rights that were evidenced by
your old certificate(s) will be sent to you, unless otherwise provided in the
appropriate box marked "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All Class C Shares and Class C Rights represented by
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 Class C
Shares and Class C Rights tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Class C Shares or Class C Rights tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Class C Shares or Class C Rights are registered in
different names on several certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Class C Shares or Class C Rights listed and transmitted hereby, no endorsements
of certificates or separate stock powers are required unless payment is to be
made to or certificates for Class C Shares or Class C Rights not tendered or
purchased are to be issued in the name of a person other than the registered
owner(s). Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Class C Shares or Class C Rights listed, the
certificates must be
15
<PAGE> 16
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner(s) appear(s) on the
certificates. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Class C Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or
if certificates for Class C Shares not tendered or purchased are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such person) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence 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 CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of and/or certificates for unpurchased Class C Shares or Class C
Rights are to be returned to a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to someone other than the signer of this Letter of Transmittal or to
an address other than that shown on the front cover hereof, the appropriate
boxes on this Letter of Transmittal should be completed. See Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Class C Shares are accepted for payment
is required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary
is not provided with the correct TIN, the Internal Revenue Service may subject
the
16
<PAGE> 17
stockholder or other payee to a $50 penalty. In addition, payments that are
made to such stockholder or other payee with respect to Class C Shares or Class
C Rights purchased pursuant to the Offer may be subject to 31% backup
withholding.
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, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is
checked, the stockholder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% of all payments made prior to the time a properly
certified TIN is provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Class C Shares or Class C Rights or of the last transferee appearing on the
transfers attached to, or endorsed on, the Class C Shares or Class C Rights.
If the Class C Shares or Class C Rights are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
17
<PAGE> 18
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Class C Shares or Class C Rights has been lost, destroyed or
stolen, the stockholder should promptly notify the Depositary. The 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 A FACSIMILE COPY HEREOF)
TOGETHER WITH CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
18
<PAGE> 19
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
- -------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
PART 1 -- PLEASE PROVIDE YOUR TIN SOCIAL SECURITY NUMBER OR EMPLOYER ID
IN THE BOX AT RIGHT AND CERTIFY BY NUMBER
SIGNING AND DATING BELOW.
----------------------------------------------
--------------------------------------------------------------------------
SUBSTITUTE PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
FORM W-9 (1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
DEPARTMENT OF THE TREASURY (2) I am not subject to backup withholding because: (a) I am exempt from
INTERNAL REVENUE SERVICE backup withholding, or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
IDENTIFICATION NUMBER ("TIN") notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out such item (2).
-----------------------------------------------------------------------------------
SIGNATURE DATE PART 3
----------------- ------------------ AWAITING TIN / /
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
19
<PAGE> 20
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within sixty
(60) days.
Signature: Date:
-------------------------------- ------------------------
20
<PAGE> 21
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR CLASS C
SHARES AND CLASS C RIGHTS AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR
DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES
SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Facsimile By Hand or
By Mail: Transmission: Overnight Delivery:
Tenders & Exchanges (201) 222-4720 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey New York, New York
07303-2563 Confirm Facsimile 10005
by Telephone:
(201) 222-4707
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
21
<PAGE> 22
THE INFORMATION AGENT FOR THE OFFER IS:
[Logo of Georgeson & Company Inc.]
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
(800) 223-2064 (Toll Free)
Banks and Brokers call collect
(212) 440-9800
The Dealer Manager for the Offer is:
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
(212) 906-7527
22
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS),
CLASS B COMMON STOCK (INCLUDING THE ASSOCIATED SERIES B PREFERRED STOCK
PURCHASE RIGHTS)
AND CLASS C COMMON STOCK (INCLUDING THE ASSOCIATED SERIES C PREFERRED STOCK
PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if (i) certificates
representing shares of Class A Common Stock, par value $.01 per share (the
"Class A Shares"), of Reliance Electric Company, a Delaware corporation (the
"Company"), and, or, if applicable, certificates for the associated Series A
preferred stock purchase rights (the "Class A Rights") issued pursuant to the
Rights Agreement, dated as of August 29, 1994, between the Company and Society
National Bank, as Rights Agent (as the same may be amended, the "Rights
Agreement"), (ii) certificates representing shares of Class B Common Stock, par
value $.01 per share (the "Class B Shares"), of the Company and, or, if
applicable, certificates for the associated Series B preferred stock purchase
rights (the "Class B Rights") issued pursuant to the Rights Agreement, or (iii)
certificates representing shares of Class C Common Stock, par value $.01 per
share (the "Class C Shares" and, together with the Class A Shares and the Class
B Shares, the "Shares"), of the Company and, or, if applicable, certificates for
the associated Series C preferred stock purchase rights (the "Class C Rights"
and, together with the Class A Rights and the Class B Rights, the "Rights")
issued pursuant to the Rights Agreement, are not immediately available
(including, if a Distribution Date (as defined in the Offer to Purchase (as
defined below)) has occurred, because certificates for Rights have not yet been
distributed by the Company) or time will not permit all required documents to
reach First Chicago Trust Company of New York (the "Depositary") on or prior to
the Expiration Date (as defined in the Offer to Purchase), or, in the case of
Class A Shares and, if available, Class A Rights, the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or sent by facsimile transmission
or mail to the Depositary. See Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
Tenders & Exchanges (201) 222-4732 14 Wall Street
P.O. Box 2563 or 8th Floor
Suite 4660 (201) 222-4721 Suite 4680
Jersey City, New Jersey 07303-2563 New York, New York 10005
Confirm Facsimile by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY 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> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ROK Acquisition Corporation, a Delaware
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 21, 1994 (the "Offer to
Purchase"), and in the related Letters of Transmittal (which together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number (and
class) of Shares and the number (and series) of Rights indicated below pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
Number of Shares: Class A: Shares
----------------------------
Class B: Shares
----------------------------
Class C: Shares
----------------------------
Number of Rights: Class A: Shares
----------------------------
Class B: Shares
----------------------------
Class C: Shares
----------------------------
Certificate No(s). (if available):
------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
If Class A Share(s) or Class A Right(s) will be tendered by book-entry
transfer, check one box.
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
-------------------------------------------------
Date:
-----------------------------------------------------------
Name(s) of Record Holder(s):
------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Address(es):
---------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Area Code and Telephone Number(s):
------------------------------
- -----------------------------------------------------------------
Signature(s):
--------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, hereby (a) represents that the
tender of Shares and/or Rights effected hereby complies with Rule 14e-4 under
the Securities Exchange Act of 1934, as amended, and (b) guarantees to deliver
to the Depositary, at one of its addresses set forth above, the certificates
representing all tendered Shares and/or Rights, in proper form for transfer, or,
in the case of Class A Shares and, if available, Class A Rights, a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Class A Shares and, if available, Class A Rights, an Agent's Message (as defined
in the Offer to Purchase), and any other documents required by the appropriate
Letter of Transmittal within (a) in the case of Shares, five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of this Notice
of Guaranteed Delivery or (b) in the case of Rights, a period ending on the
later of (i) five NYSE trading days after the date of execution of this Notice
of Guaranteed Delivery and (ii) five business days after the date certificates
for Rights are distributed to holders of Shares by the Company.
Name of Firm:
---------------------------------------------------
Address:
-------------------------------------------------------
- -----------------------------------------------------------------
Area Code and
Telephone Number:
----------------------------------------------
- -----------------------------------------------------------------
(Authorized Signature)
Title:
-----------------------------------------------------------
Name:
-----------------------------------------------------------
- ------------------------------------------------------------------
(Please type or print)
Date:
------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE OF
GUARANTEED DELIVERY. CERTIFICATES FOR SHARES OR RIGHTS SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
2
<PAGE> 1
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
(212) 906-7527
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING SHARES OF CLASS B COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES B PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$30 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF CLASS C COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES C PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$81.24 NET PER SHARE
BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 18, 1994, UNLESS THE OFFER IS EXTENDED
October 21, 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by ROK Acquisition Corporation, a Delaware
corporation (the "Purchaser"), and Rockwell International Corporation, a
Delaware corporation ("Rockwell"), to act as financial advisor and Dealer
Manager in connection with the Purchaser's offer to purchase (i) all outstanding
shares of Class A Common Stock, par value $.01 per share (the "Class A Shares"),
of Reliance Electric Company, a Delaware corporation (the "Company"), and
(unless and until the Purchaser declares that the Rights Condition (as defined
below) has been satisfied) the associated Series A preferred stock purchase
rights (the "Class A Rights") issued pursuant to the Rights Agreement dated as
of August 29, 1994 between the Company and Society National Bank, as Rights
Agent (as the same may be amended, the "Rights Agreement"), at a purchase price
of $30 per Class A Share (and associated Class A Right), net to the seller in
cash, without interest thereon, (ii) all outstanding shares of Class B Common
Stock, par value $.01 per share (the "Class B
<PAGE> 2
Shares"), of the Company and (unless and until the Purchaser declares that the
Rights Condition has been satisfied) the associated Series B preferred stock
purchase rights (the "Class B Rights") issued pursuant to the Rights Agreement
at a purchase price of $30 per Class B Share (and associated Class B Right), net
to the seller in cash, without interest thereon, and (iii) all outstanding
shares of Class C Common Stock, par value $.01 per share (the "Class C Shares"
and, together with the Class A Shares and the Class B Shares, the "Shares"), of
the Company and (unless and until the Purchaser declares that the Rights
Condition has been satisfied) the associated Series C preferred stock purchase
rights (the "Class C Rights" and, together with the Class A Rights and the Class
B Rights, the "Rights") issued pursuant to the Rights Agreement at a purchase
price of $81.24 per Class C Share (and associated Class C Right), net to the
seller in cash, without interest thereon, in each case, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 21,
1994 (the "Offer to Purchase"), and in the related Letters of Transmittal (which
together constitute the "Offer") enclosed herewith. Unless and until the
Purchaser declares that the Rights Condition is satisfied, holders of Shares
will be required to tender one associated Right for each Share tendered in order
to effect a valid tender of such Share. If the Distribution Date (as defined in
the Offer to Purchase) does not occur prior to the Expiration Date (as defined
in the Offer to Purchase), a tender of Shares will also constitute a tender of
the associated Rights. If the Distribution Date occurs and certificates
representing Rights ("Rights Certificates") are distributed by the Company to
holders of Shares prior to the time a holder's Shares are tendered pursuant to
the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number (and the series) of Rights
equal to the number (and class) of Shares tendered must be delivered to the
Depositary (as defined below) or, if available in the case of Class A Rights, a
Book-Entry Confirmation (as defined in the Offer to Purchase) received by the
Depositary with respect thereto. If the Distribution Date occurs and Rights
Certificates are not distributed prior to the time Shares are tendered pursuant
to the Offer, Rights may be tendered prior to a stockholder receiving Rights
Certificates by use of the guaranteed delivery procedure described in Section 3
of the Offer to Purchase. In any case, a tender of Shares constitutes an
agreement by the tendering stockholder to deliver Rights Certificates
representing a number (and series) of Rights equal to the number (and class) of
Shares tendered pursuant to the Offer to the Depositary within five business
days after the date Rights Certificates are distributed. The Purchaser reserves
the right to require that the Depositary receive Rights Certificates, or a
Book-Entry Confirmation, if available in the case of the Class A Rights, with
respect to such Rights, prior to accepting the related Shares for payment
pursuant to the Offer, if the Distribution Date occurs prior to the Expiration
Date. Holders of Shares and Rights whose certificates for such Shares (the
"Share Certificates") and, if applicable, Rights Certificates, are not
immediately available (including, if the Distribution Date has occurred, because
Rights Certificates have not yet been distributed by the Company), or who cannot
deliver their Share Certificates or, if applicable, their Rights Certificates,
and all other required documents to the Depositary on or prior to the Expiration
Date, or, in the case of the Class A Shares, who cannot complete the procedures
for book-entry transfer on a timely basis, must tender their Shares and Rights
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. Unless the context otherwise requires, all references to
Shares shall include the associated Rights and all references to the Rights
shall include all benefits that may inure to holders of Rights pursuant to the
Rights Agreement.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares or, if applicable, Rights registered in your
name or in the name of your nominee.
The Offer is conditioned upon, among other things, (1) Shares representing
at least a majority of the total number of outstanding Class A Shares on a fully
diluted basis (assuming conversion of all outstanding Class B Shares and Class C
Shares into Class A Shares and the exercise of all outstanding options) being
validly tendered and not withdrawn prior to the expiration of the Offer, (2) the
Agreement and Plan of Merger, dated as of August 30, 1994 (the "General Signal
Merger Agreement"), between the Company and General Signal Corporation ("General
Signal") having been terminated without any payments by or penalties to the
Company (other than any applicable payments pursuant to Section 9.05(b) of the
General Signal Merger Agreement) and the Company not having entered into or
effectuated any new or amended agreements with General Signal or any other
person or entity having the effect of impairing the ability of the Purchaser to
acquire the Company or otherwise diminishing the expected economic value to the
Purchaser of the acquisition of the Company, (3) the Rights having been redeemed
by the Board of Directors of the Company
2
<PAGE> 3
or the Purchaser being satisfied, in its sole discretion, that the Rights have
been invalidated or otherwise are inapplicable to the Offer and the Proposed
Rockwell Merger (as defined in the Offer to Purchase) (the "Rights Condition")
and (4) the Purchaser being satisfied, in its sole discretion, that Section 203
of the Delaware General Corporation Law has been complied with in connection
with the Purchaser's acquisition of the Company or is invalid or otherwise
inapplicable to the Purchaser in connection with the Offer and the Proposed
Rockwell Merger. The Offer is also subject to other terms and conditions
contained in the Offer to Purchase. See the Introduction and Sections 1, 14 and
15 of the Offer to Purchase.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated October 21, 1994.
2. Letters of Transmittal to tender Shares and Rights for your use and
for the information of your clients. Facsimile copies of the appropriate
Letter of Transmittal may be used to tender Shares and Rights.
3. The Notice of Guaranteed Delivery for Shares and Rights to be used
to accept the Offer if certificates for Shares or Rights are not
immediately available or if such certificates and all other required
documents cannot be delivered to First Chicago Trust Company of New York
(the "Depositary") by the Expiration Date or if, in the case of the Class A
Shares, the procedure for book-entry transfer cannot be completed by the
Expiration Date.
4. A printed form of 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.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 18, 1994,
UNLESS THE OFFER IS EXTENDED.
In order to accept the Offer, an appropriate duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Class A Shares or, if available, the associated Rights,
and any other required documents should be sent to the Depositary and either
Share Certificates representing the tendered Shares (and, if applicable, Rights
Certificates representing the associated tendered Rights) should be delivered to
the Depositary, or, in the case of Class A Shares, such Shares (and, if
applicable, associated tendered Rights) should be tendered by book-entry
transfer into the Depositary's account maintained at one of the Book Entry
Transfer Facilities (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letters of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or, if applicable, Rights Certificates, or
other required documents on or prior to the Expiration Date or to comply with
the book-entry transfer procedures on a timely basis, a tender may be effected
by following the guaranteed delivery procedures specified in Section 3 of the
Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager and the Information Agent, as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any of the
enclosed materials to your clients. The
3
<PAGE> 4
Purchaser will pay or cause to be paid any stock transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letters of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed material may be obtained from, the
Dealer Manager or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
DILLON, READ & CO. INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE DEALER MANAGER, THE COMPANY,
THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
4
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A PREFERRED STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING SHARES OF CLASS B COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES B PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$30 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF CLASS C COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES C PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
AT
$81.24 NET PER SHARE
BY
ROK ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
ROCKWELL INTERNATIONAL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 18, 1994, UNLESS THE OFFER IS EXTENDED
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October
21, 1994 (the "Offer to Purchase"), and the related Letter(s) of Transmittal
(which together constitute the "Offer") relating to the offer by ROK Acquisition
Corporation, a Delaware corporation (the "Purchaser"), to purchase (i) all
outstanding shares of Class A Common Stock, par value $.01 per share (the "Class
A Shares"), of Reliance Electric Company, a Delaware corporation (the
"Company"), and (unless and until the Purchaser declares that the Rights
Condition (as defined below) has been satisfied) the associated Series A
preferred stock purchase rights (the "Class A Rights") issued pursuant to the
Rights Agreement dated as of August 29, 1994 between the Company and Society
National Bank, as Rights Agent (as the same may be amended, the "Rights
Agreement"), at a purchase price of $30 per Class A Share (and associated Class
A Right), net to the seller in cash, without interest thereon, (ii) all
outstanding shares of Class B Common Stock, par value $.01 per share (the "Class
B Shares"), of the Company and (unless and until the Purchaser declares that the
Rights Condition has been satisfied) the associated Series B preferred stock
purchase rights (the "Class B Rights") issued pursuant to the Rights Agreement
at a purchase price of $30
<PAGE> 2
per Class B Share (and associated Class B Right), net to the seller in cash,
without interest thereon, and (iii) all outstanding shares of Class C Common
Stock, par value $.01 per share (the "Class C Shares" and, together with the
Class A Shares and the Class B Shares, the "Shares"), of the Company and (unless
and until the Purchaser declares that the Rights Condition has been satisfied)
the associated Series C preferred stock purchase rights (the "Class C Rights"
and, together with the Class A Rights and the Class B Rights, the "Rights")
issued pursuant to the Rights Agreement at a purchase price of $81.24 per Class
C Share (and associated Class C Right), net to the seller in cash, without
interest thereon, in each case, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter(s) of Transmittal
enclosed herewith. Unless and until the Purchaser declares that the Rights
Condition is satisfied, holders of Shares will be required to tender one
associated Right for each Share tendered in order to effect a valid tender of
such Share. If the Distribution Date (as defined in the Offer to Purchase) does
not occur prior to the Expiration Date (as defined in the Offer to Purchase), a
tender of Shares will also constitute a tender of the associated Rights. If the
Distribution Date occurs and certificates representing Rights ("Rights
Certificates") are distributed by the Company to holders of Shares prior to the
time a holder's Shares are tendered pursuant to the Offer, in order for Rights
(and the corresponding Shares) to be validly tendered, Rights Certificates
representing a number (and the series) of Rights equal to the number (and class)
of Shares tendered must be delivered to the Depositary (as defined below) or, if
available in the case of Class A Rights, a Book-Entry Confirmation (as defined
in the Offer to Purchase) received by the Depositary with respect thereto. If
the Distribution Date occurs and Rights Certificates are not distributed prior
to the time Shares are tendered pursuant to the Offer, Rights may be tendered
prior to a stockholder receiving Rights Certificates by use of the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. In any case,
a tender of Shares constitutes an agreement by the tendering stockholder to
deliver Rights Certificates representing a number (and series) of Rights equal
to the number (and class) of Shares tendered pursuant to the Offer to the
Depositary within five business days after the date Rights Certificates are
distributed. The Purchaser reserves the right to require that the Depositary
receive Rights Certificates, or a Book-Entry Confirmation, if available in the
case of the Class A Rights, with respect to such Rights, prior to accepting the
related Shares for payment pursuant to the Offer, if the Distribution Date
occurs prior to the Expiration Date. Holders of Shares and Rights whose
certificates for such Shares (the "Share Certificates") and, if applicable,
Rights Certificates, are not immediately available (including, if the
Distribution Date has occurred, because Rights Certificates have not yet been
distributed by the Company), or who cannot deliver their Share Certificates or,
if applicable, their Rights Certificates, and all other required documents to
the Depositary on or prior to the Expiration Date, or, in the case of the Class
A Shares, who cannot complete the procedures for book-entry transfer on a timely
basis, must tender their Shares and Rights according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. Unless the context
otherwise requires, all references to Shares shall include the associated Rights
and all references to the Rights shall include all benefits that may inure to
holders of Rights pursuant to the Rights Agreement.
WE ARE THE HOLDER OF RECORD OF SHARES AND RIGHTS HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES AND RIGHTS CAN BE MADE ONLY BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER(S) OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES AND RIGHTS HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares and Rights held by us for your account
pursuant to the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $30 per Class A Share or Class B Share and
$81.24 per Class C Share, including, in each case, the associated Right,
net to you in cash without interest thereon, upon the terms and subject to
the conditions set forth in the Offer.
2. The Offer is being made for all Shares.
3. The Offer is conditioned upon, among other things, (1) Shares
representing at least a majority of the total number of outstanding Class A
Shares on a fully diluted basis (assuming conversion of all outstanding
Class B Shares and Class C Shares into Class A Shares and the exercise of
all outstanding options) being validly tendered and not withdrawn prior to
the expiration of the Offer, (2) the Agreement and Plan of Merger, dated as
of August 30, 1994 (the "General Signal Merger Agreement"), between the
Company and General
2
<PAGE> 3
Signal Corporation ("General Signal") having been terminated without any
payments by or penalties to the Company (other than any applicable payments
pursuant to Section 9.05(b) of the General Signal Merger Agreement) and the
Company not having entered into or effectuated any new or amended
agreements with General Signal or any other person or entity having the
effect of impairing the ability of the Purchaser to acquire the Company or
otherwise diminishing the expected economic value to the Purchaser of the
acquisition of the Company, (3) the Rights having been redeemed by the
Board of Directors of the Company or the Purchaser being satisfied, in its
sole discretion, that the Rights have been invalidated or otherwise are
inapplicable to the Offer and the Proposed Rockwell Merger (as defined in
the Offer to Purchase) (the "Rights Condition") and (4) the Purchaser being
satisfied, in its sole discretion, that Section 203 of the Delaware General
Corporation Law has been complied with in connection with the Purchaser's
acquisition of the Company or is invalid or otherwise inapplicable to the
Purchaser in connection with the Offer and the Proposed Rockwell Merger.
The Offer is also subject to other terms and conditions contained in the
Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the
Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letters of Transmittal, stock transfer taxes on the purchase of Shares or
Rights by the Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, November 18, 1994, unless the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by First Chicago Trust Company of
New York (the "Depositary") of (a) Share Certificates and, if applicable,
associated Rights Certificates or, in the case of Class A Shares, timely
confirmation of the book-entry transfer of such Shares and, if available,
Series A Rights into the account maintained by the Depositary at The
Depository Trust Company, Midwest Securities Trust Company or Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (b) the appropriate 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 delivery, and (c) any other
documents required by the appropriate Letter of Transmittal. Accordingly,
payment may not be made to all tendering stockholders at the same time
depending upon when certificates for or, in the case of Class A Shares,
confirmations of book-entry transfer of such Shares (or associated Rights,
if available) into the Depositary's account at a Book-Entry Transfer
Facility are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. Your authorization to tender Shares shall be
deemed authorization to tender the associated Rights regardless of whether they
separate from the Shares. 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 not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares or Rights residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares in
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 is being made on
behalf of the Purchaser by Dillon, Read & Co. Inc., the Dealer Manager for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
3
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL SHARES OF ALL
CLASSES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
RELIANCE ELECTRIC COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 21, 1994 (the "Offer to Purchase"), and the
related Letter(s) of Transmittal (which together constitute the "Offer") in
connection with the offer by ROK Acquisition Corporation, a Delaware corporation
(the "Purchaser"), to purchase (i) all outstanding shares of Class A Common
Stock, par value $.01 per share (the "Class A Shares"), of Reliance Electric
Company, a Delaware corporation (the "Company"), and (unless and until the
Purchaser declares that the Rights Condition (as defined in the Offer to
Purchase) has been satisfied) the associated Series A preferred stock purchase
rights (the "Class A Rights") issued pursuant to the Rights Agreement dated as
of August 29, 1994 between the Company and Society National Bank, as Rights
Agent (as the same may be amended, the "Rights Agreement"), at a purchase price
of $30 per Class A Share (and associated Class A Right), net to the seller in
cash, without interest thereon, (ii) all outstanding shares of Class B Common
Stock, par value $.01 per share (the "Class B Shares"), of the Company and
(unless and until the Purchaser declares that the Rights Condition has been
satisfied) the associated Series B preferred stock purchase rights (the "Class B
Rights") issued pursuant to the Rights Agreement at a purchase price of $30 per
Class B Share (and associated Class B Right), net to the seller in cash, without
interest thereon, and (iii) all outstanding shares of Class C Common Stock, par
value $.01 per share (the "Class C Shares" and, together with the Class A Shares
and the Class B Shares, the "Shares"), of the Company and (unless and until the
Purchaser declares that the Rights Condition has been satisfied) the associated
Series C preferred stock purchase rights (the "Class C Rights" and, together
with the Class A Rights and the Class B Rights, the "Rights") issued pursuant to
the Rights Agreement at a purchase price of $81.24 per Class C Share (and
associated Class C Right), net to the seller in cash, without interest thereon,
in each case, upon the terms and subject to the conditions set forth in the
Offer to Purchase.
This will instruct you to tender to the Purchaser the number (and class) of
Shares and the number (and series) of Rights indicated below (or if no number
(and class or series) is indicated below, all Shares and Rights) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<S> <C>
Number of Shares to Be Tendered: Number of Rights to Be Tendered:
Class A: Shares Series A: Rights
------------------------ ------------------------
Class B: Shares Series B: Rights
------------------------ ------------------------
</TABLE>
Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares are required to tender one associated Right for
each Share tendered in order to effect a valid tender of such Share. If
certificates representing Rights ("Rights Certificates") have been distributed
by the Company to holders of Shares, such holders will be required to validly
tender Rights Certificates representing a number (and series) of Rights equal to
the number (and class) of Shares being tendered in order to effect a valid
tender of such Shares. If Rights Certificates have not been distributed by the
Company to holders of Shares, a tender of Shares will also constitute a tender
of the associated Rights and only the line with respect to "Number of Shares to
Be Tendered" should be filled in. See Section 3 of the Offer to Purchase. Unless
otherwise indicated, it will be assumed that you instruct us to tender all
Shares and Rights held by us for your account and that you instruct us to tender
all Rights associated with Shares you have instructed us to tender.
SIGN HERE
Signature(s)
-------------------------------------------------------------------
(Print Name(s))
-----------------------------------------------------------------
(Print Address(es))
------------------------------------------------------------
(Area Code and Telephone Number(s))
--------------------------------------------
(Taxpayer Identification or Social Security Number(s))
--------------------------
4
<PAGE> 1
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. 000-000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------
<S> <C> <C>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for incompetent person(3)
a designated ward, minor,
or incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
<CAPTION>
- -------------------------------------------------------
<S> <C> <C>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- -------------------------------------------------------
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State
or local government,
school district, or
prison) that receives
agricultural program
payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's, or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
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, or
Form SS-4, Application for Employer Identification Number, 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:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
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 taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--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> 1
News
CONTACTS: Richard R. Mau
Rockwell
(310) 797-5819
or
Roy Winnick
Kekst and Company
(212) 593-2655
ROCKWELL ANNOUNCES $30 PER SHARE ALL-CASH TENDER OFFER FOR
ALL SHARES OF RELIANCE ELECTRIC COMPANY
IN TRANSACTION VALUED AT $1.5 BILLION
SEAL BEACH, Calif., October 20, 1994 -- Rockwell International
Corporation (NYSE: ROK) announced today that on Friday, October
21, it will commence an all-cash tender offer for all shares of
Reliance Electric Company at a price of $30 per share of Class A
common stock and an equivalent price for convertible shares.
This offer was communicated today in a letter from Donald R.
Beall, Rockwell's Chairman and Chief Executive Officer, to
H. Virgil Sherrill, Chairman of the Board, and John C. Morley,
President and Chief Executive Officer, of Reliance Electric.
The Rockwell offer, which has a total transaction value of
approximately $1.5 billion, represents a premium of 22.4% over
yesterday's Reliance Electric closing market price of $24.50 per
Class A share, and 50.9% over the closing market price on August
29, the day before Reliance Electric's merger agreement with
General Signal Corporation was announced.
(more)
<PAGE> 2
2
Following is the complete text of Mr. Beall's letter to
Messrs. Sherrill and Morley:
Mr. H. Virgil Sherrill
Chairman of the Board
and
Mr. John C. Morley
President and Chief Executive Officer
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, Ohio 44124
Gentlemen:
As you know, Rockwell and Reliance Electric over the years
have worked together closely and cordially on a number of projects
and, during this time, have discussed a business combination of
our two companies. As recently as this past July, Rockwell
expressed its interest in acquiring Reliance Electric, and we urged
you, John, to communicate our interest to the Reliance Electric
board, which you indicated you would do. We were therefore surprised
and disappointed that Rockwell was not afforded an opportunity to
further pursue those discussions before Reliance Electric and
General Signal Corporation announced a definitive merger agreement
at the end of August.
After an intensive strategic review, including a detailed evaluation
of publicly available information concerning Reliance Electric, we
have concluded that the strategic and financial advantages of
combining our two companies are too compelling to ignore.
Accordingly, I am writing to inform you of our intention to
acquire Reliance Electric through a cash tender offer of $30 per
share for all shares of Reliance Electric's Class A common stock
and an equivalent price for its convertible shares. This represents
and exceptionally attractive opportunity for your shareowners --
specifically, an all cash offer at a premium of 22.4% over
yesterday's closing market price of $24.50 per Class A share
and 50.9% over the closing market price on August 29, the day before
Reliance Electric's merger agreement with General Signal was
announced.
(more)
<PAGE> 3
3
The transaction we propose also represents a particularly
attractive opportunity to build a combined enterprise uniquely
positioned for continued leadership in both the control and power
segments of the industrial automation business, in North America and
around the world.
Combining the operations of our Allen-Bradley automation
business and Reliance Electric will establish a global industrial
automation enterprise with combined annual sales of about $3.5
billion. It will have a broad range of man-machine interface,
sensor, control logic, mechanical transmission, motor and motor
controller products, drive systems capabilities, and global support
services. As such, the combined business can better capitalize on an
important, long-term technological trend in industrial automation:
the convergence of the control and power functions in increasingly
intelligent automation products.
We have enormous respect for Reliance Electric, a major
manufacturer of industrial products and telecommunications equipment.
As you know, Allen-Bradley, which we acquired in 1985 as part of our
continuing strategic program to grow the commercial side of our
company, has established Rockwell as a leading worldwide manufacturer
of automation control products. Since the acquisition, Allen-Bradley
has more than doubled its sales, and expects to report sales of more
than $2.1 billion for fiscal 1994.
Allen-Bradley has many strengths in control logic, man-machine
interfaces and sensors. Reliance Electric has complementary
strengths in motors and drives. Supported by Rockwell's financial
resources and advanced technology, the combined entity will be a
formidable U.S.-based global industrial automation enterprise,
well-positioned to compete with its international competitors.
Our offer is not subject to any financing contingencies. In
addition, we are advised by our legal counsel that there are no
significant antitrust or other issues associated with a combination
of our two companies.
(more)
<PAGE> 4
4
While Rockwell is and will continue to be actively engaged in
various telecommunications markets, we have determined to sell
Reliance Electric's telecommunications operations because they do not
fit into Rockwell's strategic plans.
We are convinced that a combination of Allen-Bradley and
Reliance Electric makes compelling strategic and financial sense for
both our companies and our respective constituents. I stand ready to
meet with your board to present our plans.
Sincerely,
/signed/
Donald R. Beall
cc: Members of the Board of Directors
of Reliance Electric Company
# # #
Rockwell is a diversified, high technology company holding
leadership market positions in automation, avionics, aerospace,
defense electronics, telecommunications, automotive components
and graphic systems, with annual worldwide sales of $11 billion
# # #
<PAGE> 1
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 October 21, 1994, and the related Letters 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
ROK Acquisition Corporation by Dillon, Read & Co. Inc. or 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 Class A Common Stock
(Including the Associated Series A Preferred Stock
Purchase Rights)
and
All Outstanding Shares of Class B Common Stock
(Including the Associated Series B Preferred Stock
Purchase Rights)
of
Reliance Electric Company
at
$30 Net Per Share
and
All Outstanding Shares of Class C Common Stock
(Including the Associated Series C Preferred Stock
Purchase Rights)
of
Reliance Electric Company
at
$81.24 Net Per Share
by
ROK Acquisition Corporation
a wholly-owned subsidiary of
Rockwell International Corporation
ROK Acquisition Corporation (the "Purchaser"), a Delaware corporation
and a wholly-owned subsidiary of Rockwell International Corporation, a Delaware
corporation ("Rockwell"), hereby offers to purchase (i) all outstanding shares
of Class A Common Stock, par value $.01 per share (the "Class A Shares"), of
Reliance Electric Company, a Delaware corporation (the "Company"), and (unless
and until the Purchaser declares that the Rights Condition (as defined below)
has been satisfied) the associated Series A preferred stock purchase rights
(the "Class A Rights") issued pursuant to the Rights Agreement, dated as of
August 29, 1994, between the Company and Society National Bank, as Rights Agent
(as the
<PAGE> 2
same may be amended, the "Rights Agreement"), at a purchase price of $30 per
Class A Share (and associated Class A Right), net to the seller in cash,
without interest thereon, (ii) all outstanding shares of Class B Common Stock,
par value $.01 per share (the "Class B Shares"), of the Company and (unless and
until the Purchaser declares that the Rights Condition has been satisfied) the
associated Series B preferred stock purchase rights (the "Class B Rights")
issued pursuant to the Rights Agreement at a purchase price of $30 per Class
B Share (and associated Class B Right), net to the seller in cash, without
interest thereon and (iii) all outstanding shares of Class C Common Stock, par
value $.01 per share (the "Class C Shares" and, together with the Class A
Shares and the Class B Shares, the "Shares"), of the Company and (unless and
until the Purchaser declares that the Rights Condition has been satisfied) the
associated Series C preferred stock purchase rights (the "Class C Rights" and,
together with the Class A Rights and the Class B Rights, the "Rights") issued
pursuant to the Rights Agreement at a purchase price of $81.24 per Class C Share
(and associated Class C Right), net to the seller in cash, without interest
thereon, in each case upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated October 21, 1994 (the "Offer to Purchase"), and in
the related Letters of Transmittal (which together constitute the
"Offer"). Unless the context otherwise requires, all references to Shares
shall include the associated Rights and all references to the Rights shall
include all benefits that may inure to holders of the Rights pursuant to the
Rights Agreement.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 18, 1994,
UNLESS THE OFFER IS EXTENDED.
The Purchaser reserves the right to amend the Offer (including amending
the purchase price) upon entry into a merger agreement with the Company or
otherwise or to negotiate a merger agreement with the Company not involving a
tender offer. The Purchaser and Rockwell also reserve the right to solicit the
votes of the stockholders of the Company at any annual or special meeting of
such stockholders.
The Offer is conditioned upon, among other things, (1) Shares
representing at least a majority of the total number of outstanding shares of
Class A Common Stock of the Company
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<PAGE> 3
on a fully diluted basis (assuming conversion of all outstanding Class
B Shares and Class C Shares into Class A Shares and the exercise of all
outstanding options) being validly tendered and not withdrawn prior to the
expiration of the Offer, (2) the Agreement and Plan of Merger, dated as of
August 30, 1994 (the "General Signal Merger Agreement"), between the Company
and General Signal Corporation ("General Signal") having been terminated
without any payments by or penalties to the Company (other than any applicable
payments pursuant to Section 9.05(b) of the General Signal Merger Agreement)
and the Company not having entered into or effectuated any new or amended
agreements with General Signal or any other person or entity having the effect
of impairing the ability of the Purchaser to acquire the Company or otherwise
diminishing the expected economic value to the Purchaser of the acquisition of
the Company, (3) the Rights having been redeemed by the Board of Directors of
the Company or the Purchaser being satisfied, in its sole discretion, that the
Rights have been invalidated or otherwise are inapplicable to the Offer and
the Proposed Rockwell Merger (as defined below) (the "Rights Condition") and
(4) the Purchaser being satisfied, in its sole discretion, that Section 203 of
the Delaware General Corporation Law has been complied with in connection with
the Purchaser's acquisition of the Company or is invalid or otherwise
inapplicable to the Purchaser in connection with the Offer and the Proposed
Rockwell Merger. The Offer is also subject to other terms and conditions
contained in the Offer to Purchase. See the Introduction and Sections 1, 14
and 15 of the Offer to Purchase.
The Offer is not conditioned on obtaining financing.
The purpose of the Offer and the Proposed Rockwell Merger is to
acquire control of, and the entire equity interest in, the Company. The
Purchaser currently intends, as soon as practicable following consummation of
the Offer, to seek to have the Company consummate a merger or similar business
combination with the Purchaser (the "Proposed Rockwell Merger") pursuant to
which each then outstanding Share (other than Shares owned by Rockwell or any
of its wholly-owned subsidiaries, Shares held in the treasury of the Company
and Shares held by stockholders who perfect appraisal rights under the Delaware
General Corporation Law) would be converted into the right to receive cash in
the same amount as received per applicable Share in the Offer, and the Company
would become a wholly-owned subsidiary of Rockwell.
If the Distribution Date (as defined in the Offer to Purchase) does
not occur prior to the Expiration Date (as defined below), a tender of Shares
will also constitute a tender of the associated Rights. If the Purchaser
declares that the Rights Condition is satisfied, the Purchaser will
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<PAGE> 4
not require delivery of Rights. Unless and until the Purchaser
declares that the Rights Condition is satisfied, holders of Shares will be
required to tender one associated Right for each Share tendered in order to
effect a valid tender of such Share. If the Distribution Date occurs and
certificates representing Rights ("Rights Certificates") are distributed by the
Company to holders of Shares prior to the time a holder's Shares are tendered
pursuant to the Offer, in order for Rights (and the corresponding Shares) to be
validly tendered, Rights Certificates representing a number (and the series) of
Rights equal to the number (and class) of Shares tendered must be delivered to
First Chicago Trust Company of New York (the "Depositary") or, if available in
the case of Class A Rights, a Book-Entry Confirmation (as defined below)
received by the Depositary with respect thereto. If the Distribution Date
occurs and Rights Certificates are not distributed prior to the time Shares are
tendered pursuant to the Offer, Rights may be tendered prior to a stockholder
receiving Rights Certificates by use of the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. In any case, a tender of
Shares constitutes an agreement by the tendering stockholder to deliver Rights
Certificates representing a number (and the series) of Rights equal to the
number (and class) of Shares tendered pursuant to the Offer to the Depositary
within five business days after the date Rights Certificates are distributed.
The Purchaser reserves the right to require that the Depositary receive Rights
Certificates, or a Book-Entry Confirmation, if available in the case of Class A
Rights, with respect to such Rights, prior to accepting the related Shares for
payment pursuant to the Offer if the Distribution Date occurs prior to the
Expiration Date.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Shares for payment pursuant to
the Offer. In all cases, upon the terms and subject to the conditions of the
Offer, payment for Shares purchased 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 payment from the
Purchaser and transmitting payment to validly tendering stockholders. Under no
circumstances will interest on the purchase price for Shares be paid by the
Purchaser. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
representing Shares (the "Share Certificates") for such Shares and, if
applicable, Rights Certificates for the associated Rights,
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<PAGE> 5
or, in the case of Class A Shares, timely confirmation (a "Book-Entry
Confirmation") of the book-entry transfer of such Class A Shares and, if
applicable, Class A Rights into the Depositary's account at The Depository
Trust Company, Midwest Securities Trust Company or Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, (ii) the
appropriate Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of
Class A Shares, an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer of Class A Shares and, if applicable,
Class A Rights and (iii) any other documents required by the appropriate Letter
of Transmittal. A Class A Letter of Transmittal should be used to tender Class
A Shares, a Class B Letter of Transmittal should be used to tender Class B
Shares and a Class C Letter of Transmittal should be used to tender Class C
Shares.
If, for any reason whatsoever, acceptance for payment of any Shares
and Rights tendered pursuant to the Offer is delayed, or the Purchaser is
unable to accept for payment or pay for Shares and Rights tendered pursuant to
the Offer, then, without prejudice to the Purchaser's rights set forth in the
Offer to Purchase, the Depositary may, nevertheless, on behalf of the
Purchaser, retain tendered Shares and Rights and such Shares and Rights may not
be withdrawn except to the extent that the tendering stockholder is entitled to
and duly exercises withdrawal rights as described in Section 4 of the Offer to
Purchase. Any such delay will be by an extension of the Offer to the extent
required by law.
If certain events occur, the Purchaser will not be obligated to accept
for payment or pay for any Shares tendered pursuant to the Offer. If any
tendered Shares are not purchased pursuant to the Offer for any reason, or if
Share Certificates are submitted representing more Shares than are tendered,
Share Certificates representing unpurchased or untendered Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Class A Shares delivered by book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, such Shares will be credited to an account
maintained within such Book-Entry Transfer Facility), as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
In the event separate Rights Certificates are issued, similar action will be
taken with respect to unpurchased and untendered Rights.
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<PAGE> 6
The Purchaser expressly reserves the right, in its sole discretion, at
any time and from time to time, to extend the period during which the Offer is
open for any reason, including the occurrence of any event specified in Section
14 of the Offer to Purchase, by giving oral or written notice of such extension
to the Depositary. Subject to the applicable regulations of the Securities and
Exchange Commission, the Purchaser also expressly reserves the right, in its
sole discretion, at any time or from time to time, to (i) delay acceptance for
payment of or, regardless of whether such Shares were theretofore accepted for
payment, payment for any Shares pending receipt of any regulatory or
governmental approvals specified in Section 15 of the Offer to Purchase, (ii)
terminate the Offer (whether or not any Shares have theretofore been accepted
for payment) if any condition referred to in Section 14 of the Offer to
Purchase has not been satisfied or upon the occurrence of any event specified
in Section 14 and (iii) waive any condition or otherwise amend the Offer in any
respect, in each case, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and, other than in the case
of any such waiver, by making a public announcement thereof. Any such
extension, delay, termination or amendment will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.
Except as otherwise provided in Section 4 of the Offer to Purchase,
tenders of Shares and Rights made pursuant to the Offer are irrevocable. Shares
and Rights tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment as
provided in the Offer to Purchase, may also be withdrawn at any time after
December 19, 1994 (or such later date as may apply in case the Offer is
extended). The term "Expiration Date" means 12:00 midnight, New York City
time, on Friday, November 18, 1994, unless and until the Purchaser, in its sole
discretion, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the time and date at which
the Offer, as so extended by the Purchaser, shall expire. A withdrawal of
Shares will also constitute a withdrawal of the associated Rights. Rights may
not be withdrawn unless the associated Shares are also withdrawn. In order for
a withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares and
Rights to be withdrawn, the number of Shares and Rights to be withdrawn,
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<PAGE> 7
and (if Share Certificates and Rights Certificates have been tendered) the name
of the registered holder of the Shares and Rights as set forth in the Share
Certificate and Rights Certificate, if different from that of the person who
tendered such Shares and Rights. If Share Certificates and Rights Certificates
have been delivered or otherwise identified to the Depositary, then prior to
the physical release of such certificates, the tendering stockholder must
submit the serial numbers shown on the particular certificates evidencing the
Shares and Rights to be withdrawn and the signature on the notice of withdrawal
must be guaranteed by a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution"),
except in the case of Shares and Rights tendered for the account of an
Eligible Institution. If Class A Shares and Class A Rights have been tendered
pursuant to the procedures for book-entry transfer set forth in Section 3 of
the Offer to Purchase, the notice of withdrawal must specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Class A Shares and Class A Rights, in which case a
notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in this paragraph. 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 shall
be final and binding. Any Shares and Rights properly withdrawn will be deemed
not validly tendered for purposes of the Offer, but may be retendered at any
subsequent time prior to the Expiration Date by following any of the procedures
described in Section 3 of the Offer to Purchase.
The information required to be disclosed pursuant to Rule
14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is contained in the
Offer to Purchase and is incorporated herein by reference.
A request is being made to the Company pursuant to Rule 14d-5 under the
Exchange Act for the use of the Company's stockholder list, its list of holders
of Rights and security position listings for the purpose of disseminating the
Offer to holders of Shares. Upon compliance by the Company with such request,
the Offer to Purchase and the related Letters of Transmittal and, if required,
other relevant materials will be mailed to record holders of Shares and Rights
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 and list of holders of Rights, if applicable, or who are
listed as participants in a clearing
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<PAGE> 8
agency's security position listing for subsequent transmittal to beneficial
owners of Shares and Rights.
The Offer to Purchase and the Letters of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers listed below. Additional copies of the Offer to Purchase,
the Letters of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained at the Purchaser's expense from the Information Agent
or from brokers, dealers, commercial banks and trust companies. Except as set
forth in the Offer to Purchase, neither Rockwell nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person (other than the
Information Agent and the Dealer Manager) for soliciting tenders of Shares and
Rights pursuant to the Offer.
The Information Agent for the Offer is:
[Logo of Georgeson & Company Inc.]
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
Banks and Brokers call collect
(212) 440-9800
Call Toll Free: 1-800-223-2064
The Dealer Manager for the Offer is:
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
(212) 906-7527 (call collect)
October 21, 1994
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<PAGE> 1
CONTACT
<TABLE>
<S> <C>
MEDIA Richard Mau
(310) 797-5036
or
Kekst and Company
Roy Winnick
Adam Weiner
(212) 593-2655
INVESTORS Thomas Joyce
(412) 565-7436
</TABLE>
ROCKWELL COMMENCES CASH TENDER OFFER
FOR RELIANCE ELECTRIC AT $30 PER SHARE
SEAL BEACH, CA, OCTOBER 21, 1994 -- Rockwell International Corporation (NYSE:
ROK) today announced that a wholly owned subsidiary of Rockwell today commenced
its previously announced all-cash tender offer for all of Reliance Electric
Company (NYSE: REE) at a price of $30 per share of Class A common stock and an
equivalent price for convertible shares. The Offer and withdrawal rights will
expire at 12:00 midnight, New York City time, on Friday, November 18, 1994,
unless the Offer is extended. Other terms and conditions of the Offer are set
forth in the definitive tender offer documents being filed with the Securities
and Exchange Commission.
Dillon, Read & Co. Inc. is acting as Financial Advisor and Dealer Manager to
Rockwell in connection with the tender offer and Georgeson & Company Inc. is
acting as the Information Agent.
Rockwell, headquartered in Seal Beach, Calif., is a diversified, high-technology
company holding leadership market positions in automation, avionics, aerospace,
defense electronics, telecommunications, automotive component systems and
graphic systems, with annual worldwide sales of $11 billion.
# # #
