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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
SPX CORPORATION
(NAME OF ISSUER)
SPX CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
------------------------
COMMON STOCK, PAR VALUE $10.00 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
784635 10 4
(CUSIP NUMBER OF CLASS OF SECURITIES)
PATRICK J. O'LEARY
VICE PRESIDENT, FINANCE, TREASURER AND CHIEF FINANCIAL OFFICER
SPX CORPORATION
700 TERRACE POINT DRIVE
MUSKEGON, MICHIGAN 49443
(616) 724-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
------------------------
COPY TO:
GEORGE C. MCKANN
GARDNER, CARTON & DOUGLAS
321 NORTH CLARK STREET
CHICAGO, ILLINOIS 60610
(312) 245-8417
------------------------
APRIL 11, 1997
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
------------------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$151,200,000 $30,240
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* Calculated solely for purposes of determining the filing fee, based upon
the purchase of 2,700,000 shares at the maximum tender offer price per
share of $56.
------------------------
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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<PAGE> 2
This Issuer Tender Offer Statement on Schedule 13E-4 (the "Statement")
relates to the tender offer by SPX Corporation, a Delaware corporation (the
"Company"), to purchase up to 2,700,000 shares of common stock, par value $10.00
per share (including the associated Preferred Stock Purchase Rights, the
"Shares") at prices, net to the seller in cash, not greater than $56 nor less
than $48 per Share, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated April 11, 1997 (the "Offer to Purchase") and the
related Letter of Transmittal (which are herein collectively referred to as the
"Offer"). Copies of such documents are filed as Exhibits (a)(1) and (a)(2),
respectively, to this Statement.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is SPX Corporation, a Delaware corporation. The
address of its principal executive offices is 700 Terrace Point Drive, Muskegon,
Michigan 49443.
(b) The information set forth in "Introduction," "Section 1. Number of
Shares; Proration" and "Section 9. Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase is incorporated herein by reference. The Offer is being made to all
holders of Shares, including officers, directors and affiliates of the Company,
although the Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the Offer.
(c) The information set forth in "Introduction" and "Section 7. Price Range
of Shares; Dividends" in the Offer to Purchase is incorporated herein by
reference.
(d) This Statement is being filed by the issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 10. Source and Amount of
Funds" in the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER.
(a)-(j) The information set forth in "Introduction," "Section 8. Background
and Purpose of the Offer; Certain Effects of the Offer," "Section 9. Interests
of Directors and Executive Officers; Transactions and Arrangements Concerning
the Shares," "Section 10. Source and Amount of Funds" and "Section 12. Effects
of the Offer on the Market for Shares; Registration Under the Exchange Act" in
the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 9. Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning the Shares" and
"Schedule I -- Certain Transactions Involving Shares" in the Offer to Purchase
is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in "Introduction," "Section 8. Background and
Purpose of the Offer; Certain Effects of the Offer" and "Section 9. Interests of
Directors and Executive Officers; Transactions and Arrangements Concerning the
Shares" in the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and "Section 16. Fees and
Expenses" in the Offer to Purchase is incorporated herein by reference.
<PAGE> 3
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Section 11. Certain Information About
the Company" in the Offer to Purchase is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Section 13. Certain Legal Matters;
Regulatory Approvals" in the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "Section 12. Effects of the Offer on the
Market for Shares; Registration Under the Exchange Act" in the Offer to Purchase
is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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<S> <C>
(a)(1) Form of Offer to Purchase dated April 11, 1997.
Form of Letter of Transmittal.
(a)(2)
Form of Notice of Guaranteed Delivery.
(a)(3)
Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(4)
Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(5)
Form of Letter dated April 11, 1997 to stockholders from the
Chairman, President and Chief Executive Officer of the
Company.
(a)(6)
Form of Press Release issued by the Company dated April 10,
1997.
(a)(7)
Form of Summary Advertisement dated April 11, 1997.
(a)(8)
Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(9)
Commitment Letter dated March 31, 1997 between the Company
and The First National Bank of Chicago
(b)
Not applicable.
(c)
Not applicable.
(d)
Not applicable.
(e)
Not applicable.
(f)
</TABLE>
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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.
SPX CORPORATION
By: /s/ PATRICK J. O'LEARY
-----------------------------------
Patrick J. O'Leary
Vice President, Finance, Treasurer
and Chief Financial Officer
Dated: April 11, 1997
<PAGE> 5
INDEX TO EXHIBITS
ITEM DESCRIPTION PAGE
---- ----------- ----
(a)(1) Form of Offer to Purchase dated April 11, 1997..............
(a)(2) Form of Letter of Transmittal...............................
(a)(3) Form of Notice of Guaranteed Delivery.......................
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees................................
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees........
(a)(6) Form of Letter dated April 11, 1997 to stockholders from the
Chairman, President and Chief Executive Officer of the
Company.....................................................
(a)(7) Form of Press Release issued by the Company dated April 10,
1997........................................................
(a)(8) Form of Summary Advertisement dated April 11, 1997..........
(a)(9) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9...............................
(b) Commitment Letter dated March 31, 1997 between the Company
and The First National Bank of Chicago......................
(c) Not applicable..............................................
(d) Not applicable..............................................
(e) Not applicable..............................................
(f) Not applicable..............................................
<PAGE> 1
EXHIBIT (A)(1)
SPX CORPORATION
OFFER TO PURCHASE FOR CASH UP TO 2,700,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $56 NOR LESS THAN $48 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
SPX Corporation, a Delaware corporation (the "Company"), invites its
stockholders to tender shares of its common stock, par value $10.00 per share
(including the associated Preferred Stock Purchase Rights (the "Rights"), the
"Shares"), to the Company at prices not greater than $56 nor less than $48 per
Share in cash, specified by tendering stockholders, upon the terms and subject
to the conditions set forth in this Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $56 nor less than
$48 per Share), net to the seller in cash (the "Purchase Price"), that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 2,700,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $56 nor less than $48 per Share)
validly tendered and not withdrawn pursuant to the Offer. The Company will pay
the Purchase Price for all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer including the proration terms hereof.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
The Shares are listed and principally traded on the New York Stock
Exchange, Inc. (the "NYSE") under the symbol "SPW." On April 9, 1997 the last
full trading day on the NYSE prior to the announcement by the Company of the
price range of and the number of Shares sought in the Offer, the closing per
Share sales price as reported on the NYSE Composite Tape was $45 7/8.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE
SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
------------------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
------------------------
The date of this Offer to Purchase is April 11, 1997.
<PAGE> 2
IMPORTANT
Any stockholders desiring to tender all or any portion of their Shares
should either (i) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it with any required signature guarantee and any other required
documents to The Bank of New York (the "Depositary"), and either mail or deliver
the stock certificates for such Shares to the Depositary (with all such other
documents) or follow the procedure for book-entry delivery set forth in Section
3, or (ii) request a broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such stockholder. A stockholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact that broker, dealer, commercial bank,
trust company or other nominee if such stockholder desires to tender such
Shares. Stockholders who desire to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedure for
book-entry transfer on a timely basis or whose other required documentation
cannot be delivered to the Depositary, in any case, by the expiration of the
Offer should tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3. TO EFFECT A VALID TENDER OF SHARES,
STOCKHOLDERS MUST VALIDLY COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE
SECTION RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and telephone
number set forth on the back cover of this Offer to Purchase.
2
<PAGE> 3
SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase.
Number of Shares to be
Purchased..................... 2,700,000 Shares (or such lesser number of
Shares as are validly tendered).
Purchase Price................ The Company will determine a single per Share
net cash price, not greater than $56 nor less
than $48 per Share, that it will pay for Shares
validly tendered. The Company will select the
lowest Purchase Price that will allow it to buy
2,700,000 Shares (or such lesser number of
Shares as are validly tendered at prices not
greater than $56 nor less than $48 per Share)
validly tendered. All Shares acquired in the
Offer will be acquired at the Purchase Price
even if tendered below the Purchase Price. Each
stockholder desiring to tender Shares must
specify in the Letter of Transmittal the
minimum price (not greater than $56 nor less
than $48 per Share) at which such stockholder
is willing to have Shares purchased by the
Company. Stockholders wishing to maximize the
possibility that their Shares will be purchased
at the Purchase Price may check the box in the
Letter of Transmittal marked "Shares Tendered
at Price Determined by Dutch Auction." Checking
this box may result in a Purchase Price of the
Shares so tendered at the minimum price of $48.
Market Price of Shares........ On April 9, 1997, the last reported sale price
of the Shares on the NYSE Composite Tape was
$45 7/8 per Share.
How to Tender Shares.......... See Section 3. Call the Information Agent or
consult your broker for assistance.
Dividends..................... See Section 7 for a discussion of the
suspension of further regular quarterly cash
dividends.
Brokerage Commissions......... None.
Stock Transfer Tax............ None, if payment is made to the registered
holder.
Expiration and Proration
Dates......................... Thursday, May 8, 1997, at 12:00 Midnight, New
York City time, unless extended by the Company.
Payment Date.................. As soon as practicable after the Expiration
Date.
Position of the Company and
its Directors................. Neither the Company nor its Board of Directors
makes any recommendation to any stockholder as
to whether to tender or refrain from tendering
Shares.
Withdrawal Rights............. Tendered Shares may be withdrawn at any time
until 12:00 Midnight, New York City time, on
Thursday, May 8, 1997, unless the Offer is
extended by the Company and, unless previously
purchased, after 12:00 Midnight, New York City
time, on Friday, June 6, 1997. See Section 4.
Odd Lots...................... There will be no proration of Shares tendered
by any stockholder owning beneficially fewer
than 100 Shares in the aggregate (excluding
Shares attributable to individual accounts
under the Savings Plan, but including Shares
held in the Dividend Reinvestment Plan) as of
the close of business April 10, 1997 and as of
the Expiration Date, who tenders all such
Shares at or below the Purchase Price prior to
the Expiration Date and who checks the "Odd
Lots" box in the Letter of Transmittal.
Further Developments Regarding
the Offer..................... Call the Information Agent or consult your
broker.
3
<PAGE> 4
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION
OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
------------------------
TABLE OF CONTENTS
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SECTION PAGE
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SUMMARY.............................................................. 3
INTRODUCTION......................................................... 5
THE OFFER............................................................ 7
1. Number of Shares; Proration................................. 7
2. Tenders by Owners of Fewer than 100 Shares.................. 9
3. Procedure for Tendering Shares.............................. 10
4. Withdrawal Rights........................................... 14
5. Purchase of Shares and Payment of Purchase Price............ 15
6. Certain Conditions of the Offer............................. 16
7. Price Range of Shares; Dividends............................ 17
8. Background and Purpose of the Offer; Certain Effects of the
Offer....................................................... 18
9. Interests of Directors and Executive Officers; Transactions
and Arrangements Concerning the Shares...................... 19
10. Source and Amount of Funds.................................. 20
11. Certain Information about the Company....................... 20
12. Effects of the Offer on the Market for Shares; Registration
under the Exchange Act...................................... 28
13. Certain Legal Matters; Regulatory Approvals................. 28
14. Certain U.S. Federal Income Tax Consequences................ 29
15. Extension of the Offer; Termination; Amendments............. 31
16. Fees and Expenses........................................... 32
17. Miscellaneous............................................... 33
</TABLE>
4
<PAGE> 5
TO THE HOLDERS OF SHARES OF COMMON STOCK OF
SPX CORPORATION:
INTRODUCTION
SPX Corporation, a Delaware corporation (the "Company"), invites its
stockholders to tender shares of its common stock, par value $10.00 per share
(including the associated Preferred Stock Purchase Rights (the "Rights"), the
"Shares"), to the Company at prices not greater than $56 nor less than $48 per
Share in cash, specified by tendering stockholders, upon the terms and subject
to the conditions set forth in this Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $56 nor less than
$48 per Share), net to the seller in cash (the "Purchase Price"), that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 2,700,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $56 nor less than $48 per Share)
validly tendered and not withdrawn pursuant to the Offer. The Company will pay
the Purchase Price for all Shares validly tendered prior to the Expiration Date
(as defined in Section 1) at prices at or below the Purchase Price and not
withdrawn, upon the terms and subject to the conditions of the Offer including
the proration terms described below.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
If, before the Expiration Date, more than 2,700,000 Shares (or such greater
number of Shares as the Company may elect to purchase) are validly tendered at
or below the Purchase Price and not withdrawn, the Company will, upon the terms
and subject to the conditions of the Offer, purchase Shares first from all Odd
Lot Owners (as defined in Section 2) who validly tender all their Shares at or
below the Purchase Price and then on a pro rata basis from all other
stockholders who validly tender Shares at prices at or below the Purchase Price
(and do not withdraw them prior to the Expiration Date). The Company will return
at its own expense all Shares not purchased pursuant to the Offer, including
Shares tendered at prices greater than the Purchase Price and not withdrawn and
Shares not purchased because of proration. The Purchase Price will be paid net
to the tendering stockholder in cash for all Shares purchased. Tendering
stockholders will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer
taxes on the Company's purchase of Shares pursuant to the Offer. HOWEVER, ANY
TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO
THE DEPOSITARY (AS DEFINED BELOW) THE SUBSTITUTE FORM W-9 THAT IS INCLUDED WITH
THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO 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. In addition, the Company will pay
all fees and expenses of Goldman, Sachs & Co. (the "Dealer Managers"),
Kissel-Blake Inc. (the "Information Agent") and The Bank of New York (the
"Depositary") in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company is making the Offer in order (i) to enhance long-term
stockholder value by implementing a comprehensive financial strategy that will
use the Company's cash and debt
5
<PAGE> 6
capacity to improve the Company's capital structure and lower its cost of
capital for the benefit of its stockholders and (ii) to afford to those
stockholders who desire liquidity an opportunity to sell all or a portion of
their Shares without the usual transaction costs associated with open market
sales. The Board of Directors believes the Company's financial condition and
outlook for cash generation will allow it to meet the Company's first priority,
which is to reinvest in the business, including through acquisitions. The Board
of Directors believes that the purchase of Shares is an attractive use of the
Company's financial resources and that the use of borrowing to fund the Offer
will result in a more efficient and balanced capital structure for the Company.
As part of the new capital structure strategy, the Company's Board of Directors
also adopted new policies pertaining to the distribution to its stockholders of
excess cash not required for value-enhancing investments, including
acquisitions. To this end, the Board has suspended the payment of regular
quarterly cash dividends to the Company's stockholders, although it anticipates
additional distributions to stockholders at appropriate times in the form of
open market share repurchases or otherwise. After the Share repurchase is
completed, the Company believes it will have ready access to sources of capital
sufficient to fund investments in the business, including through acquisition
opportunities that might become available.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $56 nor less than $48 per Share) at which they are willing to sell
their Shares and, if any such Shares are purchased pursuant to the Offer, to
sell those Shares for cash without the usual transaction costs associated with
open-market sales. In addition, the Offer may give stockholders the opportunity
to sell Shares at prices greater than market prices prevailing prior to
announcement of the Offer.
In addition to its authorization of the Offer, the Board of Directors has
also authorized the Company to purchase in open market or privately negotiated
transactions, or otherwise, up to 200,000 additional Shares after the
consummation of the Offer. Any such open market or privately negotiated purchase
may be on the same terms or on terms more favorable or less favorable to
stockholders than the terms of the Offer. However, the Company is not obligated
to make any such open market or privately negotiated purchase, and no assurance
can be given that the Company will engage in such transactions. In any event,
the Company will not make (and is restricted from doing so under Rule 13e-4(f))
any such purchases until the expiration of at least ten business days after the
termination of the Offer.
The Company's Savings and Stock Ownership Plan (the "Savings Plan") holds
Shares in the SPX Corporation Stock Fund under the Savings Plan (the "Fund").
Interests in the Fund are held in unallocated accounts or, if allocated, are
held on a unitized basis in individual accounts for participants under the
Savings Plan. Participants may instruct Fidelity Management Trust Company
("Fidelity"), as trustee of the Savings Plan, to tender all or part of the
Shares attributable to a participant's individual account by following the
instructions set forth in "Procedure for Tendering Shares -- Savings Plan" in
Section 3.
Stockholders who are participants in the Company's Dividend Reinvestment
Plan (the "Dividend Reinvestment Plan") may instruct The Bank of New York, as
administrator of the Dividend Reinvestment Plan, to tender part or all of the
Shares credited to a participant's account in the Dividend Reinvestment Plan by
following the instructions set forth in "Procedure for Tendering Shares --
Dividend Reinvestment Plan" in Section 3.
As of March 14, 1997, there were 14,877,014 Shares outstanding and 555,900
Shares issuable upon exercise of outstanding vested stock options under the
Company's stock option plans or agreements relating thereto (the "Options"). The
2,700,000 Shares that the Company is offering to purchase represent
approximately 18% of the outstanding Shares (approximately 17% assuming the
exercise of all outstanding vested Options). In addition to the foregoing,
1,513,250 Shares are issuable upon exercise of outstanding unvested options
under the Company's stock option plans or agreements relating thereto, which
options are eligible for vesting at various times through 2002. The Shares are
listed and principally traded on the New York Stock Exchange, Inc. ("NYSE")
under the symbol "SPW." The Shares are also listed and traded on the Pacific
Stock Exchange. On April 9, 1997, the last full trading day on the NYSE prior to
the announcement by the Company of the price range of and the number of Shares
sought in the Offer, the closing per Share sales price as reported on the NYSE
Composite Tape was $45 7/8. THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT
QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
6
<PAGE> 7
THE OFFER
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) 2,700,000 Shares or such lesser number
of Shares as are validly tendered before the Expiration Date (and not withdrawn
in accordance with Section 4) at a net cash price (determined in the manner set
forth below) not greater than $56 nor less than $48 per Share. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Thursday, May 8,
1997, unless and until the Company in its sole discretion shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. See Section 15 for a description of
the Company's right to extend the time during which the Offer is open and to
delay, terminate or amend the Offer. Subject to Section 2, if the Offer is
oversubscribed, Shares tendered at or below the Purchase Price before the
Expiration Date will be eligible for proration. The proration period also
expires on the Expiration Date.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will allow
it to buy 2,700,000 Shares (or such lesser number as are validly tendered at
prices not greater than $56 nor less than $48 per Share) validly tendered and
not withdrawn pursuant to the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 2,700,000 Shares pursuant to the Offer. See
Section 15. In accordance with applicable regulations of the Securities and
Exchange Commission (the "Commission"), the Company may purchase pursuant to the
Offer an additional amount of Shares not to exceed 2% of the outstanding Shares
without amending or extending the Offer. If (i) the Company increases or
decreases the price to be paid for Shares, the Company increases or decreases
the Dealer Managers' soliciting fee, the Company increases the number of Shares
being sought and such increase in the number of Shares being sought exceeds 2%
of the outstanding Shares, or the Company decreases the number of Shares being
sought and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of such increase or decrease is first published, sent or given
in the manner specified in Section 15, the Offer will be extended until the
expiration of such period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder desiring to tender Shares must specify the price (not greater than
$56 nor less than $48 per Share) at which such stockholder is willing to have
the Company purchase Shares. As promptly as practicable following the Expiration
Date, the Company will, in its sole discretion, determine the Purchase Price
(not greater than $56 nor less than $48 per Share) that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will allow
it to buy 2,700,000 Shares (or such lesser number of Shares as are validly
tendered at prices not greater than $56 nor less than $48 per Share) validly
tendered and not withdrawn pursuant to the Offer. The Company will pay the
Purchase Price, even if such Shares were tendered below the Purchase Price, for
all Shares validly tendered prior to the Expiration Date at prices at or below
the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer. All Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater
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than the Purchase Price and Shares not purchased because of proration, will be
returned to the tendering stockholders at the Company's expense as promptly as
practicable following the Expiration Date.
If the number of Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date is less than or equal to 2,700,000
Shares (or such greater number of Shares as the Company may elect to purchase),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
Priority. Upon the terms and subject to the conditions of the Offer, in the
event that prior to the Expiration Date more than 2,700,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) are validly tendered at or below the Purchase Price and not withdrawn,
the Company will purchase such validly tendered Shares in the following order of
priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any Odd Lot Owner (as defined in
Section 2) who:
(a) tenders all Shares (other than Shares attributable to individual
accounts under the Savings Plan) beneficially owned by such Odd Lot owner
at or below the Purchase Price (partial tenders will not qualify for this
preference); and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date on a pro rata basis.
Proration. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Date. Proration for each stockholder tendering Shares
(other than Odd Lot Owners) shall be based on the ratio of the number of Shares
tendered by such stockholder at or below the Purchase Price to the total number
of Shares tendered by all stockholders (other than Odd Lot Owners) at or below
the Purchase Price. This ratio will be applied to stockholders tendering Shares
(other than Odd Lot Owners) to determine the number of Shares that will be
purchased from each such stockholder pursuant to the Offer. Although the Company
does not expect to be able to announce the final results of such proration until
approximately seven business days after the Expiration Date, it will announce
preliminary results of proration by press release as promptly as practicable
after the Expiration Date. Stockholders can obtain such preliminary information
from the Information Agent and may be able to obtain such information from their
brokers.
On June 25, 1996, the Company's Board of Directors declared a dividend
distribution of one Right for each Share outstanding on June 25, 1996 (the
"Record Date"). Each Share issued subsequent to the Record Date had a Right
attached to it. The Rights expire on June 25, 2006 unless earlier redeemed by
the Company. Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company at an exercise price of $100,
subject to adjustment. The Rights generally become exercisable upon the
acquisition by a person of 15% or more of the Shares. The Rights are not
currently exercisable and trade together with the Shares associated therewith.
The Rights will not become exercisable or separately tradeable as a result of
the Offer. Absent circumstances causing the Rights to become exercisable or
separately tradeable prior to the Expiration Date, the tender of any Shares
pursuant to the Offer will also constitute a tender of the associated Rights. No
separate consideration will be paid for such Rights. Upon the purchase of Shares
by the Company pursuant to the Offer, the sellers of the Shares so purchased
will no longer have an interest in the Rights associated with such Shares. Upon
completion of the Offer, the Company expects that one or more current
stockholders might exceed the 15% ownership threshold which generally triggers
exercisability of the Rights. Because the terms of the Rights
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<PAGE> 9
provide an exception to the exercisability trigger for stockholders who
involuntarily exceed such threshold as a result of stock repurchases by the
Company, the completion of the Offer, by itself, will not result in
exercisability of the Rights. Such stockholders may not, however, voluntarily
acquire any additional Shares following completion of the Offer without
triggering exercisability of the Rights.
As described in Section 14, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and therefore may be relevant
to a stockholder's decision whether to tender Shares. The Letter of Transmittal
affords each tendering stockholder the opportunity to designate the order of
priority in which Shares tendered are to be purchased in the event of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares as of April 4, 1997 and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the Company's stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price and not withdrawn on or prior to the Expiration Date by
or on behalf of stockholders who beneficially owned as of the close of business
on April 10, 1997 and continue to beneficially own as of the Expiration Date, an
aggregate of fewer than 100 Shares, excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the Dividend
Reinvestment Plan ("Odd Lot Owners"). To avoid proration, however, an Odd Lot
Owner must validly tender at or below the Purchase Price all such Shares
(excluding Shares attributable to individual accounts under the Savings Plan,
but including Shares held in the Dividend Reinvestment Plan) that such Odd Lot
Owner beneficially owns; partial tenders will not qualify for this preference.
This preference is not available to partial tenders or to owners of 100 or more
Shares in the aggregate (excluding Shares attributable to individual accounts
under the Savings Plan, but including Shares held in the Dividend Reinvestment
Plan), even if such owners have separate stock certificates for fewer than 100
such Shares. Any Odd Lot Owner wishing to tender all such Shares beneficially
owned by such stockholder pursuant to this Offer must complete the box captioned
"Odd Lots" in the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery and must properly indicate in the section entitled "Price
(In Dollars) Per Share At Which Shares Are Being Tendered" in the Letter of
Transmittal the price at which such Shares are being tendered, except that an
Odd Lot Owner may check the box in the section entitled "Odd Lots" indicating
that the stockholder is tendering all of such stockholder's Shares (excluding
Shares attributable to individual accounts under the Savings Plan, but including
Shares held in the Dividend Reinvestment Plan) at the Purchase Price. See
Section 3. Stockholders owning an aggregate of less than 100 Shares whose Shares
are purchased pursuant to the Offer will avoid both the payment of brokerage
commissions and any applicable odd lot discounts payable on a sale of their
Shares in transactions on a stock exchange.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any stockholder who tendered any Shares beneficially
owned at or below the Purchase Price and who, as a result of proration, would
then beneficially own an aggregate of fewer than 100 Shares. If the Company
exercises this right, it will increase the number of Shares that it is offering
to purchase in the Offer by the number of Shares purchased through the exercise
of such right.
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<PAGE> 10
3. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) with any required
signature guarantees, and any other documents required by the Letter of
Transmittal, must be received prior to 12:00 midnight, New York City time,
on the Expiration Date by the Depositary at its address set forth on the
back cover of this offer to Purchase; or
(ii) the tendering stockholder must comply with the guaranteed
delivery procedure set forth below.
AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH
STOCKHOLDER DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY
INDICATE IN THE SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES
ARE BEING TENDERED" IN THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF
$.25) AT WHICH SUCH STOCKHOLDER'S SHARES ARE BEING TENDERED, EXCEPT THAT AN ODD
LOT OWNER MAY CHECK THE BOX IN THE SECTION OF THE LETTER OF TRANSMITTAL ENTITLED
"ODD LOTS" INDICATING THAT THE STOCKHOLDER IS TENDERING ALL OF SUCH
STOCKHOLDER'S SHARES AT THE PURCHASE PRICE. Stockholders desiring to tender
Shares at more than one price must complete separate Letters of Transmittal for
each price at which Shares are being tendered, except that the same Shares
cannot be tendered (unless properly withdrawn previously in accordance with the
terms of the offer) at more than one price. IN ORDER TO VALIDLY TENDER SHARES,
ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH
LETTER OF TRANSMITTAL. Stockholders wishing to maximize the possibility that
their Shares will be purchased at the Purchase Price may check the box on the
Letter of Transmittal marked "Shares Tendered at Price Determined by Dutch
Auction." Checking this box may result in a purchase of the Shares so tendered
at the minimum price of $48.
In addition, Odd Lot Owners who tender all Shares must complete the section
entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Owners as set forth in Section 2.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is signed
by the registered holder of the Shares (which term, for purposes of this
Section, includes any participant in The Depository Trust Company or
Philadelphia Depository Trust Company (the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the holder of the Shares)
tendered therewith and payment and delivery are to be made directly to such
registered holder, or (ii) if Shares are tendered for the account of a member
firm of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
(not a savings bank or savings and loan association) having an office, branch or
agency in the United States (each such entity being hereinafter referred to as
an "Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of
the Letter of Transmittal. If a certificate representing Shares is registered in
the name of a person other than the signer of a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to be issued, to
a person other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate, with the signature on
the certificate or stock power guaranteed by an Eligible Institution. In this
regard see Section 5 for information with respect to applicable stock transfer
taxes. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities as described above), a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) and any other
documents required by the Letter of Transmittal.
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<PAGE> 11
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such Shares into the Depositary's account in accordance with such
facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into the Depositary's account at one of the
Book-Entry Transfer Facilities, a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof), with any required signature
guarantees and other required documents must, in any case, be transmitted to and
received by the Depositary at one of its addresses set forth on the back cover
of this offer to Purchase prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be followed. DELIVERY OF THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier,
telegram or facsimile transmission), on or prior to the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this offer to
Purchase (indicating the price at which the Shares are being tendered),
including (where required) a signature guarantee by an Eligible Institution
in the form set forth in such Notice of Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) and any required signature
guarantees or other documents required by the Letter of Transmittal, are
received by the Depositary within three NYSE trading days after the date
the Depositary receives such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a stockholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the offer or, in the case of Shares tendered by
book-entry transfer at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering stockholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such stockholder.
Backup Federal Income Tax Withholding. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the stockholder or other payee provides
such person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies under penalties of
perjury that such number is correct. Therefore,
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each tendering stockholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding, unless such stockholder
otherwise establishes to the satisfaction of the Depositary that the stockholder
is not subject to backup withholding. Certain stockholders (including, among
others, all corporations and certain foreign stockholders (in addition to
foreign corporations)) are not subject to these backup withholding and reporting
requirements. In order for a foreign stockholder to qualify as an exempt
recipient for purposes of backup withholding tax, that stockholder must submit
an IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury,
attesting to that stockholder's exempt status. Such statements can be obtained
from the Depositary. See Instructions 10 and 11 of the Letter of Transmittal.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH
STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING
MUST PROVIDE THE DEPOSITARY WITH THE STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of certain United States federal income tax consequences
to tendering stockholders, see Section 14.
Withholding for Foreign Stockholders. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or his or her agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. For this purpose, a foreign stockholder is any
stockholder that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof or
(iii) an estate or trust, the income of which is subject to United States
federal income taxation regardless of the source of such income. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
stockholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. In order to obtain an exemption from
withholding on the grounds that the gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business within the
United States, a foreign stockholder must deliver to the Depositary a properly
completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced rate
of, or exemption from, withholding by reference to any outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete redemption", "substantially
disproportionate" or "not essentially equivalent to a dividend" tests described
in Section 14 or is otherwise able to establish that no tax or a reduced amount
of tax is due. Backup withholding generally will not apply to amounts subject to
the 30% or a treaty-reduced rate of withholding. Foreign stockholders are urged
to consult their own tax advisors regarding the application of United States
federal income tax withholding, including eligibility for a withholding tax
reduction or exemption, and the refund procedure. See Instructions 10 and 11 of
the Letter of Transmittal.
Savings Plan. As of December 31, 1996, the Savings Plan owned 713,663
Shares, all of which were held in the Fund. Interests in the Fund are held in
unallocated accounts, or are allocated to the individual accounts of the Savings
Plan participants, beneficiaries of deceased participants and alternate payees
pursuant to qualified domestic relations orders (collectively referred to as
"Participants"). Such Shares will, subject to the limitations of the Employee
Retirement Income
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<PAGE> 13
security Act of 1974, as amended ("ERISA"), and applicable regulations
thereunder, be tendered by Fidelity, as trustee of the Savings Plan, in
accordance with the terms of the applicable trust agreements. The trust
agreement requires Fidelity to tender Shares attributable to Participant
accounts according to the timely instructions of Participants to Fidelity, and
to tender Shares attributable to the unallocated accounts in proportion to the
timely tender instructions received from Participants. The trust agreement
provides that Fidelity is not to tender Shares attributable to Participant
accounts for which Fidelity has received no timely instructions. Fidelity will
follow the terms of the trust agreement unless otherwise required by law.
Fidelity will make available to the Participants to whose individual accounts
Shares reflecting their interest in the Fund are credited all documents
furnished to stockholders generally in connection with the Offer to the extent
such materials are provided to Fidelity. Each such Participant will also receive
a form upon which the Participant may instruct Fidelity regarding the Offer.
Each Participant may direct that all, some or none of the Shares attributable to
individual accounts under the Savings Plan be tendered and the price at which
such Shares are to be tendered. Fidelity will also provide additional
information in a separate letter with respect to the application of the offer to
Participants in the Savings Plan. PARTICIPANTS IN THE SAVINGS PLAN MAY NOT USE
THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF THE SHARES ATTRIBUTABLE TO
THEIR INDIVIDUAL ACCOUNTS, BUT MUST USE THE SEPARATE FORM SENT TO THEM.
PARTICIPANTS IN THE SAVINGS PLAN ARE URGED TO READ THE SEPARATE FORM AND RELATED
MATERIALS CAREFULLY. All proceeds received by Fidelity with respect to Shares
held in unallocated accounts in the Savings Plan will be invested in the
Fidelity Institutional Cash Portfolios: Money Market Class I. All proceeds
received by Fidelity on account of Shares attributable to Participant accounts
will be reinvested in the Fidelity Money Market Portfolio as soon as
administratively possible and such investment will be credited to the Saving
Plan Participant's individual account. Participants may contact Fidelity after
the reinvestment is complete at 1-800-835-5091 to have any proceeds of the sale
of Shares attributable to their accounts which were invested in the Fidelity
Retirement Money Market Portfolio invested in other investment options offered
under the Savings Plan.
Dividend Reinvestment Plan. As of April 9, 1997, the Dividend Reinvestment
Plan owned 84,486 Shares. Shares credited to participants' accounts under the
Dividend Reinvestment Plan will be tendered by The Bank of New York, as
administrator, according to instructions provided to the administrator from
participants in the Dividend Reinvestment Plan. Shares for which the
administrator has not received timely instructions from participants will not be
tendered. The administrator will make available to the participants whose
accounts are credited with Shares under the Dividend Reinvestment Plan all
documents furnished to stockholders generally in connection with the Offer.
BECAUSE THE DEPOSITARY FOR THE OFFER ALSO ACTS AS ADMINISTRATOR OF THE DIVIDEND
REINVESTMENT PLAN, PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN MAY USE THE
LETTER OF TRANSMITTAL TO INSTRUCT THE ADMINISTRATOR REGARDING THE OFFER BY
COMPLETING THE BOX ENTITLED "DIVIDEND REINVESTMENT PLAN SHARES." Each
participant may direct that all, some or none of the Shares credited to the
participant's account under the Dividend Reinvestment Plan be tendered and the
price at which such participant's Shares are to be tendered. Participants in the
Dividend Reinvestment Plan are urged to read the Letter of Transmittal and
related materials carefully.
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person
acting alone or in concert with others, directly or indirectly, to tender Shares
for such person's own account unless at the time of tender and at the Expiration
Date such person has a "net long position" equal to or greater than the amount
tendered in (i) the Shares and will deliver or cause to be delivered such Shares
for the purpose of tender to the Company within the period specified in the
Offer, or (ii) other securities immediately convertible into, exercisable for or
exchangeable into Shares ("Equivalent Securities") and, upon the acceptance of
such tender, will acquire such Shares by conversion, exchange or exercise of
such Equivalent Securities to the extent required by the terms of the Offer and
will deliver or cause to be
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delivered such Shares so acquired for the purpose of tender to the Company
within the period specified in the Offer. Rule 14e-4 also provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. A tender of Shares made pursuant to any method of delivery set
forth herein will constitute the tendering stockholder's representation and
warranty to the Company that (i) such stockholder has a "net long position" in
Shares or Equivalent Securities being tendered within the meaning of Rule 14e-4,
and (ii) such tender of Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will constitute
a binding agreement between the tendering stockholder and the Company upon the
terms and subject to the conditions of the Offer.
Determinations of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders it determines not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares or any particular stockholder. No tender of
Shares will be deemed to be properly made until all defects or irregularities
have been cured or waived. None of the Company, the Dealer Managers, the
Depositary, the Information Agent or any other person is or will be obligated to
give notice of any defects or irregularities in tenders, and none of them will
incur any liability for failure to give any such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless accepted for
payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 Midnight, New York City time, on Friday, June 6, 1997.
For a withdrawal to be effective, the Depositary must receive (at its
address set forth on the back cover of this offer to Purchase) a notice of
withdrawal in written, telegraphic or facsimile transmission form on a timely
basis. Such notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares tendered, the number
of Shares to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares. If the certificates have been
delivered or otherwise identified to the Depositary, then, prior to the release
of such certificates, the tendering stockholder must also submit the serial
numbers shown on the particular certificates evidencing the Shares and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry transfer
set forth in Section 3, the notice of withdrawal must specify the name and the
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility. All questions as to the form and validity, including time of
receipt, of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties. None
of the Company, the Dealer Managers, the Depositary, the Information Agent or
any other person is or will be obligated to give any notice of any defects or
irregularities in any notice of withdrawal, and none of them will incur, any
liability for failure to give any such notice. Withdrawals
14
<PAGE> 15
may not be rescinded, and any Shares properly withdrawn will thereafter be
deemed not tendered for purposes of the Offer. However, withdrawn Shares may be
retendered before the Expiration Date by again following any of the procedures
described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
Participants in the Dividend Reinvestment Plan should notify the Depositary
in accordance with the procedures for withdrawal set forth in this Section 4 in
the event that they wish to deliver a notice of withdrawal, and should specify
in such notice of withdrawal that the Shares to be withdrawn pursuant thereto
are credited to such participant's account in the Dividend Reinvestment Plan.
Participants in the Savings Plan should disregard the foregoing procedures with
respect to Shares attributable to their individual accounts and should follow
the procedures for withdrawal included in the letter furnished to such
participants by Fidelity.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders, and will accept for payment and pay for (and thereby purchase)
Shares validly tendered at or below the Purchase Price and not withdrawn as soon
as practicable after the Expiration Date. The Company will select the lowest
Purchase Price that will allow it to buy 2,700,000 Shares (or such lesser number
of Shares as are validly tendered at prices not greater than $56 nor less than
$48 per Share) validly tendered and not withdrawn pursuant to the Offer. For
purposes of the Offer, the Company will be deemed to have accepted for payment
(and therefore purchased), subject to proration, Shares that are validly
tendered at or below the Purchase Price and not withdrawn when, as and if it
gives oral or written notice to the Depositary of its acceptance of such Shares
for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per Share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Date. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other required documents.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering stockholders. In the
event of proration, the Company will determine the proration factor and pay for
those tendered Shares accepted for payment as soon as practicable after the
Expiration Date. However, the Company does not expect to be able to announce the
final results of any such proration until approximately seven business days
after the Expiration Date. Under no circumstances will the Company pay interest
on the Purchase Price including, without limitation, by reason of any delay in
making payment. Certificates for all Shares not purchased, including all Shares
tendered at prices greater than the Purchase Price and Shares not purchased due
to proration, will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to the account maintained with one of the
Book-Entry Transfer Facilities by the participant who so delivered such Shares)
as promptly as practicable following the Expiration Date or termination of
15
<PAGE> 16
the Offer without expense to the tendering stockholder. In addition, if certain
events occur, the Company may not be obligated to purchase Shares pursuant to
the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer; provided, however,
that if payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Shares 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 signing the Letter of
Transmittal, the amount of all stock transfer taxes, if any (whether imposed on
the registered holder or such other person), payable on account of the transfer
to such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of such taxes or exemption therefrom
is submitted. See Instruction 7 of the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX
CONSEQUENCES FOR FOREIGN STOCKHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
promulgated under the Exchange Act, if at any time on or after April 11, 1997
and prior to the time of payment for any such Shares (whether any Shares have
theretofore been accepted for payment, purchased or paid for pursuant to the
Offer) any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) that, in the Company's judgment in
any such case and regardless of the circumstances giving rise thereto (including
any action or omission to act by the Company), makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending before any
court, agency, authority or other tribunal any action, suit or proceeding
by any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which (i) challenges or seeks to make
illegal, or to delay or otherwise directly or indirectly to restrain,
prohibit or otherwise affect the making of the Offer, the acquisition of
Shares pursuant to the Offer or is otherwise related in any manner to, or
otherwise affects, the Offer; or (ii) could, in the sole judgment of the
Company, materially affect the business, condition (financial or other),
income, operations or prospects of the Company and its subsidiaries, taken
as a whole, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company and its subsidiaries, taken
as a whole, or materially impair the Offer's contemplated benefits to the
Company; or
(b) there shall have been any action threatened or taken, or any
approval withheld, or any statute, rule or regulation invoked, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by any
government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the sole judgment of the
Company, would or might directly or indirectly result in any of the
consequences referred to in clause (i) or (ii) of paragraph (a) above; or
16
<PAGE> 17
(c) there shall have occurred (i) the declaration of any banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory); (ii) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market; (iii) the
commencement of a war, armed hostilities or any other national or
international crisis directly or indirectly involving the United States;
(iv) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event which, in
the sole judgment of the Company, might materially affect, the extension of
credit by banks or other lending institutions in the United States; (v) any
significant decrease in the market price of the Shares or in the market
prices of equity securities generally in the United States or any change in
the general political, market, economic or financial conditions or in the
commercial paper markets in the United States or abroad that could have in
the sole judgment of the Company a material adverse effect on the business,
condition (financial or otherwise), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or on the trading in the
Shares or on the proposed financing for the Offer; (vi) in the case of any
of the foregoing existing at the time of the announcement of the Offer, a
material acceleration or worsening thereof; or (vii) any decline in either
the Dow Jones Industrial Average or the S&P 500 Composite Index by an
amount in excess of 10% measured from the close of business on April 10,
1997; or
(d) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which in the sole judgment of the
Company is or may be material to the Company and its subsidiaries taken as
a whole; or
(e) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned that
(i) any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) shall have acquired or proposed to acquire beneficial
ownership of more than 5% of the outstanding Shares, or any new group shall
have been formed that beneficially owns more than 5% of the outstanding
Shares; or
(f) any person or group shall have filed a Notification and Report
Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
reflecting an intent to acquire the Company or any of its Shares.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived by
the Company in whole or in part. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time. Any determination by the Company concerning the
events described above and any related judgment or decision by the Company
regarding the inadvisability of proceeding with the purchase of or payment for
any Shares tendered will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and principally traded on the NYSE. The Shares are
also listed and traded on the Pacific Stock Exchange. The high and low closing
sales prices per Share on the NYSE
17
<PAGE> 18
Composite Tape as compiled from published financial sources and the quarterly
cash dividends paid per Share for the periods indicated are listed below:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C> <C> <C>
FISCAL 1995
1st Quarter............................................... $17 3/8 $14 1/4 $.10
2nd Quarter............................................... 15 1/8 10 3/4 .10
3rd Quarter............................................... 16 11 1/8 .10
4th Quarter............................................... 17 14 1/8 .10
FISCAL 1996
1st Quarter............................................... $18 1/8 $13 5/8 $.10
2nd Quarter............................................... 27 1/8 18 .10
3rd Quarter............................................... 31 5/8 21 5/8 .10
4th Quarter............................................... 40 1/2 26 7/8 .10
</TABLE>
The closing per Share sales price as reported on the NYSE Composite Tape on
April 9, 1997, the last full trading day before the announcement by the Company
of the price range of and the number of Shares sought in the Offer, was $45 7/8.
THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE
OF THE SHARES.
In connection with its consideration of the Offer and the implementation of
a new capital structure for the Company that will enhance long-term stockholder
value, the Board of Directors has suspended payment of regular quarterly
dividends in respect of the Shares. Stockholders should therefore not expect to
receive any such dividends in the foreseeable future, although the Board expects
to consider distributions to stockholders in the form of further open market
share repurchases and otherwise. See Introduction.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Company is making the Offer in order (i) to use the Company's cash and
debt capacity to improve the Company's capital structure and lower its cost of
capital for the benefit of its stockholders and (ii) to afford to those
stockholders who desire liquidity an opportunity to sell all or a portion of
their Shares without the usual transaction costs associated with open market
sales. The Board of Directors believes the Company's financial condition and
outlook for cash generation will allow it to meet the Company's first priority,
which is to reinvest in the business, including through acquisitions. The Board
of Directors believes that the purchase of Shares is an attractive use of the
Company's financial resources and that the use of borrowing to fund the Offer
will result in a more efficient capital structure for the Company. As part of
the new capital structure strategy, the Company's Board of Directors also
adopted new policies pertaining to the distribution to its stockholders of
excess cash not required for value-enhancing investments, including
acquisitions. To this end, the Board has suspended payment of regular quarterly
cash dividends to the Company's stockholders, although it anticipates additional
distributions at appropriate times in the form of open market share repurchases
or otherwise. After the share repurchase is completed, the Company believes it
will have ready access to sources of capital sufficient to fund investments in
the business, including through acquisition opportunities that might become
available.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $56 nor less than $48 per Share) at which they are willing to sell
their Shares and, if any such Shares are purchased pursuant to the Offer, to
sell those Shares for cash without the usual transaction costs associated with
open-market sales. In addition, the Offer may give stockholders the opportunity
to sell Shares at prices greater than market prices prevailing prior to
announcement of the Offer.
In addition to its authorization of the Offer, the Board of Directors has
also authorized the Company to purchase in open market or privately negotiated
transactions, or otherwise, up to
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<PAGE> 19
200,000 additional Shares after the consummation of the Offer. Any such open
market or privately negotiated purchase may be on the same terms or on terms
more favorable or less favorable to stockholders than the terms of the Offer.
However, the Company is not obligated to make any such open market or privately
negotiated purchases, and no assurance can be given that the Company will engage
in such transactions. In any event, the Company will not make (and is restricted
from doing so under Rule 13e-4(f)) any such purchases until the expiration of at
least ten business days after the termination of the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS HAS
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. THE COMPANY HAS BEEN
ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY
SHARES PURSUANT TO THE OFFER.
Shares the Company acquires pursuant to the Offer will be retained as
treasury stock by the Company (unless and until the Company determines to retire
such Shares) and will be available for the Company to issue without further
stockholder action (except as required by applicable law or, if retired, the
rules of any securities exchange on which Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in the Company's business and the satisfaction of
obligations under existing or future employee benefit plans and employment
agreements. The Company has no current plans for issuance of the Shares
repurchased pursuant to the Offer.
9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE SHARES
As of March 14, 1997, there were 14,877,014 Shares outstanding and 555,900
Shares issuable upon exercise of all outstanding vested Options. As of March 14,
1997, the Company's directors and executive officers as a group (19 persons)
beneficially owned 684,748 Shares (including Shares issuable to such persons
upon exercise of Options exercisable within sixty days of such date) which
constituted 4.7% of the outstanding Shares (including Shares issuable if Options
held by the Company's directors and executive officers exercisable within sixty
days of such date were exercised) at such time. If the Company purchases
2,700,000 Shares pursuant to the Offer (approximately 18% of the outstanding
Shares as of March 14, 1997) and no director or executive officer tenders Shares
pursuant to the Offer, then after the purchase of Shares pursuant to the Offer,
the Company's directors and executive officers as a group would beneficially own
approximately 6% of the outstanding Shares (including shares issuable if Options
held by the Company's directors and executive officers exercisable within sixty
days of such date were exercised). In addition to the foregoing, 1,513,250
Shares are issuable to the Company's directors and officers as a group upon
exercise of outstanding unvested options under the Company's stock option plans
or agreements relating thereto, which options are eligible for vesting at
various times through 2002.
Except as set forth in Schedule I hereto, based upon the Company's records
and upon information provided to the Company by its directors, executive
officers, associates and subsidiaries, neither the Company nor any of its
associates or subsidiaries or persons controlling the Company nor, to the best
of the Company's knowledge, any of the directors or executive officers of the
Company or any of its subsidiaries, nor any associates or subsidiaries of any of
the foregoing, has effected any transactions in the Shares during the 40
business days prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the Company or any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to
19
<PAGE> 20
any contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer with respect to any securities of
the Company (including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or the giving or withholding of
proxies, consents or authorizations).
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 2,700,000 Shares pursuant to the Offer
at a purchase price of $56 per Share, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer (but excluding
interest on funds borrowed to finance such purchase of Shares), to be
approximately $151.7 million. The Company anticipates that the funds necessary
to purchase Shares pursuant to the Offer and to pay the related fees and
expenses will come from a five-year Revolving Credit Facility ("Revolving Credit
Facility") to be supplied by The First National Bank of Chicago ("FNBC")
pursuant to a Commitment Letter ("Commitment Letter") dated March 31, 1997. FNBC
reserves the right to syndicate a portion of its aggregate commitment to one or
more other financial institutions. A copy of the Commitment Letter is filed as
Exhibit (b) to the Schedule 13E-4 and is incorporated herein by reference.
The Revolving Credit Facility will provide an initial maximum principal
availability of $400,000,000. Outstanding principal under the unsecured
Revolving Credit Facility will bear interest at the base rate (determined by
reference to FNBC's corporate base rate or to the Federal Funds effective rate)
or LIBOR plus an applicable margin based on the ratio of the Company's debt to
cash flow.
The Commitment Letter provides that the definitive agreement for the
Revolving Credit Facility will obligate the Company to pay certain facility
fees, arrangement fees, annual administrative fees, and to reimburse the lenders
thereunder for certain fees and expenses they incur in making the loan. The
Commitment Letter also provides that the definitive loan agreement will contain
certain financial covenants related to the Company's ratios of debt to cash flow
and cash flow (plus rentals but less capital expenditures) to interest expense
(plus rentals). The Commitment Letter provides that the definitive loan
agreement will contain usual and customary (a) affirmative and negative
covenants, including restrictions on the Company's ability, and the ability of
certain of its subsidiaries, subject to certain exceptions, to incur debt, pay
dividends, make investments and acquisitions, sell assets, enter into mergers
and redeem or repurchase stock and (b) events of default, including failure to
pay principal or interest, breaches of representations or covenants, certain
events of bankruptcy or insolvency and a change in control (as defined therein).
The Company expects to repay the borrowings used to purchase Shares
pursuant to the Offer through, depending on business and market conditions,
public or private offerings of securities, additional bank borrowings, issuance
of commercial paper, internally generated funds or other financings, or such
combination of the foregoing as the Company may deem appropriate. See "Pro Forma
Financial Information" for further information concerning the assumed cost of
funds for the Offer.
11. CERTAIN INFORMATION ABOUT THE COMPANY
The Company is a global provider of vehicle service solutions to franchised
dealers and independent service locations, service support to vehicle
manufacturers and original equipment components to the world-wide motor vehicle
industry.
The Company's principal executive offices are located at 700 Terrace Point
Drive, Muskegon, Michigan 49443, and the Company's telephone number is (616)
724-5000.
20
<PAGE> 21
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following table presents summary historical consolidated financial data
for the periods indicated. The historical financial data (other than the ratios
of earnings to fixed charges) for the years ended December 31, 1996 and 1995
were derived from the audited Consolidated Financial Statements contained in the
Company's Annual Report on Form 10-K for the years ended December 31, 1996 and
1995. The following summary financial information should be read in conjunction
with, and is qualified in its entirety by reference to, the audited financial
statements and related notes, and other information pertaining to the Company,
including "Management's Discussion and Analysis of Financial Condition and
Results of Operations," contained in the Annual Report on Form 10-K for the
years ended December 31, 1996 and 1995 referred to above. Copies of these
reports may be obtained from the Commission in the manner specified in
"Additional Information" below.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996(7) 1995
------- ----
(IN MILLIONS, EXCEPT PER SHARE)
<S> <C> <C>
OPERATING DATA:
Revenues.................................................... $1,109.4 $1,098.1
Cost of products sold....................................... 850.1 853.5
SG&A........................................................ 186.5 194.5
Goodwill/Intangible amortization............................ 7.2 8.8
Minority interest loss...................................... -- 3.3
Earnings from equity interests.............................. (5.3) (3.8)
Restructuring charges and write-off goodwill(1)............. 87.9 10.7
-------- --------
Operating income (loss)..................................... (17.0) 31.1
Other expense, (income), net................................ (0.7) (3.0)
Interest expense, net....................................... 31.8 35.7
-------- --------
(Loss) before income taxes.................................. (48.1) (1.6)
Provision for income taxes.................................. 7.6 (0.2)
-------- --------
(Loss) from continuing operations........................... $ (55.7) $ (1.4)
Discontinued operation, net of taxes(2)..................... -- (2.8)
Extraordinary item, net of taxes(3)......................... (6.6) (1.1)
-------- --------
Net (loss).................................................. $ (62.3) $ (5.3)
(Loss) per share from continuing operations................. $ (3.98) (0.10)
(Loss) per share from discontinued operation................ -- (0.22)
Extraordinary item per share................................ (0.47) (0.08)
-------- --------
Net loss per share.......................................... $ (4.45) $ (0.40)
-------- --------
Weighted average shares outstanding......................... 14.0 13.2
Ratio of earnings to fixed charges(4)....................... -- --
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(5)................................................... $ 111.7 $ 85.3
Depreciation................................................ 32.7 33.2
Amortization................................................ 8.1 10.3
Capital expenditures........................................ 20.2 31.0
BALANCE SHEET DATA (AT PERIOD END):
Working Capital............................................. $ 233.7 $ 152.5
Property, plant and equipment, net.......................... 123.8 213.0
Total assets(6)............................................. 616.0 831.4
Long-term debt.............................................. 227.9 318.9
Shareholders' equity........................................ 105.9 162.2
Book value per share........................................ $ 7.52 $ 12.07
</TABLE>
- -------------------------
(1) In 1996, the Company recognized a $20 million ($12.4 million after-tax)
restructuring charge to combine five Specialty Service Tool divisions into
two divisions, rationalize certain international
21
<PAGE> 22
operations, and for an early retirement program. The Company also
recognized a $67.8 million write-off of goodwill related to the Automotive
Diagnostics Division in 1996. 1995 includes a $7 million restructuring
charge to begin the combination of five divisions into two and a $3.7
million restructuring charge to close a foundry operation in Germany.
(2) In 1995, the Company sold SPX Credit Corporation and recorded a loss on the
sale of this unit.
(3) During 1996, the Company purchased $99.9 million of its 11-3/4% senior
subordinated notes (the "Notes") at a premium of $6.6 million, net of taxes
and, in 1995, purchased $31.7 of these notes at a premium of $1.1 million,
net of taxes.
(4) For purposes of determining the ratio of earnings to fixed changes, earnings
consist of income (loss) before income taxes from continuing operations plus
fixed charges. Fixed charges consist of interest expense, net (including
amortization of deferred financing costs) and that portion of rent expense
estimated to be representative of the Interest factor. Earnings were
insufficient to cover fixed charges by $48.1 million for the year ended
December 31, 1996 and by $1.6 million for the year ended December 31, 1995.
If the 1996 restructuring charge and goodwill write-off of $87.9 million,
and the 1995 restructuring charge of $10.7 million are excluded, the ratio
of earnings to fixed charges would have been 2.10 for the year ended
December 31, 1996 and 1.22 for the year ended December 31, 1995.
(5) EBITDA represents operating income (loss) before restructuring charges and
write-off of goodwill, depreciation, and amortization, EBITDA is not
presented herein as an alternative measure of operating results, cash flow
(as defined by generally accepted accounting principles) or liquidity and
does not necessarily represent the cash available to fund cash requirements
of the Company. EBITDA is instead included because it is one measure used by
certain investors as an indicator of a company's operating performance and
its ability to service its indebtedness.
(6) Total assets include costs in excess of net assets of businesses acquired
("Goodwill") of $58.7 million at December 31, 1996 and $192.3 million at
December 31, 1995. At December 31, 1996, $59.5 million of goodwill was
included in "net assets under agreement for sale" and was included in the
disposition of Sealed Power Division ("SPD") on February 7, 1997. See Note 4
to the consolidated financial statements for further explanation.
(7) Includes SPD and Hy-Lift. SPD was sold on February 7, 1997 and Hy-Lift was
sold on November 1, 1996. Refer to Note 4 to the consolidated financial
statements for further explanation.
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<PAGE> 23
PRO FORMA FINANCIAL INFORMATION
SUMMARY UNAUDITED
PRO FORMA FINANCIAL INFORMATION
The following table presents summary unaudited pro forma consolidated
financial data for the periods indicated. The unaudited pro forma financial data
(other than the ratios of earnings to fixed charges) for the year ended December
31, 1996 was derived from the audited Consolidated Financial Statements
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996. The following summary financial information should be read in
conjunction with, and is qualified in its entirety by reference to, the audited
financial statements and related notes, and other information pertaining to the
Company, including "Management's Discussion and Analysis of Financial Condition
and Results of Operations," contained in the Annual Report on Form 10-K for the
year ended December 31, 1996 referred to above. Copies of these reports may be
obtained from the Commission in the manner specified in "Additional Information"
below.
On February 7, 1997, the Company completed the sale of substantially all of
the assets and rights used in the manufacture and distribution of piston rings
and cylinder liners, known as SPD. The sale to Dana Corporation was for $223
million of gross cash proceeds. In addition, the buyer assumed substantially all
of the liabilities and obligations of the business, excluding liabilities
related to income tax and certain other taxes, certain liabilities, debt, and
certain employee-related liabilities. Additionally, effective November 1, 1996,
the Company sold its Hy-Lift division to W.A. Thomas Company. Hy-Lift
manufactures and distributes engine valve train components to both the original
equipment market and aftermarket. The sales proceeds of $15 million were paid in
cash at the closing. The consolidated financial statements include the results
of SPD through December 31, 1996 and the results of Hy-Lift through November 1,
1996, its date of disposition. The consolidated balance sheets present the
assets and liabilities of SPD which were sold to or assumed by the buyer as "Net
assets under Agreement for Sale."
Starting in mid-March 1997, the Company announced a tender offer for the
remaining $128.4 million of the Notes. Tenders for $126.7 million of the Notes
occurred as of March 25, 1997. Payment will be made on April 14, 1997. The
premium to purchase the Notes will be recorded as an extraordinary item, net of
taxes. The Company expects to pay a pretax premium of $16.4 million, or $10
million aftertax, to purchase the Notes.
The unaudited pro forma operating data and financial ratios assume that (1)
the sales of SPD and Hy-Lift occurred as of January 1, 1996, (2) the purchase of
$126.7 million of the Notes occurred as of January 1, 1996, and (3) the
repurchase of Shares occurred as of January 1, 1996. The unaudited pro forma
balance sheet data assume that the sale of SPD, the purchase of the Notes, and
the repurchase of the Shares occurred as of the balance sheet date. The
unaudited pro forma information does not purport to represent what the results
of operations or financial position of the Company would actually have been if
these transactions had in fact occurred on such dates or to project the
Company's financial position or results of operations for any future period. For
additional information, see "Pro Forma Consolidated Financial Statements."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------
PRO FORMA (1)
--------------------------------
AT $48 PER AT $56 PER
SHARE SHARE
---------- ----------
(IN MILLIONS, EXCEPT PER SHARE)
<S> <C> <C>
OPERATING DATA:
Revenues.................................................... $839.9 $839.9
Cost of products sold....................................... 609.5 609.5
SG&A........................................................ 171.5 171.5
Goodwill/Intangible amortization............................ 5.4 5.4
Earnings from equity interests.............................. (0.9) (0.9)
Restructuring charges and write-off goodwill(1)............. 83.7 83.7
Operating income (loss)..................................... (29.3) (29.3)
Other expense, (income), net................................ (0.8) (0.8)
</TABLE>
23
<PAGE> 24
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------
PRO FORMA (1)
--------------------------------
AT $48 PER AT $56 PER
SHARE SHARE
---------- ----------
(IN MILLIONS, EXCEPT PER SHARE)
<S> <C> <C>
Interest expense, net....................................... 23.1 24.6
(Loss) before income taxes.................................. (51.6) (53.1)
Provision for income taxes.................................. 6.4 5.8
(Loss) from continuing operations(3)........................ $(58.0) $(58.9)
(Loss) per share from continuing operations................. $(5.13) $(5.21)
Weighted average shares outstanding......................... 11.3 11.3
Ratio of earnings to fixed charges(4)....................... -- --
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(5)................................................... $ 81.8 $ 81.8
Depreciation................................................ 20.3 20.3
Amortization................................................ 6.3 6.3
Capital expenditures........................................ 13.2 13.2
BALANCE SHEET DATA (AT PERIOD END):
Working Capital............................................. $ 86.9 $ 86.9
Property, plant and equipment, net.......................... 123.8 123.8
Total assets................................................ 482.2 482.2
Long-term debt.............................................. 191.0 212.6
Shareholders' equity........................................ (3.2) (24.8)
Book value per share........................................ $ (.28) $(2.19)
</TABLE>
- -------------------------
(1) The pro forma information assumes 2.7 million Shares are purchased by the
Company at $48 per Share and $56 per Share, with the purchase being financed
with borrowings under the Credit Facility of $130.1 million and $151.7
million, respectively. Expenses directly incurred to purchase the Shares are
included as part of the cost of the Shares acquired. The assumed interest
rate used in the pro forma on the revolving credit borrowings was 7.0%, the
current average interest rate experienced by the company.
(2) In 1996, the Company recognized a $15.8 million ($9.8 million aftertax)
restructuring charge to combine five Specialty Service Tool divisions into
two divisions and to rationalize certain international operations. The
Company also recognized a $67.8 million write-off goodwill related to the
Automotive Diagnostics division.
(3) Excludes the extraordinary item, net of taxes, for the early retirement of
debt in 1996, including any pro forma effect related to the repurchase of
the Shares.
(4) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes from continuing operations plus
fixed charges. Fixed charges consist of interest expense, net (including
amortization of deferred financing costs) and that portion of rent expense
estimated to be representative of the interest factor. Earnings were
insufficient to cover fixed charges by $51.6 million on a pro forma basis
assuming Shares were repurchased at $48 per share for the year ended
December 31, 1996, and by $53.1 million on a pro forma basis assuming Shares
were repurchased at $56 per share for the year ended December 31, 1996. If
the 1996 restructuring charge and write-off of goodwill, $83.7 million, is
excluded, the ratio of earnings to fixed charges would have been 2.20 on a
pro forma basis assuming Shares were repurchased at $48 per share for the
year ended December 31, 1996, and 2.09 on a pro forma basis assuming Shares
were repurchased at $56 per share for the year ended December 31, 1996.
(5) EBITDA represents operating income (loss) before restructuring charges and
write-off of goodwill, depreciation, and amortization. EBITDA is not
presented herein as an alternative measure of operating results, cash flow
(as defined by generally accepted accounting principles) or liquidity and
does not necessarily represent the cash available to fund cash requirements
of the company. EBITDA is instead included because it is one measure used by
certain investors as an indicator of a company's operating performance and
its ability to service its indebtedness.
24
<PAGE> 25
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited Pro Forma Consolidated Financial Statements of the
Company for the year ended December 31, 1996 are derived from the audited
Consolidated Financial Statements contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
On February 7, 1997, the Company completed the sale of substantially all of
the assets and rights used in the manufacture and distribution of piston rings
and cylinder liners, known as SPD. The sale to Dana Corporation was for $223
million of gross cash proceeds. In addition, the buyer assumed substantially all
of the liabilities and obligations of the business, excluding liabilities
related to income tax and certain other taxes, certain liabilities, debt, and
certain employee-related liabilities. Additionally, effective November 1, 1996,
the Company sold its Hy-Lift division to W.A. Thomas Company. Hy-Lift
manufactures and distributes engine valve train components to both the original
equipment market and aftermarket. The sales proceeds of $15 million were paid in
cash at the closing. The consolidated financial statements include the results
of SPD through December 31, 1996 and the results of Hy-Lift through November 1,
1996, its date of disposition. The consolidated balance sheets present the
assets and liabilities of SPD which were sold to or assumed by the buyer as "Net
assets under Agreement for Sale."
Starting in mid-March 1997, the Company announced a tender offer for the
remaining $128.4 million of the Notes. Tenders for $126.7 million of Notes
occurred as of March 25, 1997. Payment will be made on April 14, 1997. The
premium to purchase the Notes will be recorded as an extraordinary item, net of
taxes. The Company expects to pay a pretax premium of $16.4 million, or $10
million aftertax, to purchase the Notes.
The unaudited Condensed Pro Forma Consolidated Statement of Income for the
year ended December 31, 1996 assumes that (1) the sales of SPD and Hy-Lift
occurred as of January 1, 1996, (2) the purchase of $126.7 million of the Notes
occurred as of January 1, 1996, and (3) the repurchase of the Shares occurred as
of January 1, 1996. The unaudited Condensed Pro Forma Consolidated Balance Sheet
at December 31, 1996 assumes that the sale of SPD, the purchase of the Notes,
and the repurchase of the Shares occurred as of the balance sheet date. The
unaudited pro forma information does not purport to represent what the results
of operations or financial position of the Company would actually have been if
these transactions had in fact occurred on such dates or to project the
Company's financial position or results of operations for any future period.
The following summary financial information should be read in conjunction
with, and is qualified in its entirety by reference to, the audited financial
statements and related notes, and other information pertaining to the Company,
including "Management's Discussion and Analysis of Financial Condition and
Results of Operations," contained in the Annual Report on Form 10-K for the year
ended December 31, 1996. Copies of this report may be obtained from the
Commission in the manner specified in "Additional Information" below.
25
<PAGE> 26
SUMMARY CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------------------------------
AT $48 PURCHASE AT $56 PURCHASE
PRICE(4) PRICE(4)
SALE OF SPD AS --------------------- ---------------------
HISTORICAL & HY-LIFT(1) ADJUSTMENTS ADJUSTED ADJUST(4) PRO FORMA ADJUST(4) PRO FORMA
---------- ------------ ----------- -------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues..................... $1,109.4 $ (269.5) $ -- $839.9 $ -- $839.9 $ -- $839.9
Cost of products sold........ 850.1 (240.6) 609.5 609.5 609.5
SG&A......................... 186.5 (15.0) 171.5 171.5 171.5
Goodwill/intangible
amortization............... 7.2 (1.8) 5.4 5.4 5.4
Earnings from equity
interests.................. (5.3) 4.4 (0.9) (0.9) (0.9)
Restructuring charges and
write-off of goodwill...... 87.9 (4.2) -- 83.7 -- 83.7 -- 83.7
-------- -------- ------ ------ ----- ------ ------ ------
Operating income (loss)...... (17.0) (12.3) -- (29.3) -- (29.3) -- (29.3)
Other expense, (income),
net........................ (0.7) (0.1) (0.8) (0.8) (0.8)
Interest expense, net........ 31.8 -- (17.8)(2) 14.0 9.1 23.1 10.6 24.6
-------- -------- ------ ------ ----- ------ ------ ------
Income (loss) before
income..................... (48.1) (12.2) 17.8 (42.5) (9.1) (51.6) (10.6) (53.1)
Provisions for income
taxes...................... 7.6 (4.6) 6.8(3) 9.8 (3.4) 6.4 (4.0) 5.8
-------- -------- ------ ------ ----- ------ ------ ------
Income (loss) from continuing
operations(5).............. $ (55.7) $ (7.6) $ 11.0 $(52.3) $(5.7) $(58.0) $ (6.6) $(58.9)
-------- -------- ------ ------ ----- ------ ------ ------
Income (loss) per share from
continuing operations...... $ (3.98) $(3.74) $(5.13) $(5.21)
Weighted average shares...... 14.0 14.0 (2.7) 11.3 (2.7) 11.3
</TABLE>
- -------------------------
(1) Represents the results of the Hy-Lift division through November 1, 1996, its
date of disposition, and the results of SPD for the year ended December 31,
1996. SPD was sold on February 7, 1997.
(2) Adjustment to interest expense, net, to reflect the use of the net cash
proceeds from the sale of SPD to repurchase the Notes and the balance of the
proceeds applied to the revolving credit borrowings.
(3) Tax effect of the interest adjustment in (2) above at the Company's
incremental tax rate of 38%.
(4) Reflects increased interest expense as a result of borrowing to repurchase
the Shares. The tax benefit was calculated at the Company's incremental tax
rate of 38%.
(5) Excludes the extraordinary item, net of taxes, for the early retirement of
debt in 1996, including any pro forma effect related to (2) above.
26
<PAGE> 27
SUMMARY CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------------------------------------------------------------------------------
AT $48 PURCHASE AT $56 PURCHASE
PRICE(3) PRICE(3)
--------------- ---------------
SALE OF PURCHASE AS PRO PRO
HISTORICAL SPD(1) NOTES(2) ADJUSTED ADJUST(3) FORMA ADJUST(3) FORMA
---------- ------- -------- -------- --------- ----- --------- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and temporary investments... $ 12.3 $ 177.0 $(177.0) $ 12.3 $ -- $ 12.3 $ -- $ 12.3
Receivables...................... 96.5 96.5 96.5 96.5
Inventories...................... 109.2 109.2 109.2 109.2
Deferred income tax asset and
refunds........................ 42.2 42.2 42.2 42.2
Net assets under agreement for
sale........................... 133.8 (133.8) -- -- --
Prepaid and other current
assets......................... 14.1 -- -- 14.1 -- 14.1 -- 14.1
------ ------- ------- ------ ------- ------- ------- ------
Total current assets........... $408.1 $ 43.2 $(177.0) $274.3 $ -- $ 274.3 $ -- $274.3
Investments...................... 3.5 3.5 3.5 3.5
Property, plant & equipment,
net............................ 123.8 123.8 123.8 123.8
Other assets..................... 21.9 21.9 21.9 21.9
Costs in excess of net assets of
business acquired.............. 58.7 -- -- 58.7 -- 58.7 -- 58.7
------ ------- ------- ------ ------- ------- ------- ------
Total assets................... $616.0 $ 43.2 $(177.0) $482.2 $ -- $ 482.2 $ -- $482.2
------ ------- ------- ------ ------- ------- ------- ------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Notes payable and current
maturities of long-term debt... $ 1.4 $ -- $ -- $ 1.4 $ -- $ 1.4 $ -- $ 1.4
Accounts payable................. 53.0 53.0 53.0 53.0
Accrued liabilities.............. 115.0 13.0 128.0 -- 128.0 -- 128.0
Income taxes payable............. 5.0 -- -- 5.0 -- 5.0 -- 5.0
------ ------- ------- ------ ------- ------- ------- ------
Current Liabilities............ $174.4 $ 13.0 $ -- $187.4 $ -- $ 187.4 $ -- $187.4
Long-term liabilities............ 92.6 5.0 97.6 97.6 97.6
Deferred income taxes............ 15.2 (5.8) 9.4 9.4 9.4
Long-term debt:
Revolving credit agreement....... 73.0 (40.3) 32.7 130.1 162.8 151.7 184.4
11 3/4% Senior Subordinated
Notes.......................... 128.4 (126.7) 1.7 1.7 1.7
All Other........................ 26.5 -- -- 26.5 -- 26.5 -- 26.5
------ ------- ------- ------ ------- ------- ------- ------
Total long-term debt............. 227.9 -- (167.0) 60.9 130.1 191.0 151.7 212.6
Shareholder's equity
Common stock..................... 164.0 164.0 164.0 164.0
Paid in capital.................. 60.8 60.8 60.8 60.8
Retained earnings................ (48.7) 31.0 (10.0) (27.7) -- (27.7) -- (27.7)
Treasury stock................... (50.0) (50.0) (130.1) (180.1) (151.7) (201.7)
All Other........................ (20.2) -- -- (20.2) -- (20.2) -- (20.2)
------ ------- ------- ------ ------- ------- ------- ------
Total Shareholders' equity....... 105.9 31.0 (10.0) 126.9 (130.1) (3.2) (151.7) (24.8)
------ ------- ------- ------ ------- ------- ------- ------
Total liabilities and
shareholders' equity........... $616.0 $ 43.2 $(177.0) $482.2 $ -- $ 482.2 $ -- $482.2
------ ------- ------- ------ ------- ------- ------- ------
</TABLE>
- -------------------------
(1) Reflects the sale of SPD. Gross cash proceeds were $223 million, $177
million net. The adjustment assumes the applicable income taxes were paid
and certain liabilities arising as a result of the transaction were
recorded. The aftertax gain, $31 million, is shown as an addition to
retained earnings.
(2) Shows the effect of the Company's tender offer for the Notes. The Company
expects to pay a pretax premium of $16.4 million, or $10 million aftertax,
to purchase the Notes. Additionally, this adjustment shows the use of the
balance of the net proceeds from the sale of SPD as a $40.3 million
reduction in the revolving credit borrowings.
(3) Reflects the repurchase of 2.7 million Shares at $48 and $56 per share, plus
estimated fees of $.5 million.
27
<PAGE> 28
ADDITIONAL INFORMATION. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Company's stockholders
and filed with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 2120, Washington
D.C. 20549; at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York, New York
10048. Copies of such material may also be obtained by mail, upon payment of the
Commission's customary charges, from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549.
The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy statements and other information concerning the
Company also can be inspected at the offices of the NYSE, 20 Broad Street, New
York, New York 10005, on which the Shares are listed.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce the
number of stockholders. Nonetheless, there will still be a sufficient number of
Shares outstanding and publicly traded following the Offer to ensure a continued
trading market in the Shares. Based on the published guidelines of the NYSE and
the Pacific Stock Exchange, the Company does not believe that its purchase of
Shares pursuant to the Offer will cause its remaining Shares to be delisted from
such exchanges.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will continue
to be "margin securities" for purposes of the Federal Reserve Board's margin
regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares as contemplated by the Offer. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter. There can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that the failure to obtain any such approval or other action might not result
in adverse consequences to the Company's business. The Company's obligations
under the Offer to accept for payment and pay for Shares are subject to certain
conditions. See Section 6.
28
<PAGE> 29
14. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary is
based upon the Internal Revenue Code of 1986, as amended to the date hereof (the
"Code"), existing and proposed United States Treasury regulations promulgated
thereunder, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described herein
and could be made on a retroactive basis. As discussed below, depending upon a
stockholder's particular circumstances, the Company's purchase of such
stockholder's Shares pursuant to the Offer may be treated either as a sale or a
dividend for United States federal income tax purposes. Accordingly, such a
purchase generally will be referred to in this section of the Offer to Purchase
as an exchange of Shares for cash.
This summary does not apply to Shares reflecting interests in the Fund and
may not apply to Shares acquired as compensation (including Shares acquired upon
the exercise of options or which were or are subject to forfeiture
restrictions). The summary also does not address the state, local or foreign tax
consequences of participating in the Offer. The summary discusses only Shares
held as capital assets, within the meaning of Section 1221 of the Code, and does
not address all of the tax consequences that may be relevant to particular
stockholders in light of their personal circumstances, or to certain types of
stockholders (such as certain financial institutions, dealers in securities or
commodities, insurance companies, tax-exempt organizations or persons who hold
Shares as a position in a "straddle" or as a part of a "hedging" or "conversion"
transaction for United States federal income tax purposes). In particular, the
discussion of the consequences of an exchange of Shares for cash pursuant to the
Offer applies only to a United States Holder. For purposes of this summary, a
"United States Holder" is a beneficial owner of Shares that is (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States, any State or any
political subdivision thereof, or (iii) an estate or trust, the income of which
is subject to United States federal income taxation regardless of its source.
This discussion does not address the tax consequences to foreign stockholders
who will be subject to United states federal income tax on a net basis on the
proceeds of their exchange of Shares pursuant to the Offer because such income
is effectively connected with the conduct of a trade or business within the
United States. Such stockholders are generally taxed in a manner similar to
United States Holders; however, certain special rules apply. Foreign
stockholders who are not subject to United States federal income tax on a net
basis should see Section 3 for a discussion of the applicable United States
withholding rules and the potential for obtaining a refund of all or a portion
of the tax withheld. EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S TAX
ADVISOR AS TO THE PARTICULAR CONSEQUENCES OF PARTICIPATION IN THE OFFER.
United States Holders Who Receive Cash Pursuant to the Offer. An exchange
of Shares for cash pursuant to the Offer by a United States Holder will be a
taxable transaction for United States federal income tax purposes. As a
consequence of the exchange, a United States Holder, depending on such holder's
particular circumstances will be treated either as having sold such holder's
Shares or as having received a dividend distribution from the Company, with the
tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such Shares, and
thus will recognize gain or loss if the exchange (i) is "not essentially
equivalent to a dividend" with respect to the holder, (ii) is "substantially
disproportionate" with respect to such holder or (iii) results in "complete
termination" of such holder's equity interest in the Company, each as discussed
below. In applying these tests, a United States Holder will be treated as owning
Shares actually or constructively owned by certain related individuals and
entities.
29
<PAGE> 30
If a United States Holder sells Shares to persons other than the Company at
or about the time such holder also sells Shares to the Company pursuant to the
Offer, and the various sales effected by the holder are part of an overall plan
to reduce or terminate such holder's proportionate interest in the Company, then
the sales to persons other than the Company may, for United States federal
income tax purposes, be integrated with the holder's exchange of Shares pursuant
to the Offer and, if integrated, should be taken into account in determining
whether the holder satisfies any of the three tests described below.
A United States Holder will satisfy the "not essentially equivalent to a
dividend" test if the reduction in such holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the percentage interest of a stockholder whose relative stock
interest in a publicly-held corporation is minimal and who exercises no control
over corporate affairs should constitute such a "meaningful reduction."
In general, because the Company has only one class of stock outstanding, an
exchange of Shares for cash will be "substantially disproportionate" with
respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange.
A United States Holder that exchanges all Shares actually or constructively
owned by such holder for cash pursuant to the offer will be treated as having
completely terminated such holder's equity interest in the Company.
If a United States Holder is treated as having sold such holder's Shares
under any of the tests described above, such holder will recognize gain or loss
equal to the difference between the amount of cash received and such holder's
tax basis in the Shares exchanged therefor. Any such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if the holding
period of the Shares exceeds one year as of the date of the exchange.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares, the entire amount
of cash received by such holder will be treated as a dividend to the extent of
the Company's current and accumulated earnings and profits, which the Company
anticipates will be sufficient to cover the amount of any such dividend and will
be includible in the holder's gross income as ordinary income in its entirety,
without reduction for the tax basis of the Shares exchanged. No loss will be
recognized. The United States Holder's tax basis in the Shares exchanged
generally will be added to such holder's tax basis in such holder's remaining
Shares. To the extent that cash received in exchange for Shares is treated as a
dividend to a corporate United States Holder, such holder will be, (i) eligible
for a dividends-received deduction (subject to applicable limitations) and (ii)
subject to the "extraordinary dividend" provisions of the Code. To the extent,
if any, that the cash received by a United States Holder is not a dividend
because the Company does not have sufficient current and accumulated earnings
and profits, it will be treated first as a tax-free return of such holder's tax
basis in the Shares and thereafter as capital gain.
The Company cannot predict whether or to what extent the offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a Holder can be given no assurance that a sufficient number of such
Holder's Shares will be exchanged pursuant to the Offer to ensure that such
exchange will be treated as a sale, rather than as a dividend, for United States
federal income tax purposes pursuant to the rules discussed above.
Stockholders who do not receive cash pursuant to the Offer. Stockholders,
none of whose Shares are exchanged pursuant to the Offer, will not incur any tax
liability as a result of the consummation of the offer.
30
<PAGE> 31
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign stockholders and backup
withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH STOCKHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rules 13e-4(f)(2) and
13e-4(f)(5) promulgated under the Exchange Act, which requires that the Company
must pay the consideration offered or return the Shares tendered promptly after
termination or withdrawal of a tender offer. Subject to compliance with
applicable law, the Company further reserves the right, in its sole discretion,
and regardless of whether any of the events set forth in Section 6 shall have
occurred or shall be deemed by the Company to have occurred, to amend the Offer
in any respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares or by decreasing or
increasing the number of Shares being sought in the Offer). Amendments to the
Offer may be made at any time and from time to time by public announcement
thereof, such announcement, in the case of an extension, to be issued no later
than 9:00 a.m., New York City time, on the next business day after the last
previously scheduled or announced Expiration Date. Any public announcement made
pursuant to the Offer will be disseminated promptly to stockholders in a manner
reasonably designated to inform stockholders of such change. Without limiting
the manner in which the Company may choose to make any public announcement,
except as provided by applicable law (including Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act), the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require
the minimum period during which an offer must remain open following material
changes in the terms of the Offer or information concerning the Offer (other
than a change in price or a change in percentage of securities sought) will
depend upon the facts and circumstances, including the relative materiality of
such terms or information. If (i) the Company increases or decreases the price
to be paid for Shares, the Company increases or decreases the Dealer Managers'
soliciting fee, the Company increases the number of Shares being sought and such
31
<PAGE> 32
increase in the number of Shares being sought exceeds 2% of the outstanding
Shares, or the Company decreases the number of Shares being sought, and (ii) the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that notice of
such increase or decrease is first published, sent or given, the Offer will be
extended until the expiration of such period of ten business days.
16. FEES AND EXPENSES
The Company has retained Goldman, Sachs & Co. ("Goldman Sachs") to act as
the Dealer Managers in connection with the Offer. Goldman Sachs will receive a
fee for their services as Dealer Managers of $.10 for each Share purchased by
the Company pursuant to the Offer. The Company also has agreed to reimburse
Goldman Sachs for certain expenses incurred in connection with the Offer,
including out-of-pocket expenses and the reasonable fees and disbursements of
their counsel and to indemnify Goldman Sachs against certain liabilities in
connection with the Offer, including certain liabilities under the federal
securities laws. Goldman Sachs has rendered various investment banking and other
advisory services to the Company in the past, for which they have received
customary compensation, and can be expected to render similar services to the
Company in the future. The Company has retained Kissel-Blake Inc. as Information
Agent and The Bank of New York as Depositary in connection with the Offer. The
Information Agent and the Depositary will receive reasonable and customary
compensation for their services. The Company will also reimburse the Information
Agent and the Depositary for out-of-pocket expenses, including reasonable
attorneys' fees, and has agreed to indemnify the Information Agent and the
Depositary against certain liabilities in connection with the Offer, including
certain liabilities under the federal securities laws. The Dealer Managers and
Information Agent may contact stockholders by mail, telephone, telex, telegraph
and personal interviews, and may request brokers, dealers and other nominee
stockholders to forward materials relating to the offer to beneficial owners.
Neither the Information Agent nor the Depositary has been retained to make
solicitations or recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than the Dealer Managers)
for soliciting any Shares pursuant to the Offer. The Company will, however, on
request, reimburse such persons for customary handling and mailing expenses
incurred in forwarding materials in respect of the Offer to the beneficial
owners for which they act as nominees. No such broker, dealer, commercial bank
or trust company has been authorized to act as the Company's agent for purposes
of the Offer. The Company will pay (or cause to be paid) any stock transfer
taxes on its purchase of Shares, except as otherwise provided in Instruction 7
of the Letter of Transmittal.
32
<PAGE> 33
17. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer is being made on the Company's behalf by the Dealer
Managers or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to the
Offer. The Schedule 13E-4, including the exhibits and any amendments thereto,
may be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 11 with respect to information concerning the
Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGERS IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE DEALER MANAGERS.
SPX CORPORATION
APRIL 11, 1997
33
<PAGE> 34
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers, associates and subsidiaries,
neither the Company nor any of its associates or subsidiaries or persons
controlling the Company nor, to the best of the Company's knowledge, any of the
directors or executive officers of the Company or any of its subsidiaries, nor
any associates or subsidiary of any of the foregoing, has effected any
transactions in the Shares during the 40 business days prior to April 11, 1997.
34
<PAGE> 35
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for the Shares and any other required documents
should be sent or delivered by each stockholder or such stockholder's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at its
address set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York New York, New York 10286
10286-1248 For Information Telephone:
(800) 507-9357
</TABLE>
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent, at the telephone number and
address below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer. To confirm delivery
of Shares, stockholders are directed to contact the Depositary.
The Information Agent for the Offer is:
KISSEL-BLAKE INC.
110 Wall Street
New York, New York 10005
(212) 344-6733
or
CALL TOLL-FREE (800) 554-7733
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street,
New York, New York 10004
Call Toll-Free (800) 828-3182
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
SPX CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 11, 1997
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER
IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail:
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York
10286-1248
Facsimile Transmission:
(for Eligible Institutions Only)
(212) 815-6213
For Information Telephone:
(800) 507-9357
By Hand or Overnight Courier:
Tender & Exchange Department
101 Barclay Street
Receive and Deliver Window
New York, New York 10286
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS SHARES TENDERED (ATTACH ADDITIONAL
NAME(S) APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
- --------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
--------------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
TOTAL SHARES.........................
- --------------------------------------------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which Shares are to be purchased in the event of
proration. *** (Attach additional signed list if necessary.)
See Instruction 16
1st: 2nd: 3rd: 4th: 5th:
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate
delivered to the Depositary are being tendered hereby. See Instruction 4.
*** If you do not designate an order, then in the event less than all Shares tendered are purchased due to
proration, Shares will be selected for purchase by the Depositary.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT
BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO BOOK-ENTRY TRANSFER FACILITIES WILL NOT CONSTITUTE VALID DELIVERY
TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below). THIS LETTER OF TRANSMITTAL MAY BE USED FOR SHARES CREDITED TO ACCOUNTS
IN THE COMPANY'S DIVIDEND REINVESTMENT PLAN (THE "DIVIDEND REINVESTMENT PLAN")
(SEE BOX ENTITLED "DIVIDEND REINVESTMENT PLAN SHARES"), BUT THIS LETTER OF
TRANSMITTAL MAY NOT BE USED FOR SHARES ATTRIBUTABLE TO INDIVIDUAL ACCOUNTS UNDER
THE COMPANY'S SAVINGS AND STOCK OWNERSHIP PLAN (THE "SAVINGS PLAN"). SEE
INSTRUCTIONS 14 AND 15.
Stockholders who cannot deliver their Share certificates and any other
documents required to the Depositary by the Expiration Date (as defined in the
offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE> 3
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
Check Applicable Box: [ ] DTC [ ] PDTC
Account No.
Transaction Code No.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution that Guaranteed Delivery
If delivery is by book-entry transfer:
Name of Tendering Institution
Account No. at [ ] DTC [ ] PDTC
Transaction Code No.
Ladies and Gentlemen:
The undersigned hereby tenders to SPX Corporation, a Delaware corporation
(the "Company"), the above-described shares of its common stock, par value
$10.00 per share (including the associated Preferred Stock Purchase Rights (the
"Rights"), the "Shares"), at the price per Share indicated in this Letter of
Transmittal, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 11, 1997 (the "Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). Absent circumstances
causing the Rights to become exercisable or separately tradeable prior to the
Expiration Date, a tender of Shares will also constitute a tender of the
associated Rights. Unless the context requires otherwise, all references herein
to Shares include the associated Rights.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with 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 undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by any of the Book-Entry Transfer
Facilities, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Company upon receipt by
the Depositary, as the undersigned's agent, of the Purchase Price (as defined
below) with respect to such Shares;
<PAGE> 4
(ii) present certificates for such Shares for cancellation and transfer on
the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or 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, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's representation and warranty to
the Company that (i) the undersigned has a net long position in the Shares or
equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, and (ii) the
tender of such Shares complies with Rule 14e-4. The Company's acceptance for
payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will determine a single per
Share price (not greater than $56 nor less than $48 per Share), net to the
Seller in cash (the "Purchase Price"), that it will pay for Shares validly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
undersigned understands that the Company will select the lowest Purchase Price
that will allow it to purchase 2,700,000 Shares (or such lesser number of Shares
as are validly tendered at prices not greater than $56 nor less than $48 per
Share) and not withdrawn pursuant to the Offer. The undersigned understands that
all Shares validly tendered at prices at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, net to the seller in cash,
upon the terms and subject to the conditions of the Offer, including its
proration provisions, and that the Company will return all other Shares,
including Shares tendered at prices greater than the Purchase Price and not
withdrawn and Shares not purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not
<PAGE> 5
purchased, in the name(s) of the undersigned (and, in the case of Shares
tendered by book-entry transfer, by credit to the account at the applicable
Book-Entry Transfer Facility). Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the Purchase Price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signatures. In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the Purchase Price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail such check and/or any certificates to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation, pursuant to the
"Special Payment Instructions," to transfer any Shares from the name of the
registered holder(s) thereof if the Company does not accept for payment any of
the Shares so tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
<PAGE> 6
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
------------------------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED
MUST BE USED. (SEE INSTRUCTION 5)
------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having the Company
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders
Shares at, and is willing to accept, the Purchase Price resulting from
the Dutch auction tender process. This action could result in receiving
a price per Share as low as $48 or as high as $56.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE
DETERMINED BY STOCKHOLDER
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] $48.00 [ ] $50.25 [ ] $52.50 [ ] $54.75
[ ] $48.25 [ ] $50.50 [ ] $52.75 [ ] $55.00
[ ] $48.50 [ ] $50.75 [ ] $53.00 [ ] $55.25
[ ] $48.75 [ ] $51.00 [ ] $53.25 [ ] $55.50
[ ] $49.00 [ ] $51.25 [ ] $53.50 [ ] $55.75
[ ] $49.25 [ ] $51.50 [ ] $53.75 [ ] $56.00
[ ] $49.50 [ ] $51.75 [ ] $54.00
[ ] $49.75 [ ] $52.00 [ ] $54.25
[ ] $50.00 [ ] $52.25 [ ] $54.50
</TABLE>
<PAGE> 7
ODD LOTS
(See Instruction 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owns beneficially, as of the close of business on April
10, 1997, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the Dividend
Reinvestment Plan).
The undersigned either (check one box):
[ ] owned beneficially, as of the close of business on April 10, 1997, and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the
Dividend Reinvestment Plan), all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially, as of the close of business on
April 10, 1997, and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares (excluding Shares
attributable to individual accounts under the Savings Plan, but
including Shares held in the Dividend Reinvestment Plan) and is
tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares are Being Tendered" in this Letter of
Transmittal). [ ]
<PAGE> 8
DIVIDEND REINVESTMENT PLAN SHARES (SEE INSTRUCTION 14)
This section is to be completed ONLY if Shares held in the Dividend Reinvestment
Plan are to be tendered.
[ ] By checking this box, the undersigned represents that the undersigned is a
participant in the Dividend Reinvestment Plan and hereby instructs the
Depositary to tender on behalf of the undersigned the following number of
Shares credited to the Dividend Reinvestment Plan account of the undersigned
at the Purchase Price per Share indicated in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of
Transmittal:
_______ Shares*
* The undersigned understands and agrees that all Shares held in the Dividend
Reinvestment Plan account(s) of the undersigned will be tendered if the above
box is checked and the space above is left blank.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if the check for the aggregate Purchase Price of Shares
purchased and/or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue [ ] check and/or [ ] certificates to:
Name
(Please Print)
Address
- -------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------
(Tax Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6 AND 8)
To be completed ONLY if the check for the Purchase Price of Shares purchased
and/or certificates for Shares not tendered or not purchased are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signatures).
Mail [ ] check and/or [ ] certificates to:
- -------------------------------------------------------
(Please Print)
Address
- -------------------------------------------------------
(Include Zip Code)
<PAGE> 9
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(To be completed by all stockholders)
..........................................................................
..........................................................................
Signature(s) of Owner(s)
Dated..............................................................., 1997
Name(s)...................................................................
...................................................................
(Please Print)
Capacity (full title).....................................................
Address...................................................................
...
(Include Zip Code)
Area Code and
Telephone No. ............................................................
(Must be signed by registered holder(s) exactly as name(s) appear(s)
on Share certificates) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please set
forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 6)
Name of Firm..............................................................
Authorized Signature......................................................
Name......................................................................
......................................................................
(Please Print)
Title.....................................................................
Address...................................................................
...
(Include Zip Code)
Area Code and
Telephone No. ............................................................
Dated..............................................................., 1997
- --------------------------------------------------------------------------------
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
recognized member of an Eligible Institution (as defined in the Offer to
Purchase), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered herewith and such
holder(s) have not completed the box entitled "Special Payment Instructions" or
the box entitled "Special Delivery Instructions" on this Letter of Transmittal,
or (ii) such Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used either if Share
certificates are to be forwarded herewith or if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal prior to the
Expiration Date. If certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery.
Stockholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date may tender their Shares pursuant to the guaranteed
delivery procedure 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 provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the Expiration
Date, and (iii) the certificates for all physically delivered Shares in proper
form for transfer by delivery, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, in each case together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange, Inc. trading days after the
date the Depositary receives such Notice of Guaranteed Delivery, all as provided
in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering stockholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
<PAGE> 11
4. Partial Tenders (Not Applicable to Stockholders Who Tender By Book-Entry
Transfer). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares that are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the "Special Payment Instructions" or "Special Delivery
Instructions" boxes on this Letter of Transmittal, as promptly as practicable
following the expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Indication of Price at Which Shares Are Being Tendered. For Shares to be
validly tendered, the stockholder must check the box indicating the price per
Share at which such stockholder is tendering Shares under "Price (In Dollars)
Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal,
except that Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
may check the box above in the section entitled "Odd Lots" indicating that such
stockholder is tendering all Shares at the Purchase Price determined by the
Company. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR (OTHER
THAN AS DESCRIBED ABOVE FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE IS NO
VALID TENDER OF SHARES. A stockholder wishing to tender portions of such
stockholder's Share holdings at different prices must complete a separate Letter
of Transmittal for each price at which such stockholder wishes to tender each
such portion of such stockholder's Shares. The same Shares cannot be tendered
(unless previously validly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price. Stockholders wishing to maximize the
possibility that their Shares will be purchased at the relevant Purchase Price
may check the box on the Letter of Transmittal marked "Shares Tendered at
Purchase Price Determined by Dutch Auction." Checking this box may result in a
Purchase Price of the Shares so tendered at the minimum price of $48.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificates) evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificates). Signature(s) on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary
<PAGE> 12
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Company of the authority of such person so
to act must be submitted.
7. Stock Transfer Taxes. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the aggregate Purchase
Price is to be made to, or Shares not tendered or not purchased are to be
registered in the name of, any person other than the registered holder(s), or if
tendered Shares 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(s), such other person or
otherwise) 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. See Section 5 of the Offer to
Purchase. Except as provided in this Instruction 7, it will not be necessary to
affix transfer tax stamps to the certificates representing Shares tendered
hereby.
8. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal, or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
9. Odd Lots. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date are to be purchased, the Shares purchased
first will consist of all Shares tendered by any stockholder who owned
beneficially, as of the close of business on April 10, 1997, and continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares (excluding Shares attributable to individual accounts under the Savings
Plan, but including Shares held in the Dividend Reinvestment Plan) and who
validly tendered all such Shares at or below the Purchase Price (including by
not designating a purchase price as described above). Partial tenders of Shares
will not qualify for this preference and this preference will not be available
unless the box captioned "Odd Lots" in this Letter of Transmittal and the Notice
of Guaranteed Delivery, if any, is completed.
10. Substitute Form W-9 and Form W-8. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the stockholder or other payee provides
such person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies that such number is
correct. Therefore, each tendering stockholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup withholding,
unless such stockholder otherwise establishes to the satisfaction of the
Depositary that it is not subject to backup withholding. Certain stockholders
(including, among others, all corporations and certain foreign stockholders (in
addition to foreign corporations)) are not subject to these backup withholding
and reporting requirements. In order for a foreign stockholder to qualify as an
exempt recipient, that stockholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that stockholder's
exempt status. Such statements may be obtained from the Depositary.
11. Withholding On Foreign Stockholders. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal
<PAGE> 13
income taxes equal to 30% of the gross payments payable to a foreign stockholder
or his or her agent unless the Depositary determines that a reduced rate of
withholding is available pursuant to a tax treaty or that an exemption from
withholding is applicable because such gross proceeds are effectively connected
with the conduct of a trade or business in the United States. For this purpose,
a foreign stockholder is any stockholder that is not (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof or (iii) an estate or trust, the income of which is subject
to United States federal income taxation regardless of the source of such
income. In order to obtain a reduced rate of withholding pursuant to a tax
treaty, a foreign stockholder must deliver to the Depositary a properly
completed IRS Form 1001. In order to obtain an exemption from withholding on the
grounds that the gross proceeds paid pursuant to the Offer are effectively
connected with the conduct of a trade or business within the United States, a
foreign stockholder must deliver to the Depositary a properly completed IRS Form
4224. The Depositary will determine a stockholder's status as a foreign
stockholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to outstanding certificates or statements concerning
eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS
Form 1001 or IRS Form 4224) unless facts and circumstances indicate that such
reliance is not warranted. A foreign stockholder may be eligible to obtain a
refund of all or a portion of any tax withheld if such stockholder meets the
"complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" test described in Section 14 of the Offer to Purchase
or is otherwise able to establish that no tax or a reduced amount of tax is due.
Backup withholding generally will not apply to amounts subject to the 30% or
treaty-reduced rate of withholding. Foreign stockholders are urged to consult
their tax advisors regarding the application of United States federal income tax
withholding, including eligibility for a withholding tax reduction or exemption
and refund procedures.
12. Requests for Assistance or Additional Copies. Any questions or requests
for assistance may be directed to the Information Agent at its telephone number
and address listed below. Requests for additional copies of the Offer to
Purchase, this Letter of Transmittal or other tender offer materials may be
directed to the Information Agent, and such copies will be furnished promptly at
the Company's expense. Stockholders may also contact their local broker, dealer,
commercial bank or trust company for documents relating to, or assistance
concerning, the Offer.
13. Irregularities. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company, in its sole discretion, which determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Shares or any particular stockholder. No tender of Shares will be
deemed to be validly made until all defects or irregularities have been cured or
waived. None of the Company, the Dealer Managers, the Depositary, the
Information Agent or any other person is or will be obligated to give notice of
any defects or irregularities in tenders, and none of them will incur any
liability for failure to give any such notice.
14. Dividend Reinvestment Plan. If a tendering stockholder desires to have
tendered pursuant to the Offer Shares credited to the stockholder's account
under the Dividend Reinvestment Plan, the box captioned "Dividend Reinvestment
Plan Shares" should be completed. A participant in the Dividend Reinvestment
Plan may complete such box on only one Letter of Transmittal submitted by such
participant. If a participant submits more than one Letter of Transmittal and
completes such box on more than one Letter of Transmittal, the participant will
be deemed to have elected to tender all Shares credited to the stockholder's
account under the Dividend Reinvestment Plan at the lowest of the prices
specified in such Letters of Transmittal.
<PAGE> 14
If a stockholder authorizes a tender of Shares held in the Dividend
Reinvestment Plan, all such Shares credited to such stockholder's account(s),
including fractional Shares, will be tendered, unless otherwise specified in the
appropriate space in the box captioned "Dividend Reinvestment Plan Shares." In
the event that the box captioned "Dividend Reinvestment Plan Shares" is not
completed, no Shares held in the tendering stockholder's account will be
tendered.
15. Savings Plan. Participants in the Savings Plan (as defined in the Offer
to Purchase) may not use this Letter of Transmittal to direct the tender of
Shares attributable to their individual account, but must use the separate
instruction form sent to them by the Savings Plan trustee.
16. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the United States federal income tax classification of any
gain or loss on the Shares purchased. See Sections I and 14 of the Offer to
Purchase.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) TOGETHER
WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION
DATE. STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH
THEIR LETTER OF TRANSMITTAL.
<PAGE> 15
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK
- ------------------------------------------------------------------------------------------------------------------------
PART 1: PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
FORM W-9
OR
Employer Identification
Number
---------------------------------------------------------------------------------------
PART 3--
DEPARTMENT OF THE TREASURY PART 2: For Payees exempt from backup withholding, Awaiting TIN [ ]
INTERNAL REVENUE SERVICE see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form
W-9 and complete as instructed therein.
---------------------------------------------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I certify that (i) 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 either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate IRS center or Social
Security Administration office or (b) I intend to mail or deliver an application in
the near future) and
(ii) I am not subject to backup withholding because: (a) I am exempt from backup
withholding; or (b) I have not been notified by 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 (ii)
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.
PAYER'S REQUEST FOR SIGNATURE DATE ______________
TAXPAYER IDENTIFICATION
NUMBER ("TIN") NAME (Please Print)
ADDRESS (Include Zip Code)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
The Information Agent for the Offer is:
KISSEL-BLAKE INC.
110 Wall Street
New York, New York 10005
(212) 344-6733
or
Call Toll-Free (800) 554-7733
------------------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
Call Toll-Free (800) 828-3182
<PAGE> 1
EXHIBIT (A)(3)
SPX CORPORATION
Notice of Guaranteed Delivery
of Shares of Common Stock
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of common
stock of SPX Corporation are not immediately available, if the procedure for
book-entry transfer cannot be completed on a timely basis, or if time will not
permit all other documents required by the Letter of Transmittal to be delivered
to the Depositary (as defined below) prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase defined below). Such form may be delivered by
hand or transmitted by mail or overnight courier, or (for Eligible Institutions
only) by facsimile transmission, to the Depositary. See Section 3 of the Offer
to Purchase. THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE
THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND
CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE
TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
The Depositary for the Offer is:
<TABLE>
<S> <C> <C>
THE BANK OF NEW YORK
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT
(for Eligible Institutions Only) COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286- New York, New York 10286
1248
FOR INFORMATION TELEPHONE:
(800) 507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
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 SPX Corporation, a Delaware corporation
(the "Company"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated April 11, 1997 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer"), receipt
of which is hereby acknowledged, the number of shares of common stock, par value
$10.00 per share (including the associated Preferred Stock Purchase Rights (the
"Rights"), the "Shares"), of the Company listed below, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Unless the Rights become exercisable or separately tradeable prior to the
Expiration Date, a tender of Shares will also constitute a tender of the
associated Rights. Unless the context requires otherwise, all references herein
to Shares include the associated Rights.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
------------------------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE
SPECIFIED MUST BE USED.
------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW),
THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having the Company
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders
Shares at, and is willing to accept, the Purchase Price resulting from
the Dutch auction tender process. This action could result in receiving
a price per Share as low as $48 or as high as $56.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE
DETERMINED BY STOCKHOLDER
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] $48.00 [ ] $50.25 [ ] $52.50 [ ] $54.75
[ ] $48.25 [ ] $50.50 [ ] $52.75 [ ] $55.00
[ ] $48.50 [ ] $50.75 [ ] $53.00 [ ] $55.25
[ ] $48.75 [ ] $51.00 [ ] $53.25 [ ] $55.50
[ ] $49.00 [ ] $51.25 [ ] $53.50 [ ] $55.75
[ ] $49.25 [ ] $51.50 [ ] $53.75 [ ] $56.00
[ ] $49.50 [ ] $51.75 [ ] $54.00
[ ] $49.75 [ ] $52.00 [ ] $54.25
[ ] $50.00 [ ] $52.25 [ ] $54.50
</TABLE>
<PAGE> 3
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially, as of the close of business on April
10, 1997, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan (as defined in the offer to Purchase), but
including Shares held in the Dividend Reinvestment Plan (as defined in the Offer
to Purchase)).
The undersigned either (check one box):
[ ] owned beneficially, as of the close of business on April 10, 1997 and
continues to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the
Dividend Reinvestment Plan), all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially, as of the close of business on
April 10, 1997, and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares (excluding Shares
attributable to individual accounts under the Savings Plan, but
including Shares held in the Dividend Reinvestment Plan) and is
tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" above). [ ]
<PAGE> 4
<TABLE>
<S> <C>
Number of Shares ___________________________ ____________________________________________
Certificate No.(s) (If Available) Name(s) (Please Print)______________________
____________________________________________ ____________________________________________
____________________________________________ ____________________________________________
If Shares will be tendered by book-entry
transfer: __________________________________ ____________________________________________
____________________________________________ (ADDRESS)
Name of Tendering Institution:
____________________________________________ ____________________________________________
AREA CODE AND TELEPHONE NUMBER
Account No. at (check one)
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company ____________________________________________
SIGNATURE(S)
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company (not a savings bank or savings
and loan association) having an office, branch or agency in the United States hereby guarantees (i) that the
above-named person(s) has a net long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares complies
with Rule 14e-4, and (iii) to deliver to the Depositary at one of its addresses set forth above certificates
for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of
the Shares tendered hereby into the Depositary's account at The Depository Trust Company or Philadelphia
Depository Trust Company in each case together with a properly completed and duly executed Letter(s) of
Transmittal (or facsimiles thereof), with any required signature guarantees and any other required
documents, all within three New York Stock Exchange, Inc. trading days after the date hereof.
____________________________________________ ____________________________________________
NAME OF FIRM AUTHORIZED SIGNATURE
____________________________________________ Name________________________________________
ADDRESS PLEASE TYPE OR PRINT
____________________________________________ Title_______________________________________
CITY, STATE, ZIP CODE
Area Code and Tel. No. _____________________ Date __________________________________, 199
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT (A)(4)
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
SPX CORPORATION
OFFER TO PURCHASE FOR CASH UP TO 2,700,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $56 NOR LESS THAN $48 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
April 11, 1997
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
In our capacity as Dealer Managers, we are enclosing the material listed
below relating to the offer of SPX Corporation, a Delaware corporation (the
"Company"), to purchase up to 2,700,000 shares of its capital stock, par value
$10.00 per share, (including the associated Preferred Stock Purchase Rights (the
"Rights"), the "Shares"), at prices not greater than $56 nor less than $48 per
Share, net to the seller in cash, specified by tendering stockholders, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
April 11, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"). Unless the Rights become
exercisable or separately tradeable prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase), a tender of Shares will also constitute a
tender of the associated Rights. Unless the context otherwise requires, all
references herein to Shares include the associated Rights. Also enclosed is
certain other material related to the Offer.
The Company will determine a single price (not greater than $56 nor less
than $48 per Share), net to the seller in cash, that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to purchase 2,700,000 Shares (or such lesser number of Shares as
is validly tendered at prices not greater than $56 nor less than $48 per Share)
and not withdrawn pursuant to the Offer. The Company will purchase all Shares
validly tendered at prices at or below the Purchase Price and not withdrawn,
upon the terms and subject to the conditions of the Offer, including the
provisions relating to proration described in the Offer to Purchase. See Section
1 of the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase Price
and Shares not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
<PAGE> 2
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of your
clients.
3. A letter to stockholders of the Company from John B. Blystone, the
Chairman, President and Chief Executive Officer of the Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the Depositary by
the Expiration Date (each as defined in the offer to Purchase).
5. A letter that 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 for
obtaining such clients, instructions with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal income tax
withholding.
7. A return envelope addressed to The Bank of New York, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the Dealer Managers). The Company will, upon request, reimburse brokers,
dealers, commercial banks and trust companies for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials relating
to the Offer to their customers. The Company will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 7 of the Letter of Transmittal.
As described in the Offer to Purchase, if more than 2,700,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date, as defined in Section 1 of the Offer to Purchase, the
Company will accept Shares for purchase in the following order of priority: (i)
all Shares validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date by any stockholder who owned beneficially, as of
the close of business on April 10, 1997, and who continues to own beneficially
as of the Expiration Date, an aggregate of fewer than 100 Shares (excluding
Shares attributable to individual accounts under the Savings Plan (as defined in
the Offer to Purchase), but including Shares held in the Company's Dividend
Reinvestment Plan) and who validly tenders all of such Shares (partial tenders
will not qualify for this preference) and completes the box captioned "Odd Lots"
in the Letter of Transmittal and, if applicable, the Notice of Guaranteed
Delivery; and (ii) after purchase of all of the foregoing Shares, all other
Shares validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date on a pro rata basis.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES
2
<PAGE> 3
ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS
OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to the Information Agent or the Dealer
Managers at their respective addresses and telephone numbers set forth on the
back cover of the enclosed Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEALER MANAGERS, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (A)(5)
SPX CORPORATION
OFFER TO PURCHASE FOR CASH UP TO 2,700,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $56 NOR LESS THAN $48 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated April 11,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by SPX Corporation, a
Delaware corporation (the "Company"), to purchase up to 2,700,000 shares of its
common stock, par value $10.00 per share (including the associated Preferred
Stock Purchase Rights (the "Rights"), the "Shares"), at prices not greater than
$56 nor less than $48 per Share, net to the seller in cash, specified by
tendering stockholders, upon the terms and subject to the conditions of the
Offer. Unless the Rights become exercisable or separately tradeable prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), a tender of
Shares will also constitute a tender of the associated Rights. Unless the
context otherwise requires, all references herein to Shares include the
associated Rights. Also enclosed herewith is certain other material related to
the Offer, including a letter from John B. Blystone, Chairman, President and
Chief Executive Officer of the Company, to stockholders.
The Company will determine a single per Share price (not greater than $56
nor less than $48 per Share) (the "Purchase Price") that it will pay for the
Shares validly tendered pursuant to the Offer and not withdrawn, taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will allow
it to purchase 2,700,000 Shares (or such lesser number of Shares as are validly
tendered at prices not greater than $56 nor less than $48 per Share) and not
withdrawn pursuant to the Offer. The Company will purchase all Shares validly
tendered at prices at or below the Purchase Price and not withdrawn, upon the
terms and subject to the conditions of the Offer, including the provisions
thereof relating to proration. See Section 1 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is directed to the following:
1. You may tender Shares at prices (in multiples of $.25), which cannot be
greater than $56 nor less than $48 per Share, as indicated in the attached
Instruction Form, net to you in cash.
<PAGE> 2
2. The Offer is extended for up to 2,700,000 Shares, constituting
approximately 18% of the total Shares outstanding as of March 14, 1997. The
Offer is not conditioned on any minimum number of Shares being tendered. The
Offer is, however, subject to certain other conditions set forth in the Offer to
Purchase.
3. The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York City time, on Thursday, May 8, 1997, unless the Offer is
extended. Your instructions to us should be forwarded to us in ample time to
permit us to submit a tender on your behalf.
4. As described in the Offer to Purchase, if more than 2,700,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase,
the Company will purchase Shares in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any stockholder who owned
beneficially, as of the close of business on April 10, 1997, and who
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares (excluding Shares attributable to individual accounts
under the Savings Plan (as defined in the offer to Purchase), but including
Shares held in the Company's Dividend Reinvestment Plan) and who validly
tenders all of such Shares (partial tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and
(ii) after purchase of all the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date on a pro rata basis. See Section 1 of the Offer to
Purchase for a discussion of proration.
5. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the purchase of Shares by the
Company pursuant to the Offer will be paid by the Company, except as otherwise
provided in Instruction 7 of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices, you
must complete a separate Instruction Form for each price at which you wish to
tender each portion of your Shares. We must submit separate Letters of
Transmittal on your behalf for each price you will accept.
7. If you owned beneficially, as of the close of business on April 10,
1997, and continue to own beneficially as of the Expiration Date, an aggregate
of fewer than 100 Shares (excluding Shares attributable to individual accounts
under the Savings Plan, but including Shares held in the Company's Dividend
Reinvestment Plan), and you instruct us to tender at or below the Purchase Price
on your behalf all such Shares prior to the Expiration Date and check the box
captioned "Odd Lots" in the Instruction Form, all such Shares will be accepted
for purchase before proration, if any, of the other tendered Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
2
<PAGE> 3
tendered unless otherwise specified on the Instruction Form. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF BY THE EXPIRATION OF THE OFFER.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction the securities or blue
sky laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on the Company's behalf by the Dealer Managers or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
3
<PAGE> 4
INSTRUCTION FORM
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 2,700,000 SHARES OF COMMON STOCK
OF
SPX CORPORATION
AT A PURCHASE PRICE NOT GREATER THAN
$56 NOR LESS THAN $48 PER SHARE
The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase, dated April 11, 1997, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the Offer by SPX Corporation
(the "Company") to purchase up to 2,700,000 shares of its common stock, par
value $10.00 per share (including the associated Preferred Stock Purchase Rights
(the "Rights"), the "Shares"), at prices not greater than $56 nor less than $48
per Share, net to the undersigned in cash, specified by the undersigned, upon
the terms and subject to the terms and conditions of the Offer. Unless the
Rights become exercisable or separately tradeable prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase), a tender of Shares will also
constitute a tender of the associated Rights. Unless the context otherwise
requires, all references herein to Shares include the associated Rights.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
SHARES TENDERED
[ ] By checking this box, all Shares held by us for your account will be
tendered. If fewer than all Shares held by us for your account are to be
tendered, please check the box and indicate below the aggregate number of
Shares to be tendered by us.
________ Shares
Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
4
<PAGE> 5
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
------------------------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION FORM
FOR EACH PRICE SPECIFIED MUST BE USED.
------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO
VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having the Company
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders
Shares at, and is willing to accept, the Purchase Price resulting from
the Dutch auction tender process. This action could result in receiving
a price per Share as low as $48 or as high as $56.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE
DETERMINED BY STOCKHOLDER
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] $48.00 [ ] $50.25 [ ] $52.50 [ ] $54.75
[ ] $48.25 [ ] $50.50 [ ] $52.75 [ ] $55.00
[ ] $48.50 [ ] $50.75 [ ] $53.00 [ ] $55.25
[ ] $48.75 [ ] $51.00 [ ] $53.25 [ ] $55.50
[ ] $49.00 [ ] $51.25 [ ] $53.50 [ ] $55.75
[ ] $49.25 [ ] $51.50 [ ] $53.75 [ ] $56.00
[ ] $49.50 [ ] $51.75 [ ] $54.00
[ ] $49.75 [ ] $52.00 [ ] $54.25
[ ] $50.00 [ ] $52.25 [ ] $54.50
</TABLE>
5
<PAGE> 6
ODD LOTS
[ ] By checking this box, the undersigned represents that the undersigned owned
beneficially, as of the close of business on April 10, 1997, and continues
to own beneficially as of the Expiration Date, an aggregate of fewer than
100 Shares (excluding Shares attributable to individual accounts under the
Savings Plan, but including Shares held in the Company's Dividend
Reinvestment Plan) and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per Share in the box entitled "Price (in
Dollars) Per Share At which Shares Are Being Tendered" above). [ ]
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE
--------------------------------------
Signature(s)
Dated: , 1997 Name
--------------------------------------
Address
--------------------------------------
--------------------------------------
--------------------------------------
Social Security or Taxpayer ID No.
6
<PAGE> 1
EXHIBIT (A)(6)
April 11, 1997
Dear Stockholder:
SPX Corporation is offering to purchase up to 2,700,000 shares of its
common stock (including associated Preferred Stock Purchase Rights) at a price
not greater than $56 nor less than $48 per share. The Company is conducting the
Offer through a procedure commonly referred to as a "Dutch auction." This
procedure allows you to select the price within the specified price range at
which you are willing to sell all or a portion of your shares to the Company.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your shares, instructions on how to
tender shares are provided in the enclosed materials. I encourage you to read
these materials carefully before making any decision with respect to the Offer.
Neither the Company nor its Board of Directors makes any recommendation to any
stockholder whether to tender any or all shares.
Please note that the Offer is scheduled to expire at 12:00 midnight, New
York city time, on Thursday, May 8, 1997, unless extended by the Company.
Questions regarding the Offer should not be directed to the Company but should
instead be directed to Kissel-Blake Inc., the Information Agent, at
1-800-554-7733.
Sincerely,
/s/ JOHN B. BLYSTONE
John B. Blystone
Chairman, President and Chief
Executive Officer
<PAGE> 1
EXHIBIT (a)(7)
FOR IMMEDIATE RELEASE
Contact: John D. Tyson
Charles A. Bowman
616-724-5406
SPX ANNOUNCES NEW FINANCIAL STRATEGY THAT INCLUDES A
"DUTCH AUCTION" REPURCHASE OF 2.7 MILLION SHARES BETWEEN $48
AND $56 PER SHARE AND ELIMINATION OF QUARTERLY CASH DIVIDENDS
MUSKEGON, MI -- April 10, 1997 -- SPX Corporation (NYSE:SPW) today
announced a new financial strategy that provides the company added flexibility
and a more efficient capital structure. The new strategy includes a "Dutch
auction" tender offer commencing tomorrow, April 11, for 2.7 million shares at
a price not less than $48 nor greater than $56 per share. The company also
announced that future distributions are expected to be made through share
repurchases and that quarterly cash dividends are eliminated.
The new strategy aligns the company's financial and capital policies
with the Economic Value Added (EVA) financial management system that has been
the basis of its performance measurement and compensation systems since early
1996. The company has taken several actions in conjunction with the new
financial strategy, some of which were recently executed and others that
commence tomorrow, including:
* Completion of a tender offer to purchase for cash all of the
company's outstanding 11 3/4% Senior Subordinated Notes Due 2002, $128,415,000
in principal amount, and elimination of certain restrictive covenants. The
company commenced the tender on March 11, 1997, and tenders for $126,739,000 of
notes and consents to eliminate the covenants occurred on March 25, 1997.
Payment will be made on April 14, 1997. The completion of this action
eliminated restrictive covenants which, among other things, prevented the
company from repurchasing its own shares.
* Negotiation of a new credit agreement that provides lower cost
capital and flexibility needed to fund positive EVA growth investments. The
company received a firm commitment for a $400 million unsecured line of credit
on March 31, 1997. The new credit facility will provide the company with less
restrictive covenants and lower cost capital in support of its growth
<PAGE> 2
strategy, permit the "Dutch auction" announced today, provide immediate
capacity for acquisitions and add sufficient working capital flexibility for
the immediate future.
* Execution of a leveraged share repurchase using a self-tender "Dutch
auction" for 2.7 million shares, approximately 18% of the company's outstanding
shares. The "Dutch auction" tender offer commences tomorrow, at a price of not
less than $48 nor more than $56 per share, and expires at midnight on May 8,
1997. The "Dutch auction" self-tender allows the company to quickly
releverage, lower its cost of capital, and distribute cash to tendering
shareholders. Company directors and management have indicated that they will
not tender their shares in the "Dutch auction."
The tender offer will be subject to various terms and conditions
described in the offering materials being distributed to shareholders. Under
the terms of the "Dutch auction" offer, SPX shareholders will be given the
opportunity to specify prices within the company's stated price range at which
they are willing to tender their shares. Upon receipt of the tenders, SPX will
determine a final price that enables it to purchase up to the stated number of
shares from those shareholders who agreed to sell at or below the
company-selected purchase price. All shares purchased will be at the same
price. No transaction costs will be charged to tendering shareholders. If
more than 2.7 million shares are tendered at or below the purchase price, there
will be a proration.
The tender offer will not be contingent upon any minimum number of
shares being offered. The company intends to use borrowings under its
revolving credit facility to purchase the shares.
Goldman, Sachs & Co. will act as Dealer Managers for the tender offer.
The Information Agent is Kissel-Blake, Inc. Persons with questions about the
tender offer should contact the Dealer Managers at 800-828-3182, or the
Information Agent at 800-554-7733.
Following completion of the "Dutch auction" tender offer, the company
has been authorized to purchase up to an additional 200,000 shares through open
market or privately negotiated transactions.
* Elimination of the quarterly cash dividend in favor of share
repurchases as the preferred method of returning cash to shareholders. The
company believes that repurchasing shares is a superior method of distributing
cash to shareholders because it gives the shareholder a choice of whether or
not to participate in the distribution. Additionally, for many shareholders,
repurchases are more tax effective.
<PAGE> 3
*Establishment of a target book debt-to-total-capital ratio of 50%,
which management believes is appropriate for the company long-term.
Immediately after the "Dutch auction," the company's leverage will exceed the
target, but management believes that it can achieve this ratio within three
years.
Commenting on today's announcement, John B. Blystone, Chairman,
President and Chief Executive Officer of SPX Corporation said, "The
implementation of this new financial strategy is completely consistent with the
EVA discipline at SPX. It provides the financial flexibility and resources the
company needs to move rapidly ahead with its plans for global growth, and it
positions the company's stock for future appreciation."
Mr. Blystone also said, "The actions announced today reflect the
leadership team's confidence in the company's potential. The use of
appropriate leverage for these transactions should provide assurance to
shareholders that future strategic acquisitions will be value enhancing. We
remain positive in our outlook for the business in 1997 and beyond."
Patrick J. O'Leary, Vice President and Chief Financial Officer of SPX
Corporation said, "The company's purchase of its common stock in this way is an
attractive and speedy use of financial resources that will result in a more
efficient and balanced capital structure and a lower cost of capital. SPX will
continue to have ready access to sources of capital to make investments in the
business, including acquisition opportunities that may become available."
Mr. O'Leary added, "We are giving our shareholders a choice. Investors
may choose to tender and receive an aggregate distribution equal to
approximately 25 years of cash dividends at the current dividend payout rate.
Other investors who are supportive of our EVA culture and the cash dividend
elimination may choose to remain invested. Our focus continues to be on
maximizing the wealth of all shareholders."
SPX Corporation is a global provider of Vehicle Service Solutions to
franchised dealers and independent service locations, Service Support to Vehicle
Manufacturers, and Original Equipment Components to the worldwide motor vehicle
industry.
###
Statements in this press announcement that are not strictly historical
are "forward-looking" statements within the meaning of the Safe Harbor
provisions of the federal securities laws. Investors are cautioned that such
statements are merely predictions and speak only as of the date of this
release. Actual results may differ materially due to risks and uncertainties
that are described in the Company's Form 10-K for fiscal year 1996 and the 1996
Annual Report to Shareholders.
<PAGE> 1
EXHIBIT (A)(8)
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 and the
related Letter of Transmittal. Capitalized terms not defined in this
announcement have the respective meanings ascribed to such terms in the Offer to
Purchase. The Offer is not being made to, nor will the Company accept tenders
from, holders of Shares in any jurisdiction in which the Offer or its acceptance
would violate that jurisdiction's laws. The Company is not aware of any
jurisdiction in which the making of the Offer or the tender of Shares would not
be in compliance with the laws of such jurisdiction. In jurisdictions whose laws
require that the Offer be made by a licensed broker or dealer, the Offer shall
be deemed to be made on the Company's behalf by Goldman, Sachs & Co. or by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH BY
SPX CORPORATION
Up to 2,700,000 Shares of its Common Stock (including the associated Preferred
Stock Purchase Rights) at a Purchase Price not greater than
$56 nor less than $48 per Share
SPX Corporation, a Delaware corporation (the "Company"), invites its
stockholders to tender up to 2,700,000 shares of its common stock, par value
$10.00 per share (including the associated Preferred Stock Purchase Rights (the
"Rights"), the "Shares"), to the Company at prices not greater than $56 nor less
than $48 per Share in cash, specified by tendering stockholders, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated April 11,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"). Unless the Rights become exercisable or
separately tradeable prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase), a tender of Shares will also constitute a tender of the
associated Rights. Unless the context otherwise requires, all references herein
to Shares include the associated Rights. The information contained in the Offer
to Purchase and the Letter of Transmittal is incorporated by reference herein in
its entirety.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, MAY 8, 1997, UNLESS THE OFFER IS EXTENDED.
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR
EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $56 nor less than
$48 per Share), net to the seller in cash (the "Purchase Price"), that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 2,700,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than
<PAGE> 2
$56 nor less than $48 per Share) validly tendered and not withdrawn pursuant to
the Offer. The Company will pay the Purchase Price for all Shares validly
tendered prior to the Expiration Date (as defined below) at prices at or below
the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer including the proration terms described below. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Thursday, May 8,
1997, unless and until the Company in its sole discretion shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased), subject
to proration, Shares that are validly tendered at or below the Purchase Price
and not withdrawn when, as and if it gives oral or written notice to The Bank of
New York (the "Depositary") of its acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares tendered and accepted
for payment pursuant to the Offer will be made promptly (subject to possible
delay in the event of proration) but only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other required
documents.
Upon the terms and subject to the conditions of the Offer, in the event
that prior to the Expiration Date more than 2,700,000 Shares are validly
tendered at or below the Purchase Price and not withdrawn, the Company will
purchase such validly tendered Shares in the following order of priority: (i)
all Shares validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date by any Odd Lot Owner who tenders all such Shares
(other than Shares attributable to accounts under the SPX Corporation Savings
and Stock Ownership Plan) beneficially owned by such Odd Lot Owner at or below
the Purchase Price (partial tenders will not qualify for this preference) and
who completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery, and (ii) after purchase of all
of the foregoing Shares, all other Shares validly tendered at or below the
Purchase Price and not withdrawn prior to the Expiration Date on a pro rata
basis.
The Company is making the Offer in order (i) to enhance long-term
stockholder value by implementing a comprehensive financial strategy that will
use the Company's cash and debt capacity to improve the Company's capital
structure and lower its cost of capital for the benefit of its stockholders and
(ii) to afford to those stockholders who desire liquidity an opportunity to sell
all or a portion of their Shares without the usual transaction costs associated
with open market sales. As part of the new capital structure strategy, the
Company's Board of Directors also adopted new policies pertaining to the
distribution to stockholders of excess cash balances not required for
value-enhancing investments, including acquisitions. To this end, the Board has
suspended the payment of regular quarterly cash dividends to the Company's
stockholders, although it anticipates additional distributions to stockholders
at appropriate times in the form of open market share repurchases or otherwise.
After the Offer is completed, the Company expects to have sufficient cash flow
and access to other sources of capital to fund its growth initiatives, including
making strategic acquisitions.
The Company expressly reserves the right, at any time or from time to time,
in its sole discretion, to extend the period of time during which the Offer is
open by giving notice of such extension to the Depositary and making a public
announcement thereof. Subject to certain conditions set forth in the Offer to
Purchase, the Company also expressly reserves the right to terminate the Offer
and not accept for payment any Shares not theretofore accepted for payment.
Shares tendered pursuant to the Offer may be withdrawn at any time before
the Expiration Date and, unless accepted for payment by the Company as provided
in the Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York
City time, on Friday, June 6, 1997. For a withdrawal to be effective, the
Depositary must receive a notice of withdrawal in written, telegraphic or
facsimile transmission form on a timely basis. Such notice of withdrawal must
specify the name of the person
2
<PAGE> 3
who tendered the Shares to be withdrawn, the number of Shares tendered, the
number of Shares to be withdrawn and the name of the registered holder, if
different from that of the person who tendered such Shares. If the certificates
have been delivered or otherwise identified to the Depositary, then, prior to
the release of such certificates, the tendering stockholder must also submit the
serial numbers shown on the particular certificates evidencing the Shares and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry transfer,
the notice of withdrawal must specify the name and the number of the account at
the applicable Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with the procedures of such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE STOCKHOLDERS DECIDE WHETHER TO
ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHAT PRICE OR PRICES TO TENDER
THEIR SHARES. These materials are being mailed to record holders of Shares and
are being furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the Company's stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated by reference herein.
Additional copies of the Offer to Purchase and the Letter of Transmittal
may be obtained from the Information Agent and will be furnished at the
Company's expense. Questions and requests for assistance may be directed to the
Information Agent as set forth below:
The Information Agent for the Offer is:
KISSEL-BLAKE INC.
110 Wall Street
New York, New York 10005
(212) 344-6733
or
Call toll-free (800) 554-7733
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(800) 323-5678
April 11, 1997
3
<PAGE> 1
EXHIBIT (a)(9)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER --
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------- ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
NUMBER OF -- NUMBER OF --
- --------------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C>
1. An individual's The individual 8. Sole proprietorship The owner(4)
account account
2. Two or more The actual owner of the 9. A valid trust, estate, The legal entity (Do
individuals account or, if combined or pension trust not furnish the
(joint account) funds, any one of the identifying number of
individuals(1) the personal
3. Husband and wife The actual owner of the representative or
(joint account) account or, if joint trustee unless the
funds, either person(1) legal entity itself is
4. Custodian account of The minor(2) not designated in the
a minor (Uniform Gift account title.)(5)
to Minors Act) 10. Corporate account The corporation
5. Adult and minor The adult or, if the 11. Religious, The organization
(joint account) minor is the only charitable, or
contributor, the educational
minor(1) organization account
6. Account in the name The ward, minor, or 12. Partnership held in The partnership
of guardian or incompetent person(3) the name of the
committee for a business
designated ward, 13. Association, club, or The organization
minor, or incompetent other tax-exempt
person organization
7. a) The usual The grantor-trustee(1) 14. A broker or The broker or nominee
revocable savings registered nominee
trust account 15. Account with the The public entity
(grantor is also Department of
trustee); Agriculture in the
b) So-called trust The actual owner(1) name of a public
account that is entity (such as a
not a legal or State or local
valid trust under government, school
State law 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
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to non-resident 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 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. 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 OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't 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 any
agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof. A
registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - 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 U.S. 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.
<PAGE> 1
[FIRST CHICAGO LETTERHEAD]
EXHIBIT (b)
March 31, 1997
SPX Corporation
700 Terrace Point Drive
Muskegon, MI 49443-3301
Attention: Mr. Patrick O'Leary
Vice President Finance,
Treasurer, and Chief Financial Officer
Gentlemen/Ladies:
.
Re: Commitment Letter
SPX Corporation (the "Borrower"), has requested a credit facility (the
"Facility") in the aggregate principal amount of $400 million (the "Aggregate
Commitment"). The First National Bank of Chicago is pleased to offer to act as
administrative agent (the "Agent") under the Facility and to commit to make
loans to the Borrower in the amount of the Aggregate Commitment on the terms
and subject to the conditions set forth herein and in the term sheet attached
hereto (the "Term Sheet"). The Agent intends, and reserves the right, to
syndicate the Facility to a group of lenders (collectively, including the
Agent, the "Lenders") selected by First Chicago Capital Markets, Inc. ("FCCM")
and reasonably acceptable to the Borrower. FCCM will act as arranger (the
"Arranger") and will, upon consultation with the Borrower, manage all aspects
of the syndication including, without limitation, the timing of all offers to
potential lenders, the acceptance of commitments, and the amounts accepted. The
Borrower agrees to participate actively in the preparation of an information
package regarding the operations and prospects of the Borrower and the
presentation of the information to prospective lenders.
The obligation of the Agent to make loans under the Facility is subject to the
following: (i) the preparation, execution, and delivery of a credit agreement
("Credit Agreement") and other loan documents (collectively, together with the
Credit Agreement, the "Loan Documents") mutually acceptable to the Borrower and
the Lenders incorporating, without limitation, substantially the terms and
conditions outlined herein and in the Term Sheet; and (ii) except as disclosed
in the Borrower's Report on Form 10-K for the fiscal year ended December 31,
1996 previously provided to the Agent, the Agent's determination that there is
no
<PAGE> 2
[FIRST OF CHICAGO LETTERHEAD]
March 31, 1997
Page 2 of 4
material adverse change in the business, condition (financial or otherwise),
operations, performance, properties of the Borrower since December 31, 1996 and
prior to closing; and (iii) the absence of any material adverse change prior to
closing in primary and secondary loan syndication markets or capital markets
generally which the Agent reasonably believes would adversely affect the
Agent's ability to syndicate the Facility as contemplated hereby.
The Borrower hereby agrees to reimburse the Agent and the Arranger for all
reasonable out-of-pocket expenses (including the reasonable fees, time charges,
and expenses of attorneys for the Agent and the Arranger, which attorneys may
be employees of the Agent or the Arranger) incurred in connection with the
preparation, negotiation, execution, syndication, and enforcement of this
commitment letter, the fee letter of even date herewith between the Borrower
and the Agent and the Arranger (the "Fee Letter"), the Loan Documents, and any
other documentation contemplated hereby or thereby.
The Borrower hereby further agrees to (i) indemnify and hold harmless the
Agent, the Arranger, the Lenders, and their respective officers, employees,
agents, and directors (each an "indemnified party") against any and all losses,
claims, damages, costs, expenses (including the reasonable fees, time charges,
and expenses of attorneys for the indemnified parties, which attorneys may be
employees of the indemnified parties), or liabilities of every kind whatsoever
(collectively, the "Indemnified Obligations") to which each of the indemnified
parties may become subject arising out of this Commitment Letter, Term Sheet or
Fee Letter, or the syndication of the Facility, including, without limitation,
expenses incurred in connection with investigating or defending against any
liability or action (whether or not such indemnified party is a party thereto),
except that the Borrower shall not be liable for any Indemnified Obligations of
any indemnified party to the extent (a) any of the foregoing is found in a
final judgment by a court of competent jurisdiction to have arisen from such
indemnified party's gross negligence or willful misconduct, or (b) such
Indemnified Obligations arise as a result of any claim, litigation or
proceeding between Borrower and Agent in which the Borrower prevails; and (ii)
assert no claim against any indemnified party seeking consequential damages on
any theory of liability in connection in any way with the transaction which is
the subject of this Commitment.
The Borrower's obligations under the immediately preceding two paragraphs shall
continue and are and shall remain absolute obligations of the Borrower, unless
and until superseded by the indemnity provisions of definitive Loan Documents,
whether or not Loan Documents are executed or any loan is made by the Agent
<PAGE> 3
[FIRST OF CHICAGO LETTERHEAD]
March 31, 1997
Page 3 of 4
or any conditions of lending are met. The obligations of the Agent and the
Arranger under this commitment letter shall be enforceable solely by the
Borrower and may not be relied upon by any other person.
This commitment letter, the Fee Letter, and the Term Sheet are for the
Borrower's confidential use only and may not be disclosed by it to any person
other than its employees, attorneys, and financial advisors (but not commercial
lenders), and then only in connection with the proposed transaction and on a
confidential basis, except where (in the Borrower's judgment) disclosure is
required by law or where the Agent or the Arranger consents to the proposed
disclosure, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, the Agent consents to the inclusion of this commitment letter
and term sheet in the Borrower's Schedule 13E-4 to be filed on or about April
10, 1997. Officers, directors, employees, and agents of each of the Arranger
and the Agent shall at all times have the right to share information (subject
to the confidentiality provisions of the Confidentiality Agreement dated on or
about the date hereof by the Agent and FCCM to the Borrower) received from the
Borrower and its affiliates and their respective officers, directors,
employees, and agents.
Please indicate the Borrower's acceptance of the commitment herein contained in
the space indicated below and return a copy of this commitment letter so
executed to the Arranger. By its acceptance hereof, the Borrower agrees to pay
the Agent and the Arranger the fees described in the Term Sheet and Fee Letter.
This commitment will expire at 5:00 p.m. (CST) on the fifth business day
following the date hereof, unless on or prior to such time the Arranger shall
have received a copy of this commitment letter executed by the Borrower,
together with the fees due and payable pursuant to the Fee Letter.
Notwithstanding timely acceptance of this commitment letter pursuant to the
preceding sentence, the commitment herein contained will automatically
terminate unless definitive Loan Documents are executed on or before April 30,
1997.
This commitment letters, the Fee Letters, and the Term Sheet supersede any and
all prior versions hereof or thereof. This commitment letter may only be
amended by a writing signed by all parties hereto.
IF THIS COMMITMENT LETTER, THE TERM SHEET, THE FEE LETTER, OR ANY ACT,
OMISSION, OR EVENT HEREUNDER OR THEREUNDER BECOMES
<PAGE> 4
[FIRST OF CHICHGO LETTERHEAD]
March 31, 1997
Page 4 of 4
THE SUBJECT OF A DISPUTE, THE BORROWER, THE AGENT, AND THE ARRANGER EACH HEREBY
WAIVE TRIAL BY JURY. THIS COMMITMENT LETTER SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS.
Sincerely,
THE FIRST NATIONAL BANK OF CHICAGO
individually and as Agent
By: Patricia H. Besser
------------------------------
Title: Vice President/Sr. Banker
--------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
as Arranger
By: Sumit Sengupta
-------------------------------
Title: Director
--------------------------
ACCEPTED AND AGREED TO:
SPX CORPORATION
By: Patrick J. O'Leary
----------------------------
Title: Chief Financial Officer
--------------------------
Date: 4/4/97
--------------------------
<PAGE> 5
[FIRST CHICAGO LETTERHEAD]
March 31, 1997
SPX Corporation
700 Terrace Point Drive
Muskegon, MI 49443-3301
Attention: Mr. Patrick O'Leary
Vice President Finance,
Treasurer, and Chief Financial Officer
Gentlemen/Ladies:
Re: Fee Letter
Reference is made to the letter ("Commitment Letter"), dated this date, from
The First National Bank of Chicago (the "Agent") and First Chicago Capital
Markets, Inc. (the "Arranger") to SPX Corporation (the "Borrower"). Capitalized
terms not defined herein shall have the meaning set forth in the Commitment
Letter. In addition to fees which may be agreed to by the Borrower in any
existing or subsequent commitment letter, term sheet, fee letter, Credit
Agreement, or other agreement, the Borrower agrees to pay the Agent and the
Arranger the following non-refundable fees:
1. Arrangement Fee: An arrangement fee of 0.275 % of the Aggregate
Commitment, payable to the Arranger on the date the Borrower signs the
Credit Agreement.
2. Annual Administrative Agent's Fee: An annual fee of $50,000, payable to
the Agent for the first year at the initial funding, and in years
thereafter quarterly in arrears.
The foregoing fees are in addition to, and not in limitation of, any fees which
shall be payable to the Agent in its capacity as a Lender. Nothing herein shall
restrict the Agent and the Arranger (or require the consent of the Borrower)
from dividing their respective fees between each other in a manner other than
as set forth herein. The Borrower agrees not to disclose any or all of the
terms of this fee letter to any person other than employees, attorneys, or
accountants of the Borrower, in each case, to whom it is necessary to disclose
the information (and whom, in each case, shall be made aware of this promise
not to disclose)
<PAGE> 6
[FIRST CHICAGO LETTERHEAD]
March 31, 1997
Page 2 of 2
or as may be required by law or any court or regulatory agency having
jurisdiction over the Borrower.
If the Borrower is in agreement with the foregoing, please execute and return
to the Arranger the enclosed copy of this fee letter.
Sincerely,
THE FIRST NATIONAL BANK OF CHICAGO
individually and as Agent
By: Patricia H. Besser
----------------------------------
Title: Vice President/Sr. Banker
--------------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
as Arranger
By: Sumit Sengupta
----------------------------------
Title: Director
-------------------------------
ACCEPTED AND AGREED TO:
SPX CORPORATION
By Patrick J. O'Leary
--------------------------------
Title: Chief Financial Officer
---------------------------
Date: 4/4/97
---------------------------
<PAGE> 7
TERM SHEET
SPX CORPORATION
MARCH 31, 1997
This Term Sheet is delivered with a commitment letter of even date herewith
(the "Commitment Letter"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Commitment Letter.
GENERAL TERMS
Borrower: SPX Corporation.
GUARANTORS: Each wholly-owned domestic subsidiary shall
unconditionally guarantee all of the indebtedness,
obligations, and liabilities of the Borrower arising
under or in connection with the Loan Documents.
AGGREGATE AMOUNT: $400,000,000 (the "Aggregate Commitment") comprised of
loans under the facility described below (the
"Facility").
ADMINISTRATIVE AGENT: The First National Bank of Chicago (the "Agent").
ARRANGER: First Chicago Capital Markets, Inc. (the "Arranger").
LENDERS: A group of lenders selected by the Arranger and
reasonably satisfactory to the Borrower
(collectively, together with the Agent in its capacity as
lender, the "Lenders"). (The maximum commitment of the
Agent is $400,000,000.)
SYNDICATION The Arranger will manage all aspects of the syndication
MANAGEMENT: including, without limitation, the timing of offers to
potential Lenders, the amounts offered to potential
Lenders, the acceptance of commitments, and the
compensation provided (subject to the provisions of this
Term Sheet and the Fee Letter). Without limiting the
foregoing, upon the Arranger's acceptance of any such
commitment from a Lender, the Agent shall be relieved of
its commitment to fund such amount.
ALLOCATION: The Arranger shall, upon consultation with the Borrower,
allocate the commitments received from the Lenders.
COLLATERAL: Unsecured.
THE FACILITY
TYPE: Five-year revolving credit loan.
<PAGE> 8
USE OF PROCEEDS: The proceeds from the Facility will be used to repurchase
Borrower's common stock in an amount not to exceed
$150,000,000, provided that the $400,000,000 commitment
shall be reduced by the principal amount of the public
subordinated debt not tendered to the Borrower as part of
its tender offer; to refinance existing senior debt; for
acquisitions; and for working capital and general
corporate purposes (with a $35,000,000 sublimit for
letters of credit).
MATURITY: Final maturity shall be the fifth anniversary of the
Closing Date.
INTEREST RATES AND FEES
All amounts outstanding under the Facility shall bear interest, at the
Borrower's option, at the margin based on the ratio of Debt/EBITDA set forth in
the table below. There shall be a commitment fee of the percent per annum set
forth in the table below on the daily unborrowed portion of the Aggregate
Commitment, payable quarterly in arrears to the Agent for the ratable benefit
of the Lenders from closing until the termination date. Letters of credit shall
be priced at the Eurodollar Rate Margin plus customary fees.
<TABLE>
<CAPTION>
EURODOLLAR POST-CLOSING
BASE RATE MARGIN COMMITMENT FEE
DEBT/EBITDA RATE MARGIN (IN BASIS POINTS) (IN BASIS POINTS)
<S> <C> <C> <C> <C>
Level 1 > 3.5:1 0 100.0 25.0
-
Level 2 > 3.0:1 but < 3.5:1 0 87.5 25.0
-
Level 3 > 2.5:1 but < 3.0:1 0 75.0 22.5
-
Level 4 > 2.0:1 but < 2.5:1 0 62.5 20.0
-
Level 5 > 1.0:1 but < 2.0:1 0 50.0 17.5
-
Level 6 < 1.0:1 0 37.5 15.0
</TABLE>
Initial pricing shall be set at Level 4.
Debt/EBITDA shall be determined quarterly, beginning with the quarter ending
June 30, 1997, for the preceding 12-month period.
GENERAL PROVISIONS Eurodollar Rate interest periods shall be one, two,
RELATING TO three, or six months. Interest on Eurodollar Rate
INTEREST RATES: loans shall be payable in arrears on the last day of each
interest period and, in the case of an interest period
longer than three months, quarterly, upon any prepayment
(whether due to acceleration or otherwise), and at final
maturity.
Page 2
<PAGE> 9
Interest on all loans, Eurodollar Rate loans, and fees
shall be calculated for actual days elapsed on the basis
of a 360-day year. Interest on ABR loans shall be
calculated for actual days elapsed on the basis of a
365-, or when appropriate, 366-day year.
The Credit Agreement will include customary provisions
relating to yield protection, availability, and capital
adequacy. After default, the Required Lenders may
increase the interest rate to ABR plus 2% per annum.
DEFINITIONS RELATING The following terms shall have the meanings set forth
TO INTEREST RATES: below:
"ABR" means a fluctuating rate of interest equal
to the higher of (a) CBR and (b) the Federal Funds
Effective Rate most recently determined by the Agent plus
1/2% per annum.
"CBR" means the corporate base rate of interest
announced by the Agent from time to time, changing when
and as said corporate base rate changes.
"Eurodollar Rate" means the rate at which the Agent
offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at
11:00 a.m. (London time) two business days prior to the
borrowing date in the approximate amount of, and for a
maturity corresponding to, the Agent's (in its capacity
as a Lender) portion of the loan, adjusted for
Federal Reserve Board reserve requirements.
"Federal Funds Effective Rate" means, for any period, a
fluctuating rate of interest equal for each day during
such period to (a) the weighted average of the rates on
overnight Federal Funds transaction with members of the
Federal Reserve System arranged by Federal Funds
brokers, as published for such day by the Federal
Reserve Bank of New York or (b) if such rate is not so
published for any day the average of the quotations for
such day on such transactions received by the Agent
from three Federal Funds brokers of recognized standing
selected by it.
AGENT AND The Borrower shall pay such additional fees to the Agent
ARRANGER FEES: and the Arranger as are specified in the Fee Letter
dated the date hereof between the Borrower and the Agent
and the Arranger.
INITIAL BORROWINGS: All borrowings must be ABR or one week Eurodollar loans
until the earlier of 90 days following closing or the
date the Agent determines the syndication has closed.
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PREPAYMENTS AND COMMITMENT REDUCTIONS
MANDATORY Prepayments for sale of assets (other than those
PREPAYMENTS: permitted by part (i) of the asset sale covenant).
VOLUNTARY The Aggregate Commitment may be reduced by the Borrower
COMMITMENT in a minimum amount of $5,000,000 upon three business
REDUCTIONS: days' prior written notice.
VOLUNTARY
PREPAYMENTS: Loans bearing interest based on the ABR may be prepaid at
any time without penalty in a minimum amount of
$1,000,000. Loans bearing interest based on the
Eurodollar Rate may be paid at any time, provided that
the Borrower shall compensate the Lenders for any funding
losses and loss of profits incurred as a result of any
prepayment of a loan bearing interest based on the
Eurodollar Rate prior to the last day of the applicable
interest period.
APPLICATION OF All mandatory prepayments shall permanently reduce
PREPAYMENTS: commitments under the Facility and repay outstandings in
excess of the reduced commitment.
CONDITIONS PRECEDENT
Usual conditions to each loan (including absence of default or unmatured
default, absence of material litigation, and lack of material adverse change
from the Borrower's financial condition and operations as reflected in the
Borrower's consolidated financial statements as of December 31, 1996,
previously delivered to the Agent (except as disclosed in writing by Borrower
to Agent prior to the Closing Date or as otherwise approved by the Required
Lenders)). Additional conditions precedent to initial loan will include,
without limitation, pro forma financial statements reflecting the transactions
contemplated herein; and consent, if necessary, of the public subordinated debt
holders or other debt holders.
REPRESENTATIONS AND WARRANTIES
Usual representations and warranties to be made as of the Closing Date and in
connection with each loan including, without limitation, representations
regarding corporate existence and standing, authorization and validity, no
conflict, government consent, financial statements, absence of material adverse
change, absence of litigation and contingent obligations, taxes, subsidiaries,
ERISA, compliance with laws, ownership of properties, insurance, absence of
default or unmatured default, and continued accuracy of representations,
subject in each case to customary exceptions (including without limitation with
respect to materiality in a manner acceptable to Borrower and Agent).
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COVENANTS
The Credit Agreement will contain customary covenants (including, without
limitation, compliance with laws, maintenance of insurance, keeping of books,
conduct of business, maintenance of properties, payment of taxes, inspection of
records, and furnishing of quarterly and annual financial statements, quarterly
compliance certificates, and other financial information. The Credit Agreement
will contain the following covenants:
RESTRICTED PAYMENTS: The Borrower shall not pay any dividends or other
distributions on its capital stock or repurchase any
capital stock of the Borrower (except for any such
dividends, distributions or repurchases payable solely
in capital stock of the Borrower or in cash in lieu of
fractional shares in respect thereof). Notwithstanding
the foregoing, the Borrower may, provided there is no
default, (i) apply up to $150,000,000 to the repurchase
of the Borrower's common stock pursuant to the proposed
Dutch Auction, (ii) repurchase an additional 500,000
shares of the Borrower's common stock pursuant to a
buy-back program to be announced. Borrower may also
prepay any subordinated debt not prepaid at the time of
the initial funding hereunder.
INDEBTEDNESS: The Borrower shall not, nor permit any subsidiary to,
incur indebtedness except (i) indebtedness existing on
the date of closing and refinancings thereof, (ii)
indebtedness of any person existing at the time of the
acquisition of the capital stock of such person or all or
substantially all of the assets of such person, (iii)
indebtedness in connection with any sale of receivables
described under the caption "Sale of Accounts" below, and
(iv) a $20,000,000 debt basket for additional
indebtedness not covered by the other exceptions to this
covenant.
MERGERS, Borrower will not, nor permit any subsidiary to,
CONSOLIDATIONS, consolidate, merge or sell all or substantially all of
SALE OF ASSETS: its assets, except (i) a subsidiary may merge or
consolidate with or sell its assets to the Borrower or
another subsidiary or otherwise if the "Sale of Assets"
covenant is complied with, (ii) the Borrower may
consolidate or merge with or sell all of its assets to
another person, provided that the Borrower is the
surviving person and immediately after such merger,
Borrower shall not be in default under the Credit
Agreement, and (iii) other exceptions similar to those
contained in the Credit Agreement among SPX Corporation,
the Agent, and the Lenders named therein, dated March 24,
1994 ("Existing Credit Agreement").
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SALE OF ASSETS: The Borrower will not, and will not permit any subsidiary
to, sell, lease, transfer or otherwise dispose of
assets with an aggregate market value in excess of
$10,000,000 in any one year, unless the proceeds thereof
are (i) invested within a twelve month period in other
capital assets (including any goodwill in connection
therewith), whether directly, through the purchase of the
equity interests in another person or otherwise, or (ii)
applied to the repayment of the Facility; provided that
the aggregate asset sales shall not exceed annually 15%
of the Borrower's consolidated assets and shall not
exceed 25% of the Borrower's consolidated assets during
the term of the Facility.
INVESTMENTS, LOANS, Borrower will not, and will not permit any subsidiary, to
ADVANCES AND make any investments in the capital stock of any other
ACQUISITIONS: person, or loans, or advances or acquisitions of the
capital stock or indebtedness of any other person or of
all or substantially all of the assets of any person or
partnership interest ("Investments") with exceptions
similar to those contained in the Existing Credit
Agreement. Without limiting the foregoing, Borrower may
make Investments (i) up to $75,000,000 of investments in
subsidiaries of which up to $20,000,000 may be
investments in foreign subsidiaries, and (ii) in an
amount up to $50,000,000 (including assumed debt) per
acquisition (provided that Borrower may make the
approximately $70,000,000 acquisition of the Company
previously identified to Agent) with an aggregate of
$150,000,000 (including assumed debt) of acquisitions
during the term of the Facility, with usual conditions
before each acquisition, including without limitation, no
default before or on a pro forma basis after each
acquisition.
LIENS AND
ENCUMBRANCES: Borrower will not, nor permit any subsidiary to, create
or incur any lien, other than (i) customary
exceptions for liens for taxes, statutory liens, judgment
liens, and exceptions to title, (ii) liens existing on
the Closing Date, (iii) liens existing on assets at the
time of the acquisition thereof (and not incurred in
contemplation thereof), (iv) liens existing on assets of
any person at the time such person becomes a subsidiary
(and not incurred in contemplation thereof), (v) purchase
money liens and capital leases, (vi) liens in respect of
industrial development projects and (vii) other liens, in
addition to those described in clauses (i) - (vii) above
incurred in the ordinary course of business; provided
that the obligations secured by all such liens for items
(v) through (vii) shall not exceed $20,000,000 in the
aggregate; and provided further that the industrial
revenue bonds, purchase money liens and capital leases
existing on the closing date shall not be counted toward
the $20 000,000 basket.
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TRANSACTION WITH
AFFILIATES: The Borrower will not, nor permit any subsidiary to,
enter into any transaction with an affiliate (other
than transactions between the Borrower or any subsidiary
with any subsidiary) except on fair and reasonable terms
no less favorable to the Borrower or such subsidiary than
would obtain in a comparable arm's-length transaction
with a person other than an affiliate.
SALE OF ACCOUNTS: Borrower will not sell accounts, except the sale of
receivables in connection with a $50,000,000 asset
securitization acceptable to the Required Lenders.
FINANCIAL COVENANTS: Ratio of Debt to EBITDA not to exceed 3.75:1.0 for the
period from closing to December 31, 1997, 3.5:1.0 for
the period from January 1, 1998, to September 30, 1998,
and 3.0:1 thereafter.
Ratio of (EBITDA + Rentals - CapEx) to (Interest Expense
+ Rentals) not to be less than 1.5:1.0 for the period
from closing to September 30, 1997, 1.75:1 for the
period from October 1, 1997, to September 30, 1998, and
2:0:1 thereafter.
Capital Expenditures shall mean all payments during a
specified period in respect of expenditures for any
assets, or for improvements, replacements,
substitutions or additions therefor or thereto, which are
capitalized on the consolidated balance sheet of the
Borrower (except in respect of any capital leases, assets
acquired with the proceeds of purchase money
indebtedness, Acquisitions, etc.).
Debt shall mean, without duplication, obligations of the
Borrower and its subsidiaries for borrowed money,
obligations secured by assets of the Borrower and its
subsidiaries and guaranties of Debt of others by the
Borrower or any subsidiary, including without
limitation, receivables financings.
EBITDA shall mean consolidated net income of the
Borrower and its subsidiaries, plus interest expense,
depreciation, amortization and other non-cash charges
and income taxes, all as determined in accordance with
GAAP, except that interest expense shall be adjusted for
the effect of any rate hedging transaction or interest
rate swap. EBITDA will exclude the following items
reflected in the Borrower's financial statements for
those quarters prior to and ending on June 30, 1997: a
goodwill write-off of $67,800,000 during 1996;
restructuring charges incurred during 1996 of
$15,800,000; premiums for repurchase of subordinated
debt of $26,700,000; and costs and fees related to
accounts receivable securitizations.
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Rentals shall mean all rentals payable by the Borrower or
any subsidiary as a lessee of real or personal
property, excluding, however, any amounts payable on
account of maintenance, repairs, insurance, taxes,
assessments, water rates and similar charges.
Other: Covenants for sale and leaseback, financial reporting,
use of proceeds, notice of default, conduct of business,
taxes, insurance, compliance with laws, maintenance of
properties, inspection, environmental matters, change in
corporate or partnership structure or fiscal year, tax
consolidation, ERISA compliance.
DEFAULTS
Nonpayment of principal when due; nonpayment of interest, fees or other amounts
after a grace period of 5 days; material inaccuracy of representations and
warranties; violation of covenants (subject, in the case of affirmative
covenants, to a grace period of 30 days after notice from the Agent or any
Lender); the acquisition by any person of 25% or more of Borrower's voting
stock (but excluding any acquisition by any shareholder currently owning 10% or
more of Borrower's voting stock), or during any 25 consecutive months, the
ceasing of the continuing directors (including each director first elected
during such period who was approved by a vote of a majority of the directors of
the Borrower) to constitute a majority of the board of Borrower ("change of
control"); cross-default to indebtedness of the Borrower or any of its
subsidiaries in an aggregate principal amount of more than $10,000,000;
bankruptcy of the Borrower or any subsidiary; judgments in excess of
$10,000,000 in the aggregate against the Borrower or any subsidiary remain
unpaid 30 days after due; termination or invalidity of the guarantee of any
Guarantor; a violation of environmental law which could reasonably be expected
to have a material adverse effect; and the occurrence of a default under any
Loan Document.
VOTING
Amendments and waivers with respect to the loan documentation for the Facility
shall require the approval of Lenders holding not less than 51% of the
aggregate principal amount of Loans and unused Commitments under the Facility
(the "Required Lenders"), except that the consent of each Lender affected
thereby shall be required with respect to (i) reductions in the amount or
extensions of the scheduled final maturity of any loans, (ii) reductions in the
rate of interest or any fee or extensions of any due date thereof, (iii)
increases in the amount or extensions of the expiry date of any Lender's
commitment, (iv) modifications to the voting percentages required for
amendments to the loan documentation under the Facility, (v) release of
guarantors, (vi) reductions in the amount or extensions of the payment date for
prepayments, (vii) permitting Borrower assignments, or (viii) amending the
definition of commitment.
ASSIGNMENTS AND PARTICIPATIONS
The Lenders shall be permitted to sell participations in their loans and
commitments (with voting rights for participants limited to those matters
requiring the affirmative vote of each Lender affected thereby as described
under "Voting" above); and the Lenders shall be permitted to sell
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assignments in their loans and commitments with the consent of the Agent and
the Borrower, which consent shall not be unreasonably withheld (with customary
exceptions for which no such consent is required).
MISCELLANEOUS
GOVERNING LAW: The Commitment Letter, the Fee Letter, and this Term
Sheet are governed by the internal laws of the State of
Illinois.
EXPENSES: The expenses of the Agent and the Arranger, whether
incurred prior to or subsequent to closing, in
investigation, preparation, negotiation, documentation,
syndication, administration, and collection will be for
the account of the Borrower, including reasonable
expenses of and fees for attorneys for the Agent and the
Arranger (who may or may not be employees of the Agent or
the Arranger) and, in connection with any enforcement
thereof or restructuring thereof after a default, other
advisors and professionals engaged by the Agent or the
Arranger.
This Term Sheet is intended as an outline only and does
not purport to summarize all the conditions, covenants,
representations, warranties, and other provisions which
would be contained in definitive legal documentation
for the financing contemplated hereby. The commitment
of the Agent and the other Lenders is subject to
negotiation and execution of definitive Loan Documents in
form and substance satisfactory to the Lenders and their
respective counsel.
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