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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
HOLOPHANE CORPORATION
(NAME OF SUBJECT COMPANY)
HOLOPHANE CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
43645B10
(CUSIP NUMBER OF CLASS OF SECURITIES)
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JOHN R. DALLEPEZZE
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
HOLOPHANE CORPORATION
250 EAST BROAD STREET
SUITE 1400
COLUMBUS, OHIO 43215
(614) 224-3134
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE AND
COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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WITH A COPY TO:
RONALD A. ROBINS, JR., ESQ.
VORYS, SATER, SEYMOUR AND PEASE LLP
52 EAST GAY STREET
COLUMBUS, OHIO 43215
(614) 464-6400
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Holophane Corporation, a Delaware
corporation (the "Company"), and the address of its principal executive offices
is 250 East Broad Street, Suite 1400, Columbus, Ohio 43215. The title of the
class of equity securities to which this statement relates is the common stock,
par value $0.01 per share, of the Company (the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to the tender offer disclosed in a Tender Offer
Statement on Schedule 14D-1, dated as of June 25, 1999 (the "Schedule 14D-1") of
NSI Enterprises, Inc., a Delaware corporation (the "Purchaser") and a
wholly-owned subsidiary of National Service Industries, Inc., a Delaware
corporation ("Parent"), to purchase all of the outstanding Shares at a price of
$38.50 per Share or any greater amount per Share paid pursuant to such tender
offer as it may be amended (the "Merger Consideration"), net to the seller in
cash, less any required withholding taxes, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 25, 1999 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute the
"Offer"). A copy of the Offer to Purchase and the Letter of Transmittal are
filed as Exhibits (a)(1) and (a)(2), respectively, to this Statement.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 20, 1999, by and among Parent, the Purchaser and the Company (the
"Merger Agreement"). The Merger Agreement provides, among other things, that
upon the terms and subject to the conditions contained therein, and in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), after the satisfaction or waiver of the conditions contained therein,
and the purchase of the Shares pursuant to the Offer, the Purchaser will be
merged with and into the Company (the "Merger"). A copy of the Merger Agreement
is filed as Exhibit (c)(1) to this Statement and is incorporated herein by
reference in its entirety.
According to the Schedule 14D-1, the address of the principal executive
offices of each of the Purchaser and Parent is 1420 Peachtree Street, N.E.,
Atlanta, Georgia 30309.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
Statement, are set forth in Item 1 above.
(b) Except as described in this Item 3(b) and in Annex I attached hereto,
which is incorporated herein by reference in its entirety, there are, to the
knowledge of the Company, no material contracts, agreements, arrangements or
understandings or any actual or potential conflicts of interest between the
Company or its affiliates and (i) its executive officers, directors or
affiliates or (ii) Parent, the Purchaser, or their respective executive
officers, directors or affiliates.
CONFIDENTIALITY AGREEMENT
The following is a summary of the Confidentiality Agreement, dated as of
March 31, 1999, between the Company and Parent (the "Confidentiality
Agreement"). This summary does not purport to be complete and is qualified in
its entirety by reference to the complete text of the Confidentiality Agreement,
a copy of which is filed as Exhibit (c)(2) hereto and is incorporated herein by
reference. Capitalized terms not otherwise defined below shall have the meanings
set forth in the Confidentiality Agreement.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, Parent has agreed to keep confidential all
non-public, confidential or proprietary information furnished to it by the
Company, subject to certain exceptions (the "Evaluation Material") and to use
the Evaluation Material solely for the purpose of evaluating a possible
transaction involving the Company and Parent.
In addition to the provisions with respect to the maintenance of
confidentiality and the permitted use of the Evaluation Material, Parent also
agreed in the Confidentiality Agreement to (i) not use the Evaluation Material
for the direct or indirect purpose of soliciting the business of customers of
the Company, (ii) certain standstill
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restrictions, (iii) certain restrictions on the solicitation of employees of the
Company and (iv) indemnify and hold harmless the Company and its directors,
officers, stockholders, owners, affiliates and representatives from any damage,
loss, cost (including reasonable legal fees and the cost of enforcing such
indemnity) or liability arising out of or resulting from any breach by Parent,
any of its affiliates or any Related Party of its or their obligations under the
Confidentiality Agreement.
AGREEMENT AND PLAN OF MERGER
The following is a summary of the Merger Agreement. This summary does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Merger Agreement, a copy of which is filed as Exhibit
(c)(1) hereto and is incorporated herein by reference. Capitalized terms not
otherwise defined below shall have the meaning set forth in the Merger
Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, and in any event within five business days from the
date of public announcement of the execution thereof. The obligation of
Purchaser to accept for payment Shares tendered pursuant to the Offer is subject
to (i) the Minimum Condition (as defined below) and (ii) the satisfaction or
waiver of certain other conditions of the Offer. See "-- Certain Conditions of
the Offer." Under the Merger Agreement, the Purchaser expressly reserves the
right to waive the Minimum Condition or any other conditions to the Offer, to
increase the price per Share payable in the Offer and to make any other change
in the terms or conditions of the Offer. The Minimum Condition of the Offer is
that at the expiration of the Offer, at least a majority of the Shares
(determined on a fully diluted basis) shall have been validly tendered and not
properly withdrawn.
Notwithstanding the above, under the terms of the Merger Agreement, the
Purchaser shall not (i) waive the Minimum Condition without the consent of the
Board of Directors of the Company (the "Board of Directors") or (ii) without the
consent of the Board of Directors, make any change in the terms or conditions of
the Offer which (A) changes the form of consideration to be paid, (B) decreases
the price per Share payable in the Offer, (C) reduces the maximum number of
Shares to be purchased in the Offer, (D) imposes additional conditions to the
Offer, (E) extends the Expiration Date (except as required by law or the
applicable rules and regulations of the Commission) or (F) amends any term of
the Offer in any manner adverse to holders of Shares; provided that the
Purchaser shall have the right, in its sole discretion, to extend the Offer on
up to two separate occasions for up to five business days each, notwithstanding
the prior satisfaction of conditions to the Offer, in order to attempt to
satisfy the Minimum Condition or to satisfy the requirements of Section 253 of
the DGCL. The Purchaser shall have no obligation to pay interest on the purchase
price of tendered Shares, including in the event the Purchaser exercises its
right to extend the period of time during which the Offer is open. The rights
reserved by the Purchaser in this paragraph are in addition to the Purchaser's
rights to terminate the Offer as described in "-- Certain Conditions of the
Offer."
Certain Conditions of the Offer. Notwithstanding any other term or
provision of the Offer, the Purchaser will not be required to accept for payment
or, subject to any applicable rules and regulations of the Commission, to pay
for any Shares tendered pursuant to the Offer and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may amend or terminate the Offer, to the extent provided
in the Merger Agreement, unless the Minimum Condition shall have been satisfied
or waived in accordance with the terms thereof. Furthermore, notwithstanding any
other term or provision of the Offer, the Purchaser will not be required to
accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may terminate or amend the Offer, to the extent provided
in the Merger Agreement, if, at any time on or after June 20, 1999, and before
the acceptance of such Shares for payment or, subject to any applicable rules
and regulations of the Commission, the payment therefor, any of the following
conditions exists:
(a) an order shall have been entered (or any governmental entity shall
have threatened in writing to seek an order) in any action or proceeding
before any federal or state court or governmental agency or other
regulatory body or a permanent injunction by any federal or state court of
competent jurisdiction in the
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United States shall have been issued and remain in effect (i) making
illegal the purchase of, or payment for, any Shares by the Purchaser,
Parent or any of Parent's other subsidiaries; (ii) otherwise preventing the
consummation of the Offer or the Merger; (iii) imposing limitations on the
ability of the Purchaser, Parent or any of Parent's other subsidiaries to
exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser
pursuant to the Offer on all matters properly presented to the Company's
stockholders; (iv) prohibiting or materially limiting the ownership or
operation by the Company or any of its subsidiaries, or Parent or any of
its subsidiaries, of all or any material portion of the business or assets
of the Company and its subsidiaries, or Parent and its subsidiaries, or
compelling Parent or any of its subsidiaries to dispose of all or any
material portion of the businesses or assets of the Company or its
subsidiaries or Parent or its subsidiaries, as a result of transactions
contemplated by the Offer or the Merger Agreement; or (v) requiring
divestiture by Parent or the Purchaser of any Shares;
(b) there shall have been any federal or state statute, rule or
regulation enacted, enforced, promulgated, amended or made applicable to
the Company, the Purchaser, Parent or any other affiliate of Parent or the
Company or the Offer or the Merger on or after June 25, 1999 by any
governmental entity that could reasonably be expected to result, directly
or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) (i) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, which breach shall not have been cured or waived within the
earlier of (A) five business days after receipt of notice thereof by the
Company or (B) two business days prior to the date on which the Offer
expires; provided that if notice of such breach is received by the Company
within such two business day period, the Purchaser will extend the Offer by
at least two business days, or (ii) any of the representations and
warranties of the Company set forth in the Merger Agreement (disregarding
any qualifications contained therein regarding materiality or Material
Adverse Effect) shall not be true when made or at any time prior to
consummation of the Offer as if made at and as of such time, except to the
extent that such breach would not be reasonably likely to have a Material
Adverse Effect;
(d) the Merger Agreement is terminated in accordance with its terms or
the Offer is terminated with the consent of the Company;
(e) any event occurs that is reasonably likely to result in a Material
Adverse Effect;
(f) (i) the Board of Directors or any committee thereof withdraws or
modifies in a manner adverse to Parent or the Purchaser the approval or
recommendation of the Offer, the Merger or the Merger Agreement, or
approves or recommends any Alternative Transaction, (ii) any person or
group enters into a definitive agreement or an agreement in principle with
the Company with respect to an Alternative Transaction or (iii) the Board
of Directors or any committee thereof resolves to do any of the foregoing;
(g) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated;
or
(h) any consent required to be filed or obtained in connection with
the Offer, the failure of which to be so filed or obtained would have a
Material Adverse Effect, shall not have been obtained.
The Merger. The Merger Agreement provides that subject to the terms and
conditions thereof (and including those described above in "-- Certain
Conditions of the Offer") and in accordance with the DGCL, at the Effective Time
of the Merger, the Purchaser shall be merged with and into the Company. As a
result of the Merger, the separate corporate existence of the Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger
(the "Surviving Corporation").
Pursuant to the Merger Agreement, each Share outstanding immediately prior
to the Effective Time (unless otherwise provided for) shall be converted into
the right to receive $38.50 in cash, net to the seller in cash, less any
required withholding taxes and without interest thereon (the "Merger
Consideration"), upon surrender of the certificate formerly representing such
Share in the manner described in the Merger Agreement.
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As soon as practicable following the date of the Merger Agreement, upon the
written request of the Purchaser, the Company (or, if appropriate, any committee
administering any stock option or compensation plan or arrangement) and the
Purchaser shall take such actions as are reasonably required (including, if
necessary, the provision of funds by the Purchaser to the Company) to provide
that at the Effective Time, each holder of a then outstanding stock option
and/or right to purchase Shares granted under any stock option or compensation
plan or arrangement of the Company (a "Company Stock Option"), whether or not
then exercisable, shall, upon surrender thereof to the Company or its designee,
receive from the Company the difference between the Merger Consideration and the
exercise price per Share for the Shares covered by such Company Stock Option,
net of any applicable tax withholding. Subject to the terms and conditions set
forth in the Merger Agreement, the Company and such committee shall further take
all actions necessary to cause each Company Stock Option to be canceled at the
Effective Time by virtue of the Merger and to cause the stock option or
compensation plan or arrangements of the Company providing for the granting of
Company Stock Options ("Option Plans") to terminate as of the Effective Time and
the provisions in any other plan, program or arrangement providing for the
issuance or grant by the Company or any of its subsidiaries of any interest in
respect of the capital stock of the Company or any of such subsidiaries to be
terminated as of the Effective Time. Without limiting the generality of the
foregoing, the Company and such committee shall have given all requisite notices
under all Option Plans and any agreements with respect to any Company Stock
Option, accelerated the vesting of Company Stock Options and given holders
thereof the requisite opportunity to exercise as is required, in each case, such
that following the Effective Time no holder of Options or any participant in the
Option Plans or any other such plans, programs or arrangements shall have the
right thereunder to acquire any equity securities of the Company or any of its
subsidiaries.
The Merger Agreement provides that, unless otherwise stipulated, Shares
that are outstanding immediately prior to the Effective Time and which are held
by stockholders who have not voted in favor of or consented to the Merger in
writing and have demanded appraisal for such Shares in accordance with the DGCL
shall not be converted into a right to receive the Merger Consideration, but
shall be entitled to receive the consideration as shall be determined pursuant
to Section 262 of the DGCL; provided that if such holder shall have failed to
perfect or shall have withdrawn or otherwise lost his, her or its right to
appraisal, such holder's Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration.
The Merger Agreement also provides that at the Effective Time and without
any further action on the part of the Company and the Purchaser, the (Second)
Restated Certificate of Incorporation of the Company in effect at the Effective
Time shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law. At the Effective Time and
without any further action on the part of the Company and the Purchaser, the
Bylaws of the Purchaser in effect at the Effective Time shall be the Bylaws of
the Surviving Corporation until amended in accordance with applicable law.
The Merger Agreement provides that from and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Purchaser at the Effective Time shall be
the directors of the Surviving Corporation and (ii) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Stockholders' Meeting; Proxy Statement. The Merger Agreement provides that
the Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement, unless a vote
of stockholders of the Company is not required by the DGCL. The Board of
Directors of the Company shall recommend approval and, to the extent required by
the DGCL, adoption by the Company's stockholders of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement. In connection
with such meeting, the Company (i) will promptly prepare and file with the
Commission, will use its reasonable efforts to have cleared by the Commission
and will thereafter mail to its stockholders as promptly as practicable a proxy
or information statement of the Company (the "Company Proxy Statement") and all
other proxy materials for such meeting, (ii) will use its reasonable efforts to
obtain the necessary approvals by its stockholders of the Merger Agreement and
(iii) will otherwise comply with all legal requirements applicable to such
meeting. Notwithstanding the foregoing, if the Purchaser acquires at least 90%
of the outstanding Shares, the Company has agreed, at the request of the
Purchaser, to take all necessary and appropriate action to cause the Merger to
become effective as
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soon as reasonably practicable after such acquisition, without a meeting of the
Company's stockholders, in accordance with Section 253 of the DGCL.
Neither the Board of Directors nor any committee thereof will, except as
expressly permitted by the Merger Agreement, (i) withdraw, qualify or modify, or
propose publicly to withdraw, qualify or modify, in a manner adverse to Parent
or the Purchaser, its approval or recommendation of the Merger or the Merger
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any transaction involving any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its material subsidiaries or the acquisition of any equity
interest in, or substantial portion of the assets of, the Company or any of its
material subsidiaries, other than the transactions contemplated by the Merger
Agreement (an "Acquisition Proposal") from a party other than Parent or the
Purchaser (an "Alternative Transaction") or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "Acquisition Agreement") related to any
Alternative Transaction. Notwithstanding the foregoing, if, prior to the
approval of the Merger Agreement by the stockholders of the Company, the Board
of Directors determines in the exercise of its fiduciary duties, after it has
received a Superior Proposal (as hereinafter defined) in compliance with the
terms of the Merger Agreement, that it may (subject to this and the following
sentences) inform the stockholders of the Company that it no longer believes
that the Merger is advisable and no longer recommends approval (a "Subsequent
Determination") and enter into an Acquisition Agreement with respect to a
Superior Proposal, but only at a time that is after the fifth day following
delivery to Parent of written notice advising Parent that the Board of Directors
has received a Superior Proposal. Such written notice must specify the material
terms and conditions of such Superior Proposal, identify the person making such
Superior Proposal and state that the Board of Directors intends to make, or is
considering making, a Subsequent Determination. During the five day period, the
Company is obligated to provide an opportunity for Parent to propose such
adjustments to the terms and conditions of the Merger Agreement as would enable
the Board of Directors to proceed with its recommendation to the stockholders of
the Company without a Subsequent Determination. A "Superior Proposal" means any
proposal (on its most recently amended or modified terms, if amended or
modified) made by any person other than Parent or its affiliates to enter into
an Alternative Transaction which the Board of Directors determines in its good
faith judgment to be more favorable to the stockholders of the Company than the
Merger, taking into account all relevant factors, including, but not limited to,
whether, in the good faith judgment of the Board of Directors, after
consultation with the Company's independent financial advisor, the third party
is reasonably able to finance the transaction, and any proposed changes to the
Merger Agreement that may be proposed by Parent in response to such Alternative
Transaction.
Designation of Directors. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of more than a majority of the outstanding Shares
pursuant to the Offer, and from time to time thereafter, Purchaser will be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors as shall give Purchaser representation
on the Board of Directors equal to a majority of the Board of Directors, and
that the Company will amend or cause to be amended its Bylaws as necessary to
effect such representation and will, at such time, promptly take all action
necessary to cause the Purchaser's designees to be so elected or appointed,
including either increasing the size of the Board of Directors or securing the
resignations of incumbent directors or both. The Company has also agreed to use
its reasonable best efforts to cause persons designated by the Purchaser to
constitute the same percentage as is on the Board of Directors on each committee
of the Board of Directors.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, the concurrence of a majority of the directors of
the Company then in office who are neither designated by the Purchaser nor are
employees of the Company (the "Disinterested Directors") shall be required to
authorize any amendment, or waiver of any term or condition, of the Merger
Agreement or the certificate of incorporation or bylaws of the Company, any
termination of the Merger Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Purchaser or waiver or assertion of any of the Company's rights thereunder, and
any other consent or action by the Board of Directors with respect to the Merger
Agreement. The number of Disinterested Directors shall not be less than two.
Access to Information; Confidentiality. From the date of the Merger
Agreement until the Effective Time, upon reasonable, prior notice from Parent,
the Company will give Parent and the Purchaser, their counsel,
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financial advisors, auditors and other authorized representatives reasonable
access during normal business hours and without disrupting the orderly conduct
of business by the Company and its subsidiaries to the offices, properties,
books and records of the Company and its subsidiaries, will furnish to Parent
and the Purchaser, their counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to reasonably cooperate with
Parent and the Purchaser in their investigation of the business of the Company
and its subsidiaries.
The Merger Agreement further provides that Parent and the Purchaser will
hold, and will cause their respective officers, directors, employees,
accountants, lenders, counsel, consultants, advisors and agents to hold, in
confidence, all confidential documents and information concerning the Company
and its subsidiaries furnished to Parent or the Purchaser in connection with the
transactions contemplated by the Merger Agreement in accordance with the
Confidentiality Agreement.
Other Offers. The Merger Agreement provides that the Company and its
subsidiaries will not, nor shall the Company authorize or permit any officers,
directors, employees, representatives or agents of the Company and its
subsidiaries to, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal or (ii) engage in negotiations
with, or disclose any nonpublic information relating to the Company or any of
its subsidiaries or afford access to the properties, books or records of the
Company or any of its subsidiaries to, any person that may be considering
making, or has made, an Acquisition Proposal; provided, however, that nothing
contained in the Merger Agreement prevents the Company or the Board of Directors
from (a) furnishing nonpublic information to, or affording access to the
properties, books or records of the Company or any of its subsidiaries to, or
entering into discussions or an agreement with, any person in connection with an
unsolicited Acquisition Proposal by such person, if and only to the extent that
(x) the Company's Board of Directors determines in good faith after consultation
with outside legal counsel that such action is necessary to comply with its
fiduciary duties to the stockholders of the Company under applicable law, (y)
prior to furnishing any such nonpublic information to, or entering into
discussions or negotiations with, such person, the Board of Directors receives
from such person an executed confidentiality agreement with customary terms and
(z) the Board of Directors concludes in the exercise of its fiduciary duties
that the Acquisition Proposal is a Superior Proposal, or (b) taking and
disclosing to the Company's stockholders any position, and making any related
filings with the Commission, as required by Rules l4e-2 and 14d-9 under the
Exchange Act with respect to any Alternative Transaction that is a tender offer;
provided, that the Board of Directors shall not recommend that the stockholders
of the Company tender their Shares in connection with any such tender offer
unless the Board of Directors by majority vote determines in good faith that
failing to take such action would constitute a breach of the Board of Directors'
fiduciary duties under applicable law. The Company will promptly notify Parent
after receipt of any Acquisition Proposal or any request for nonpublic
information relating to the Company or any of its subsidiaries or for access to
the properties, books or records of the Company or any of its subsidiaries by
any person that has made an Acquisition Proposal and will keep Parent fully
informed of the status and details of any such Acquisition Proposal, indication
or request. The Company has agreed not to take any action with respect to such
proposal or inquiry for five days after delivery of such notice to Parent and
will negotiate exclusively and in good faith with Parent for such five day
period to make such adjustments in the terms and conditions of the Merger
Agreement as would enable the Company to proceed with the transactions
contemplated therein on such adjusted terms.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement provides that the Certificate of Incorporation of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in the (Second) Restated Certificate of
Incorporation of the Company and these provisions are not to be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect materially adversely the rights thereunder of
individuals who at the Effective Time were directors or officers of the Company,
with respect to any act or omission in their capacity as an officer or director
of the Company occurring on or prior to the Effective Time, unless such
modification shall be required by law.
Parent has agreed to maintain the current policies of directors' and
officers' liability insurance maintained by the Company (or substitute policies
with substantially the same coverage and containing substantially comparable
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terms and conditions) for at least six years after the Effective Time, with
respect to matters occurring prior to the Effective Time; provided that Parent
will not be required to expend more than an amount per year equal to 400% of
current annual premiums paid by the Company to maintain or procure such
coverage.
The Company will, to the fullest extent permitted under applicable law and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and after the Effective Time, the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless each present
and former director and officer of the Company (collectively, the "Indemnified
Parties") against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or directly pertaining to any
action or omission in their capacity as an officer or director of the Company
occurring on or prior to the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, for a period of six years after the
Effective Time, in each case to the fullest extent permitted under applicable
law (and shall pay any expenses in advance of the final disposition of such
action or proceeding to each Indemnified Party to the fullest extent permitted
under applicable law, upon receipt from the Indemnified Party to whom expenses
are advanced of an undertaking to repay such advances required under applicable
law). In the event of any such claim, action, suit, proceeding or investigation,
(i) the Company or the Surviving Corporation, as the case may be, have agreed to
pay the reasonable fees and expenses of counsel selected by the Indemnified
Parties promptly after statements therefor are received and (ii) the Company and
the Surviving Corporation shall cooperate in the defense of any such matter. In
the event that any claim for indemnification is asserted or made within such
six-year period, all rights to indemnification in respect of such claim shall
continue until the final disposition of such claim.
Conduct of Business Pending the Merger. Pursuant to the Merger Agreement,
the Company and its subsidiaries have agreed to conduct their business in the
ordinary course consistent with past practice and to use their reasonable
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees.
The Company and its subsidiaries will also refrain from taking various
actions without Parent's consent, which consent shall not be unreasonably
delayed, conditioned or withheld, pending consummation of the Merger. These
limitations cover, among other things (subject to certain limitations): changes
in governing documents; changes in capital stock; declaration or payment of
dividends or other distributions; increases in the compensation or benefits of
directors, officers and employees (except to the extent required under existing
plans); adopting a plan of complete or partial dissolution; incurring debt above
specified levels or entering into transactions other than in the ordinary course
of business consistent with past practice; making capital expenditures beyond
specified limits; entering into certain transactions; making any material tax
election; changing any accounting principles in a material manner; and paying or
discharging any claims, liabilities or obligations other than in the ordinary
course of business consistent with past practice or as required pursuant to
contracts or agreements existing as of the date of the Merger Agreement.
Employee Benefits Matters. As of the Effective Time, the Surviving
Corporation will employ all employees of the Company who desire employment. With
respect to each individual who is employed by the Surviving Corporation as of
the Effective Time, Parent may, at its option, either (i) cause the Surviving
Corporation to continue to provide for such individual's participation in each
medical, surgical, hospitalization and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of ERISA) of the Company on the same terms
as immediately prior to the Effective Time or (ii) permit such individual to
participate in an employee welfare plan sponsored by Parent or any affiliate of
Parent (a "Purchaser Plan") which provides substantially similar benefits as
prior to the Effective Time on the same terms and to the same extent as
similarly situated employees of Parent's Lithonia Lighting unit; provided that
if Parent elects to permit an employee to participate in a Purchaser Plan
pursuant to clause (ii) above, such employee will (A) not be subject to any
preexisting condition provision or waiting period under any Purchaser Plan which
provides medical, dental, vision or prescription drug benefits and (B) to the
extent permitted by applicable law, be credited with prior service with the
Company for all purposes related to eligibility and vesting under any Purchaser
Plan in which such employee participates.
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With respect to any employee of the Company as of the date of the Merger
Agreement who is not employed by the Surviving Corporation as of the Effective
Time, the Surviving Corporation will be responsible for providing continuation
coverage to such employee (and his or her dependents), as required under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Further, with
respect to any former employee of the Company (or his or her dependents) who is
receiving continuation coverage under COBRA as of the Effective Time, the
Surviving Corporation will maintain such continuation coverage in compliance
with COBRA.
Parent has agreed to cause the Surviving Corporation to continue each of
the following plans and agreements for the remaining term thereof: (i) the
Company's Second Amended and Restated Supplemental Executive Retirement Plan
(the "SERP"); and (ii) certain Termination Benefit Agreements and Employment
Agreements between the Company and its executive officers; provided that the
Surviving Corporation shall not be obligated to make contributions to the SERP
or to permit employees to defer compensation into the SERP for more than two
years after the Effective Time. Parent has also agreed to cause the Surviving
Corporation to continue for at least two years, or offer a comparable plan to,
the Company's bonus plans and educational assistance program. Any outstanding
rights under the following plans will be fully satisfied in connection with the
transactions contemplated by the Merger Agreement and, upon satisfaction of
those rights, the plans shall be terminated: (i) the Company's Employee Stock
Option (Purchase) Plan; and (ii) the Company's Performance Award Program.
Under the Merger Agreement, Parent has agreed to assume and honor, and
cause the Surviving Corporation to assume and to honor, in accordance with their
terms all employment, severance and other compensation agreements and
arrangements listed in the Disclosure Schedule delivered pursuant to the Merger
Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations and warranties by the Company concerning: the Company's
capitalization; required filings and consents; the Board of Directors' approval
of the Merger Agreement and the transactions contemplated thereby (including
approvals so as to render inapplicable thereto the limitation on business
combinations contained in Section 203 of the DGCL); Commission filings and
financial statements; absence of certain changes or events; compliance with law;
absence of litigation; employee benefit plans; environmental matters; tax
matters; real estate matters; intellectual property; Year 2000 issues; and
brokers. Some of the representations are qualified by a material adverse effect
clause. "Material Adverse Effect," for the purposes of the Merger Agreement and
the Offer to Purchase, means an effect that (A) is materially adverse to the
financial condition, business, assets or results of operations of the Company
and its subsidiaries taken as a whole, excluding in all cases: (i) events or
conditions generally affecting the industry in which the Company and its
subsidiaries operate or arising from changes in general business or economic
conditions; (ii) any change or effect resulting from any change in law or
generally accepted accounting principles, which generally affect entities such
as the Company; and (iii) any change or effect resulting from the execution
and/or announcement of the Merger Agreement or compliance by the Company with
the terms of the Merger Agreement or any agreement contemplated by the Merger
Agreement, or (B) would prevent or materially delay the consummation of the
Offer or the Merger.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of Parent, the Purchaser and the Company to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions: (i) the Merger Agreement and the transactions contemplated
hereby shall have been approved and adopted by the stockholders of the Company,
to the extent required by, and in accordance with, the DGCL and the Company's
(Second) Restated Certificate of Incorporation and Bylaws; (ii) no governmental
entity shall have enacted, issued, promulgated, enforced or entered any law,
rule, regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making the Merger illegal or otherwise restricting, preventing or prohibiting
consummation of the Merger; (iii) Purchaser shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; and (iv) all actions
by or in respect of or filings with any governmental body, agency, official or
authority required shall have been obtained or made.
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Termination Events. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval thereof by the stockholders of the Company, to the extent required by
the DGCL):
(a) by mutual written consent of Parent and the Company;
(b) by either the Company or Parent, if the Effective Time shall not
have occurred on or before December 31, 1999 (provided that the right to
terminate the Merger Agreement under this provision will not be available
to any party whose breach of the Merger Agreement has been the primary
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date);
(c) by either the Company or Parent, if any governmental entity shall
have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties shall use their
reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the
Merger Agreement and such order, decree, ruling or other action shall have
become final and non-appealable;
(d) by Parent:
(i) if the Purchaser terminates the Offer without the Purchaser
having purchased any Shares by reason of the failure to satisfy any
condition set forth in Annex I to the Merger Agreement;
(ii) if the Board of Directors (A) fails to include in the Schedule
14D-9 or the Company Proxy Statement its recommendation without
modification or qualification that the stockholders of the Company
accept the Offer and approve the Merger Agreement and the Merger, (B)
approves or recommends any other Acquisition Proposal, (C) withdraws,
modifies or qualifies its recommendation of the Offer, the Merger
Agreement or the Merger in a manner adverse to the interests of Parent
or the Purchaser or (D) resolves to do any of the foregoing; or
(e) by the Company:
(i) if the Purchaser fails to commence the Offer within 5 business
days following the date of the initial public announcement of the Offer;
(ii) if the Purchaser terminates the Offer without having accepted
any Shares for payment by reason of the failure to satisfy any condition
set forth in Annex I to the Merger Agreement (unless such failure
results from the failure of the Company to perform in any material
respect any of its covenants or agreements contained in the Merger
Agreement or the material breach by the Company of any of its
representations and warranties contained in the Merger Agreement);
(iii) if the Purchaser fails to pay for Shares within 90 days
following the commencement of the Offer, unless the failure to pay for
Shares is the result of the failure of the Company to perform in any
material respect any of its covenants or agreements contained in the
Merger Agreement or the material breach by the Company of any
representations or warranties contained in the Merger Agreement;
(iv) if any of Parent's or the Purchaser's representations or
warranties contained in the Merger Agreement are not true and correct in
any material respect, as if such representation or warranty was made as
of such time on or after the date of the Merger Agreement; or Parent or
the Purchaser fails to perform in any material respect any obligation or
to comply in any material respect with any agreement or covenant of
Parent or the Purchaser to be performed or complied with by it under the
Merger Agreement and which, in any such case, is not cured within 5
business days following receipt of notice thereof; or
(v) if, prior to the purchase of Shares pursuant to the Offer and
after it has received a Superior Proposal in compliance with the Merger
Agreement, the Company's Board of Directors determines that it is
obligated by its fiduciary duties under applicable law to terminate the
Merger Agreement, provided that such termination will not be deemed
effective under the Merger Agreement until the Company pays the
Termination Fee (as defined below) and reimburses certain of Parent's
and the Purchaser's expenses.
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Fees and Expenses. If (i) Parent terminates the Merger Agreement because
the Board of Directors (A) fails to include a recommendation in the Schedule
14D-9 or Company Proxy Statement, (B) approves or recommends any other
Acquisition Proposal, (C) withdraws, modifies or qualifies its recommendation of
the Offer or the Merger in a manner adverse to the interests of Parent or the
Purchaser or (D) resolves to do any of the foregoing, or (ii) the Company
terminates the Merger Agreement prior to the purchase of Shares pursuant to the
Offer and after it has received a Superior Proposal in compliance with the
Merger Agreement because its Board of Directors determines that such termination
is obligated by its fiduciary duties under applicable law, then in each such
case the Company has agreed to pay to Parent and the Purchaser, within five
business days of such termination, a fee, in cash in an amount of $20,000,000
(the "Termination Fee"). In addition, the Company has agreed to reimburse
Parent, the Purchaser and their affiliates (not later than five business days
after submission of valid statements therefor) for all actual documented
out-of-pocket fees and expenses incurred by any of them or on their behalf in
connection with the Offer and the Merger and the consummation of all
transactions contemplated by the Merger Agreement (including, without
limitation, fees and disbursements payable to financing sources, investment
bankers, counsel to the Purchaser or Parent or any of the foregoing, and
accountants) up to a maximum amount of $3 million.
If within 12 months after termination of the Merger Agreement, the Company
consummates an Acquisition Proposal with a person other than Parent or the
Purchaser, then immediately prior to, and as a condition of, consummation of
such transaction the Company shall pay to Parent upon demand an amount in cash
equal to the Termination Fee to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger, unless the Termination Fee is payable
or has been paid in accordance with the Merger Agreement or if the Merger
Agreement is terminated by the Company as a result of Parent's failure in any
material respect to perform its obligations under the Merger Agreement or as a
result of a material breach of any of its representations or warranties.
RECENT AMENDMENTS TO BENEFIT PLANS
Supplemental Executive Retirement Plan. The following is a summary of
certain material provisions of the SERP which was adopted by the Company
effective as of June 1, 1999. This summary does not purport to be complete and
is qualified in its entirety by reference to the complete text of the SERP, a
copy of which is filed as Exhibit (c)(4) hereto and is incorporated herein by
reference. Capitalized terms not otherwise defined below shall have the meanings
set forth in the SERP.
The SERP is a non-qualified deferred compensation plan which is designed to
allow certain key executives of the Company to defer recognition, for income tax
purposes, of a portion of their annual compensation. Under the plan, generally,
a participating executive may defer receipt of payment of a portion of his or
her annual salary and annual bonus. Such deferred amounts are paid at a later
date pursuant to the applicable provisions of the SERP.
The SERP supersedes and replaces the Amended and Restated Holophane
Corporation Supplemental Executive Retirement Plan (the "Existing SERP"). The
SERP amended the Existing SERP to (i) allow participants to defer to the SERP
the cash portion of "change of control benefits" to which they may become
entitled under the terms of their employment or termination agreements; (ii)
allow participants to defer the distribution of "change of control" benefits to
which they may become entitled under the SERP; (iii) allow participants to elect
a lump sum distribution of SERP benefits by incurring a six percent reduction in
the value of the benefit; (iv) require the establishment of a trust to hold SERP
assets; (v) curtail the sponsor's right to terminate the SERP by providing that
any termination may not affect elections available under the SERP; (vi) require
the assumption of the SERP by any successor to the Company; and (vii) add a
series of forms and agreements through which participants may exercise various
elections made available under the SERP. The SERP did not otherwise materially
change the Existing SERP.
Holophane Corporation Executives' Deferred Compensation Plan. The
following is a summary of certain material provisions of the Holophane
Corporation Executives' Deferred Compensation Plan (the "Executives' Deferred
Compensation Plan") which was adopted by the Company effective June 1, 1999.
This summary does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Executives' Deferred Compensation Plan, a
copy of which is filed as Exhibit (c)(5) hereto and is incorporated herein by
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reference. Capitalized terms not otherwise defined below shall have the meanings
set forth in the Executives' Deferred Compensation Plan.
The Executives' Deferred Compensation Plan is a non-qualified deferred
compensation plan for certain executives of the Company. Under the terms of the
plan, eligible executives may (i) defer receipt of the gain they otherwise would
receive on the conversion of stock options under either or both of the Incentive
Stock Plan or the 1996 Incentive Stock Plan (both as defined below) and receive
that gain over a ten year period; and (ii) elect a lump sum distribution of plan
benefits by incurring a six percent reduction in the value of the benefit.
Holophane Corporation Executives' Deferred Compensation Program. The
following is a summary of certain material provisions of the Holophane
Corporation Executives' Deferred Compensation Program (the "Executives' Deferred
Compensation Program") which was adopted by the Company effective June 1, 1999.
This summary does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Executives' Deferred Compensation Program,
a copy of which is filed as Exhibit (c)(6) hereto and is incorporated herein by
reference. Capitalized terms not otherwise defined below shall have the meanings
set forth in the Executives' Deferred Compensation Program.
The Executives' Deferred Compensation Program is substantially identical to
the Executives' Deferred Compensation Plan. However, the program was designed
for a different group of executives of the Company. The substantive rights of
the participating executives in the Executives' Deferred Compensation Program
are identical to the substantive rights of the participating executives in the
Executives' Deferred Compensation Plan.
Holophane Corporation Incentive Stock Plan. The following is a summary of
certain material provisions of the Holophane Corporation Incentive Stock Plan,
as amended by the Company effective June 1, 1999 (the "Incentive Stock Plan").
This summary does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Incentive Stock Plan, a copy of which is
filed as Exhibit (c)(7) hereto and is incorporated herein by reference.
Capitalized terms not otherwise defined below shall have the meanings set forth
in the Incentive Stock Plan.
The Incentive Stock Plan is a broad-based program designed to provide
eligible employees with equity-based compensation. Generally, under the terms of
the Incentive Stock Plan, the Company may award stock options, restricted
shares, share appreciation rights (SAR's) and performance shares to
participants.
The June 1, 1999 amendments to the Incentive Stock Plan allow participants
to defer the gain they might otherwise receive on the conversion of stock
options issued under the original Incentive Stock Plan after a "change of
control." The June 1, 1999 amendments did not otherwise materially change the
Incentive Stock Plan.
Holophane Corporation 1996 Incentive Stock Plan. The following is a
summary of certain material provisions of the Holophane Corporation 1996
Incentive Stock Plan, as amended by the Company effective June 1, 1999 (the
"1996 Incentive Stock Plan"). This summary does not purport to be complete and
is qualified in its entirety by reference to the complete text of the 1996
Incentive Stock Plan, a copy of which is filed as Exhibit (c)(8) hereto and is
incorporated herein by reference. Capitalized terms not otherwise defined below
shall have the meanings set forth in the 1996 Incentive Stock Plan.
Like the Incentive Stock Plan (described above), the 1996 Incentive Stock
Plan is a broad-based program designed to provide eligible employees with
equity-based compensation. The types of awards available under the 1996
Incentive Stock Plan are similar to the types of awards available under the
Incentive Stock Plan.
The June 1, 1999 amendments allow participants to defer the gain they might
otherwise receive on the conversion of stock options issued under the 1996
Incentive Stock Plan after a "change of control." The June 1, 1999 amendments
did not otherwise materially change the 1996 Incentive Stock Plan.
Holophane Corporation Fee Deferral Plan for Non-Employee Directors. The
following is a summary of certain material provisions of the Holophane
Corporation Fee Deferral Plan for Non-Employee Directors, as amended by the
Company effective June 1, 1999 (the "Non-Employee Director Fee Deferral Plan").
This summary does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Non-Employee Director Fee Deferral Plan, a
copy of which is filed as Exhibit (c)(9) hereto and is incorporated
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herein by reference. Capitalized terms not otherwise defined below shall have
the meanings set forth in the Non-Employee Director Fee Deferral Plan.
The Non-Employee Director Fee Deferral Plan is a non-qualified deferred
compensation plan for outside directors of the Company. Under the terms of the
plan, eligible directors may defer recognition, for income tax purposes, of all
or a portion of their directors' fees otherwise payable to them by the Company.
Such deferred amounts are paid at a later date pursuant to the applicable
provisions of the plan.
Effective June 1, 1999, the Company amended the Non-Employee Director Fee
Deferral Plan in order to extend to non-employee directors substantially similar
deferral opportunities made available to executives (e.g., the deferral of stock
option gain and "change of control" benefits) through changes made to
executives' employment and termination agreements and by amendments made to the
SERP. The June 1, 1999 amendments did not otherwise materially change the
Non-Employee Director Fee Deferral Plan.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) On several occasions between 1993 and 1998, the Board of Directors of
the Company discussed possible means of enhancing stockholder value. These
included not only the sale of the Company, but also the possibility of the
Company's making one or more significant acquisitions itself. However, while the
Company believes that it has successfully acquired and integrated several,
relatively small businesses, including Antique Street Lamps, Inc., MetalOptics
Corporation and Holophane S.A. de C.V., the Company has not been able to
identify any significant acquisitions. In addition, management of the Company
has met periodically with representatives of other lighting companies to explore
opportunities for a transaction involving the Company, whether in the context of
discussions pursuant to a confidentiality agreement, informal conversations at
trade shows and lighting industry events and otherwise.
In early 1999, the Board of Directors of the Company began discussing a
possible consolidation trend in the lighting industry. Several Board members
expressed concern that, if the Company could not find a suitably large
acquisition target, then the Board should consider pursuing the sale of the
Company.
On February 25, 1999, at the request of the Board of Directors, Salomon
Smith Barney Inc. ("Salomon Smith Barney"), the Company's financial advisor,
reviewed with the Board of Directors and Vorys, Sater, Seymour and Pease LLP
("Vorys Sater"), the Company's outside legal counsel, several possible strategic
alternatives available to the Company for increasing stockholder value. These
alternatives included a full, public auction of the Company, a limited, private
auction of the Company, a leveraged recapitalization or leveraged buyout and a
significant acquisition program.
After discussion of these alternatives, the Board of Directors determined
that the Company should pursue a private auction with a limited number of
potential purchasers, both strategic and financial. The Board of Directors made
clear at such time that the Company was not for sale and that several of the
other strategic alternatives for increasing stockholder value remained
attractive, but that, given the perceived consolidation trend, the Company
should "test the market" with respect to a possible sale. Furthermore, the Board
of Directors, with senior management's strong concurrence, stressed the need for
confidentiality and discretion in the process, so as not to risk losing sales
and operational employees during the process.
Between February 25, 1999, and March 24, 1999, the Company, with the
assistance of its advisors, prepared a confidential memorandum and management
presentation for participants in the limited auction process. During such
period, a select list of potential purchasers were contacted and confidentiality
agreements were executed with each of the potential purchasers who had requested
a confidential memorandum.
On March 17, 1999, the Board of Directors of the Company met by telephone
conference, with the participation of the Company's chief financial officer and
the Company's legal and financial advisors, at which meeting the Board was
updated on the status of the process. On March 25, 1999, the Board of Directors
convened again by telephone conference, with the Company's chief financial
officer and Vorys Sater present, for a further update on the process and for
final comments on the confidential memorandum. The Board of Directors reiterated
that the Company was not for sale, but authorized continuing to consider the
limited auction process and distributing a confidential memorandum to each of
the potential purchasers that had entered into a confidentiality
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agreement with the Company. On March 31, 1999 and thereafter, confidential
memoranda were distributed to 19 potential purchasers.
On April 13, 1999, the Board of Directors met by telephone conference, with
the participation of the Company's chief financial officer and the Company's
legal and financial advisors, at which meeting the Board was updated on the
Company's first fiscal quarter and the bidding process.
First round indications of interest were due on April 28, 1999. On April
29, 1999, the Company held its 1999 Annual Meeting of Stockholders in Columbus,
Ohio. Following the Annual Meeting, the Board of Directors met with the
Company's chief financial officer and its legal and financial advisors to
discuss the first round indications of interest. Salomon Smith Barney reviewed
in detail each of the seven initial indications of interest that had been
received. Following extensive discussion, the Board determined that the Company
should continue the limited auction process and instructed Salomon Smith Barney
to invite the top five participants to the next round, which involved management
presentations and data room visits.
Beginning on May 18, 1999, four of the five participants visited the
Company's facilities in Newark, Ohio, met with senior management and reviewed
due diligence materials. Each participant also received a first draft of the
Merger Agreement.
Final bids were due on June 16, 1999, together with a mark-up of the form
of the Merger Agreement previously distributed to the participants by Vorys
Sater. On June 16, 1999, the Company received three offers. On June 17, 1999,
the Board of Directors met by telephone conference with the Company's chief
financial officer and legal and financial advisors to review in detail each of
the offers and the comments to the Merger Agreement.
Following extensive discussions regarding each of the offers and proposed
terms, the Board instructed Salomon Smith Barney to approach Parent, which the
Board deemed to have submitted the best proposal. The Company's legal and
financial advisors were authorized to negotiate with Parent and its financial
advisors, Wasserstein Perella & Co., Inc. ("Wasserstein Perella"), terms and
conditions (including price) within specific parameters. The Board further
instructed Salomon Smith Barney to contact another bidder if Parent declined to
improve certain terms and conditions of its offer. In connection with these
revised terms, on June 18, 1999, Vorys Sater delivered a revised draft of the
Merger Agreement to King & Spalding, Parent's outside legal counsel, for the
consideration of Parent and its advisors.
On June 18, 1999, Parent and its financial advisors communicated improved
terms and conditions, including an increase in the per Share offer price to
$38.50 per Share, subject to the condition that its revised proposal would not
be valid if the final Merger Agreement was not negotiated promptly or other
potential purchasers were contacted.
Over the weekend of June 19 and June 20, 1999, the Company and Parent, and
their respective advisors, negotiated the terms of the Merger Agreement. On the
afternoon of Sunday, June 20, 1999, the Board of Directors of the Company met in
person and by telephone conference, with the participation of the Company's
chief financial officer and legal and financial advisors, to review the final
terms of the Merger Agreement and Parent's revised Offer. At this meeting, Vorys
Sater summarized for the Board the material terms of, and resolution of key
issues in, the revised Merger Agreement. Salomon Smith Barney then reviewed with
the Board its financial analysis of the per Share cash consideration payable in
the Offer and the Merger and rendered an oral opinion (subsequently confirmed by
delivery of a written opinion dated June 20, 1999) as to the fairness, from a
financial point of view, of the $38.50 per Share cash consideration to be
received in the Offer and the Merger by the holders of Shares (other than Parent
and its affiliates). After extensive discussion of the terms of the Offer and
the Merger, the Board of Directors unanimously approved the Offer and the Merger
and determined that they were advisable and fair to, and in the best interests
of, the Company and its stockholders. Further, the Board of Directors
unanimously approved the Merger Agreement and the transactions contemplated
thereby and recommended that the stockholders accept the Offer and tender their
Shares to the Purchaser and, at any meeting duly called and held for such
purpose, approve the Merger and the Merger Agreement. Following such actions,
the Merger Agreement was executed and delivered by the parties thereto. On
Monday, June 21, 1999, prior to the opening of trading on the New York Stock
Exchange, Parent and the Company jointly announced that the Merger Agreement had
been signed and the Purchaser's intention to commence the Offer.
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On June 25, 1999, the Purchaser commenced the Offer.
(b) At the meeting held on June 20, 1999, the Board of Directors
unanimously approved the Offer and the Merger and determined that they were
advisable and fair to, and in the best interests of, the Company and its
stockholders. Further, the Board of Directors unanimously approved the Merger
Agreement and the other transactions contemplated thereby and recommended that
the stockholders accept the Offer and tender their Shares to the Purchaser and,
at any meeting duly called and held for such purpose, approve the Merger and the
Merger Agreement. In making such recommendation and approving the Merger
Agreement and the transactions contemplated thereby, the Board considered a
number of factors, including, but not limited to, the following:
(i) the Company's business, financial condition, results of
operations, assets, liabilities, business strategy and prospects, as well
as various risks and uncertainties associated with those prospects,
including the Company's competitive environment, new product development
efforts, and the status of other business initiatives;
(ii) the perception of the Board of Directors that a trend of
consolidation and concentration was occurring in the lighting industry, and
that the lighting industry requires that companies be significantly larger
than the Company because of the cyclical and capital- and research and
development-intensive nature of the industry;
(iii) the fact that the Company had been approached several times over
the past five years with respect to a possible acquisition, that the
Company had carefully considered such transactions, that the Company had
carefully considered over the past several months a broad range of options
to enhance stockholder value, including acquiring smaller or
similarly-sized companies, a leveraged recapitalization and a leveraged
buy-out, and that no other compelling opportunities of these kinds became
evident;
(iv) the fact that, after conducting a limited auction process, no
other bidders in such process proposed acquiring the Company on more
attractive terms than those of the Offer and the Merger;
(v) the financial and other terms and conditions of the Merger
Agreement, including the proposed structure of the Offer and the Merger
involving a cash tender offer of $38.50 per Share for all outstanding
shares to be followed by a merger for the same consideration and including
the terms relating to the treatment of the Company's employees;
(vi) the fact that the value of $38.50 per Share cash price to be
received by the Company's stockholders in both the Offer and the Merger
represented a significant premium over the market prices of the Common
Stock over various periods;
(vii) the fact that neither the Offer nor the Merger is subject to any
financing condition, and that Parent has represented to the Company that it
has or will have available, prior to the expiration of the Offer,
sufficient funds to enable the Purchaser to consummate the Offer, the
Merger and the other transactions contemplated by the Merger Agreement;
(viii) the opinion of Salomon Smith Barney dated June 20, 1999 to the
effect that, as of such date and based upon and subject to certain matters
stated in such opinion, the $38.50 per Share cash consideration to be
received in the Offer and the Merger by holders of Shares (other than
Parent and its affiliates) was fair, from a financial point of view, to
such holders. The full text of Salomon Smith Barney's written opinion dated
June 20, 1999 which sets forth the assumptions made, matters considered and
limitations on the review undertaken by Salomon Smith Barney, is attached
hereto as Annex II and is incorporated herein by reference. Salomon Smith
Barney's opinion is directed only to the fairness, from a financial point
of view, of the $38.50 per Share cash consideration to be received in the
Offer and the Merger by holders of Shares (other than Parent and its
affiliates) and is not intended to constitute, and does not constitute, a
recommendation as to whether any stockholder should tender Shares pursuant
to the Offer. HOLDERS OF SHARES ARE URGED TO READ SUCH OPINION CAREFULLY IN
ITS ENTIRETY;
(ix) the fact that, prior to consummation of the Offer, the Board of
Directors may approve a proposal to be acquired by a third party after a
majority of the Board of Directors has determined in good faith (A) after
consultation with outside legal counsel that such action is necessary to
comply with its fiduciary duties and
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(B) that such proposal is more favorable to the Company's stockholders,
taking into account all relevant factors, including, but not limited to,
after consultation with the Company's independent financial advisor, the
third party's ability to finance the transaction, and after the Company
shall have a paid a termination fee of $20,000,000 to Parent plus expenses
of up to $3,000,000;
(x) the recommendation of the Company's management with respect to the
Offer and the Merger; and
(xi) the likelihood that the Offer and the Merger would be
consummated, including the likelihood of satisfaction of regulatory
approvals required pursuant to, and the other conditions to the Offer and
the Merger contained in the Merger Agreement.
The Board of Directors' approval and recommendation was based on the
totality of the information considered by it. The Board of Directors did not
assign relative weights to the factors considered by it or determine that any
one factor was of primary importance.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company has retained Salomon Smith Barney to act as its financial
advisor in connection with the Offer and the Merger. Pursuant to the terms of
Salomon Smith Barney's engagement, the Company has agreed to pay Salomon Smith
Barney upon completion of the Offer and the Merger an aggregate financial
advisory fee based on a percentage of the total consideration, including
liabilities assumed, payable in the Offer and the Merger. It is currently
estimated that the aggregate financial advisory fee payable to Salomon Smith
Barney will be approximately $3.1 million. The Company also has agreed to
reimburse Salomon Smith Barney for reasonable travel and other out-of-pocket
expenses, including the reasonable fees and disbursements of its legal counsel,
and to indemnify Salomon Smith Barney and related parties against certain
liabilities, including liabilities under the federal securities laws, arising
out of Salomon Smith Barney's engagement. Salomon Smith Barney has in the past
provided investment banking services to the Company and Parent unrelated to the
Offer and the Merger, for which services Salomon Smith Barney has received
compensation. In the ordinary course of business, Salomon Smith Barney and its
affiliates (including Citigroup Inc. and its affiliates) may actively trade or
hold the securities of the Company and Parent for their own account or for the
account of customers and, accordingly, may at any time hold a long or short
position in such securities.
Neither the Company nor anyone acting on its behalf has or currently
intends to employ, retain or compensate any person to take solicitations or
recommendations to the stockholders of the Company on its behalf with respect to
the Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) Except as set forth herein, there have been no transactions in the
Shares which were effected during the past sixty days by the Company, or to the
best knowledge of the Company, by any executive officer, director, affiliate or
subsidiary of the Company.
(b) To the best knowledge of the Company, all of its executive officers,
directors, affiliates or subsidiaries presently intend to tender pursuant to the
Offer, all Shares which are owned beneficially by such persons, subject to and
consistent with any fiduciary obligations in the case of Shares held by
fiduciaries.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth above herein, the Company is not engaged in any
negotiations in response to the Offer which relates to or would result in (i) an
extraordinary transaction, such as a merger or reorganization, involving the
Company or any subsidiary of the Company; (ii) a purchase, sale or transfer of a
material amount of assets by the Company or any subsidiary of the Company; (iii)
a tender offer for or other acquisition of securities by or of the Company; or
(iv) any material change in the present capitalization or dividend policy of the
Company.
15
<PAGE> 17
(b) Except as described herein, there are no transactions, Board of
Directors' resolutions, agreements in principle or signed contracts in response
to the Offer that relate to or would result in one or more of the events
referred to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Information Statement attached hereto as Annex I is being furnished in
connection with the contemplated designation by the Purchaser, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board of Directors
of the Company other than at a meeting of the Company's stockholders, following
the purchase by the Purchaser, pursuant to the Offer, of the number of Shares
representing not less than a majority of the outstanding Shares on a fully
diluted basis.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
<TABLE>
<S> <C> <C>
Exhibit(a)(1) -- Offer to Purchase, dated June 25, 1999
Exhibit(a)(2) -- Letter of Transmittal, dated June 25, 1999
Exhibit(a)(3) -- Opinion of Salomon Smith Barney Inc., dated June 20, 1999
(filed as Annex II hereto)
Exhibit(a)(4) -- Joint Press Release of the Company and Parent, dated June
21, 1999
Exhibit(a)(5) -- Letter to stockholders of the Company dated June 25, 1999
Exhibit(c)(1) -- Agreement and Plan of Merger, dated as of June 20, 1999,
among the Company, the Purchaser and Parent
Exhibit(c)(2) -- Confidentiality Agreement, dated as of March 31, 1999,
between the Company and Parent
Exhibit(c)(3) -- The Company's Information Statement filed pursuant to
Section 14(f) of the Securities Exchange Act of 1934 and
Rule 14f-1 thereto (filed as Annex I hereto)
Exhibit(c)(4) -- Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan
Exhibit(c)(5) -- Holophane Corporation Executives' Deferred Compensation Plan
Exhibit(c)(6) -- Holophane Corporation Executives' Deferred Compensation
Program
Exhibit(c)(7) -- Holophane Corporation Incentive Stock Plan, as amended,
effective June 1, 1999
Exhibit(c)(8) -- Holophane Corporation 1996 Incentive Stock Plan, as amended,
effective June 1, 1999
Exhibit(c)(9) -- Holophane Corporation Fee Deferral Plan for Non-Employee
Directors, as amended, effective June 1, 1999
Exhibit(c)(10) -- Employment Agreement dated as of August 30, 1993 between the
Company and John R. DallePezze, as amended, effective June
1, 1999
Exhibit(c)(11) -- Representative Amended Termination Benefit Agreement between
the Company and Bruce Philp, as amended, effective June 1,
1999 (Each of John W. Harvey, S. Lee Keller, William T.
Weisert, Robert St. Germain, Robert Taylor, Jerome
Henderson, Robert Peery, Paolo Minissi, Stuart R.A. Carter
and Sandra K. Cashell entered into substantially identical
agreements)
</TABLE>
16
<PAGE> 18
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
HOLOPHANE CORPORATION
By: /s/ JOHN R. DALLEPEZZE
------------------------------------
Name: John R. DallePezze
Title: President, Chief Executive
Officer
and Chairman of the Board
Dated: June 25, 1999
17
<PAGE> 19
ANNEX I
HOLOPHANE CORPORATION
250 EAST BROAD STREET
SUITE 1400
COLUMBUS, OHIO 43215
INFORMATION STATEMENT
PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
This Information Statement, which is being mailed on or about June 25, 1999
to the holders of record of shares of Common Stock, par value $0.01 per share
(the "Common Stock") of Holophane Corporation, a Delaware corporation (the
"Company"), is being furnished in connection with the potential designation by
NSI Enterprises, Inc., a Delaware corporation (the "Purchaser"), of persons to
the board of directors of the Company (the "Board of Directors" or the "Board").
Such designation shall be made pursuant to an Agreement and Plan of Merger dated
as of June 20, 1999 (the "Merger Agreement") among the Company, the Purchaser
and National Service Industries, Inc., a Delaware corporation ("Parent"). This
Information Statement is attached as Annex I to the Schedule 14D-9 (the
"Schedule 14D-9") of the Company with respect to the Offer (as defined below).
Pursuant to the Merger Agreement, the Purchaser commenced a tender offer on
June 25, 1999 to purchase all of the outstanding shares of Common Stock at a
price of $38.50 per share or any greater amount per share paid pursuant to such
tender offer as it may be amended, net to the sellers in cash, less any required
withholding taxes, upon the terms and conditions set forth in the Offer to
Purchase dated June 25, 1999 (the "Offer to Purchase"), and the related Letter
of Transmittal (which together constitute the "Offer"). Upon the terms and
subject to the conditions of the Offer and the Merger Agreement (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay all shares of
Common Stock validly tendered prior to the Expiration Date (as defined below)
and not properly withdrawn. The term "Expiration Date" means 12:00 midnight, New
York City time, on Friday, July 23, 1999, unless and until the Purchaser, in its
sole discretion (but subject to the terms and conditions of the Merger
Agreement) shall have extended the period during which the Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Purchaser, shall expire.
The Merger Agreement provides, among other things, that promptly upon the
purchase by the Purchaser of more than a majority of the outstanding shares of
Common Stock pursuant to the Offer, and from time to time thereafter, the
Purchaser shall be entitled to designate up to such number of directors, rounded
up to the next whole number, on the Board of Directors as shall give the
Purchaser representation on the Board of Directors equal to a majority of the
Board of Directors, and the Company shall, at such time, promptly take all
action necessary to cause the Purchaser's designees to be so elected, including
either increasing the size of the Board of Directors or securing the
resignations of incumbent directors or both. At such times, the Company will use
its reasonable best efforts to cause persons designated by the Purchaser to
constitute the same percentage as is on the Board of Directors of each committee
of the Board of Directors.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, the concurrence of a majority of the directors of
the Company then in office who are neither designated by the Purchaser nor are
employees of the Company (the "Disinterested Directors") will be required to
authorize any amendment, or waiver of any term or condition, of the Merger
Agreement or the certificate of incorporation or bylaws of the Company, any
termination of the Merger Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Purchaser or waiver or assertion of any of the Company's rights thereunder, and
any other consent or action by the Board of Directors with respect to the Merger
Agreement. The number of Disinterested Directors shall not be less than two.
I-1
<PAGE> 20
The information contained in this Information Statement concerning the
Purchaser and Parent has been furnished to the Company by Parent. The Company
assumes no responsibility for the accuracy, completeness or fairness of any such
information.
You are urged to read this Information Statement carefully. You are not,
however, required to take any action.
WE ARE NOT NOW ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY AT THIS TIME.
PURCHASER DESIGNEES
Set forth in the table below are the name, age and principal occupation and
business experience of each of the persons who the Purchaser has informed the
Company that it intends to designate for election to the Board of Directors (the
"Purchaser Designees"). Unless otherwise indicated, the business address for
each individual listed below is 1420 Peachtree Street, N.E., Atlanta, Georgia
30309. Except for Stewart A. Searle III, who is a Canadian citizen, each of the
Purchaser Designees is a United States citizen.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING PAST
NAME AGE FIVE YEARS AND OTHER DIRECTORSHIPS
- ---- --- ----------------------------------
<S> <C> <C>
James 61 Director of Parent (since 1996); Chairman of the
S. Board of Parent (since February 1996); Chief
Balloun.... Executive Officer of Parent (since February
1996); President of Parent (since October 1996);
Director of McKinsey & Co. (from June 1976
through January 1996). Director of Georgia
Pacific Corporation, Radiant Systems, Inc. and
Wachovia Corporation.
Brock 51 Executive Vice President and Chief Financial
A. Officer of Parent (since 1996); President of
Hattox.... Engineering and Construction Group (January 1995
through September 1996) and Chief Financial
Officer of McDermott International, Inc. (March
1991 through September 1996).
David 61 Director of Parent (since 1990); Executive Vice
Levy... President, Administration and Counsel of Parent
(since September 1992); Senior Vice President,
Secretary and Counsel of Parent (1982 through
September 1992).
Stewart 47 Senior Vice President -- Planning and Development
A. of Parent (since 1996); Senior Vice President of
Searle Development of Equifax, Inc. (1992 through 1996).
III...
</TABLE>
It is expected that the Purchaser Designees may assume office at any time
following the purchase by the Purchaser of a majority of the outstanding shares
of Common Stock pursuant to the Offer, and that, upon assuming office, the
Purchaser Designees will thereafter constitute at least a majority of the Board
of Directors. The Purchaser has informed the Company that each of the Purchaser
Designees has consented to act as a director of the Company, if so designated.
None of Purchaser's Designees or their associates is a director of, or
holds any position with, the Company. To the best of the Company's knowledge,
none of the Purchaser Designees or their associates beneficially owns any equity
securities, or rights to acquire any equity securities, of the Company or has
been involved in any transactions with the Company or any of its directors or
executive officers that are required to be disclosed pursuant to the rules and
regulations of the Securities and Exchange Commission.
I-2
<PAGE> 21
INFORMATION WITH RESPECT TO THE COMPANY
The following information is summarized, in substantial part, from the
Company's Proxy Statement dated as of March 25, 1999, in connection with its
1999 Annual Meeting of Stockholders.
GENERAL
The shares of Common Stock are the only class of voting securities of the
Company outstanding. Each outstanding share of Common Stock is entitled to one
vote. As of March 10, 1999, 10,586,541 shares of Common Stock were outstanding.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of March 10, 1999, by each
of the Company's directors, each of the Company's named executive officers, all
directors and executive officers as a group and each person who is known by the
Company to beneficially own five percent or more of any class of the Company's
voting securities.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
------------------------------------------------
DIRECTORS AND OTHER NAMED NUMBER EXERCISABLE
EXECUTIVE OFFICERS(a) OF SHARES OPTIONS TOTAL PERCENT
- ------------------------- --------- ----------- --------- -------
<S> <C> <C> <C> <C>
John R. DallePezze (b)........................... 337,613 333,167 670,780 6.1%
William R. Michaels.............................. 70,818 14,000 84,818 *
Robert L. Purdum................................. 4,000 26,000 30,000 *
Anthony P. Scotto................................ 48,533 14,000 62,533 *
Tadd C. Seitz.................................... 9,000 26,000 35,000 *
Jeffrey M. Wilkins............................... 2,000 14,000 16,000 *
John W. Harvey................................... 57,879 88,850 146,729 1.4
S. Lee Keller (b)................................ 122,999 80,850 203,849 1.9
Bruce A. Philp (b)............................... 149,415 78,850 228,265 2.1
William T. Weisert (b)........................... 31,945 59,750 91,695 *
All directors and executive officers as a group
(12 persons)................................... 851,107 763,467 1,614,574 14.2
OTHER 5% STOCKHOLDERS
The Capital Group Companies, Inc.(c)
333 South Hope Street
Los Angeles, CA 90071.......................... 903,500 8.5
First Pacific Advisors, Inc.(d)
11400 West Olympic Boulevard
Los Angeles, CA 90064.......................... 603,100 5.7
T. Rowe Price Associates, Inc.(e)
100 East Pratt Street
Baltimore, MD 21202............................ 1,543,800 14.6
</TABLE>
- ---------------
* Less than 1%.
(a) The business address of each of the directors and named executive officers
is: c/o Holophane Corporation, 250 East Broad Street, Suite 1400, Columbus,
Ohio 43215.
(b) Also includes shares of Common Stock held by the respective spouses of
executive officers of the Company and by their children who reside with
them.
I-3
<PAGE> 22
(c) Information is based on the Amendment No. 2 to Schedule 13G dated February
8, 1999, filed jointly by Capital Guardian Trust Company ("Capital Trust"),
a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934,
as amended, and Capital International, Inc. ("Capital International"), an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, which reflects the beneficial ownership of and sole dispositive
power over 903,500 shares of Common Stock by Capital Trust. Capital Trust
has sole voting power over 732,900 shares. Capital International has sole
voting power over 188,000 shares.
(d) Information is based on the Amendment No. 2 to Schedule 13G dated February
12, 1999, filed jointly by First Pacific Advisors, Inc., ("First Pacific"),
a Massachusetts corporation, and Source Capital, Inc. ("Source Capital"), a
Delaware corporation, which reflects the beneficial ownership of and shared
dispositive power over 603,100 shares of Common Stock by First Pacific.
First Pacific has sole voting power over no shares. Source Capital has sole
voting power over 535,500 shares.
(e) Information is based on the Schedule 13G dated February 12, 1999, filed
jointly by T. Rowe Price Associates, Inc. ("Price Associates"), an
investment advisor registered under the Investment Advisors Act of 1940, and
T. Rowe Price Small Cap Value Fund, Inc. ("Value Fund"), a Maryland
corporation, which reflects the beneficial ownership of and sole dispositive
power over 1,543,800 shares of Common Stock by Price Associates. Price
Associates has sole voting power over 274,200 shares. Value Fund has sole
voting power over 800,000 shares and sole dispositive power over no shares.
CURRENT BOARD OF DIRECTORS
The Board of Directors of the Company is currently fixed at six persons and
is divided into three classes with regular three year staggered terms. The term
of office of directors in Class I expires at the 2000 Annual Meeting. The term
of office of directors in Class II expires at the 2001 Annual Meeting. The term
of office of directors in Class III expires at the 2002 Annual Meeting.
CLASS I -- TERM TO EXPIRE AT THE 2000 ANNUAL MEETING
WILLIAM R. MICHAELS DIRECTOR SINCE 1989
Mr. Michaels, 64, was the Chairman of the Board of the Company from June
1989 through February 1992. From September 1988 to June 1997, Mr. Michaels was
Chairman of the Board, President and Chief Executive Officer and since June 1997
Chairman of the Board of Pinnacle Automation, Inc., a manufacturer of
specialized material handling systems. Mr. Michaels is a member of the
Compensation Committee.
ROBERT L. PURDUM DIRECTOR SINCE 1994
Mr. Purdum, 63, retired as Chairman of Armco Inc., a major steel
manufacturer, in 1994. Mr. Purdum joined Armco in 1962 following service in the
U.S. Navy. He was elected President of Armco in 1986 and served as Chief
Executive Officer from November 1990 to December 1993. Mr. Purdum is a director
of Berlitz International, Inc., a language services firm, and Chairman of
Bucyrus International, a mining equipment manufacturer. Mr. Purdum is also a
partner in American Industrial Partners and is Chairman of Steel Heddle, a
textile products company. Mr. Purdum is a member of the Audit Committee.
CLASS II -- TERM TO EXPIRE AT THE 2001 ANNUAL MEETING
JOHN R. DALLEPEZZE, CHAIRMAN DIRECTOR SINCE 1989
Mr. DallePezze, 55, has been a Director, President and Chief Executive
Officer of the Company since he joined the Company in October 1989 and Chairman
of the Board since February 1992. Prior to joining the Company, Mr. DallePezze
served from 1983 to 1989 as President of the McCullough Division of N.L.
Industries Inc. and Western Atlas International Inc. Prior to 1983, Mr.
DallePezze served as General Manager of the Lighting Products Division of
Corning Inc. Mr. DallePezze serves as a director of Belden, Inc., a wire and
cable manufacturer.
I-4
<PAGE> 23
ANTHONY P. SCOTTO DIRECTOR SINCE 1991
Mr. Scotto, 52, has been a consultant to Oak Hill Capital Management since
November 1998 and has served as a Managing Director of Oak Hill Partners, Inc.
since 1992. Mr. Scotto serves as a director of Ivex Packaging Corporation,
Specialty Foods Corporation and Grove Worldwide, LLC. Mr. Scotto is Chairman of
the Audit Committee.
CLASS III -- TERM TO EXPIRE AT THE 2002 ANNUAL MEETING
TADD C. SEITZ DIRECTOR SINCE 1993
Mr. Seitz, 57, is the retired Chairman and Chief Executive Officer of The
Scotts Company, a manufacturer of lawn and garden care products. Mr. Seitz
serves on several private company boards. Mr. Seitz is Chairman of the
Compensation Committee.
JEFFREY M. WILKINS DIRECTOR SINCE 1996
Mr. Wilkins, 54, has been Chairman and Chief Executive Officer of Metatec
Corporation, an information services company, since August 1989. Mr. Wilkins
founded and served as Chief Executive Officer of CompuServe from its beginning
in 1969 until mid-1985. Mr. Wilkins serves as a director of Checkfree
Corporation. Mr. Wilkins is a member of the Compensation Committee.
DIRECTORS' REMUNERATION; ATTENDANCE
Directors of the Company who are not employees receive an annual retainer
fee of $25,000. Employees who serve as directors receive no additional
remuneration. All directors are reimbursed for out-of-pocket expenses.
Non-employee directors receive no fringe benefits other than elective deferral
of directors' fees through the Supplemental Executive Retirement Plan.
All independent directors receive an annual grant of options to purchase
4,000 shares of Common Stock pursuant to the Company's 1996 Incentive Stock
Plan.
The Company's certificate of incorporation and bylaws provide for the
elimination of liability of directors and the indemnification of directors and
officers to the fullest extent permitted by Delaware law.
The Board of Directors met four times during 1998. All of the directors
attended at least 75% of the total number of meetings of the Board and of the
committees on which they served during 1998.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has standing Compensation and Audit Committees. The
Board does not have a nominating committee. The full Board selects the nominees
for directors.
Compensation Committee. The Compensation Committee met four times during
1998. The purpose of the Compensation Committee of the Board (the "Committee")
is to establish and administer executive compensation policies which are aligned
with the Company's business objectives. A detailed report follows.
Audit Committee. The Audit Committee met four times during 1998. Its
functions are to recommend the appointment of independent accountants; review
the arrangements for and scope of the audit by the independent accountants;
review the independence of the independent accountants; consider the adequacy of
the system of internal accounting controls and review any proposed corrective
actions; review and monitor the Company's policies regarding business ethics and
conflicts of interests; discuss with management and the independent accountants
the Company's draft annual financial statements and key accounting and/or
reporting matters; and other related functions.
I-5
<PAGE> 24
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth information concerning total compensation
earned or paid to the Chief Executive Officer and the four most highly
compensated executive officers of the Company who served in such capacities on
December 31, 1998 (the "named executive officers") for services rendered to the
Company.
SUMMARY COMPENSATION TABLE
The following table discloses compensation paid or to be paid to the named
executive officers for each of the last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL -------------------------
Compensation(a) SECURITIES
NAME AND PRINCIPAL -------------------------- UNDERLYING LTIP ALL OTHER
POSITION YEAR SALARY BONUS(b) OPTIONS/SARS PAYOUTS(b) Compensation(c)
- ------------------ ---- -------- -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John R. DallePezze 1998 $352,385 $182,500 56,000 $79,364 $42,997
Chairman, President & 1997 346,192 193,868 62,500 203,767 49,573
Chief Executive Officer 1996 305,597 122,575 55,000 203,767 44,233
John W. Harvey(d) 1998 $168,769 $ 73,700 12,400 $28,344 $18,957
Vice President, 1997 167,173 78,700 14,000 72,775 21,270
Manufacturing 1996 152,800 49,100 13,000 72,775 19,224
S. Lee Keller(e) 1998 $172,669 $ 42,600 12,400 $28,344 $17,053
Vice President, 1997 171,404 68,600 14,000 72,775 20,957
Sales 1996 152,800 41,800 13,000 72,775 18,713
Bruce A. Philp(f) 1998 $170,885 $ 63,200 12,400 $28,344 $18,370
Vice President, Finance 1996 167,173 79,400 14,000 72,775 21,203
Chief Financial Officer 1996 152,800 46,500 13,000 72,775 19,042
William T. Weisert(g) 1998 $145,239 $ 49,600 7,600 $22,570 $15,219
Vice President, 1997 145,519 48,300 11,000 57,933 16,244
Research & Development 1996 135,190 28,600 8,800 57,933 15,518
</TABLE>
- ---------------
(a) Other Annual Compensation, which consists solely of perquisites or other
personal benefits, was less than the lesser of $50,000 or 10% of such named
executive officer's annual salary and bonus for such year.
(b) Amounts include deferred portions under the Company's Supplemental Executive
Retirement Plan.
(c) All Other Compensation for the 1998 fiscal year reflects amounts contributed
by the Company to Messrs. DallePezze, Harvey, Keller, Philp and Weisert of
$11,200 each under the Company's Thrift Plan and $31,797, $7,757, $5,853,
$7,170 and $4,019, respectively, as supplemental retirement benefits under
the Company's Supplemental Executive Retirement Plan.
(d) Mr. Harvey, 54, was elected Vice President, Manufacturing on June 28, 1989.
(e) Mr. Keller, 51, was elected Vice President, Sales on June 28, 1989.
(f) Mr. Philp, 47, was elected Vice President, Finance, Chief Financial Officer
and Secretary on June 28, 1989.
(g) Mr. Weisert, 53, was elected Vice President, Research & Development on June
28, 1989.
I-6
<PAGE> 25
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1998 to
the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO Option Term(b)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------------------
NAME GRANTED FISCAL YEAR PRICE(c) DATE 5% 10%
- ---- ---------- ------------ --------- ------------- ------------ --------------
($/SHARE)
<S> <C> <C> <C> <C> <C> <C>
John R. Dallepezze... 56,000(a) 26.9 $24.4375 Feb. 24, 2008 $860,642 $2,181,037
John W. Harvey....... 12,400(a) 6.0 $24.4375 Feb. 24, 2008 $190,571 $ 482,944
S. Lee Keller........ 12,400(a) 6.0 $24.4375 Feb. 24, 2008 $190,571 $ 482,944
Bruce A. Philp....... 12,400(a) 6.0 $24.4375 Feb. 24, 2008 $190,571 $ 482,944
William T. Weisert... 7,600(a) 3.7 $24.4375 Feb. 24, 2008 $116,801 $ 295,998
</TABLE>
- ---------------
(a) Twenty-five percent of such options vest on February 24, 1999, with the
remaining 75% vesting 25% per year until fully vested on February 24, 2002.
Such options have stock-for-stock exercise and tax withholding features,
which allow the holders, in lieu of paying cash for the exercise price and
any tax withholding, to have the Company commensurately reduce the number of
shares of Common Stock to which they would otherwise be entitled upon
exercise of such options.
(b) The dollar amounts under these columns are the result of calculations at the
5% and 10% annualized rates of stock price appreciation set by the
Securities and Exchange Commission and therefore are not intended to
forecast future appreciation, if any, of the Company's stock price.
(c) The exercise price of the options is the per share fair market value of the
underlying Common Stock on the date of the grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
The following table provides information on option exercises in fiscal 1998
by the named executive officers and the values of such officers' unexercised
options at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED OPTIONS THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- -------------------- -------------------
<S> <C> <C> <C> <C>
John R. DallePezze............. 5,000 $75,530 275,371/150,625 $3,613,773/$749,039
John W. Harvey................. 0 $ 0 73,750/34,650 $ 984,953/$179,422
S. Lee Keller.................. 0 $ 0 65,750/34,650 $ 859,453/$179,422
Bruce A. Philp................. 0 $ 0 63,750/34,650 $ 828,078/$179,422
William T. Weisert............. 0 $ 0 49,713/23,438 $ 661,746/$121,395
</TABLE>
EMPLOYMENT AGREEMENT
On August 30, 1993, the Company entered into an amended employment
agreement (the "Employment Agreement") with Mr. DallePezze which sets forth the
terms and conditions of Mr. DallePezze's employment as President, Chairman and
Chief Executive Officer. Mr. DallePezze's current compensation includes a base
salary of $369,000 and a targeted bonus of 70% of his base salary.
If Mr. DallePezze's employment is terminated by the Company without Cause
or if he resigns for Good Reason, other than within two years following a Change
of Control (in each case, as defined in the Employment Agreement), Mr.
DallePezze would be entitled to receive severance payments and other benefits.
These payments
I-7
<PAGE> 26
and benefits would include (a) a single lump sum payment of any accrued base
salary, benefits and bonus under the Bonus Plan; (b) continuation of base
salary, bonus payments and fringe benefits generally for a period of 36 months
following termination of employment, provided that such amounts shall be reduced
if Mr. DallePezze accepts third-party employment; and (c) full vesting of all
outstanding stock options.
Within two years following a Change of Control, if Mr. DallePezze's
employment is terminated by the Company without Cause or if he resigns for Good
Reason, he would be entitled to receive certain lump sum payments and other
benefits, including (a) a single lump sum payment of any accrued base salary,
benefits and bonus under the Bonus Plan; (b) a single lump sum payment equal to
the sum of (i) two times Mr. DallePezze's applicable base salary and targeted
Annual Bonus and (ii) the maximum Long-Term bonus payment possible under the
Bonus Plan; and (c) reimbursement of any excise tax incurred under Section 4999
of the Internal Revenue Code of 1986 (the "Code") plus any resulting income
taxes as a result of such reimbursement. In addition, upon the occurrence of a
Change in Control, Mr. DallePezze will become fully vested in all employee
benefit plans in which he is a participant, including all stock options granted
to him.
If Mr. DallePezze's employment is terminated by the Company for Cause or if
he resigns without Good Reason, he would not be entitled to any severance pay or
any other additional compensation.
In June 1999, the Employment Agreement was amended to allow Mr. DallePezze
to defer receipt of all or a portion of his severance benefits (payable
following a Change in Control) and to have such deferred amounts contributed to
the Company's Second Amended and Restated Supplemental Executive Retirement Plan
and later distributed to him under the terms of such plan. The 1999 amendment
did not otherwise materially change the Employment Agreement. The complete text
of the Employment Agreement, as amended, is filed as Exhibit (c)(10) to the
Schedule 14D-9.
TERMINATION BENEFITS AGREEMENTS
In September and October 1993, the Company entered into certain Termination
Benefits Agreements (the "Termination Agreements") with each of the Company's
executive officers other than Mr. DallePezze. Under the terms of the Termination
Agreements, the executive officers are entitled to receive certain benefits upon
the termination of their employment within two years following a Change in
Control if termination is without Cause or for Good Reason (all terms as defined
in the Termination Agreements). Benefits payable upon termination would include
(a) a single lump sum payment of any accrued base salary, benefits and bonus
under the Bonus Plan; (b) continuation of fringe benefits for a period of 18
months following termination of employment; (c) a single lump sum payment equal
to the sum of (i) 1 1/2 times the executive's applicable base salary and
targeted annual bonus and (ii) the maximum Long-Term bonus payment possible
under the Bonus Plan; and (d) reimbursement of any excise tax incurred under
Section 4999 of the Code, plus any resulting income taxes. In addition, upon the
occurrence of a Change in Control, the executive will become fully vested in all
employee benefit plans in which he is a participant, including all stock options
granted to him.
In June 1999, the Termination Agreements were amended to allow eligible
executives to defer receipt of all or a portion of their termination benefits
(payable following a Change in Control) and to have such amounts contributed to
the Company's Second Amended and Restated Supplemental Executive Retirement Plan
and later distributed to them under the terms of such plan. The 1999 amendment
did not otherwise materially change the Termination Agreements. The complete
text of a representative Termination Agreement, as amended, is filed as Exhibit
(c)(11) to the Schedule 14D-9.
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE OFFICERS OF THE
COMPANY
The purpose of the Compensation Committee of the Board of Directors is to
establish and administer executive compensation policies which are aligned with
the Company's business objectives. The Committee recommends compensation actions
for all corporate officers to the Board of Directors for approval. All Committee
members are non-employee directors.
I-8
<PAGE> 27
Compensation Philosophy
There are certain guiding principles utilized by the Committee in
structuring the compensation packages of key executives. They are:
Pay for Performance -- To align the executives' interest with the
interests of stockholders, a high percentage of executives' total
compensation is composed of leveraged short-term and long-term
incentives directly linked to the performance of the Company.
Competitiveness -- Executives are provided with an opportunity to earn
total compensation at a level above the median for comparable companies
when Company performance exceeds industry norms and that of its
competitors. This opportunity enables the Company to significantly
challenge its management team.
Executive Ownership -- A major component of total compensation is equity
based. This links management's interests with stockholders' interests
and provides rewards for long-term results.
Management Development -- Total compensation programs are designed to
attract and retain individuals with the leadership and technical skills
required to ensure the Company's future. The Committee believes that the
Company's human resources can provide a competitive advantage.
Components of Executive Compensation
The components of total compensation for all executives are base salary, a
bonus plan, fringe benefits and stock options. The Committee annually reviews
total compensation for the Company's executives as well as each component of
compensation. Compensation consultants are utilized by the Committee to assist
in structuring the compensation program and to supply appropriate competitive
compensation information. The Committee has utilized data from a group of
publicly held companies in similar lines of business as the Company as well as
data for general industrial companies of similar size as the Company. For stock
performance comparisons, the Company utilizes the Dow Jones Industrial Index for
the Electrical Components and Equipment Group which includes companies engaged
in similar lines of business as the Company. While some of these companies were
also used for competitive compensation information, those with substantially
larger market capitalization were excluded.
Base Salary -- Base salary for all executive officers is targeted to be in
the second quartile (below the median but above the 25th percentile) of
comparable companies. Salaries are reviewed annually and may be adjusted based
subjectively on individual and corporate performance, as measured by sales,
EBITDA and net income, as well as industry comparisons. No specific weight was
assigned to these factors in determining 1998 base salaries for the executive
officers.
Bonus Plan -- The Company's management employees, including the executive
officers, participate in the Holophane Bonus Plan, consisting of both an Annual
and Long-Term Bonus. The Plan is targeted to provide total cash compensation
(salary plus bonuses) in the third quartile of comparable companies if Company
performance objectives are met. Depending on actual performance, total cash
compensation may range from the lowest to the highest quartile of comparable
companies.
Each Bonus Plan participant has a target bonus ranging from 10% to 70% of
base salary. Annual Bonuses, ranging from 0% to 150% of target, are paid based
upon performance against Company financial objectives, including goals for
increases in sales and EBITDA. The Chief Executive Officer's Annual Bonus is
based solely upon performance versus these objectives. The Annual Bonus for
other Plan participants, including the executive officers, is based on
performance versus both (in order of importance) Company objectives and
individual objectives. While sales and net income improved in 1998, overall
Company performance fell short of the Company's financial objectives resulting
in bonuses which were lower than target.
The Long-Term Bonus is paid if certain long-term goals are met. The
Long-Term Bonus Plan is a rolling three year plan. Awards are based solely on
achievement of earnings per share objectives. The maximum Long-Term Bonus award
for each participant equals the target bonus in the first year of each plan
period was paid
I-9
<PAGE> 28
below maximum level, but reflects the three year 25% growth of earnings per
share. During this time frame, the market price of Holophane stock increased
18%.
Fringe Benefits -- The executive officers participate in the same fringe
benefit plans offered to all salaried employees, including the 5% defined
contribution Thrift Plan. Additionally, they participate in the Supplemental
Executive Retirement Plan, a non-qualified plan intended to "restore" retirement
benefits which would have accrued under the Thrift Plan were it not for various
limitations under the Code. In addition, participants may be entitled to defer a
portion of their bonuses.
Stock Options -- The Company's Incentive Stock Plans foster executive stock
ownership and align the executives' interests with stockholders' interests.
Grants are targeted to be at the 75th percentile of grants for similarly
compensated executives at comparable companies. Consistent with the intent of
the Incentive Stock Plans, the Compensation Committee has established stock
ownership expectations for all participants.
The maximum number of shares of Common Stock with respect to which awards
may be granted under the 1996 Incentive Stock Plan is 800,000. Last year,
207,800 stock options were granted to directors and key employees, including the
named executives as set forth in the Summary Compensation Table.
Section 162(m) Compliance
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") places
certain restrictions on the amount of compensation in excess of $1,000,000 which
may be deducted for each executive. The Company intends to satisfy the
requirements of Section 162(m) should the need arise.
Chief Executive Officer Compensation
Mr. DallePezze is compensated pursuant to the terms of his Employment
Agreement. Based on competitive data from the Company's compensation consultant,
the Committee believes that, relative to CEO compensation in comparable
companies, Mr. DallePezze's base salary for 1998 was in the second quartile, his
annual cash compensation was in the second quartile and his total cash
compensation was in the third quartile. Mr. DallePezze was granted 56,000 stock
options pursuant to the 1996 Incentive Stock Plan described above under Stock
Options. This grant was established at the 75th percentile of grants for
similarly compensated executives at comparable companies. The grant also
reflects Mr. DallePezze's leadership in achieving the Company's past performance
as well as expectations for his future contribution.
Members of the Compensation Committee
William R. Michaels
Tadd C. Seitz, Chairman
Jeffrey M. Wilkins
I-10
<PAGE> 29
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company since becoming a public company on October 28, 1993
with the cumulative total return of (i) the Standard & Poor's 500 Composite
Stock Price Index and (ii) the Dow Jones Industrial Index for the Electrical
Components and Equipment Group. The graph assumes the investment of $100 in the
Common Stock of the Company, the Standard & Poor's 500 Index and the Dow Jones
Industrial Index for the Electrical Components and Equipment Group. The initial
public offering price of the Company's Common Stock was $10 per share, adjusted
for the 3:2 stock split on December 15, 1995.
[GRAPH]
<TABLE>
<CAPTION>
HOLOPHANE ELECTRICAL COMPONENTS STANDARD & POOR'S
CORPORATION & EQUIPMENT INDEX 500 INDEX
----------- --------------------- -------------
<S> <C> <C> <C> <C>
10/28/93 100.00 100.00 100.00
12/31/93 113.33 102.97 100.94
12/31/94 125.00 107.22 100.24
12/31/95 217.50 140.20 139.73
12/31/96 190.00 170.75 171.81
12/31/97 247.50 209.62 229.11
12/31/98 256.88 245.87 294.59
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company is required to
report any known failures by officers, directors or 10% stockholders to file on
a timely basis a Form 3, Form 4 or Form 5, relating to beneficial ownership of
the Company's equity securities, during the last fiscal year. To the best of the
Company's knowledge, all required filings have been made on a timely basis,
except that Mr. Harvey failed to file a Form 4 on a timely basis pertaining to
the disposal of 500 shares of Common Stock.
I-11
<PAGE> 30
ANNEX II
[LETTERHEAD OF SALOMON BARNEY INC.]
June 20, 1999
The Board of Directors
Holophane Corporation
250 East Broad Street
Columbus, Ohio 43215
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders of the common stock of Holophane Corporation
("Holophane") of the consideration to be received by such holders pursuant to
the terms and subject to the conditions set forth in the Agreement and Plan of
Merger, dated as of June 20, 1999 (the "Merger Agreement"), among Holophane,
National Service Industries, Inc. ("NSI") and NSI Enterprises, Inc., a wholly
owned subsidiary of NSI ("Sub"). As more fully described in the Merger
Agreement, (i) Sub will commence a tender offer to purchase all outstanding
shares of the common stock, par value $0.01 per share, of Holophane (the
"Holophane Common Stock") at a purchase price of $38.50 per share, net to the
seller in cash, less any required withholding taxes (the "Cash Consideration"
and, such tender offer, the "Tender Offer") and (ii) subsequent to the Tender
Offer, Sub will be merged with and into Holophane (the "Merger" and, together
with the Tender Offer, the "Transaction") and each outstanding share of
Holophane Common Stock not previously tendered will be converted into the right
to receive the Cash Consideration.
In arriving at our opinion, we reviewed the Merger Agreement and held
discussions with certain senior officers, directors and other representatives
and advisors of Holophane and certain senior officers and other representatives
and advisors of NSI concerning the business, operations and prospects of
Holophane. We examined certain publicly available business and financial
information relating to Holophane as well as certain financial forecasts and
other information and data for Holophane which were provided to or otherwise
discussed with us by the management of Holophane. We reviewed the financial
terms of the Transaction as set forth in the Merger Agreement in relation to,
among other things: current and historical market prices and trading volumes of
Holophane Common Stock; the historical and projected earnings and other
operating data of Holophane; and the capitalization and financial condition of
Holophane. We considered, to the extent publicly available, the financial terms
of certain other similar transactions recently effected which we considered
relevant in evaluating the Transaction and analyzed certain financial, stock
market and other publicly available information relating to the businesses of
other companies whose operations we considered relevant in evaluating those of
Holophane. In connection with our engagement, we were requested to approach, and
we held discussions with, third parties to solicit indications of interest in
the possible acquisition of Holophane. In addition to the foregoing, we
conducted such other analyses and examinations and considered such other
information and financial, economic and market criteria as we deemed appropriate
in arriving at our opinion.
In rendering our opinion, we have assumed and relied, without independent
verification, upon the accuracy and completeness of all financial and other
information and data publicly available or furnished to or otherwise reviewed by
or discussed with us. With respect to financial forecasts and other information
and data provided to or otherwise reviewed by or discussed with us, we have been
advised by the management of Holophane that such forecasts and other information
and data were reasonably prepared on bases reflecting the best currently
available estimates and judgments of the management of Holophane as to the
future financial performance of Holophane. We have not made or been provided
with an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of Holophane nor have we made any physical inspection
of the properties or assets of Holophane. We express no view as to, and our
opinion does not address, the relative merits of the Transaction as compared to
any alternative business strategies that might exist for Holophane or the effect
of any other transaction in which Holophane might engage. Our opinion is
necessarily based upon information available to us, and financial, stock market
and other conditions and circumstances existing and disclosed to us, as of the
date hereof.
II-1
<PAGE> 31
The Board of Directors
Holophane Corporation
June, 20, 1999
Page 2
Salomon Smith Barney Inc. has acted as financial advisor to Holophane in
connection with the proposed Transaction and will receive a fee for such
services, a significant portion of which is contingent upon the consummation of
the Transaction. We also will receive a fee upon the delivery of this opinion.
We have in the past provided investment banking services to Holophane and NSI
unrelated to the proposed Transaction, for which services we have received
compensation. In the ordinary course of our business, we and our affiliates may
actively trade or hold the securities of Holophane and NSI for our own account
or for the account of our customers and, accordingly, may at any time hold a
long or short position in such securities. In addition, we and our affiliates
(including Citigroup Inc. and its affiliates) may maintain relationships with
Holophane, NSI and their respective affiliates.
Our advisory services and the opinion expressed herein are provided for the
information of the Board of Directors of Holophane in its evaluation of the
proposed Transaction, and our opinion is not intended to be and does not
constitute a recommendation to any stockholder as to whether such stockholder
should tender shares of Holophane Common Stock in the Tender Offer or how such
stockholder should vote on any matters relating to the proposed Transaction.
Based upon and subject to the foregoing, our experience as investment
bankers, our work as described above and other factors we deemed relevant, we
are of the opinion that, as of the date hereof, the Cash Consideration to be
received in the Transaction by the holders of Holophane Common Stock (other than
NSI and its affiliates) is fair, from a financial point of view, to such
holders.
Very truly yours,
/s/ Salomon Smith Barney Inc.
SALOMON SMITH BARNEY INC.
II-2
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
Exhibit (a)(1) Offer to Purchase, dated June 25, 1999
Exhibit (a)(2) Letter of Transmittal, dated June 25, 1999
Exhibit (a)(3) Opinion of Salomon Smith Barney Inc., dated June 20, 1999
(filed as Annex II hereto)
Exhibit (a)(4) Joint Press Release of the Company and Parent, dated June
21, 1999
Exhibit (a)(5) Letter to stockholders of the Company dated June 25, 1999
Exhibit(c)(1) Agreement and Plan of Merger, dated as of June 20, 1999,
among the Company, the Purchaser and Parent
Exhibit (c)(2) Confidentiality Agreement, dated as of March 31, 1999,
between the Company and Parent
Exhibit (c)(3) The Company's Information Statement filed pursuant to
Section 14(f) of the Securities Exchange Act of 1934 and
Rule 14f-1 thereto (filed as Annex I hereto)
Exhibit (c)(4) Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan
Exhibit (c)(5) Holophane Corporation Executives' Deferred Compensation Plan
Exhibit (c)(6) Holophane Corporation Executives' Deferred Compensation
Program
Exhibit (c)(7) Holophane Corporation Incentive Stock Plan, as amended,
effective June 1, 1999
Exhibit (c)(8) Holophane Corporation 1996 Incentive Stock Plan, as amended,
effective June 1, 1999
Exhibit (c)(9) Holophane Corporation Fee Deferral Plan for Non-Employee
Directors, as amended, effective June 1, 1999
Exhibit (c)(10) Employment Agreement dated as of August 30, 1993 between the
Company and John R. DallePezze, as amended, effective June
1, 1999
Exhibit (c)(11) Representative Amended Termination Benefit Agreement between
the Company and Bruce Philp, as amended, effective June 1,
1999 (Each of John W. Harvey, S. Lee Keller, William T.
Weisert, Robert St. Germain, Robert Taylor, Jerome
Henderson, Robert Peery, Paolo Minissi, Stuart R.A. Carter
and Sandra K. Cashell entered into substantially identical
agreements)
</TABLE>
<PAGE> 1
Exhibit (a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
HOLOPHANE CORPORATION
at
$38.50 Net Per Share
by
NSI ENTERPRISES, INC.
a wholly owned subsidiary
of
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JULY 23, 1999,
UNLESS THE OFFER IS EXTENDED.
---------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST A MAJORITY OF THE SHARES OF COMMON STOCK(DETERMINED ON A FULLY DILUTED
BASIS), OF HOLOPHANE CORPORATION (THE "COMPANY") AND (II) THE EXPIRATION OR
TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"). THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1
AND 15.
---------------------
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER (THE
"MERGER AGREEMENT"), DATED AS OF JUNE 20, 1999, BY AND AMONG PARENT, THE
PURCHASER AND THE COMPANY. SEE SECTION 11.
---------------------
THE BOARD OF DIRECTORS OF HOLOPHANE CORPORATION (I) HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND THE MERGER, ARE ADVISABLE AND ARE FAIR TO AND IN
THE BEST INTERESTS OF THE STOCKHOLDERS OF HOLOPHANE CORPORATION, (II) HAS
APPROVED THE OFFER AND THE MERGER AND (III) RECOMMENDS THAT ALL HOLDERS OF
SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER.
---------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) of Holophane Corporation should either (1) complete
and sign the Letter of Transmittal (or a facsimile thereof) in accordance with
the instructions in the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile) and any other required documents to the
Depositary (as defined herein), and either deliver the certificate(s)
representing the tendered Shares and any other required documents to the
Depositary or deliver an Agent's Message (as defined herein) and tender such
Shares pursuant to the procedure for book-entry transfer set forth in Section 3,
deliver an Agent's Message (as defined herein) and tender such Shares pursuant
to the procedures for book-entry transfer set forth in Section 3 or (2) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such stockholder. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if they desire to tender Shares so registered.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Wasserstein
Perella & Co., Inc. (the "Dealer Manager") or to D. F. King & Co., Inc. (the
"Information Agent") at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may also be obtained from the Information Agent or the Dealer Manager,
or from brokers, dealers, commercial banks or trust companies.
---------------------
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
June 25, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
THE TENDER OFFER............................................ 2
1. Term of the Offer, Expiration Date................... 2
2. Acceptance for Payment and Payment for Shares........ 3
3. Procedure for Tendering Shares....................... 4
4. Withdrawal Rights.................................... 7
5. Certain Federal Income Tax Consequences.............. 8
6. Price Range of Shares; Dividends..................... 9
7. Certain Information Concerning the Company........... 9
8. Certain Information Concerning the Purchaser and
Parent............................................... 12
9. Source and Amount of Funds........................... 14
10. Background of the Offer; Contacts with the Company... 14
11. The Merger Agreement................................. 15
12. Purpose of the Offer; The Merger; Plans for the
Company.............................................. 23
13. Dividends and Distributions.......................... 25
14. Effect of the Offer on the Market for the Shares,
Stock Exchange Listing and Exchange Act
Registration......................................... 25
15. Certain Conditions of the Offer...................... 26
16. Certain Legal Matters and Regulatory Approvals....... 27
17. Fees and Expenses.................................... 29
18. Miscellaneous........................................ 29
SCHEDULE I -- Directors and Executive Officers of the
Purchaser and Parent...................................... S-1
</TABLE>
i
<PAGE> 3
TO THE STOCKHOLDERS OF HOLOPHANE CORPORATION:
INTRODUCTION
NSI Enterprises, Inc., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of National Service Industries, Inc., a Delaware
corporation ("Parent"), hereby offers to purchase all of the outstanding shares
of Common Stock, par value $.01 per share (the "Shares"), of Holophane
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$38.50 per Share, net to the seller in cash, less any required withholding taxes
and without interest thereon, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of Wasserstein Perella & Co., Inc.
("Wasserstein Perella"), which is acting as Dealer Manager for the Offer (in
such capacity, the "Dealer Manager"), First Chicago Trust Company of New York,
which is acting as the Depositary (in such capacity, the "Depositary") and D.F.
King & Co., Inc., which is acting as the Information Agent (in such capacity,
the "Information Agent"), incurred in connection with the Offer. See Section 17.
The Board of Directors of the Company (the "Board of Directors") (i) has
unanimously determined that the Merger Agreement (as defined below) and the
transactions contemplated thereby, including each of the Offer and the Merger
(as defined below), are advisable and are fair to and in the best interests of
the stockholders of the Company, (ii) has approved the Offer and the Merger and
(iii) recommends that all holders of the Shares accept the Offer and tender
their Shares to the Purchaser.
The Board of Directors has received the written opinion dated June 20, 1999
of Salomon Smith Barney Inc. ("Salomon Smith Barney"), financial advisor to the
Company, to the effect that, as of such date and based upon and subject to
certain matters stated in such opinion, the $38.50 per Share cash consideration
to be received in the Offer and the Merger by the holders of Shares (other than
Parent and its affiliates) was fair, from a financial point of view, to such
holders. A copy of Salomon Smith Barney's written opinion is attached to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which is being distributed to the stockholders of the Company, and such
stockholders are urged to read the opinion carefully in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1) AT LEAST A MAJORITY OF THE SHARES OF COMMON STOCK (DETERMINED ON A
FULLY DILUTED BASIS) OF THE COMPANY (THE "MINIMUM CONDITION") AND (II) THE
EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"). SEE SECTIONS 1 AND 15. IF THE PURCHASER PURCHASES NOT LESS THAN THAT
NUMBER OF SHARES NEEDED TO SATISFY THE MINIMUM CONDITION, IT WILL BE ABLE TO
EFFECT THE MERGER WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER OF THE
COMPANY. SEE SECTION 12.
The Company has represented to Parent that, as of June 15, 1999, there were
(i) 10,564,265 Shares issued and outstanding, (ii) 1,432,330 Shares reserved for
issuance upon the exercise of outstanding stock options, (iii) up to 78,000
shares issuable under additional employee benefits plans and (iv) up to 154,590
shares potentially issuable pursuant to obligations under a previous acquisition
agreement. Based upon the foregoing, the Purchaser believes that approximately
6,114,593 Shares constitute a majority of the outstanding Shares on a fully
diluted basis.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 20, 1999 (the "Merger Agreement"), among Parent, the Purchaser and
the Company. The Merger Agreement provides, among other things, for the making
of the Offer by the Purchaser, and further provides that, following the
<PAGE> 4
completion of the Offer, upon the terms and subject to the conditions of the
Merger Agreement and in accordance with the Delaware General Corporation Law
(the "DGCL"), the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and become a wholly owned subsidiary
of Parent, and the separate corporate existence of the Purchaser will cease.
Pursuant to the Merger Agreement, the Company has also agreed, if and to
the extent permitted by law, at the request of the Purchaser and subject to the
terms of the Merger Agreement, to take all necessary and appropriate actions to
cause the Merger to become effective as soon as reasonably practicable after the
purchase of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with Section 253 of the DGCL. See Section 11.
At the effective time of the Merger (the "Effective Time"), each Share
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company and each Share, if any, owned by Parent, the
Purchaser or any other direct or indirect subsidiary of the Company, of Parent
or of the Purchaser, which shall be canceled, and other than Shares, if any
(collectively, "Dissenting Shares"), held by stockholders who have not voted in
favor of the Merger or consented thereto and who have perfected their appraisal
rights in accordance with Section 262 of the DGCL) will be converted into the
right to receive $38.50 in cash (the "Merger Consideration"), less any required
withholding taxes and without interest thereon.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of the Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERM OF THE OFFER, EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), the Purchaser will accept
for payment and pay for all Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday, July 23,
1999, unless and until the Purchaser (subject to the terms and conditions of the
Merger Agreement), shall have extended the period during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS
IMPOSED BY THE HSR ACT. SEE SECTION 15, WHICH SETS FORTH IN FULL THE CONDITIONS
TO THE OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT AND THE
APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"), THE PURCHASER RESERVES THE RIGHT TO WAIVE THE MINIMUM CONDITION
OR ANY OF THE OTHER CONDITIONS TO THE OFFER, TO INCREASE THE PRICE PER SHARE
PAYABLE IN THE OFFER AND TO MAKE ANY OTHER CHANGE IN THE TERMS AND CONDITIONS OF
THE OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT, INCLUDING THE
PROVISIONS OF THE MERGER AGREEMENT SET FORTH IN THE NEXT PARAGRAPH, AND THE
APPLICABLE RULES AND REGULATIONS OF THE COMMISSION, IF BY THE EXPIRATION DATE
ANY OR ALL OF SUCH CONDITIONS TO THE OFFER HAVE NOT BEEN SATISFIED, THE
PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO (I) TERMINATE THE
OFFER AND RETURN ALL TENDERED SHARES TO TENDERING STOCKHOLDERS, (II) WAIVE SUCH
2
<PAGE> 5
UNSATISFIED CONDITIONS AND PURCHASE ALL SHARES VALIDLY TENDERED OR (III) EXTEND
THE OFFER AND, SUBJECT TO THE TERMS OF THE OFFER (INCLUDING THE RIGHTS OF
STOCKHOLDERS TO WITHDRAW THEIR SHARES), RETAIN THE SHARES WHICH HAVE BEEN
TENDERED, UNTIL THE TERMINATION OF THE OFFER, AS EXTENDED.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, the Purchaser shall not (i) waive the Minimum
Condition without the consent of the Board of Directors and (ii) without the
consent of the Board of Directors, the Purchaser shall not make any change in
the terms or conditions of the Offer which (A) changes the form of consideration
to be paid, (B) decreases the price per Share payable in the Offer, (C) reduces
the maximum number of Shares to be purchased in the Offer, (D) imposes
additional conditions to the Offer, (E) extends the Expiration Date (except as
required by law or the applicable rules and regulations of the Commission) or
(F) amends any term of the Offer in any manner adverse to holders of Shares;
provided that Purchaser shall have the right, in its sole discretion, to extend
the Offer on up to two separate occasions for up to five business days each,
notwithstanding the prior satisfaction of conditions set forth in the Merger
Agreement, in order to attempt to satisfy the Minimum Condition or to satisfy
the requirements of Section 253 of the DGCL. The Purchaser shall have no
obligation to pay interest on the purchase price of tendered Shares, including
in the event the Purchaser exercises its right to extend the period of time
during which the Offer is open. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 15.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, and such announcement in
the case of an extension will be made in accordance with Rule 14e-1(d) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Purchaser
may choose to make any public announcement, except as provided by applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that material changes be promptly disseminated to holders of Shares), the
Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a release to the
Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will disseminate
additional tender offer materials and extend the Offer to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality, of the changes. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought, a minimum
ten business day period from the day of such change is generally required to
allow for adequate dissemination to stockholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday, or a federal holiday
and consists of the time period from 12:01 A.M. through 12:00 midnight, New York
City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date as soon as
practicable after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 15,
including without limitation the expiration or termination of the waiting period
applicable to the acquisition of
3
<PAGE> 6
Shares pursuant to the Offer under the HSR Act. In addition, subject to
applicable rules of the Commission, the Purchaser expressly reserves the right
to delay acceptance for payment of or payment for Shares pending receipt of any
other regulatory approvals specified in Section 16. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act.
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the HSR Act, see Section 16.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares ("Share Certificates") or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry transfer and (iii) any other documents required by
the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting such payments to stockholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT. If for any reason whatsoever acceptance for
payment of or payment for any Shares tendered pursuant to the Offer is delayed
or the Purchaser is unable to accept for payment or pay for Shares tendered
pursuant to the Offer, then without prejudice to the Purchaser's rights set
forth herein, the Depositary may nevertheless, on behalf of the Purchaser and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered Shares and such
Shares may not be withdrawn except to the extent that the tendering stockholder
is entitled to and duly exercises withdrawal rights as described in Section 4.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned
without expense to the tendering stockholder (or, in the case of Shares tendered
by book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve the Purchaser of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. Except as set forth below, in order for Shares to be
validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of
4
<PAGE> 7
its addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date and either (i) Share Certificates evidencing tendered
Shares must be received by the Depositary at such address or such Shares must be
tendered pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary, in each case on or
prior to the Expiration Date or (ii) the guaranteed delivery procedures
described below must be complied with.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility 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 the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer at the Book-Entry Transfer
Facility, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, must in any case be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered holder, the Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case, signed exactly as
the name of the registered holder appears on such certificates, with the
signatures on such certificates or stock powers guaranteed as aforesaid. See
Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
5
<PAGE> 8
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, or such stockholder cannot deliver the Share Certificates and all
other required documents to reach the Depositary on or prior to the Expiration
Date, or such stockholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, 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) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form made available by the Purchaser is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation),
representing all tendered Shares in proper form for transfer, together with
the Letter of Transmittal (or a facsimile thereof) properly completed and
duly executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
New York Stock Exchange ("NYSE") trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares tendered within the meaning of, and that the tender
of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act,
each in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's proxies, with full power of substitution, in the manner set forth
in the Letter of Transmittal, to the full extent of such stockholder's rights
with respect to the Shares tendered by such stockholder and accepted for payment
by the Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after June 20,
1999). All such proxies shall be considered irrevocable. Such appointment will
be effective when, and only to the extent that, the Purchaser accepts such
Shares for payment. Upon such acceptance for payment, all prior proxies given by
such stockholder with respect to such Shares (and such other Shares and
securities) will be revoked without further action, and no subsequent proxies
may be given nor any subsequent written consents executed (and, if given or
executed, will not be deemed effective). The designees of the Purchaser will,
with respect to the Shares (and such other Shares and securities) for which such
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. The Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon the Purchaser's payment for such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser in its sole discretion, which
determination shall be final and binding on all parties. The Purchaser reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may in the opinion of its
counsel be unlawful. The Purchaser also reserves the absolute right to waive any
6
<PAGE> 9
defect or irregularity in any tender of Shares of any particular stockholder
whether or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Purchaser,
Parent, any of their affiliates or assigns, the Dealer Manager, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of Federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash with such stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%.
All stockholders surrendering Shares pursuant to the Offer should complete
and sign the substitute Form W-9 included in the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is proved in a manner satisfactory to
the Depositary). Certain stockholders (including among others all corporations
and certain foreign individuals and entities) are not subject to backup
withholding. Noncorporate foreign stockholders should complete and sign a Form
W-8, Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
Other Requirements. The Purchaser's acceptance for payment of Shares
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation and warranty that the stockholder is the holder of
the Shares within the meaning of, and that the tender of the Shares complies
with, Rule 14e-4 under the Exchange Act.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn
at any time on or prior to the Expiration Date and, unless theretofore accepted
for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after Monday, August 23, 1999. If the Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares or is unable to purchase Shares
validly tendered pursuant to the Offer for any reason, then without prejudice to
the Purchaser's rights under the Offer, the Depositary may nevertheless, on
behalf of the Purchaser, retain tendered Shares and such Shares may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as described in this Section 4. Any such delay in acceptance
for payment will be accompanied by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If Share Certificates to be withdrawn have been delivered
or otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and the signatures on the notice of withdrawal must
be guaranteed by an Eligible Institution unless such Shares have been tendered
for the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedure for book-entry transfer as set forth in Section 3, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which
case a notice of withdrawal will be
7
<PAGE> 10
effective if delivered to the Depositary by any method of delivery described in
the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The summary of tax
consequences set forth below is for general information only and is based on
current law. The tax treatment of each stockholder will depend in part upon such
stockholder's particular situation. Special tax consequences not described
herein may be applicable to particular classes of taxpayers, such as financial
institutions, broker-dealers, persons who are not citizens or residents of the
United States, stockholders who acquired their Shares through the exercise of an
employee stock option or otherwise as compensation, and persons who received
payments in respect of options to acquire Shares.
ALL STOCKHOLDERS AND OPTION HOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND
ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX
LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local or foreign income or other tax laws. Generally, for Federal income tax
purposes, a stockholder will recognize gain or loss in an amount equal to the
difference between the cash received by the stockholder pursuant to the Offer or
the Merger and the stockholder's adjusted tax basis in the Shares sold pursuant
to the Offer or converted into cash in the Merger. For Federal income tax
purposes, such gain or loss will be a capital gain or loss if the Shares are a
capital asset in the hands of the stockholder, and a long-term capital gain or
loss if the stockholder's holding period is more than one year as of the date
the Purchaser accepts such Shares for payment pursuant to the Offer or the
effective date of the Merger, as the case may be. In the case of a stockholder
who is not a corporation, long-term capital gain is eligible for a maximum
Federal income tax rate of 20%. There are limitations on the deductibility of
capital losses.
Under the "backup withholding" rules, the Purchaser or the Depositary or
exchange agent generally will be required to withhold, and will withhold, 31% of
any cash payments to a stockholder pursuant to the Offer or the Merger unless
the stockholder provides a TIN (which is, in the case of an individual, the
taxpayer's social security number) and certifies that such number is correct and
that such stockholder is not subject to backup withholding. Accordingly, unless
an exemption to the backup withholding rules applies and is proved in a manner
satisfactory to the Purchaser or the Depositary or exchange agent, each
stockholder should complete the Substitute Form W-9 accompanying these materials
to provide the information and certification that is necessary to avoid backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules will be credited against a stockholder's
regular Federal income tax liability (which may entitle the stockholder to a
refund), provided that the required information is provided to the IRS.
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<PAGE> 11
6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's Annual
Report to Stockholders for the fiscal year ended December 31, 1998 (the "1998
Annual Report"), the Shares are listed and traded principally on the NYSE under
the symbol "HLP." The following table sets forth, for the periods indicated, the
high and low sales prices per Share on the NYSE as reported by the Dow Jones
News Service. The Company did not pay any cash dividends during such periods.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1997:
First Quarter............................................. $22 18 3/4
Second Quarter............................................ 23 1/4 19 1/4
Third Quarter............................................. 24 1/4 18 3/8
Fourth Quarter............................................ 26 21 1/4
1998:
First Quarter............................................. $25 3/4 22 3/4
Second Quarter............................................ 30 21
Third Quarter............................................. 30 20 1/4
Fourth Quarter............................................ 26 18
1999:
First Quarter............................................. $26 22
Second Quarter (through June 24, 1999).................... 38 1/4 21 15/16
</TABLE>
On June 18, 1999, the last full trading day prior to announcement of the
Offer, the closing sale price per Share reported on the NYSE was $28.3125. On
June 24, 1999, the last full trading day before commencement of the Offer, the
closing sale price per Share reported on the NYSE was $38 3/16. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or is based upon publicly available documents
and records on file with the Commission and other public sources. The summary
information concerning the Company in this Section 7 and elsewhere in this Offer
to Purchase is derived from the 1998 Annual Report and other publicly available
information. The summary information set forth below is qualified in its
entirety by reference to such reports (which may be obtained and inspected as
described below) and should be considered in conjunction with the more
comprehensive financial and other information in such reports and other publicly
available reports and documents filed by the Company with the Commission and
other publicly available information. Although the Purchaser and Parent do not
have any knowledge that would indicate that any statements contained herein
based upon such reports are untrue, neither the Purchaser nor Parent assumes any
responsibility for the accuracy or completeness of the information contained
therein, or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information but
which are unknown to the Purchaser and Parent.
General. The Company was incorporated under the laws of the State of
Delaware in May 1989. The Company is listed on the NYSE and is a vertically
integrated, international manufacturer and marketer of highly engineered
lighting fixtures and systems for a wide range of industrial, commercial and
outdoor applications. The Company provides standard and specialized fixtures for
both interior and exterior lighting needs. The Company uses a factory sales
force and markets its products worldwide for use in both new construction and
retrofit applications. The Company employs approximately 2,050 employees. The
Company's principal executive offices are located at 250 East Broad Street,
Suite 1400, Columbus, Ohio 43215. The telephone number of the Company at such
offices is (614) 224-3134.
9
<PAGE> 12
Financial Information. Set forth below are certain selected consolidated
financial data for the Company's last three fiscal years and the three months
ended March 31, 1999, which were derived from the 1998 Annual Report and the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
Results for the three months ended March 31, 1999, are not necessarily
indicative of the results to be expected for the full fiscal year. More
comprehensive financial information (including management's discussion and
analysis of financial condition and results of operations) is included in the
reports and other documents filed by the Company with the Commission, and the
following financial data are qualified in their entirety by reference to such
reports and other documents including the financial information and related
notes contained therein. Such reports and other documents may be examined and
copies thereof may be obtained from the offices of the Commission and the NYSE
in the manner set forth below under "Available Information."
HOLOPHANE CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED FOR THE YEAR ENDED DECEMBER 31,
MARCH 31, ---------------------------------
1999 1998 1997 1996
------------ --------- --------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................................... $52,773 $214,875 $205,327 $190,939
Gross margin....................................... 20,482 84,945 80,194 73,655
Operating income................................... 6,110 31,607 30,987 28,017
Interest expense, net.............................. 301 1,133 1,305 1,612
Income before income taxes, cumulative effect of
accounting change and extraordinary item......... 5,915 30,474 29,682 26,405
Provision for income taxes......................... 2,130 11,265 11,059 9,937
Income before cumulative effect of accounting
change and extraordinary item.................... 3,785 19,209 18,623 16,468
Net income (loss).................................. 3,785 19,209 18,623 16,468
Net income (loss) available to common
stockholders..................................... 3,785 $ 19,209 $ 18,623 $ 16,468
BALANCE SHEET DATA:
Cash............................................... $ 4,890 $ 5,535 $ 11,709 $ 8,072
Total assets....................................... 137,502 136,547 126,796 123,967
Debt............................................... 15,459 21,527 19,574 25,256
Stockholders' equity............................... 86,334 82,198 75,103 67,144
PER COMMON SHARE DATA:
Basic net earnings before cumulative effect of
accounting change and extraordinary items........ $ 0.36 $ 1.77 $ 1.65 $ 1.44
Basic net earnings................................. 0.36 1.77 1.65 1.44
Diluted net earnings............................... 0.35 1.72 1.60 1.40
</TABLE>
Certain Financial Projections for the Company. Prior to entering into the
Merger Agreement, Parent conducted a due diligence review of the Company and in
connection with such review received certain non-public information provided by
the Company, including certain projected financial information (the
"Projections") for the four fiscal years ending December 31, 2002. The Company
does not in the ordinary course publicly disclose projections and the
Projections were not prepared with a view to public disclosure. The Company has
advised Parent and the Purchaser that the Projections represent what the Company
believes to be a reasonable estimate of the Company's future financial
performance and reflect significant assumptions and subjective judgments by the
Company's management regarding industry performance and general business and
economic conditions. The Projections do not give effect to the Offer or the
potential combined
10
<PAGE> 13
operations of Parent and the Company. The Projections are set forth below in
this Offer to Purchase for the limited purpose of giving the holders of the
Shares access to financial projections prepared by the Company's management that
were made available to Parent and the Purchaser in connection with the Merger
Agreement and the Offer.
HOLOPHANE CORPORATION
PROJECTED FINANCIAL PERFORMANCE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
---------------------------------
1999 2000 2001 2002
------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net Sales................................................... $237.5 $263.2 $292.1 $324.1
EBIT(1)..................................................... 35.2 40.3 47.3 55.0
EBITDA(2)................................................... 44.5 50.6 57.5 65.4
Net Income.................................................. 21.6 25.3 30.4 36.1
</TABLE>
- ---------------
(1) EBIT means earnings before interest and income taxes.
(2) EBITDA means earnings before interest, income taxes, depreciation and
amortization.
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS
Certain matters discussed and statements made herein may constitute
forward-looking statements within the meaning of the Securities Act of 1933 and
the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995, 15 U.S.C.A. Section 77z-2 and 78u-5 (Supp. 1996).
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those contemplated by such forward-looking statements. Forward-looking
statements include the information set forth above in "Certain Financial
Projections for the Company." Forward-looking statements also include those
preceded by, followed by or that include the words "believes", "expects",
"anticipates" or similar expressions. Such statements should be viewed with
caution.
While presented with numerical specificity, the Projections are based upon
a variety of estimates and hypothetical assumptions which may not be accurate,
may not be realized, and are also inherently subject to significant business,
economic and competitive uncertainties and contingencies, all of which are
difficult to predict, and most of which are beyond the control of the Company,
Parent or the Purchaser. Accordingly, there can be no assurance that any of the
Projections will be realized and the actual results may vary materially from
those shown above.
In addition, the Projections were not prepared in accordance with generally
accepted accounting principles, and neither the Company's nor Parent's
independent accountants have examined or compiled any of the Projections or
expressed any conclusion or provided any other form of assurance with respect to
the Projections and accordingly assume no responsibility for the Projections.
The Projections were prepared with a limited degree of precision, and were not
prepared with a view to public disclosure or compliance with the published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections, which could
require a more complete presentation of data than as shown above. The inclusion
of the Projections herein should not be regarded as a representation by Parent
and the Purchaser or any other person that the projected results will be
achieved. The Projections should be read in conjunction with the historical
financial information of the Company included above and in the reports and other
documents of the Company that may be obtained from the offices of the Commission
and the NYSE in the manner set forth below under "Available Information." None
of Parent, the Purchaser or any other person assumes any responsibility for the
accuracy, completeness or validity of the foregoing Projections.
11
<PAGE> 14
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and in accordance therewith is obligated to file periodic
reports, proxy statements 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 such proxy statements and distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission located in Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and may also be available for
inspection and copying at prescribed rates at the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New
York 10048. Such reports, proxy statements and other information may also be
obtained at the Web site that the Commission maintains at http://www.sec.gov.
Copies of this material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material is also available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005. Except as otherwise noted in this Offer to Purchase, all of the
information with respect to the Company set forth in this Offer to Purchase has
been derived from publicly available information.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The
Purchaser, a Delaware corporation and a wholly owned subsidiary of Parent, was
organized in 1996. The \Purchaser has not carried on any activities to date
other than those incident to its formation and commencement of the Offer. The
Purchaser has its principal executive offices at 1420 Peachtree Street, N.E.,
Atlanta, Georgia 30309-3002. The telephone number for the Purchaser at such
offices is (404) 853-1000.
Parent, a Delaware corporation formed in 1928, provides a wide variety of
products and services through the following operating segments: Lighting
Equipment, Textile Rental, Chemical and Envelope. Parent has its principal
executive offices at 1420 Peachtree Street, N.E., Atlanta, Georgia 30309-3002.
The telephone number for Parent at such offices is (404) 853-1000.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent and certain other information are
set forth in Schedule I hereto.
12
<PAGE> 15
Set forth below are certain selected consolidated financial data relating
to Parent and its subsidiaries for Parent's last three fiscal years which have
been derived from the financial statements contained in Parent's Annual Report
to Stockholders for the fiscal year ended August 31, 1998. More comprehensive
financial information (including management's discussion and analysis of
financial condition and results of operations) is included in the reports and
other documents filed by Parent with the Commission, and the following financial
data are qualified in its entirety by reference to such reports and other
documents, including the financial information and related notes contained
therein. Such reports and other documents may be examined and copies thereof may
be obtained from the offices of the Commission and the NYSE in the manner set
forth below under "Available Information."
NATIONAL SERVICE INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31,
------------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS DATA:
Net sales of products.................................... $1,718,564 $1,542,644 $1,482,937
Service revenues......................................... 312,746 493,535 530,625
---------- ---------- ----------
Total revenues................................... 2,031,310 2,036,179 2,013,562
Cost of products sold.................................... 1,044,215 945,794 933,405
Cost of services......................................... 183,470 283,024 304,381
Selling and administrative expenses...................... 634,061 633,740 616,513
Interest expense, net.................................... 749 1,624 1,565
Gain on sale of businesses............................... (2,449) (75,097) (7,579)
Restructuring expense, asset impairments, and other
charges............................................... -- 63,091 --
Other (income) expense, net.............................. (1,857) 4,925 3,429
---------- ---------- ----------
Income before taxes........................................ 173,121 179,078 161,848
Provision for income taxes................................. 64,401 71,800 60,700
---------- ---------- ----------
Net income................................................. $ 108,720 $ 107,278 $ 101,148
========== ========== ==========
BALANCE SHEET DATA:
Total assets............................................... $1,010,684 $1,106,352 $1,094,646
Net working capital........................................ 385,056 498,758 408,955
Total debt................................................. 86,073 32,086 31,662
Stockholders' equity....................................... 578,901 671,813 718,008
PER SHARE DATA:
Basic earnings per share................................... $ 2.56 $ 2.37 $ 2.11
Diluted earnings per share................................. 2.53 2.36 2.10
</TABLE>
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and in accordance therewith is obligated to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as of particular dates concerning Parent's directors and officers,
their remuneration, options granted to them, the principal holders of Parent's
securities and any material interest of such persons in transactions with Parent
is required to be disclosed in such proxy statements and distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and may also be available for inspection and copying at
prescribed rates at the regional offices of the Commission located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven
World Trade Center, Suite 1300, New York, New York 10048. Such reports, proxy
statements and other information may also be obtained at the Web site that the
Commission maintains at http:// www.sec.gov. Copies of this material may also be
obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
13
<PAGE> 16
Such material is also available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
None of the Purchaser, Parent nor, to the best knowledge of the Purchaser
and Parent, any of the persons listed on Schedule I hereto or any associate or
majority-owned subsidiary of the Purchaser, Parent or any of the persons so
listed, beneficially owns or has a right to acquire directly or indirectly any
Shares, and none of the Purchaser, Parent nor, to the best knowledge of the
Purchaser and Parent, any of the persons or entities referred to above, or any
of the respective executive officers, directors or subsidiaries of any of the
foregoing, has effected any transactions in the Shares during the past 60 days.
9. SOURCE AND AMOUNT OF FUNDS. The Offer is not conditioned upon any
financing arrangements. The total amount of funds required by the Purchaser to
purchase all outstanding Shares (on a fully diluted basis) pursuant to the Offer
and to pay fees and expenses related to the Offer and the Merger is estimated to
be approximately $485,000,000. The Purchaser plans to obtain all funds needed
for the Offer and the Merger through capital contributions or advances made by
Parent. Parent plans to obtain certain of the funds for such capital
contributions or advances from its available cash and from working capital and
expects to obtain the balance of such funds required to purchase the Shares from
(i) Parent's current loan facility (the "Credit Facility") which is provided by
Wachovia Bank of Georgia, N.A., Bank of America and SunTrust Bank, Atlanta, and
(ii) under a loan facility (the "New Facility") to be provided by The First
National Bank of Chicago, Banc One Capital Markets, Inc. and Wachovia Capital
Markets, Inc. (the "New Banks").
The Credit Facility will expire on July 22, 2001. Borrowings under the
Credit Facility bear interest at one of the following: (i) a base rate (greater
of the prime rate or the federal funds rate plus 50 basis points) (the "Base
Rate"); (ii) a rate based on LIBOR divided by one minus the percentage
prescribed by the Board of Governors of the Federal Reserve System for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency Liabilities" (the "Eurodollar Rate");
(iii) a rate based on a quote delivered by the lending bank at the time of
borrowing by Parent or one of its affiliates (the "Money Market Rate"); or (iv)
a rate based, generally, on the offered rates for certain foreign currency
deposits divided by a percentage equal to one minus the then stated maximum rate
of all reserves requirements applicable to any member bank of the Federal
Reserve System. Parent will use certain of the additional funds under the Credit
Facility to finance the purchase of Shares by the Purchaser pursuant to the
Offer.
Parent has received commitment letters (the "Commitment Letter") from the
New Banks pursuant to which the New Banks have agreed to lend to Parent and/or
one or more of its affiliates up to $250 million. The New Facility will expire
364 days after execution of the agreement evidencing the New Facility.
Borrowings under the New Facility will bear interest at a rate based on one of
(i) the Base Rate, (ii) the Eurodollar rate or (iii) the Money Market rate, plus
an applicable margin. Parent will use the funds from the New Facility to finance
the purchase of Shares by Purchaser pursuant to the Offer.
The foregoing summary of the Credit Facility is qualified in its entirety
by reference to the text of the Credit Facility, a copy of which has been
incorporated by reference as an exhibit to the Schedule 14D-1. The foregoing
summary of the New Facility is subject to the preparation and completion of a
definitive credit agreement for the New Facility and is qualified in its
entirety by reference to the text of the Commitment Letter, a copy of which has
been filed as an exhibit to the Schedule 14D-1. The Credit Facility and the
Commitment Letter may be inspected at, and copies may be obtained from, the same
places and in the manner set forth under the caption "Available Information" in
Section 8. If and when definitive agreements relating to the New Facility are
executed, copies will be filed as exhibits to an amendment to the Schedule
14D-1.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. Over the past
several years, the members of Parent's senior management have considered various
potential transactions which could enhance the value of Parent for its
stockholders including the possibility of a strategic acquisition of the
Company.
On March 31, 1999, Parent executed a confidentiality agreement and received
a confidential memoranda distributed to the Parent and other potential
purchasers in a limited auction of the Company.
14
<PAGE> 17
First round indications of interest were due on April 28, 1999. Parent
submitted a preliminary indication of interest and was invited to visit the
Company's facilities in Newark, Ohio on May 19, 1999. Parent met with senior
management and reviewed due diligence materials in a data room.
Final bids were due on June 16, 1999. On June 11, 1999, Parent's Board of
Directors met to discuss a possible bid for the Company. After reports from
management and Parent's financial advisor, the Board approved the submission of
a bid and authorized the officers of Parent to negotiate and execute the Merger
Agreement if the Company accepted Parent's bid. Parent delivered a proposal to
the Company together with a mark-up of a draft Merger Agreement distributed by
the Company's counsel on June 16, 1999.
On the afternoon of June 17, 1999, Salomon Smith Barney informed Parent and
its financial advisor, Wasserstein Perella, that the Company's legal and
financial advisors were authorized to negotiate with Parent and Wasserstein
Perella terms and conditions (including price) within specific parameters.
Salomon Smith Barney also informed Parent and Wasserstein Perella that it was
authorized by the Company's Board of Directors to contact another bidder if
Parent declined to improve certain terms and conditions of its offer. On June
18, King & Spalding, Parent's outside legal counsel, received a revised draft of
the Merger Agreement from Vorys, Sater, Seymour and Pease LLP, the Company's
outside legal counsel, for the consideration of Parent and its advisors.
On June 18, 1999, Parent agreed to increase the Offer to $38.50 per Share,
and Parent and its financial advisors communicated the revised offer price per
Share to the Company's financial advisor, subject to the condition that Parent's
revised proposal would not be valid if the final Merger Agreement was not
negotiated promptly or if other potential purchasers were contacted.
Over the weekend of June 19 and June 20, 1999, the Company and Parent, and
their respective advisors, negotiated the terms of the Merger Agreement. On the
afternoon of Sunday, June 20, 1999, the Board of Directors of the Company met in
person and by telephone conference, and (i) unanimously determined that the
Merger Agreement and the transactions contemplated thereby, including each of
the Offer and the Merger are advisable and fair to, and in the best interests
of, the stockholders of the Company, (ii) approved the Offer and the Merger and
(iii) recommended that the stockholders of the Company accept the Offer and
tender their Shares to the Purchaser. Following such actions, the Merger
Agreement was executed and delivered by the parties thereto. On Monday, June 21,
1999, prior to the opening of trading on the NYSE, Parent and the Company
jointly announced that the Merger Agreement had been signed and that the
Purchaser intended to commence the Offer.
On June 25, 1999, the Purchaser commenced the Offer.
11. THE MERGER AGREEMENT. The following is a summary of the material terms
of the Merger Agreement, which summary is qualified in its entirety by reference
to the Merger Agreement which is filed as an exhibit to the Tender Offer
Statement on Schedule 14D-1.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, and in any event within five business days from the
date of public announcement of the execution thereof. The obligation of
Purchaser to accept for payment Shares tendered pursuant to the Offer is subject
to (i) the Minimum Condition and (ii) the satisfaction or waiver of certain
other conditions of the Offer. See Section 15. Under the Merger Agreement, the
Purchaser expressly reserves the right to waive the Minimum Condition or any
other conditions to the Offer, to increase the price per Share payable in the
Offer and to make any other change in the terms or conditions of the Offer. The
Minimum Condition of the Offer is that at the expiration of the Offer, at least
a majority of the Shares (determined on a fully diluted basis) shall have been
validly tendered and not properly withdrawn.
Notwithstanding the above, under the terms of the Merger Agreement, the
Purchaser shall not (i) waive the Minimum Condition without the consent of the
Board of Directors or (ii) without the consent of the Board of Directors, make
any change in the terms or conditions of the Offer which (A) changes the form of
consideration to be paid, (B) decreases the price per Share payable in the
Offer, (C) reduces the maximum number of Shares to be purchased in the Offer,
(D) imposes additional conditions to the Offer, (E) extends the Expiration Date
(except as required by law or the applicable rules and regulations of the
Commission) or
15
<PAGE> 18
(F) amends any term of the Offer in any manner adverse to holders of Shares;
provided that the Purchaser shall have the right, in its sole discretion, to
extend the Offer on up to two separate occasions for up to five business days
each, notwithstanding the prior satisfaction of conditions to the Offer, in
order to attempt to satisfy the Minimum Condition or to satisfy the requirements
of Section 253 of the DGCL. The Purchaser shall have no obligation to pay
interest on the purchase price of tendered Shares, including in the event the
Purchaser exercises its right to extend the period of time during which the
Offer is open. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer pursuant to Section
15.
The Merger. The Merger Agreement provides that subject to the terms and
conditions thereof (and including those described in Section 15) and in
accordance with the DGCL, at the Effective Time of the Merger, the Purchaser
shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of the Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
Pursuant to the Merger Agreement, each Share outstanding immediately prior
to the Effective Time (unless otherwise provided for) shall be converted into
the right to receive $38.50 in cash, less any required withholding taxes and
without interest thereon (the "Merger Consideration"), upon surrender of the
certificate formerly representing such Share in the manner described in the
Merger Agreement.
As soon as practicable following the date of the Merger Agreement, upon the
written request of the Purchaser, the Company (or, if appropriate, any committee
administering any stock option or compensation plan or arrangement) and the
Purchaser shall take such actions as are reasonably required (including, if
necessary, the provision of funds by the Purchaser to the Company) to provide
that at the Effective Time, each holder of a then outstanding stock option
and/or right to purchase Shares granted under any stock option or compensation
plan or arrangement of the Company (a "Company Stock Option"), whether or not
then exercisable, shall, upon surrender thereof to the Company or its designee,
receive from the Company the difference between the Merger Consideration and the
exercise price per Share for the Shares covered by such Company Stock Option,
net of any applicable tax withholding. Subject to the terms and conditions set
forth in the Merger Agreement, the Company and such committee shall further take
all actions necessary to cause each Company Stock Option to be canceled at the
Effective Time by virtue of the Merger and to cause the stock option or
compensation plan or arrangements of the Company providing for the granting of
Company Stock Options ("Option Plans") to terminate as of the Effective Time and
the provisions in any other plan, program or arrangement providing for the
issuance or grant by the Company or any of its subsidiaries of any interest in
respect of the capital stock of the Company or any of such subsidiaries to be
terminated as of the Effective Time. Without limiting the generality of the
foregoing, the Company and such committee shall have given all requisite notices
under all Option Plans and any agreements with respect to any Company Stock
Option, accelerated the vesting of Company Stock Options and shall have given
holders thereof the requisite opportunity to exercise as is required, in each
case, such that following the Effective Time no holder of Options or any
participant in the Option Plans or any other such plans, programs or
arrangements shall have the right thereunder to acquire any equity securities of
the Company or any of its subsidiaries.
The Merger Agreement provides that, unless otherwise stipulated, Shares
that are outstanding immediately prior to the Effective Time and which are held
by stockholders who have not voted in favor of or consented to the Merger in
writing and have demanded appraisal for such Shares in accordance with the DGCL
shall not be converted into a right to receive the Merger Consideration, but
shall be entitled to receive the consideration as shall be determined pursuant
to Section 262 of the DGCL; provided that if such holder shall have failed to
perfect or shall have withdrawn or otherwise lost his, her or its right to
appraisal, such holder's Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration.
The Merger Agreement also provides that at the Effective Time and without
any further action on the part of the Company and the Purchaser, the (Second)
Restated Certificate of Incorporation of the Company in effect at the Effective
Time shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law. At the Effective Time and
without any further action on the part
16
<PAGE> 19
of the Company and the Purchaser, the Bylaws of the Purchaser in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation until amended in
accordance with applicable law.
The Merger Agreement provides that from and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Purchaser at the Effective Time shall be
the directors of the Surviving Corporation and (ii) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Stockholders' Meeting; Proxy Statement. The Merger Agreement provides that
the Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement, unless a vote
of stockholders of the Company is not required by the DGCL. The Board of
Directors of the Company shall recommend approval and, to the extent required by
the DGCL, adoption by the Company's stockholders of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement. In connection
with such meeting, the Company (i) will promptly prepare and file with the
Commission, will use its reasonable efforts to have cleared by the Commission
and will thereafter mail to its stockholders as promptly as practicable a proxy
or information statement of the Company (the "Company Proxy Statement") and all
other proxy materials for such meeting, (ii) will use its reasonable efforts to
obtain the necessary approvals by its stockholders of the Merger Agreement and
(iii) will otherwise comply with all legal requirements applicable to such
meeting. Notwithstanding the foregoing, if the Purchaser acquires at least 90%
of the outstanding Shares, the Company has agreed, at the request of the
Purchaser, to take all necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after such acquisition,
without a meeting of the Company's stockholders, in accordance with Section 253
of the DGCL.
Neither the Board of Directors nor any committee thereof will, except as
expressly permitted by the Merger Agreement, (i) withdraw, qualify or modify, or
propose publicly to withdraw, qualify or modify, in a manner adverse to Parent
or the Purchaser, its approval or recommendation of the Merger or the Merger
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any transaction involving any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its material subsidiaries or the acquisition of any equity
interest in, or substantial portion of the assets of, the Company or any of its
material subsidiaries, other than the transactions contemplated by the Merger
Agreement (an "Acquisition Proposal") from a party other than Parent or the
Purchaser (an "Alternative Transaction") or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "Acquisition Agreement") related to any
Alternative Transaction. Notwithstanding the foregoing, if, prior to the
approval of the Merger Agreement by the stockholders of the Company, the Board
of Directors determines in the exercise of its fiduciary duties, after it has
received a Superior Proposal (as hereinafter defined) in compliance with the
terms of the Merger Agreement, that it may (subject to this and the following
sentences) inform the stockholders of the Company that it no longer believes
that the Merger is advisable and no longer recommends approval (a "Subsequent
Determination") and enter into an Acquisition Agreement with respect to a
Superior Proposal, but only at a time that is after the fifth day following
delivery to Parent of written notice advising Parent that the Board of Directors
has received a Superior Proposal. Such written notice must specify the material
terms and conditions of such Superior Proposal, identify the person making such
Superior Proposal and state that the Board of Directors intends to make, or is
considering making, a Subsequent Determination. During the five day period, the
Company is obligated to provide an opportunity for Parent to propose such
adjustments to the terms and conditions of the Merger Agreement as would enable
the Board of Directors to proceed with its recommendation to the stockholders of
the Company without a Subsequent Determination. A "Superior Proposal" means any
proposal (on its most recently amended or modified terms, if amended or
modified) made by any person other than Parent or its affiliates to enter into
an Alternative Transaction which the Board of Directors determines in its good
faith judgment to be more favorable to the stockholders of the Company than the
Merger, taking into account all relevant factors, including, but not limited to,
whether, in the good faith judgment of the Board of Directors, after
consultation with the Company's independent
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<PAGE> 20
financial advisor, the third party is reasonably able to finance the
transaction, and any proposed changes to the Merger Agreement that may be
proposed by Parent in response to such Alternative Transaction.
Designation of Directors. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of more than a majority of the outstanding Shares
pursuant to the Offer, and from time to time thereafter, Purchaser will be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors as shall give Purchaser representation
on the Board of Directors equal to a majority of the Board of Directors, and
that the Company will amend or cause to be amended its Bylaws as necessary to
effect such representation and will, at such time, promptly take all action
necessary to cause the Purchaser's designees to be so elected or appointed,
including either increasing the size of the Board of Directors or securing the
resignations of incumbent directors or both. The Company has also agreed to use
its reasonable best efforts to cause persons designated by the Purchaser to
constitute the same percentage as is on the Board of Directors on each committee
of the Board of Directors.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, the concurrence of a majority of the directors of
the Company then in office who are neither designated by the Purchaser nor are
employees of the Company (the "Disinterested Directors") shall be required to
authorize any amendment, or waiver of any term or condition, of the Merger
Agreement or the certificate of incorporation or bylaws of the Company, any
termination of the Merger Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Purchaser or waiver or assertion of any of the Company's rights thereunder, and
any other consent or action by the Board of Directors with respect to the Merger
Agreement. The number of Disinterested Directors shall not be less than two.
Access to Information; Confidentiality. From the date of the Merger
Agreement until the Effective Time, upon reasonable, prior notice from Parent,
the Company will give Parent and the Purchaser, their counsel, financial
advisors, auditors and other authorized representatives reasonable access during
normal business hours and without disrupting the orderly conduct of business by
the Company and its subsidiaries to the offices, properties, books and records
of the Company and its subsidiaries, will furnish to Parent and the Purchaser,
their counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to reasonably cooperate with Parent and the Purchaser in
their investigation of the business of the Company and its subsidiaries.
The Merger Agreement further provides that Parent and the Purchaser will
hold, and will cause their respective officers, directors, employees,
accountants, lenders, counsel, consultants, advisors and agents to hold, in
confidence, all confidential documents and information concerning the Company
and its subsidiaries furnished to Parent or the Purchaser in connection with the
transactions contemplated by the Merger Agreement in accordance with the
confidentiality agreement, dated on or about March 31, 1999, between Parent and
the Company.
Other Offers. The Merger Agreement provides that the Company and its
subsidiaries will not, nor shall the Company authorize or permit any officers,
directors, employees, representatives or agents of the Company and its
subsidiaries to, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal or (ii) engage in negotiations
with, or disclose any nonpublic information relating to the Company or any of
its subsidiaries or afford access to the properties, books or records of the
Company or any of its subsidiaries to, any person that may be considering
making, or has made, an Acquisition Proposal; provided, however, that nothing
contained in the Merger Agreement prevents the Company or the Board of Directors
from (a) furnishing nonpublic information to, or affording access to the
properties, books or records of the Company or any of its subsidiaries to, or
entering into discussions or an agreement with, any person in connection with an
unsolicited Acquisition Proposal by such person, if and only to the extent that
(x) the Company's Board of Directors determines in good faith after consultation
with outside legal counsel that such action is necessary to comply with their
fiduciary duties to the stockholders of the Company under applicable law, (y)
prior to furnishing any such nonpublic information to, or entering into
discussions or negotiations with, such person, the Board of Directors receives
from such person an executed confidentiality agreement
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<PAGE> 21
with customary terms and (z) the Board of Directors concludes in the exercise of
its fiduciary duties that the Acquisition Proposal is a Superior Proposal, or
(b) taking and disclosing to the Company's stockholders any position, and making
any related filings with the Commission, as required by Rules l4e-2 and 14d-9
under the Exchange Act with respect to any Alternative Transaction that is a
tender offer; provided, that the Board of Directors shall not recommend that the
stockholders of the Company tender their Shares in connection with any such
tender offer unless the Board of Directors by majority vote determines in good
faith that failing to take such action would constitute a breach of the Board of
Directors' fiduciary duties under applicable law. The Company will promptly
notify Parent after receipt of any Acquisition Proposal or any request for
nonpublic information relating to the Company or any of its subsidiaries or for
access to the properties, books or records of the Company or any of its
subsidiaries by any person that has made an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request. The Company has agreed not to take any action
with respect to such proposal or inquiry for five days after delivery of such
notice to Parent and will negotiate exclusively and in good faith with Parent
for such five day period to make such adjustments in the terms and conditions of
the Merger Agreement as would enable Company to proceed with the transactions
contemplated therein on such adjusted terms.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement provides that the certificate of incorporation of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in the (Second) Restated Certificate of
Incorporation of the Company and these provisions are not to be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect materially adversely the rights thereunder of
individuals who at the Effective Time were directors or officers of the Company,
with respect to any act or omission in their capacity as an officer or director
of the Company occurring on or prior to the Effective Time, unless such
modification shall be required by law.
Parent has agreed to maintain the current policies of directors' and
officers' liability insurance maintained by the Company (or substitute policies
with substantially the same coverage and containing substantially comparable
terms and conditions) for at least six years after the Effective Time, with
respect to matters occurring prior to the Effective Time; provided that Parent
will not be required to expend more than an amount per year equal to 400% of
current annual premiums paid by the Company to maintain or procure such
coverage.
The Company will, to the fullest extent permitted under applicable law and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and after the Effective Time, the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless each present
and former director and officer of the Company (collectively, the "Indemnified
Parties") against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or directly pertaining to any
action or omission in their capacity as an officer or director of the Company
occurring on or prior to the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, for a period of six years after the
Effective Time, in each case to the fullest extent permitted under applicable
law (and shall pay any expenses in advance of the final disposition of such
action or proceeding to each Indemnified Party to the fullest extent permitted
under applicable law, upon receipt from the Indemnified Party to whom expenses
are advanced of an undertaking to repay such advances required under applicable
law). In the event of any such claim, action, suit, proceeding or investigation,
(i) the Company or the Surviving Corporation, as the case may be, have agreed to
pay the reasonable fees and expenses of counsel selected by the Indemnified
Parties promptly after statements therefor are received and (ii) the Company and
the Surviving Corporation shall cooperate in the defense of any such matter. In
the event that any claim for indemnification is asserted or made within such
six-year period, all rights to indemnification in respect of such claim shall
continue until the final disposition of such claim.
Conduct of Business Pending the Merger. Pursuant to the Merger Agreement,
the Company and its subsidiaries have agreed to conduct their business in the
ordinary course consistent with past practice and to
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<PAGE> 22
use their reasonable efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees.
The Company and its subsidiaries will also refrain from taking various
actions without Parent's consent, which consent shall not be unreasonably
delayed, conditioned or withheld, pending consummation of the Merger. These
limitations cover, among other things (subject to certain limitations): changes
in governing documents; changes in capital stock; declaration or payment of
dividends or other distributions; increases in the compensation or benefits of
directors, officers and employees (except to the extent required under existing
plans); adopting a plan of complete or partial dissolution; incurring debt above
specified levels or entering into transactions other than in the ordinary course
of business consistent with past practice; making capital expenditures beyond
specified limits; entering into certain transactions; making any material tax
election; changing any accounting principles in a material manner; and paying or
discharging any claims, liabilities or obligations other than in the ordinary
course of business consistent with past practice or as required pursuant to
contracts or agreements existing as of the date of the Merger Agreement.
Employee Benefits Matters. As of the Effective Time, the Surviving
Corporation will employ all employees of the Company who desire employment. With
respect to each individual who is employed by the Surviving Corporation as of
the Effective Time, Parent may, at its option, either (i) cause the Surviving
Corporation to continue to provide for such individual's participation in each
medical, surgical, hospitalization and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of ERISA) of the Company on the same terms
as immediately prior to the Effective Time or (ii) permit such individual to
participate in an employee welfare plan sponsored by Parent or any affiliate of
Parent (a "Purchaser Plan") which provides substantially similar benefits as
prior to the Effective Time on the same terms and to the same extent as
similarly situated employees of Parent's Lithonia Lighting unit; provided that
if Parent elects to permit an employee to participate in a Purchaser Plan
pursuant to clause (ii) above, such employee will (A) not be subject to any
preexisting condition provision or waiting period under any Purchaser Plan which
provides medical, dental, vision or prescription drug benefits and (B) to the
extent permitted by applicable law, be credited with prior service with the
Company for all purposes related to eligibility and vesting under any Purchaser
Plan in which such employee participates.
With respect to any employee of the Company as of the date of the Merger
Agreement who is not employed by the Surviving Corporation as of the Effective
Time, the Surviving Corporation will be responsible for providing continuation
coverage to such employee (and his or her dependents), as required under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Further, with
respect to any former employee of the Company (or their dependents) who is
receiving continuation coverage under COBRA as of the Effective Time, the
Surviving Corporation will maintain such continuation coverage in compliance
with COBRA.
Parent has agreed to cause the Surviving Corporation to continue each of
the following plans and agreements for the remaining term thereof: (i) the
Company's Second Amended and Restated Supplemental Executive Retirement Plan
(the "SERP"); and (ii) certain Termination Benefit Agreements and Employment
Agreements between the Company and its executive officers; provided that the
Surviving Corporation shall not be obligated to make contributions to the SERP
or to permit employees to defer compensation into the SERP for more than two
years after the Effective Time. Parent has also agreed to cause the Surviving
Corporation to continue for at least two years, or offer a comparable plan to
the Company's bonus plans and educational assistance program. Any outstanding
rights under the following plans will be fully satisfied in connection with the
transactions contemplated by the Merger Agreement and, upon satisfaction of
those rights, the plans shall be terminated: (i) the Company's Employee Stock
Option (Purchase) Plan; and (ii) the Company's Performance Award Program.
Under the Merger Agreement, Parent has agreed to assume and honor, and
cause the Surviving Corporation to assume and to honor, in accordance with their
terms all employment, severance and other compensation agreements and
arrangements listed in the Disclosure Schedule delivered pursuant to the Merger
Agreement.
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<PAGE> 23
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations and warranties by the Company concerning: the Company's
capitalization; required filings and consents; the Board of Directors' approval
of the Merger Agreement and the transactions contemplated thereby (including
approvals so as to render inapplicable thereto the limitation on business
combinations contained in Section 203 of the DGCL); Commission filings and
financial statements; absence of certain changes or events; compliance with law;
absence of litigation; employee benefit plans; environmental matters; tax
matters; real estate matters; intellectual property; Year 2000 issues; and
brokers. Some of the representations are qualified by a material adverse effect
clause. "Material Adverse Effect," for the purposes of the Merger Agreement and
this Offer to Purchase, means an effect that (A) is materially adverse to the
financial condition, business, assets or results of operations of the Company
and its subsidiaries taken as a whole, excluding in all cases: (i) events or
conditions generally affecting the industry in which the Company and its
subsidiaries operate or arising from changes in general business or economic
conditions; (ii) any change or effect resulting from any change in law or
generally accepted accounting principles, which generally affect entities such
as the Company; and (iii) any change or effect resulting from the execution
and/or announcement of the Merger Agreement or compliance by the Company with
the terms of the Merger Agreement or any agreement contemplated by the Merger
Agreement, or (B) would prevent or materially delay the consummation of the
Offer or the Merger.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of Parent, the Purchaser and the Company to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions: (i) the Merger Agreement and the transactions contemplated
hereby shall have been approved and adopted by the stockholders of the Company,
to the extent required by, and in accordance with, DGCL and the Company's
(Second) Restated Certificate of Incorporation and Bylaws; (ii) no governmental
entity shall have enacted, issued, promulgated, enforced or entered any law,
rule, regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making the Merger illegal or otherwise restricting, preventing or prohibiting
consummation of the Merger; (iii) Purchaser shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; and (iv) all actions
by or in respect of or filings with any governmental body, agency, official or
authority required shall have been obtained or made.
Termination Events. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval thereof by the stockholders of the Company, to the extent required by
DGCL):
(a) by mutual written consent of Parent and the Company;
(b) by either the Company or Parent, if the Effective Time shall not
have occurred on or before December 31, 1999 (provided that the right to
terminate the Merger Agreement under this provision will not be available
to any party whose breach of the Merger Agreement has been the primary
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date);
(c) by either the Company or Parent, if any governmental entity shall
have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties shall use their
reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the
Merger Agreement and such order, decree, ruling or other action shall have
become final and non-appealable;
(d) by Parent:
(i) if the Purchaser terminates the Offer without the Purchaser
having purchased any Shares by reason of the failure to satisfy any
condition set forth in Annex I to the Merger Agreement;
(ii) if the Board of Directors (A) fails to include in the Schedule
14D-9 or the Company Proxy Statement its recommendation without
modification or qualification that the stockholders of the Company
accept the Offer and approve the Merger Agreement and the Merger, (B)
approves or recommends any other Acquisition Proposal, (C) withdraws,
modifies or qualifies its recommenda-
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<PAGE> 24
tion of the Offer, the Merger Agreement or the Merger in a manner
adverse to the interests of Parent or the Purchaser or (D) resolves to
do any of the foregoing; or
(e) by the Company:
(i) if the Purchaser fails to commence the Offer within 5 business
days following the date of the initial public announcement of the Offer;
(ii) if the Purchaser terminates the Offer without having accepted
any Shares for payment by reason of the failure to satisfy any condition
set forth in Annex I to the Merger Agreement (unless such failure
results from the failure of the Company to perform in any material
respect any of its covenants or agreements contained in the Merger
Agreement or the material breach by the Company of any of its
representations and warranties contained in the Merger Agreement);
(iii) if the Purchaser fails to pay for Shares within 90 days
following the commencement of the Offer, unless the failure to pay for
Shares is the result of the failure of the Company to perform in any
material respect any of its covenants or agreements contained in the
Merger Agreement or the material breach by the Company of any
representation or warranties contained in the Merger Agreement;
(iv) if any of Parent's or the Purchaser's representations or
warranties contained in the Merger Agreement are not true and correct in
any material respect, as if such representation or warranty was made as
of such time on or after the date of the Merger Agreement; or Parent or
the Purchaser fails to perform in any material respect any obligation or
to comply in any material respect with any agreement or covenant of
Parent or the Purchaser to be performed or complied with by it under the
Merger Agreement and which, in any such case, is not cured within 5
business days following receipt of notice thereof; or
(v) if, prior to the purchase of Shares pursuant to the Offer and
after it has received a Superior Proposal in compliance with the Merger
Agreement, the Company's Board of Directors determines that it is
obligated by its fiduciary duties under applicable law to terminate the
Merger Agreement, provided that such termination will not be deemed
effective under the Merger Agreement until the Company pays the
Termination Fee (as defined below) and reimburses certain of Parent's
and the Purchaser's expenses.
Fees and Expenses. If (i) Parent terminates the Merger Agreement because
the Board of Directors (A) fails to include its recommendation of the Offer or
the Merger in the Schedule 14D-9 or Company Proxy Statement, (B) approves or
recommends any other Acquisition Proposal, (C) withdraws, modifies or qualifies
its recommendation of the Offer or the Merger in a manner adverse to the
interests of Parent or the Purchaser or (D) resolves to do any of the foregoing,
or (ii) the Company terminates the Merger Agreement prior to the purchase of
Shares pursuant to the Offer and after it has received a Superior Proposal in
compliance with the Merger Agreement because its Board of Directors determines
that such termination is obligated by its fiduciary duties under applicable law,
then in each such case the Company has agreed to pay to Parent and the
Purchaser, within five business days of such termination, a fee, in cash, in an
amount of $20,000,000 (the "Termination Fee"). In addition, the Company has
agreed to reimburse Parent, the Purchaser and their affiliates (not later than
five business days after submission of valid statements therefor) for all actual
documented out-of-pocket fees and expenses incurred by any of them or on their
behalf in connection with the Offer and the Merger and the consummation of all
transactions contemplated by the Merger Agreement (including, without
limitation, fees and disbursements payable to financing sources, investment
bankers, counsel to Purchaser or Parent or any of the foregoing, and
accountants) up to a maximum amount of $3 million.
If within 12 months after termination of the Merger Agreement, the Company
consummates an Acquisition Proposal with a person other than Parent or the
Purchaser, then immediately prior to, and as a condition of, consummation of
such transaction the Company shall pay to Parent upon demand an amount in cash
equal to the Termination Fee to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger, unless the Termination Fee is payable
or has been paid in accordance with the Merger
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<PAGE> 25
Agreement or if the Merger Agreement is terminated by the Company as a result of
Parent's failure in any material respect to perform its obligations under the
Merger Agreement or as a result of a material breach of any of its
representations or a warranties.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY. The purpose
of the Offer is to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to the Merger Agreement. As promptly
as practicable following the purchase of Shares pursuant to the Offer and after
satisfaction or waiver of all conditions to the Merger set forth in the Merger
Agreement, the Purchaser intends to acquire the remaining equity interest in the
Company not acquired in the Offer by consummating the Merger.
Vote Required to Approve the Merger. The Board of Directors has approved
and adopted the Merger and the Merger Agreement in accordance with the DGCL. The
Board of Directors will be required to submit the Merger Agreement to the
Company's stockholders for approval at a stockholders' meeting convened for that
purpose in accordance with the DGCL. The Merger must be approved by the
affirmative vote of the holders of at least a majority of the outstanding
Shares. The Minimum Condition requires that there shall have been validly
tendered and not properly withdrawn, together with the Shares owned, directly or
indirectly, by Parent, a majority of the Shares (determined on a fully diluted
basis). Upon consummation of the Offer and assuming the Minimum Condition is
satisfied, the Purchaser will own sufficient Shares to enable it to effect
stockholder approval of the Merger with the affirmative vote of the Shares owned
by it. The Purchaser intends to exercise its ability in such case to approve the
Merger without the affirmative vote of any other stockholder. The Board of
Directors has approved the Merger Agreement and the transactions contemplated
thereby, so as to render inapplicable the limitation on business combinations
contained in Section 203 of the DGCL.
Pursuant to the Merger Agreement, the Company has agreed, if and to the
extent permitted by law, at the request of the Purchaser and subject to the
terms of the Merger Agreement, to take all necessary and appropriate actions to
cause the Merger to become effective as soon as reasonably practicable after the
purchase of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with Section 253 of the DGCL.
THE OFFER IS CONDITIONED UPON THE MINIMUM CONDITION BEING SATISFIED.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION WHICH THE PURCHASER MAY MAKE WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF
THE EXCHANGE ACT.
Appraisal Rights in Connection with the Offer. Stockholders do not have
appraisal rights as a result of the Offer. However, if the Merger is
consummated, stockholders of the Company at the time of the Merger who do not
vote in favor of the Merger will have the right under the DGCL to dissent and
demand appraisal of, and receive payment in cash of the fair value of, their
Shares outstanding immediately prior to the Effective Time in accordance with
Section 262 of the DGCL.
Under the DGCL, dissenting stockholders who comply with the applicable
statutory procedures will be entitled to receive a judicial determination of the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of such merger or similar business combination)
and to receive payment of such fair value in cash. Any such judicial
determination of the fair value of such Shares could be based upon
considerations other than or in addition to the price paid in the Offer and the
Merger and the market value of the Shares. In Weinberger v. UOP, Inc., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding. Stockholders should recognize that the value so determined
could be higher or lower than the price per Share paid pursuant to the Offer or
the Merger Consideration per Share.
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<PAGE> 26
In addition, several decisions by Delaware courts have held that in certain
circumstances a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires that the merger be fair
to other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the other stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above.
However, a damages remedy or injunctive relief may be available if a merger
is found to be the product of procedural unfairness, including fraud,
misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DGCL.
The foregoing description of the DGCL is not necessarily complete and is
qualified in its entirety by reference to the DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. If applicable,
Rule 13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such alternative transaction and the consideration offered to minority
stockholders in the Merger or such alternative transaction, be filed with the
Commission and disclosed to stockholders prior to consummation of the Merger or
such alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 14. If such registration were terminated,
Rule 13e-3 would be inapplicable to any such future Merger or such alternative
transaction.
Plans for the Company. Subject to certain matters described below, it is
currently expected that, following the Merger, the business and operations of
the Company will generally continue as they are currently being conducted.
Parent intends to conduct the Company's operations as a part of its current
Lighting division and to cause the Company's operations to continue to be run
and managed by, among others, certain of the Company's existing executive
officers. Parent believes that the Company conducts complementary operations and
has complementary products and customers, and thus does not anticipate any
significant Merger-related terminations or facilities closings. Parent will,
however, continue to evaluate all aspects of the business, operations,
capitalization and management of the Company during the pendency of the Offer
and after the consummation of the Offer and the Merger and will take such
further actions as it deems appropriate under the circumstances then existing.
Parent intends to seek additional information about the Company during this
period. Thereafter, Parent intends to review such information as part of a
comprehensive review and integration of the Company's business, operations,
capitalization and management.
Except as described in this Offer to Purchase, none of the Purchaser,
Parent nor, to the best knowledge of the Purchaser and Parent, any of the
persons listed on Schedule I has any present plans or proposals that would
relate to or result in an extraordinary corporate transaction such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries
or a sale or other transfer of a material amount of
24
<PAGE> 27
assets of the Company or any of its subsidiaries, any material change in the
capitalization or dividend policy of the Company or any other material change in
the Company's corporate structure or business or the composition of the Board of
Directors or management.
13. DIVIDENDS AND DISTRIBUTIONS. If the Company should, on or after the
date of the Merger Agreement, split, combine or otherwise change the Shares or
its capitalization, or disclose that it has taken any such action, then without
prejudice to the Purchaser's rights under Section 15, the Purchaser may make
such adjustments to the purchase price and other terms of the Offer as it deems
appropriate to reflect such split, combination or other change.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any cash or stock dividend or other distribution on, or issue any
rights with respect to, the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of the
Purchaser or the nominee or transferee of the Purchaser on the Company's stock
transfer records of such Shares that are purchased pursuant to the Offer, then
without prejudice to the Purchaser's rights under Section 15, (i) the purchase
price payable per Share by the Purchaser pursuant to the Offer will be reduced
to the extent any such dividend or distribution is payable in cash and (ii) any
non-cash dividend, distribution (including additional Shares) or right received
and held by a tendering stockholder shall be required to be promptly remitted
and transferred by the tendering stockholder to the Depositary for the account
of the Purchaser, accompanied by appropriate documentation of transfer. Pending
such remittance or appropriate assurance thereof, the Purchaser will, subject to
applicable law, be entitled to all rights and privileges as owner of any such
non-cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the preceding paragraphs except as
permitted, required or specifically contemplated by the Merger Agreement and
nothing herein shall constitute a waiver by Parent or the Purchaser of any of
its rights under the Merger Agreement or a limitation of remedies available to
Parent or the Purchaser for any breach of the Merger Agreement, including
termination thereof.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, STOCK EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public. Following
the purchase of Shares pursuant to the Offer, at least a majority of the
outstanding Shares will be owned by Purchaser.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5,000,000. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NYSE for continued listing and the listing of the Shares
is discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other sources. The extent of the public market therefor and
the availability of such quotations would depend, however, upon such factors as
the number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of the securities firms, the possible termination of registration under
the Exchange Act as described below and other factors. The Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to be
greater or less than the Offer price.
25
<PAGE> 28
The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders. The termination of the registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
stockholders' meetings and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of the
securities pursuant to Rule 144 under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for NASDAQ reporting.
The Shares are currently "margin securities" under the rules of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"), which
has the effect, among other things, of allowing brokers to extend credit on the
collateral of such Shares for the purpose of buying, carrying, or trading in
securities. Depending upon factors similar to those described above with respect
to listing and market quotations, it is possible that, following the Offer, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and therefore could no longer be used
as collateral for purpose credits made by brokers. In any event, the Shares will
cease to be "margin securities" if registration of the Shares under the Exchange
Act is terminated.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term or
provision of the Offer, the Purchaser will not be required to accept for payment
or, subject to any applicable rules and regulations of the Commission, to pay
for any Shares tendered pursuant to the Offer and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may amend or terminate the Offer, to the extent provided
in the Merger Agreement, unless the Minimum Condition shall have been satisfied
or waived in accordance with the terms thereof. Furthermore, notwithstanding any
other term or provision of the Offer, the Purchaser will not be required to
accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may terminate or amend the Offer, to the extent provided
in the Merger Agreement, if, at any time on or after June 20, 1999, and before
the acceptance of such Shares for payment or, subject to any applicable rules
and regulations of the Commission, the payment therefor, any of the following
conditions exists:
(a) an order shall have been entered (or any governmental entity shall
have threatened in writing to seek an order) in any action or proceeding
before any federal or state court or governmental agency or other
regulatory body or a permanent injunction by any federal or state court of
competent jurisdiction in the United States shall have been issued and
remain in effect (i) making illegal the purchase of, or payment for, any
Shares by the Purchaser, Parent or any of Parent's other subsidiaries; (ii)
otherwise preventing the consummation of the Offer or the Merger; (iii)
imposing limitations on the ability of the Purchaser, Parent or any of
Parent's other subsidiaries to exercise effectively full rights of
ownership of any Shares, including, without limitation, the right to vote
any Shares acquired by Purchaser pursuant to the Offer on all matters
properly presented to the Company's stockholders; (iv) prohibiting or
materially limiting the ownership or operation by the Company or any of its
subsidiaries, or Parent or any of its subsidiaries, of all or any material
portion of the business or assets of the Company and its subsidiaries, or
Parent and its subsidiaries, or compelling Parent or any of its
subsidiaries to dispose of all or any material portion of the businesses or
assets of the Company or its subsidiaries or Parent or its subsidiaries, as
a result of transactions contemplated by the Offer or the Merger Agreement;
or (v) requiring divestiture by Parent or the Purchaser of any Shares;
26
<PAGE> 29
(b) there shall have been any federal or state statute, rule or
regulation enacted, enforced, promulgated, amended or made applicable to
the Company, the Purchaser, Parent or any other affiliate of Parent or the
Company or the Offer or the Merger on or after June 25, 1999 by any
governmental entity that could reasonably be expected to result, directly
or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) (i) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, which breach shall not have been cured or waived within the
earlier of (A) five business days after receipt of notice thereof by the
Company or (B) two business days prior to the date on which the Offer
expires; provided that if notice of such breach is received by the Company
within such two business day period, the Purchaser will extend the Offer by
at least two business days, or (ii) any of the representations and
warranties of the Company set forth in the Merger Agreement (disregarding
any qualifications contained therein regarding materiality or Material
Adverse Effect) shall not be true when made or at any time prior to
consummation of the Offer as if made at and as of such time, except to the
extent that such breach would not be reasonably likely to have a Material
Adverse Effect;
(d) the Merger Agreement is terminated in accordance with its terms or
the Offer is terminated with the consent of the Company;
(e) any event occurs that is reasonably likely to result in a Material
Adverse Effect;
(f) (i) the Board of Directors or any committee thereof withdraws or
modifies in a manner adverse to Parent or the Purchaser the approval or
recommendation of the Offer, the Merger or the Merger Agreement, or
approves or recommends any Alternative Transaction, (ii) any person or
group enters into a definitive agreement or an agreement in principle with
the Company with respect to an Alternative Transaction or (iii) the Board
of Directors or any committee thereof resolves to do any of the foregoing;
(g) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated;
or
(h) any consent required to be filed or obtained in connection with
the Offer, the failure of which to be so filed or obtained would have a
Material Adverse Effect, shall not have been obtained.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, based upon its examination of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, neither the Purchaser nor Parent
is aware of any licenses or other regulatory permits that appear to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company's subsidiaries) as contemplated
herein, or of any filings, approvals or other actions by or with any domestic
(Federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company's
subsidiaries) by the Purchaser pursuant to the Offer as contemplated herein.
Should any such approval or other action be required, it is the Purchaser's
present intention to seek such approval or action. However, the Purchaser does
not presently intend to delay the purchase of Shares tendered pursuant to the
Offer pending the receipt of any such approval or the taking of any such action
(subject to the Purchaser's right to delay or decline to purchase Shares if any
of the conditions in Section 15 shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Parent or the Purchaser or that certain parts of the
businesses of the Company, Parent or the Purchaser might not have to be disposed
of or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval was not
obtained or such other action was not taken, any of which could cause the
Purchaser to elect to terminate the Offer without purchasing the Shares
thereunder. The Purchaser's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions, including conditions relating
to the legal matters discussed in this Section 16.
27
<PAGE> 30
State Takeover Laws. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have or whose business operations have substantial economic effects in
such states, or which have substantial assets, security holders, principal
executive offices or principal places of business therein. To the extent that
certain provisions of certain of these state takeover statutes purport to apply
to the Offer, the Purchaser believes that such laws conflict with federal law
and constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Act, which as a matter of
state securities law made takeovers of corporations meeting certain requirements
more difficult, and the reasoning in such decision is likely to apply to certain
other state takeover statutes. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court of the United States held that the State of
Indiana could, as a matter of corporate law and in particular those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. Subsequently, in TLX Acquisition Corp.
v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they applied to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a
federal district court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for purchase or pay for, any Shares
tendered. See Section 15.
In connection with the regulation of control bids by tender offer in Ohio,
the Purchaser filed a Form 041 on June 25, 1999 with the Ohio Division of
Securities pursuant to R.C.1707.041 of the Ohio Securities Act.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer is subject to such
requirements. See Section 2.
Parent has filed, on June 23, 1999, with the FTC and the Antitrust Division
a Premerger Notification and Report Form in connection with the purchase of
Shares pursuant to the Offer. Under the provisions of the HSR Act applicable to
the Offer, the purchase of Shares pursuant to the Offer may not be consummated
until the expiration of a 15-calendar day waiting period following the filing by
Parent. Accordingly, the waiting period under the HSR Act applicable to such
purchases of Shares pursuant to the Offer will expire at 11:59 p.m., New York
City time, on July 8, 1999, unless such waiting period is terminated or is
extended by a request from the FTC or the Antitrust Division for additional
information or documentary material prior to the expiration of the waiting
period. If either the FTC or the Antitrust Division were to request additional
information or documentary material from Parent, the waiting period would expire
at 11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Parent with such request. Thereafter, the waiting
period could be extended only by court order or agreement of the parties. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and in any event the
purchase of and payment for Shares will be deferred until ten days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order or
28
<PAGE> 31
agreement of the parties. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law. See
Section 4.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either of the FTC and the
Antitrust Division could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
purchased by the Purchaser or the divestiture of substantial assets of Parent,
its subsidiaries or the Company. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances.
Margin Credit Regulations. Federal Reserve Board Regulations T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
17. FEES AND EXPENSES. Wasserstein Perella is acting as Dealer Manager in
connection with the Offer and serving as financial advisor to Parent in
connection with the Offer and the Merger. Parent has agreed to pay to
Wasserstein Perella a fee of $2,800,000 upon the consummation of a merger or
other business combination with, or acquisition of 50% or more of the
outstanding Shares or at least 50% of the assets of the Company. Parent will
also reimburse Wasserstein Perella for reasonable out-of-pocket expenses and has
also agreed to indemnify Wasserstein Perella against certain liabilities and
expenses in connection with the Offer and the Merger.
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and First Chicago Trust Company of New York to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee stockholders to forward the Offer materials
to beneficial owners. The Information Agent and the Depositary will receive
reasonable and customary compensation for services relating to the Offer and
will be reimbursed for certain out-of-pocket expenses. The Purchaser and Parent
have also agreed to indemnify the Information Agent and the Depositary against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager, the Information Agent and the Depositary).
Brokers, dealers, commercial banks and trust companies will, upon request, be
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
18. MISCELLANEOUS. The Offer is being made solely by this Offer to
Purchase and the related Letter of Transmittal and is being made to all holders
of Shares. The Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to nor will tenders be accepted from or on
behalf of the holders of Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by the Dealer Manager or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
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<PAGE> 32
The Purchaser and Parent have filed with the Commission a Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 8 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
NSI ENTERPRISES, INC.
June 25, 1999
30
<PAGE> 33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND PARENT
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name and
position with the Purchaser of each director and executive officer of the
Purchaser are set forth below. Unless otherwise indicated, the business address
of each such director and executive officer is: c/o National Service Industries,
Inc., NSI Center, 1420 Peachtree Street, N.E., Atlanta, Georgia 30309. The other
required information with respect to each such person is set forth under
"Directors and Executive Officers of Parent" below. Except as set forth below,
all directors and executive officers listed below are citizens of the United
States.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---- ---------------------------
<S> <C>
James S. Balloun.............. Director, Chairman of the Board, Chief Executive Officer and
President of Purchaser.
Brock A. Hattox............... Director, Executive Vice President and Chief Financial
Officer of Purchaser.
David Levy.................... Director, Executive Vice President, Administration and
Counsel of Purchaser.
Stewart A. Searle III*........ Senior Vice President of Purchaser.
*Canadian citizenship
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and material occupations, positions,
offices or employments during the last five years of each director and executive
officer of Parent and certain other information are set forth below. Unless
otherwise indicated, the business address of each such director and executive
officer is: c/o National Service Industries, Inc., NSI Center, 1420 Peachtree
Street, N.E., Atlanta, Georgia 30309. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
Parent. Except as set forth below, all directors and executive officers listed
below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
James S. Balloun.............. Director of Parent (since 1996); Chairman of the Board of
Parent (since 2/96); Chief Executive Officer of Parent
(since 2/96); President of Parent (since 10/96); Director
of McKinsey & Co. (6/76 through 1/96). Director of
Georgia-Pacific Corporation, Radiant Systems, Inc. and
Wachovia Corporation.
John L. Clendenin............. Director of Parent (since 1996); Chairman of BellSouth
1873 Flagler Estates Drive Corporation (1983 through 12/97); Chairman, President and
West Palm Beach, Florida Chief Executive Officer of BellSouth (1983 through 12/96).
33411 Director of Coca-Cola Enterprises Inc., Equifax Inc., The
Home Depot, Inc., The Kroger Company, Nabisco Group
Holdings, Powerwave Technologies, Springs Industries, Inc.
and Wachovia Corporation. Director of Parent from 1984
until 1995.
Thomas C. Gallagher........... Director of Parent (since 1997); President and Chief
Genuine Parts Company Operating Officer of Genuine Parts Company (since 1990);
2999 Circle 75 Parkway Chairman and Chief Executive Officer of S.P. Richards
Atlanta, Georgia 30339 Company (various positions since 1970). Director of
Genuine Parts Company and Oxford Industries, Inc.
</TABLE>
S-1
<PAGE> 34
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
George H. Gilmore, Jr......... Executive Vice President and Group President of Parent
(since 6/99); President and Chief Operating Officer of
Calmat Co. (1998 to 6/99); President of Moore Department
Solutions (1995 to 1997) and President of Moore Business
Systems (1994 to 1995) of Moore Corporation.
Brock A. Hattox............... Executive Vice President and Chief Financial Officer of
Parent (since 1996); President of Engineering and
Construction Group (1/95 through 9/96) and Chief Financial
Officer of McDermott International, Inc. (3/91 through
9/96).
Robert M. Holder, Jr.......... Director of Parent (since 1974); Chairman of the Board of
The RMH Group Holder Corporation (1960 through 3/97); Chief Executive
3333 Riverwood Parkway, S.E. Officer of Holder Corporation (1960 through 1994);
Suite 500 Chairman of the Board of The RMH Group (since 4/97).
Atlanta, Georgia 30339
James C. Kennedy.............. Director of Parent (since 1993); Chairman and Chief
Cox Enterprises, Inc. Executive Officer of Cox Enterprises, Inc. (various
P.O. Box 105357 positions since 1972). Director of Cox Communications,
Atlanta, Georgia 30348 Inc. and Cox Radio, Inc.
David Levy.................... Director of Parent (since 1984); Executive Vice President,
Administration and Counsel of Parent (since 9/92); Senior
Vice President, Secretary and Counsel of Parent (1982
through 9/92).
Bernard Marcus................ Director of Parent (since 1990); Chairman of the Board of
The Home Depot, Inc. The Home Depot, Inc. (since 1978) and Chief Executive
2455 Paces Ferry Road Officer (1978 through 1997); Chairman of the Board and
Atlanta, Georgia 30339 President of Handy Dan Improvement Centers, Inc. (1972
through 1978). Director of DBT Online, Inc. and Westfield
America, Inc.
John G. Medlin, Jr............ Director of Parent (since 1988); Chairman Emeritus of
Wachovia Corporation Wachovia Corporation; Non-executive Chairman of the Board
100 North Main Street Wachovia (1994 through 1998); Chief Executive Officer of
Winston-Salem, North Wachovia (1977 through 1993). Director of BellSouth
Carolina Corporation, Burlington Industries, Inc., Media General,
27150 Inc., USAirways Group, Inc., and Wachovia Corporation.
Sam Nunn...................... Director of Parent (since 1997); Senior Partner in King &
King & Spalding Spalding, Attorneys, Atlanta, Georgia (since 1997); United
191 Peachtree Street, N.W. States Senator (1973 through 1996). Director of The
Atlanta, Georgia 30303 Coca-Cola Company, General Electric Company,
Scientific-Atlanta, Inc., Texaco, Inc. and Total System
Services, Inc.
Herman J. Russell............. Director of Parent (since 1996); Chairman of the Board
H.J. Russell & Company (since 1959) and Chief Executive Officer (since 1998) of
504 Fair Street, S.W. H.J. Russell & Company; Chief Executive Officer of H.J.
Atlanta, Georgia 30313 Russell & Company (1959 through 1996). Director of Georgia
Power Company.
Stewart A. Searle III*........ Senior Vice President -- Planning and Development of Parent
(since 1996); Senior Vice President of Development of
Equifax Inc. (1992 through 1996).
*Canadian citizenship
</TABLE>
S-2
<PAGE> 35
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
Betty L. Siegel............... Director of Parent (since 1988); President of Kennesaw State
Kennesaw State University University (since 1981). Director of AGL Resources, Inc.
1000 Chastain Road and Equifax Inc.
Kennesaw, Georgia 30144
Barrie A. Wigmore............. Director of Parent (since 1997); Limited Partner of Goldman
Goldman, Sachs & Co. Sachs Group, LP (since 1988). Director of Potash Corporation
85 Broad Street -- 2nd Floor of Saskatchewan.
New York, New York 10004
</TABLE>
3. OWNERSHIP OF SUBJECT COMPANY'S SECURITIES BY DIRECTORS AND EXECUTIVE
OFFICES OF PARENT AND PURCHASER.
To the best knowledge of the Purchaser and Parent, none of the persons
listed on this Schedule I beneficially owns or has a right to acquire directly
or indirectly any Shares, and none of the persons listed on this Schedule I has
effected any transactions in the Shares during the past 60 days.
S-3
<PAGE> 36
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary as follows:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
ATTN: Corporate Actions ATTN: Corporate Actions ATTN: Corporate Actions
Suite 4660 Suite 4680 c/o Securities Transfer
P.O. Box 2569 14 Wall Street and Reporting Services, Inc.
Jersey City, NJ 07303-2569 Eighth Floor 100 William Street -- Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
By Facsimile Transmission: Confirm by Telephone:
<S> <C>
(201) 222-4720 (201) 222-4707
or or
(201) 222-4721 (800) 446-2617
</TABLE>
Any questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective telephone numbers
and addresses listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained
from the Information Agent. You may also contact your broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: 1-800-207-3155
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
Call Collect (212) 969-2700
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
HOLOPHANE CORPORATION
Pursuant to the Offer to Purchase dated June 25, 1999
by
NSI ENTERPRISES, INC.
A WHOLLY OWNED SUBSIDIARY OF
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
ATTN: Corporate Actions ATTN: Corporate Actions ATTN: Corporate Actions
Suite 4660 Suite 4680 c/o Securities Transfer
P.O. Box 2569 14 Wall Street and Reporting Services, Inc.
Jersey City, NJ 07303-2569 Eighth Floor 100 William Street -- Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
By Facsimile Transmission Confirm Facsimile by Telephone
(for Eligible Institutions only):
<S> <C>
(201) 222-4720 (201) 222-4707
or or
(201) 222-4721 (800) 446-2617
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if
tenders of Shares are to be made by book-entry transfer into the account of
First Chicago Trust Company of New York, as Depositary (the "Depositary"), at
The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as
defined below). Stockholders who tender Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to NSI Enterprises, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of National Service
Industries, Inc., a Delaware corporation ("Parent"), the below-described shares
of Common Stock, par value $.01 per share (the "Shares"), of Holophane
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$38.50 per Share, net to the seller in cash, less any required withholding taxes
and without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated June 25, 1999 (the "Offer to Purchase") and
in this Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). The undersigned understands that the Purchaser reserves
the right to transfer or assign in whole or from time to time in part, to one or
more of its affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, receipt of which is hereby acknowledged.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all of the Shares that are being tendered
hereby and any and all non-cash dividends, distributions (including additional
Shares) or rights declared, paid or issued with respect to the tendered Shares
on or after June 20, 1999 and payable or distributable to the undersigned on a
date prior to the transfer to the name of the Purchaser or nominee or transferee
of the Purchaser on the Company's stock transfer records of the Shares tendered
herewith (collectively, a "Distribution"), and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares (and any Distribution) with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver such Share Certificates (as defined herein) (and any Distribution),
or transfer ownership of such Shares (and any Distribution) on the account books
maintained by the Book-Entry Transfer Facility, together in either case the
appropriate evidences of transfer, to the Depositary for the account of the
Purchaser, (b) present such Shares (and any Distribution) for transfer on the
books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any Distribution), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, with full power of substitution, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Purchaser and with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after June 20, 1999. Such appointment will be effective when, and only to the
extent that, the Purchaser accepts such Shares for payment. Upon such acceptance
for payment, all prior proxies given by such stockholder with respect to such
Shares (and such other Shares and securities) will be revoked without further
action, and no subsequent proxies may be given nor any subsequent written
consents executed (and, if given or executed, will not be deemed effective). The
designees of the Purchaser will be empowered to exercise all voting and other
rights of such stockholder as they in their sole discretion may deem proper at
any annual or special meeting of the Company's stockholders or any adjournment
or postponement thereof, by written consent in lieu of any such meeting or
otherwise. The Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon the Purchaser's payment for such
Shares the Purchaser must be able to exercise full voting rights with respect to
such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distribution) tendered hereby and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to the Shares (and any Distribution), free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distribution). In addition, the undersigned
shall promptly remit and transfer to the Depositary for the account of the
Purchaser any and all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, the Purchaser will be, subject to
applicable law, entitled to all rights and privileges as owner of any such
Distribution and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
<PAGE> 3
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.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after August 23, 1999. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered". Similarly, unless otherwise indicated herein under "Special Delivery
Instructions", please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered". In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or any
certificate(s) for Shares not tendered or accepted for payment in the name of,
and deliver such check and/or such certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name(s) of their registered holder(s) thereof if the Purchaser does not accept
for payment any of the Shares so tendered.
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) & ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED (ATTACH
NAME(S) APPEAR(S) ON CERTIFICATE(S) ADDITIONAL SIGNED LIST IF NECESSARY)
---------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
SHARE CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificate delivered to the Depositary will be deemed to have
been tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
-----------------------------------------------------------------------------
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
Account Number
-----------------------------------------------------------------------------
Transaction Code Number
-----------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
---------------------------------------------------------------------
(If delivered by Book-Entry Transfer provide the following):
The Depository Trust Company Account Number
------------------------------------------------------------------
Transaction Code Number
-----------------------------------------------------------------------------
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] Check and/or [ ] Certificate(s) to:
Name ------------------------------------------------------------
(Please Print)
Address -----------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
(Tax ID, or Social Security No.)
(See Substitute Form W-9 included herein)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail: [ ] Check and/or [ ] Certificate(s) to:
Name
------------------------------------------------------------
(Please Print)
Address -----------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
------------------------------------------------------------
<PAGE> 6
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: , 1999
- --------------------------------------------------------------------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Tax Identification or
Social Security No.
- --------------------------------------------------------------------------------
COMPLETE SUBSTITUTE FORM W-9
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Dated: , 1999
- --------------------------------------------------------------------------------
<PAGE> 7
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORM W-9 THE RIGHT AND CERTIFY BY SIGNING AND DATING ---------------------------
BELOW. or
---------------------------
Employer Identification Number
- -----------------------------------------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me) and
DEPARTMENT OF THE (2) I am not subject to backup withholding because: (a) I am exempt from backup
TREASURY withholdings, or (b) I have not been notified by the Internal Revenue Service
INTERNAL REVENUE (the "IRS") that I am subject to backup withholding as a result of a failure
SERVICE to report all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
PAYER'S REQUEST FOR Certification Instructions -- You must cross out item (2) above if you have been
TAXPAYER IDENTIFICATION notified by the IRS that you are currently subject to backup withholding because
NUMBER ("TIN") of under-reporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such Item (2).
---------------------------------
SIGN HERE Signature PART 3 --
Date , 1999 Awaiting TIN [ ]
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld.
Signature ________________________________ Date __________________ , 1999
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" above, or (b) if such Shares are
tendered for the account of a firm which is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). In all other cases, all signatures on
this Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5 of this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message it utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase).
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery 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 made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, in each case together with the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by this Letter of Transmittal,
must be received by the Depositary within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATE AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered". In such cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two of more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE> 9
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardian attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) 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 the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificate(s) for Shares
not tendered or accepted for payment are to be registered in the name of, any
person other than the registered holder(s), or if tendered certificate(s) 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) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or an exemption therefrom, is submitted.
EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN
THIS LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be returned
to a person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. Subject to the terms and conditions of the
Agreement and Plan of Merger, dated as of June 20, 1999, by and among Purchaser,
Parent and the Company, the conditions of the Offer (other than the Minimum
Condition (as defined in the Offer to Purchase)) may be waived by the Purchaser
in whole or in part at any time and from time to time in its sole discretion.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
<PAGE> 10
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
<PAGE> 11
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect:
(212) 269-5550
All Others Call Toll-Free:
1-800-207-3155
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
Call Collect (212) 969-2700
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE> 1
Exhibit (a)(4)
Monday June 21, 6:01 am Eastern Time
Company Press Release
SOURCE: National Service Industries, Inc.
NSI to Acquire Holophane
Corporation for $38.50 Per Share in Cash
Strategic Acquisition Extends NSI's Position in North American Lighting
Equipment Business
ATLANTA and COLUMBUS, Ohio, June 21 /PRNewswire/ -- National Service Industries
(NYSE: NSI - news) and Holophane Corporation (NYSE: HLP - news) today announced
they have signed a definitive agreement under which NSI will acquire Holophane
for $38.50 per share in cash, or a total of approximately $450 million. The
transaction has been approved by the boards of directors of both companies and
is expected to be completed in the fourth quarter of NSI's fiscal 1999.
"Holophane is an excellent business with complementary products and customers
that make it an ideal strategic fit with Lithonia Lighting," said James S.
Balloun, NSI's chairman, president, and chief executive officer. The combination
will increase the scale and capabilities of NSI's lighting equipment segment.
With annual revenues of more than $1.1 billion, NSI's Lithonia Lighting is
currently the largest company in the highly fragmented North American lighting
equipment business. Holophane, with 1998 sales of $215 million, has a strong
presence in outdoor and industrial lighting equipment. This acquisition will
give NSI the leadership position in these growth segments. Holophane brings to
NSI a widely recognized brand, an innovative product development program,
significant manufacturing expertise, and a 225-person factory sales force that
is unique in the lighting equipment industry. Holophane will also expand NSI's
international lighting presence with more than $40 million in non-U.S. sales.
NSI will commence a cash tender offer for all of Holophane's outstanding common
shares by June 25, 1999. The transaction is subject to antitrust clearance, a
majority of Holophane's shares being
<PAGE> 2
tendered in the offer, and customary closing conditions. NSI will initially
finance the transaction with short-term debt. NSI plans to manage this debt and
its operating cash flow in a way that returns the company to its targeted 30-40%
debt-to-capital ratio before the end of fiscal year 2001.
NSI expects to achieve annual cost synergies of approximately $13 million by
2002 and to accelerate its lighting revenue growth as a result of sharing
capabilities between the companies. On a reported earnings basis, the
acquisition is expected to be dilutive by approximately $.13 per share in the
first fiscal year after closing and accretive by approximately $.13 per share in
the second year and approximately $.25-$.30 per share in the third year. Further
synergies and cost savings are expected beyond 2002.
"In such a fragmented market, the combined strengths of Lithonia and Holophane
will create a real powerhouse, second to none," continued Balloun. "Holophane
has built a strong reputation and widely recognized brand by providing
high-quality, reliable, and energy-efficient products. Lithonia will also
benefit from Holophane's product development expertise, especially in the area
of optical design, and its superb factory sales force, which is unusually
effective in understanding application requirements for its products and
identifying value-added solutions for its customers. All in all, Holophane's
vertically integrated manufacturing operations, strong market position in
industrial and outdoor lighting, extensive business with utilities and energy
service companies, and international capabilities will strengthen NSI's
leadership position in the lighting equipment business. At the same time,
Holophane can benefit from Lithonia's strengths, including extensive sales and
marketing capabilities, a broad product line, and recognized expertise in
information systems. This acquisition demonstrates our commitment to delivering
long-term value to our shareholders."
Said John R. DallePezze, chairman, president, and chief executive officer of
Holophane Corporation, "We are very pleased with this transaction, which
provides a full and fair price for Holophane shareholders while affording our
employees the opportunity to become part of a larger, more diversified
organization. I look forward to assisting in what I am sure will be a smooth
transition." Holophane's board has recommended that Holophane shareholders
tender their shares.
<PAGE> 3
NSI expects to realize the planned $13 million in cost synergies through
reductions in raw materials, components, and overhead. NSI has established a
post-acquisition team headed by John K. Morgan, executive vice president of
Lithonia, who will become general manager of Holophane. The post-acquisition
team, which will be comprised of senior executives of both companies, will
oversee the steps necessary to bring Holophane into NSI's lighting segment and
implement cost-saving and revenue-enhancement synergies. The work is expected to
be completed by the end of fiscal year 2000.
Wasserstein Perella & Co. served as financial advisor to NSI in this transaction
and will be dealer-manager for the tender offer. Salomon Smith Barney served as
financial advisor to Holophane in this transaction.
Holophane Corporation is a leading international manufacturer and marketer of
premium quality, highly engineered lighting fixtures and systems for a wide
range of industrial, commercial, and outdoor applications.
National Service Industries, Inc., with fiscal year 1998 sales of $2.0 billion,
has four business segments -- lighting equipment, chemicals, textile rental, and
envelopes. NSI has reported increased income and earnings per share in 35 of the
last 37 years. Dividends have been increased for 37 consecutive years and paid
for the past 63 years without a decrease.
Certain information contained in this press release is forward-looking
information based on current expectations and plans that involve risks and
uncertainties. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. Statements herein that may be
considered forward looking include: (a) statements made regarding the effect of
the Holophane acquisition on NSI's current business, growth expectations, and
market position; (b) statements made regarding the effect from Holophane's
operations on earnings per share; (c) statements made regarding the expectation
of sales and cost synergies resulting from the Holophane acquisition; (d)
statements made concerning targeted debt-to-capital ratios; and (e) statements
made concerning the process of bringing Holophane into the NSI organization. The
following factors, in addition to those discussed in the company's Annual Report
on Form 10-K for the year ended August 31, 1998 and subsequent securities
filings, could cause results to differ materially from management's expectations
<PAGE> 4
as suggested by such forward-looking information: (a) the uncertainty of general
business and economic conditions, particularly the potential for a slowdown in
non-residential construction awards; (b) unforeseen competitive reactions to the
acquisition; and (c) loss of key sales and management personnel due to the
acquisition.
<PAGE> 1
Exhibit (a)(5)
[HOLOPHANE LOGO]
JOHN R. DALLEPEZZE
Chairman, CEO
June 25, 1999
Dear Stockholder:
On behalf of the Board of Directors of Holophane Corporation (the
"Company"), I am pleased to inform you that the Company entered into an
Agreement and Plan of Merger dated as of June 20, 1999 (the "Merger Agreement"),
with National Service Industries, Inc. ("Parent") and NSI Enterprises, Inc. (the
"Purchaser"), a wholly-owned subsidiary of Parent, pursuant to which the
Purchaser has commenced a cash tender offer (the "Offer") to purchase all of the
outstanding shares (the "Shares") of the Company's common stock at $38.50 per
Share, net to the seller in cash, less any withholding taxes.
Following the successful completion of the Offer, upon the terms and
subject to the conditions contained in the Merger Agreement, the Purchaser will
be merged into the Company (the "Merger"), and each Share outstanding after the
Offer (other than Shares held by Parent, the Purchaser or the Company and Shares
held by stockholders, if any, who are entitled to and who perfect their
appraisal rights under Delaware General Corporation Law) will be converted into
the right to receive $38.50 per Share in cash.
The Board of Directors of the Company has determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, upon the terms and subject to the conditions set forth in the Merger
Agreement are fair to, and in the best interests of, the Company and
stockholders and has approved the Offer, the Merger and the Merger Agreement and
recommends that the stockholders of the Company accept the Offer and tender
their Shares to the Purchaser pursuant to the Offer.
In arriving at its decision, the Board of Directors gave careful
consideration to a number of factors described in the enclosed
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which is being filed today with the Securities and Exchange Commission. The
Board has received a written opinion dated June 20, 1999 of Salomon Smith Barney
Inc. ("Salomon Smith Barney"), the Company's financial advisor, to the effect
that, as of such date and based upon and subject to the matters stated in such
opinion, the $38.50 per Share cash consideration to be received in the Offer and
the Merger by the holders of Shares (other than Parent and its affiliates) was
fair, from a financial point of view, to such holders. The enclosed Schedule
14D-9 describes the Board's decision and contains other important information
relating to that decision. We urge you to read it carefully.
Accompanying this letter, in addition to the attached Schedule 14D-9
relating to the Offer, is the Purchaser's Offer to Purchase, dated June 25,
1999, together with related materials including a letter of transmittal to be
used for tendering your Shares. These documents set forth the terms and
conditions of the Offer and provide instructions as to how to tender your
Shares. I urge you to read the enclosed materials carefully and consider all
factors set forth therein before making your decision with respect to the Offer.
I personally, along with the entire Board of Directors, management and
employees of the Company, thank you for the support you have given the Company.
Very truly yours,
/s/ John R. DallePezze
John R. DallePezze
Chairman of the Board,
President and Chief
Executive Officer
HOLOPHANE CORPORATION
250 E. Broad Street - Suite 1400 - Columbus, OH 43215 - (614) 224-3134 - FAX
(614) 341-2142
<PAGE> 1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
dated as of
June 20, 1999
among
HOLOPHANE CORPORATION
NATIONAL SERVICE INDUSTRIES, INC.
and
NSI ENTERPRISES, INC.
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - THE OFFER.............................................................................................1
SECTION 1.01. The Offer.......................................................................................1
SECTION 1.02. Company Action..................................................................................2
ARTICLE II - THE MERGER...........................................................................................3
SECTION 2.01. The Merger......................................................................................3
SECTION 2.02. Conversion of Shares............................................................................4
SECTION 2.03. Surrender and Payment...........................................................................4
SECTION 2.04. Dissenting Shares...............................................................................5
SECTION 2.05. Stock Options...................................................................................5
ARTICLE III - THE SURVIVING CORPORATION...........................................................................6
SECTION 3.01. Certificate of Incorporation....................................................................6
SECTION 3.02. Bylaws..........................................................................................6
SECTION 3.03. Directors and Officers..........................................................................6
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................6
SECTION 4.01. Corporate Existence and Power...................................................................6
SECTION 4.02. Corporate Authorization.........................................................................7
SECTION 4.03. Governmental Authorization......................................................................7
SECTION 4.04. Non-Contravention...............................................................................7
SECTION 4.05. Capitalization..................................................................................8
SECTION 4.06. Subsidiaries....................................................................................8
SECTION 4.07. SEC Filings.....................................................................................9
SECTION 4.08. Financial Statements............................................................................9
SECTION 4.09. No Material Undisclosed Liabilities.............................................................9
SECTION 4.10. Absence of Certain Changes......................................................................9
SECTION 4.11. Litigation.....................................................................................10
SECTION 4.12. Employee Benefit Plans.........................................................................10
SECTION 4.13. Taxes..........................................................................................12
SECTION 4.14. Title to Properties; Encumbrances..............................................................13
SECTION 4.15. Environmental Laws.............................................................................13
SECTION 4.16. Intellectual Property..........................................................................14
SECTION 4.17. Year 2000 Compliance...........................................................................14
SECTION 4.18. Labor Matters..................................................................................15
SECTION 4.19. Employment Matters.............................................................................15
SECTION 4.20. Compliance with Laws...........................................................................16
SECTION 4.21. Contracts......................................................................................16
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.22. Insurance.....................................................................................16
SECTION 4.23. Transactions with Affiliates..................................................................16
SECTION 4.24. Finders'Fees..................................................................................16
SECTION 4.25. Confidentiality Agreements....................................................................17
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER..........................................................................................17
SECTION 5.01. Corporate Existence and Power..................................................................17
SECTION 5.02. Corporate Authorization........................................................................17
SECTION 5.03. Governmental Authorization.....................................................................17
SECTION 5.04. Non-Contravention..............................................................................17
SECTION 5.05. Finders'Fees...................................................................................18
SECTION 5.06. Financing......................................................................................18
ARTICLE VI - COVENANTS OF THE COMPANY............................................................................18
SECTION 6.01. Conduct of the Company.........................................................................18
SECTION 6.02. Stockholder Meeting; Proxy Material............................................................20
SECTION 6.03. Disclosure Documents...........................................................................21
SECTION 6.04. Access to Information..........................................................................22
SECTION 6.05. Other Offers...................................................................................22
SECTION 6.06. Company Board Representation; Section 14(f)....................................................23
ARTICLE VII - COVENANTS OF PARENT AND PURCHASER..................................................................24
SECTION 7.01. Confidentiality................................................................................24
SECTION 7.02. Obligations of Purchaser.......................................................................24
SECTION 7.03. Disclosure Documents...........................................................................24
SECTION 7.04. Employee Matters...............................................................................25
ARTICLE VIII - COVENANTS OF PARENT, PURCHASER AND THE COMPANY....................................................26
SECTION 8.01. Reasonable Efforts.............................................................................26
SECTION 8.02. Certain Filings................................................................................26
SECTION 8.03. Public Announcements...........................................................................27
SECTION 8.04. Further Assurances.............................................................................27
SECTION 8.05. Notices of Certain Events......................................................................27
SECTION 8.06. Directors'and Officers'Indemnification and Insurance...........................................28
ARTICLE IX - CONDITIONS TO THE MERGER............................................................................29
SECTION 9.01. Conditions to the Obligations of Each Party....................................................29
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
ARTICLE X - TERMINATION..........................................................................................30
SECTION 10.01. Termination...................................................................................30
SECTION 10.02. Effect of Termination.........................................................................31
SECTION 10.03. Fees and Expenses.............................................................................32
ARTICLE XI - MISCELLANEOUS.......................................................................................32
SECTION 11.01. Definitions...................................................................................32
SECTION 11.02. Notices.......................................................................................37
SECTION 11.03. Survival of Representations and Warranties....................................................38
SECTION 11.04. Amendments; No Waivers........................................................................38
SECTION 11.05. Successors and Assigns........................................................................38
SECTION 11.06. Governing Law.................................................................................39
SECTION 11.07. Severability..................................................................................39
SECTION 11.08. Counterparts; Effectiveness...................................................................39
Annex I - Conditions to the Offer
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 20, 1999 among HOLOPHANE
CORPORATION, a Delaware corporation (the "Company"), NATIONAL SERVICE
INDUSTRIES, INC., a Delaware corporation ("Parent"), and NSI ENTERPRISES, INC.,
a Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser").
WHEREAS, the respective Boards of Directors of the Company, Parent and
Purchaser have determined that the merger of Purchaser with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement, would be advisable and in the best interests of their respective
stockholders, and have approved the Merger, pursuant to which each Share issued
and outstanding immediately prior to the Effective Time, will, except as
otherwise provided herein, be converted into the right to receive $38.50 per
Share in cash;
WHEREAS, the Board of Directors of the Company has resolved to
recommend that the holders of such Shares accept the Offer and approve this
Agreement and, to the extent required by Delaware Law, the Merger and the
consummation of the transactions contemplated hereby upon the terms and subject
to the conditions set forth herein;
WHEREAS, in furtherance thereof, the Boards of Directors of Parent,
Purchaser and the Company have approved this Agreement, the Offer and the Merger
in accordance with Delaware Law and upon the terms and subject to the conditions
set forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 10.01 and that none of the
events set forth in Annex I hereto shall have occurred and are existing,
Purchaser shall, as promptly as practicable after the date hereof, but in no
event later than five business days following the public announcement of the
terms of this Agreement, commence an offer (the "Offer") to purchase any and all
of the outstanding shares of common stock, $.01 par value (the "Shares"), of the
Company at a price of $38.50 per Share, net to the seller in cash, less any
required withholding taxes. The Offer shall be subject to the condition that at
least a majority of the Shares (on a fully diluted basis) shall have been
validly tendered in accordance with the terms of the Offer prior to the
expiration date of the Offer and not withdrawn (the "Minimum Tender Condition")
and to the other conditions set forth
<PAGE> 6
in Annex I hereto. Purchaser expressly reserves the right to waive the Minimum
Tender Condition or any of the other conditions to the Offer, to increase the
price per Share payable in the Offer and to make any other change in the terms
or conditions of the Offer; provided that (i) the Purchaser shall not waive the
Minimum Tender Condition without the consent of the Board of Directors of the
Company and (ii) without the consent of the Board of Directors of the Company,
the Purchaser shall not make any change in the terms or conditions of the Offer
which (A) changes the form of consideration to be paid or (B) decreases the
price per Share payable in the Offer or (C) reduces the maximum number of Shares
to be purchased in the Offer or (D) imposes conditions to the Offer in addition
to those set forth in Annex I hereto or (E) extends the expiration date of the
Offer (except as required by law or the applicable rules and regulations of the
SEC) or (F) amends any term of the Offer in any manner adverse to holders of
Shares; provided that Purchaser shall have the right, in its sole discretion, to
extend the Offer on up to two separate occasions for up to five business days
each, notwithstanding the prior satisfaction of conditions set forth on Annex I
hereto, in order to attempt to satisfy the Minimum Tender Condition or to
satisfy the requirements of Section 253 of the Delaware General Corporation Law.
(b) Promptly upon commencement of the Offer, Parent and the Purchaser
shall file the Offer Documents with the SEC. Parent, the Purchaser and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have been found to be
or become false or misleading in any material respect. Parent and the Purchaser
agree to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given an opportunity to review and comment on
the Schedule 14D-l prior to the filing thereof with the SEC. Parent and the
Purchaser shall provide the Company and its counsel a copy of any written
comments or telephonic notification of any oral comments Parent or the Purchaser
may receive from the SEC or its staff with respect to the Offer Documents
promptly after the receipt thereof and shall provide the Company and its
respective counsel with a copy of any written responses thereto and telephonic
notification of any oral responses thereto of Parent or the Purchaser or their
counsel.
SECTION 1.02. Company Action. (a) The Company hereby consents to the
Offer and represents that its Board of Directors, at a meeting duly called and
held, has (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, are fair to and in the best interest
of the Company's stockholders; (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger; and (iii) resolved to
recommend acceptance of the Offer and approval and adoption of this Agreement
and the Merger by its stockholders. The Company further represents that the
Company's financial adviser has delivered to the Company's Board of Directors
its opinion to the effect that, as of the date of this Agreement, the
consideration to be received in the Offer and the Merger by the holders of
Shares (other than Parent, Purchaser or any Affiliate thereof) is fair, from a
financial point of view, to such holders. The Company has been authorized by its
financial advisor to permit, subject to prior review and consent by such
financial advisor (such consent not to be unreasonably withheld), the inclusion
of such opinion (or a reference thereto) in the Offer Documents. The Company
hereby
2
<PAGE> 7
consents to the inclusion in the Offer Documents of the recommendation of the
Company's Board of Directors described in this Section 1.02. The Company will
promptly furnish Parent and Purchaser with a list of its stockholders, mailing
labels and any available listing or computer file containing the names and
addresses of all record holders of Shares and lists of securities positions of
Shares held in stock depositories, in each case true and correct in all material
respects as of the most recent practicable date, and will provide to Parent and
Purchaser such additional information (including, without limitation, updated
lists of stockholders, mailing labels and lists of securities positions) and
such other assistance as Parent and Purchaser may reasonably request, from time
to time in connection with the Offer.
(b) Promptly upon commencement of the Offer, the Company will file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which shall reflect the recommendations of the Company's Board of
Directors referred to above. The Company, Parent and Purchaser each agree
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that it shall have been found to be or become false or
misleading in any material respect. The Company agrees to take all steps
reasonably necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, other than the
Purchaser, Parent and Parent's other subsidiaries, in each case as and to the
extent required by applicable federal securities laws. Parent and Purchaser and
their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) Subject to the terms and conditions of
this Agreement and in accordance with Delaware Law, at the Effective Time, the
Purchaser shall be merged with and into the Company, whereupon the separate
existence of Purchaser shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Purchaser will file a certificate of merger or, as appropriate, a certificate of
ownership and merger (either, a "Certificate of Merger") with the Secretary of
State of the State of Delaware and make all other filings or recordings required
by Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in the
certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of the Company and Purchaser, all
as provided under Delaware Law.
3
<PAGE> 8
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by the
Company, Purchaser, Parent or any of such parties' direct or indirect
subsidiaries immediately prior to the Effective Time shall be cancelled, and no
payment shall be made with respect thereto;
(b) each issued and outstanding share of common stock of Purchaser
outstanding immediately prior to the Effective Time shall be converted into and
become that number of shares of common stock of the Surviving Corporation that
equals the number of shares of common stock of the Company issued and
outstanding immediately prior to the Effective Time divided by the number of
shares of common stock of Purchaser issued and outstanding immediately prior to
the Effective Time; and
(c) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 2.02(a) or as provided in Section
2.04 with respect to Dissenting Shares (as defined herein), be converted into
the right to receive $38.50 in cash, without interest (the "Merger
Consideration").
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint an agent who shall be reasonably acceptable to the Company
(the "Exchange Agent") for the purpose of exchanging certificates representing
Shares for the Merger Consideration. Promptly, when and as needed, Parent will
make available to the Exchange Agent the Merger Consideration to be paid in
respect of the Shares. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of Shares at the Effective
Time a letter of transmittal for use in such exchange (which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares, less any
required withholding taxes. Until so surrendered, each such certificate shall,
after the Effective Time, represent for all purposes only the right to receive
such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving
4
<PAGE> 9
Corporation, they shall be cancelled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this Article
II.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, Parent shall not be liable
to any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for Dissenting Shares for
which appraisal rights have been perfected shall be returned to Parent, upon
demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Delaware Law ("Dissenting
Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Surviving Corporation shall give Parent
prompt notice of any demands received by the Company for appraisal of Shares,
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Surviving Corporation shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.
SECTION 2.05. Stock Options. As soon as practicable following the date
of this Agreement, upon the written request of the Purchaser, the Company (or,
if appropriate, any committee administering any stock option or compensation
plan or arrangement) and the Purchaser shall take such actions as are reasonably
required (including, if necessary, the provision of funds by the Purchaser to
the Company) to provide that at the Effective Time, each holder of a then
outstanding stock option and/or right to purchase Shares granted under any stock
option or compensation plan or arrangement of the Company (a "Company Stock
Option"), whether or not then exercisable, shall, upon surrender thereof to the
Company or its designee, receive from the Company the difference between the
Merger Consideration and the exercise price per Share for the Shares covered by
such Company Stock Option, net of any applicable tax withholding. Subject to the
terms and conditions set forth herein, the Company and such committee shall
further take all actions necessary to cause each Company Stock Option to be
canceled at the Effective Time by virtue of the Merger and to cause the stock
option or compensation plan or arrangements of the Company providing for the
granting of Company Stock Options ("Option Plans") to terminate as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant by the Company or any of its Subsidiaries of
any interest in respect of the capital stock of the Company or any of such
Subsidiaries to be
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terminated as of the Effective Time. Without limiting the generality of the
foregoing, the Company and such committee shall have given all requisite notices
under all Option Plans and any agreements with respect to any Company Stock
Option, accelerated the vesting of Company Stock Options and given holders
thereof the requisite opportunity to exercise as is required, in each case, such
that following the Effective Time no holder of Options or any participant in the
Option Plans or any other such plans, programs or arrangements shall have the
right thereunder to acquire any equity securities of the Company or any of its
Subsidiaries. The holders of Company Stock Options shall be entitled to enforce
this Section 2.05 against the Company, the Surviving Corporation and the
Purchaser.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. Subject to Section 8.06
hereof, the certificate of incorporation of the Company in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 3.02. Bylaws. Subject to Section 8.06 hereof, the bylaws of
Purchaser in effect at the Effective Time shall be the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Purchaser at the Effective Time shall
be the directors of the Surviving Corporation, and (ii) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation. If at the Effective Time, a vacancy shall exist on the Board of
Directors of the Company or in any office of the Surviving Corporation, such
vacancy may thereafter be filled in the manner provided by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the disclosure schedule prepared and signed by
the Company and delivered to Purchaser simultaneously with the execution hereof
(the "Disclosure Schedule"), the Company represents and warrants to Parent and
Purchaser that, as of the date hereof (or, if made as of a specified date, as of
such date):
SECTION 4.01. Corporate Existence and Power. (a) The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. The Company is duly
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qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not, individually
or in the aggregate, have or be reasonably likely to have a Material Adverse
Effect.
(b) The Company has heretofore made available to Parent and Purchaser
true and complete copies of the Company's certificate of incorporation and
bylaws as currently in effect. Such certificate of incorporation and bylaws are
in full force and effect, and no other organizational documents are applicable
or binding on the Company. The Company is not in violation in any material
respect of any of the provisions of its certificate of incorporation or bylaws.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for any required approval by the Company's stockholders in
connection with the consummation of the Merger, have been duly authorized by all
necessary corporate action. This Agreement has been duly and validly executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company. The Board of Directors of the Company has expressly approved this
Agreement (including as it may be amended from time to time) with the purpose of
rendering inapplicable hereto and to the Offer and the Merger the limitation on
business combinations contained in Section 203 of Delaware Law.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
Governmental Entity other than (i) the filing of the Certificate of Merger in
accordance with Delaware Law, (ii) the applicable requirements of the HSR Act
and (iii) compliance with any applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 4.04. Non-Contravention. Except as set forth in Section 4.04 of
the Disclosure Schedule and without giving effect to any change in the form of
the Merger as permitted by Section 8.07, the execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not (i) contravene or conflict
with the certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, (ii) assuming compliance with the matters referred to in Section
4.03, contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any of its Subsidiaries, (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or any of its Subsidiaries or to a loss
of any benefit to which the Company or any of its Subsidiaries is entitled under
any provision of any agreement, contract or other instrument binding upon the
Company or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by the Company or any of its Subsidiaries, or (iv)
result in the creation or imposition of any Lien on any asset of
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the Company or any of its Subsidiaries, except, in the case of clauses (ii),
(iii) and (iv), for such exceptions which would not, individually or in the
aggregate, have or be reasonably likely to have a Material Adverse Effect.
SECTION 4.05. Capitalization. The authorized capital stock of the
Company consists of one million (1,000,000) shares of preferred stock, par value
$.01 per share (the "Preferred Stock"), and twenty million (20,000,000) shares
of Common Stock, par value $.01 per share. As of June 15, 1999, there were (a)
no shares of Preferred Stock and 10,564,265 shares of Common Stock outstanding
(excluding 1,331,595 shares of Common Stock held in treasury), (b) outstanding
Company Stock Options to purchase an aggregate of 1,432,330 Shares (of which
Company Stock Options to purchase an aggregate of 914,430 Shares were
exercisable), (c) up to 69,000 Shares issuable under the Company's Employee
Stock Option (Purchase) Plan, (d) up to 9,000 Shares issuable under the
Company's Performance Award Plan and (e) up to 154,590 Shares issuable pursuant
to Section 2.02 of the MetalOptics Stock Purchase Agreement. All outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and were issued free of any
preemptive or similar rights. Except as set forth in this Section 4.05, and
except for changes since June 15, 1999 resulting from the exercise of Company
Stock Options outstanding on such date, there are outstanding (i) no shares of
capital stock or other voting securities of the Company, (ii) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Company Securities").
There are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. All of the Company's Subsidiaries and their respective
jurisdictions of incorporation are identified in Exhibit 21 to the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1998 .
(b) All of the outstanding capital stock of, or other ownership
interests in, each of the Company's Subsidiaries, is, unless otherwise required
by applicable law, owned by the Company, directly or indirectly, free and clear
of any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). There are no outstanding (i) securities of
the Company or any of its Subsidiaries convertible into or exchangeable for
shares of capital stock or other voting securities or ownership interests in any
Subsidiary, and (ii) options or other rights to acquire from the
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Company or any of its Subsidiaries, and no other obligation of the Company or
any of its Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Subsidiary
(the items in clauses (i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
SECTION 4.07. SEC Filings. (a) The Company has filed with the SEC and
made available to Parent and Purchaser (i) the annual reports on Form 10-K for
its fiscal years ended December 31, 1998, 1997 and 1996 and its quarterly report
on Form l0-Q for its fiscal quarter ended March 31, 1999 (the income statements,
balance sheets and other financial statements, and the notes thereto, included
in such filings being referred to herein as the "Financial Statements"), (ii)
its proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since January 1, 1996
and (iii) all other reports, statements, schedules and registration statements
required to be filed with the SEC since January 1, 1996.
(b) As of its filing date, each such report, statement or schedule
filed with the SEC did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
SECTION 4.08. Financial Statements. The Financial Statements fairly
present, in all material respects, in conformity with GAAP (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended (subject to normal year-end adjustments and the absence of
notes thereto in the case of any unaudited interim Financial Statements).
SECTION 4.09. No Material Undisclosed Liabilities. Except (a) as
disclosed in the Financial Statements or the other documents referred to in
Section 4.07 or in the Company SEC Documents and (b) liabilities incurred in
connection with the Offer or the Merger which, to the extent they have been
incurred or were known prior to the date hereof, are disclosed in Section 4.09
of the Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise, that have, or would be reasonably likely to have, a Material
Adverse Effect.
SECTION 4.10. Absence of Certain Changes. Since the Balance Sheet Date,
except as disclosed in the Company SEC Documents filed prior to the date hereof
or as disclosed in Section 4.10 of the Disclosure Schedule, the Company and each
Subsidiary has conducted its respective business only in the ordinary and usual
course, and there has not occurred (i) any event or change having or reasonably
likely to have a Material Adverse Effect; (ii) any material change by the
Company in its accounting methods, principles or practices; (iii) any
revaluation by the Company of any of its material assets; (iv) any declaration,
setting aside or payment of any dividends or distributions in respect of the
Shares; (v) any increase in or establishment of any bonus, insurance,
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severance, defined compensation, pension, retirement, profit sharing, stock
option (including the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan or agreement or arrangement, or any other increase in the
compensation payable or to become payable to any present or former directors,
officers or employees of the Company or any of its Subsidiaries, other than
merit or equity increases in the ordinary course of business consistent with
past practice with respect to employees who are not directors or officers of the
Company or any of its Subsidiaries; or (vi) any other action which, if it had
been taken after the date hereof, would have required the consent of Parent
under Section 6.01 hereof.
SECTION 4.11. Litigation. Except as disclosed in Section 4.11 of the
Disclosure Schedule, as of the date hereof, there is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the knowledge
of the Company, threatened against or involving the Company or any of its
Subsidiaries which, if determined or resolved adversely to the Company or such
Subsidiary, would be reasonably likely to have a Material Adverse Effect. Except
as disclosed in Section 4.11 of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries is subject to any material judgment, order or decree.
SECTION 4.12. Employee Benefit Plans. (a) Section 4.12(a) of the
Disclosure Schedule contains a true and complete list of each deferred
compensation and each incentive compensation, stock purchase, stock option and
other equity compensation plan, program, agreement or arrangement (the "Company
Stock Plans"); each severance or termination pay, medical, surgical,
hospitalization, life insurance and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of the ERISA); each profit-sharing, stock
bonus or other "pension" plan, fund or program (within the meaning of Section
3(2) of ERISA); each employment, termination or severance agreement; and each
other employee benefit plan, fund, program, agreement or arrangement, in each
case, that is sponsored, maintained or contributed to or required to be
contributed to by the Company or by any ERISA Affiliate, or to which the Company
or an ERISA Affiliate is party, whether written or oral, for the benefit of any
employee or former employee of the Company or any Subsidiary (each, a "Plan").
Neither the Company, any Subsidiary nor any ERISA Affiliate has any commitment
or formal plan or announced intention to create, any additional employee benefit
plan or modify or change any existing Plan that would affect any employee or
former employee of the Company or any Subsidiary, except for modifications or
changes contemplated herein or required by law as a condition of obtaining or
retaining the Company's intended ERISA, tax, securities or accounting treatment
with respect to such Plan.
(b) The Company has heretofore delivered to Parent true and complete
copies of each Plan currently in effect and any and all amendments thereto (or
if a Plan is not a written Plan, a description thereof), any related trust or
other funding vehicle, any reports or summaries required under ERISA or the Code
and the most recent determination letter received from the Internal Revenue
Service with respect to each Plan intended to qualify under Section 401 of the
Code.
(c) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists
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that presents a material risk to the Company or any ERISA Affiliate of incurring
any such liability, other than liability for premiums due the PBGC (which
premiums have been paid when due). Insofar as the representation made in this
Section 4.12(c) applies to Sections 4064, 4069 or 4204 of Title IV of ERISA, it
is made with respect to any employee benefit plan, program, agreement or
arrangement subject to Title IV of ERISA to which the Company or any ERISA
Affiliate made, or was required to make, contributions during the five year
period ending on the last day of the most recent plan year ended prior to the
Closing Date and any part of a plan year ending on the Closing Date.
(d) The PBGC has not instituted proceedings to terminate any Title IV
Plan and no condition exists that presents a material risk that such proceedings
will be instituted.
(e) With respect to each Title IV Plan, the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such plan's actuary
with respect to such plan, did not exceed, as of its latest valuation date, the
then current value of the assets of such plan allocable to such accrued
benefits. Except as set forth in Section 4.12(e) of the Disclosure Schedule, the
fair market value of the assets of each other Plan as of the end of its most
recent plan year at least equaled it liabilities or, as for a Plan which is
unfunded, its liabilities are shown on the Financial Statements.
(f) No Title IV Plan or any trust established thereunder has incurred
any "accumulated funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, as of the last day of the most
recent fiscal year of each Title IV Plan ended prior to the Closing Date. All
contributions required to be made with respect to any Plan on or prior to the
Closing Date have been timely made.
(g) No Title IV Plan is a "multi-employer pension plan," as defined in
Section 3(37) of ERISA, nor is any Title IV Plan a plan described in Section
4063(a) of ERISA. Neither the Company nor any ERISA Affiliate has made or
suffered a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in Sections 4203 and 4205 of ERISA (or any liability
resulting therefrom has been satisfied in full).
(h) Neither the Company or any Subsidiary, any Plan, any trust created
thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Subsidiary, any Plan,
any such trust, or any trustee or administrator thereof, or any party dealing
with any Plan or any such trust could reasonably be expected to be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a
tax imposed pursuant to Section 4975 or 4976 of the Code.
(i) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including, but not
limited to, ERISA and the Code, except where the failure to so operate or
administer such Plan would not be reasonably likely to have a Material Adverse
Effect.
(j) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code is so qualified, and the trusts maintained thereunder are
exempt from taxation under Section 501(a) of the Code. Each Plan intended to
satisfy the requirements of Section 501(c)(9) has satisfied such requirements.
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(k) No Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
the Company or any Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
(l) Except as set forth in Section 4.12(l) of the Disclosure Schedule,
no amounts payable under the Plans will fail to be deductible for federal income
tax purposes by virtue of Section 280G of the Code.
(m) Except as set forth in Section 4.12(m) of the Disclosure Schedule
or as expressly provided in this Agreement, the consummation of the Merger will
not, either alone or in combination with another event, (i) entitle any current
or former employee or officer of the Company or any ERISA Affiliate to severance
pay, unemployment compensation or any other payment or (ii) accelerate the time
of payment or vesting, or increase the amount of compensation due any such
employee or officer.
(n) There are no pending or, to the knowledge of the Company,
threatened claims by or on behalf of any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
SECTION 4.13 Taxes. (a) The Company and its Subsidiaries (and any
consolidated, combined, unitary or aggregate group for tax purposes of which the
Company or any of its Subsidiaries is a member) timely filed (or have had timely
filed on their behalf) with the appropriate Tax Authorities all material Tax
Returns required to be filed by Company and its Subsidiaries and such Tax
Returns are true, correct, and complete in all material respects;
(b) The Company and its Subsidiaries have paid, or where payment is not
yet due, have established (or have had established on their behalf and for their
sole benefit and recourse) an adequate accrual in accordance with GAAP for the
payment of, all Taxes (as hereinafter defined) for all periods ending through
the Closing Date;
(c) There are no material Liens for Taxes upon any property or assets
of the Company or any of its Subsidiaries, except for Liens for Taxes not yet
due or being contested in good faith and for which adequate reserves have been
established in accordance with GAAP;
(d) Except as set forth in Section 4.13(d) of the Disclosure Schedule,
no federal, state, local or foreign audits, investigations, claims or other
administrative proceedings ("Audits") are presently pending with regard to any
material Taxes or material Tax Returns of the Company or any of its
Subsidiaries, and to the knowledge of the Company, no Audit is threatened.
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SECTION 4.14. Title to Properties; Encumbrances. Each of the Company
and its Subsidiaries has good, valid and marketable title to all the material
properties and assets which it purports to own (real, personal and mixed,
tangible and intangible), including, without limitation, all the properties and
assets reflected in the Balance Sheet (except for property disposed of since the
Balance Sheet Date in the ordinary course of business and consistent with past
practice), and all the material properties and assets purchased by the Company
and the Company Subsidiaries since the Balance Sheet Date, which subsequently
acquired material properties and assets (other than inventory and short term
investments) are listed in Section 4.14 of the Disclosure Schedule. All
properties and assets reflected in the Balance Sheet are free and clear of all
Liens except, with respect to all such properties and assets, (a) Liens shown on
the Balance Sheet and Liens incurred in connection with the purchase of such
property and/or assets, if such purchase was effected after the date of the
Balance Sheet, with respect to which no default exists; (b) Liens which do not
materially detract from the value or impair the use of the property subject
thereto, or materially impair the operations of the Company or any of its
Subsidiaries; and (c) Liens for current Taxes not yet due.
SECTION 4.15. Environmental Laws. Except as disclosed in the Company
SEC Documents filed prior to the date hereof, (a) the Company and each of its
Subsidiaries are, and within the period of all applicable statutes of
limitations have been, in compliance with all Environmental Laws, including, but
not limited to, compliance with any permits or other governmental authorizations
or any Governmental Entity decrees, orders or judgments or the terms and
conditions thereof except where the failure to so comply would not be reasonably
likely to have a Material Adverse Effect or otherwise require disclosure in the
Company SEC Documents; (b) neither the Company nor any of its Subsidiaries has
received any communication or notice, whether from a Governmental Entity or
otherwise, alleging any violation of or noncompliance with any Environmental
Laws by the Company or any of its Subsidiaries or for which the any of them is
responsible, and there is no pending or, to the Company's knowledge, threatened
Environmental Claim, except where such Environmental Claim would not be
reasonably likely to have a Material Adverse Effect or otherwise require
disclosure in the Company SEC Documents; and (c) to the Company's knowledge,
there are no past or present facts or circumstances that could form the basis of
any Environmental Claim against the Company or any of its Subsidiaries or
against any person or entity whose liability for any Environmental Claim the
Company or any of its Subsidiaries has retained or assumed either contractually
or by operation of law, except where such Environmental Claim, if made, would
not be reasonably likely to have a Material Adverse Effect or otherwise require
disclosure in the Company SEC Documents. All material permits and other
governmental authorizations currently held or required to be held by the Company
and its Subsidiaries pursuant to any Environmental Laws are identified in
Section 4.15 of the Disclosure Schedule. The Company has provided to Parent all
material assessments, reports, data, results of investigations or audits,
correspondence and other information that is in the possession of the Company
regarding environmental matters pertaining to, or the environmental condition of
the business, property or assets of, the Company and its Subsidiaries, or the
compliance (or noncompliance) by the Company or any of its Subsidiaries with any
Environmental Laws.
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SECTION 4.16. Intellectual Property. (a) The Company owns or has the
right to use all the Company's Intellectual Property, free and clear of all
Liens, except where the failure to own or possess such Intellectual Property
would not be reasonably likely to have a Material Adverse Effect. The Company or
one of its Subsidiaries is listed in the records of the appropriate United
States, state or foreign agency as the sole owner of record for all material
applications, registrations or patents included in the Company's Intellectual
Property, and all of the foregoing are listed on Section 4.16(a) of the
Disclosure Schedule and are validly subsisting.
(b) Section 4.16(b) of the Disclosure Schedule sets forth a list of all
license agreements under which the Company or any of its Subsidiaries has
granted the right to use the Company's Intellectual Property or received the
right to use any Intellectual Property of any third party.
(c) Except as set forth in Section 4.16(c) of the Disclosure Schedule,
no person has a right to receive a royalty or similar payment in respect of any
item of the Intellectual Property pursuant to any contractual arrangements
entered into by the Company or otherwise. To the knowledge of the Company, no
former or present employees, officers or directors of the Company hold any
right, title or interest, directly or indirectly, in whole or in part, in or to
any of the Company's Intellectual Property.
(d) To the knowledge of the Company, the conduct of the business of the
Company does not materially violate or infringe upon any Intellectual Property
right of any third party, and there is no pending or threatened opposition,
interference, re-examination, cancellation, claim of invalidity or other legal
or governmental proceeding in any jurisdiction involving any of the Company's
Intellectual Property. There are no claims or suits pending or, to the knowledge
of the Company, threatened, and the Company has received no written notice of
any claim or suit (i) alleging that the conduct of the Company's business
infringes upon or constitutes the unauthorized use of the proprietary rights of
any third party or (ii) challenging the ownership, use, validity or
enforceability of the Company's Intellectual Property which, if adversely
determined, would be reasonably likely to have a Material Adverse Effect. Except
as set forth in Section 4.16(d) of the Disclosure Schedule, to the knowledge of
the Company, none of the Intellectual Property of the Company is being violated
or infringed upon by any third party. There are no settlements, consents,
judgments, orders or other agreements which restrict the Company's rights to use
any of its Intellectual Property.
SECTION 4.17. Year 2000 Compliance. Except as set forth in Section 4.17
of the Disclosure Schedule, the Company has taken commercially reasonable steps
to ensure that all Date Data and Date-Sensitive Systems of the Company and its
Subsidiaries will be Year 2000 Compliant by December 31, 1999. Except as set
forth in Section 4.17 of the Disclosure Schedule, all statements made by the
Company since January 1, 1997 in the Company SEC Documents concerning the Year
2000 Compliant status of its Date Data and Date-Sensitive Systems did not
contain a material misstatement of fact or omit to state a material fact
necessary to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. As used herein:
(i) "Date Data" means any data of any type that includes date information or
which is otherwise derived from, dependent on or related to date
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information, (ii) "Date-Sensitive System" means any software, microcode or
hardware system or component, including any electronic or electronically
controlled system or component, that processes any Date Data and that is
installed, in development or on order by the Company or any of its Subsidiaries
for its internal use, or which the Company or any of its Subsidiaries sells,
leases, licenses, assigns or otherwise provides, or the provision or operation
of which the Company or any of its Subsidiaries provides the benefit, to its
customers, vendors, suppliers, affiliates or any other third party, and (iii)
"Year 2000 Compliant" means (A) with respect to Date Data, that such data is in
proper format and accurate for all dates in the twentieth and twenty-first
centuries, and (B) with respect to Date-Sensitive Systems, that each such system
accurately processes all Date Data, including for the twentieth and twenty-first
centuries, without loss of any functionality, including but not limited to
calculating, comparing, sequencing, storing and displaying such Date Data
(including all leap year considerations), when used as a stand-alone system or
in combination with other software or hardware.
SECTION 4.18. Labor Matters. Section 4.18 of the Disclosure Schedule
sets forth each collective bargaining or similar agreement between the Company
or any of its Subsidiaries with any labor organization or employee association.
Except as set forth in Section 4.18 of the Disclosure Schedule, none of the
employees of the Company or any of its Subsidiaries is represented by any labor
organization or covered by any collective bargaining or similar agreement.
Except as set forth in Section 4.18 of the Disclosure Schedule, within the past
12 months, neither the Company nor any of its Subsidiaries has received notice
from any union of its desire to terminate any collective bargaining agreements
or of its intention to seek to organize any employees of the Company or its
Subsidiaries. Except as set forth in Section 4.18 of the Disclosure Schedule,
there is no unfair labor practice charge or complaint against the Company or any
of its Subsidiaries pending or, to the knowledge of the Company, threatened
before the National Labor Relations Board. There is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
and, except as set forth in Section 4.18 of the Disclosure Schedule, during the
past five years there has not been any such action. There is no grievance or
arbitration proceeding which would be reasonably likely to have a Material
Adverse Effect.
SECTION 4.19. Employment Matters. Section 4.19 of the Disclosure
Schedule sets forth a list of all employment contracts or severance agreements
with any employees of the Company or any of its Subsidiaries. The Company has
provided each of such contracts or agreements, as well as all written personnel
policies, rules or procedures applicable to employees of the Company or any of
its Subsidiaries, to Parent. Except as set forth in Section 4.19 of the
Disclosure Schedule, the Company and its Subsidiaries are not parties to, or
bound by, any employment agreement or any other arrangement or understanding
with any Person that provides for the payment of any consideration by the
Company or any of its Subsidiaries or the Surviving Corporation to such Person
or creates any other rights or obligations as a result of a change in control of
the Company or the consummation of any of the transactions contemplated by this
Agreement.
SECTION 4.20. Compliance with Laws. The Company and its Subsidiaries
are in compliance with, and have not violated any applicable law, rule or
regulation of any United States federal, state, local, or foreign government or
agency thereof except where such non-compliance
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or violation would not be reasonably likely to have a Material Adverse Effect,
and no notice, charge, claim, action or assertion has been received by the
Company or any of its Subsidiaries or has been filed, commenced or, to the
Company's knowledge, threatened against the Company or any of its Subsidiaries
alleging any such violation, except for any matter which is not reasonably
likely to have a Material Adverse Effect. All licenses, permits and approvals
required under such laws, rules and regulations are in full force and effect
except where the failure to be in full force and effect would not be reasonably
likely to have a Material Adverse Effect.
SECTION 4.21. Contracts. Each Company Agreement is valid, binding and
enforceable and in full force and effect, except where failure to be valid,
binding and enforceable and in full force and effect would not be reasonably
likely to have a Material Adverse Effect, and there are no defaults thereunder,
except those defaults that would not be reasonably likely to have a Material
Adverse Effect. Section 4.21 of the Disclosure Schedule sets forth a true and
complete list of all material Company Agreements entered into by the Company or
any of the Company Subsidiaries since December 31, 1998 and all amendments to
any Company Agreements included as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998.
SECTION 4.22. Insurance. Section 4.22 of the Disclosure Schedule
contains an accurate and complete description of all material policies of fire,
liability, workmen's compensation and other forms of insurance owned or held by
the Company or any of its Subsidiaries. All such policies are in full force and
effect, all premiums due and payable have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
SECTION 4.23. Transactions with Affiliates. Except to the extent
disclosed in the Company SEC Documents filed prior to the date of this Agreement
or as disclosed in Section 4.23 of the Disclosure Schedule, since December 31,
1998, there have been no transactions, agreements, arrangements or
understandings between the Company and any Person that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act.
SECTION 4.24. Finders' Fees. Except for Salomon Smith Barney Inc., the
fees of which have been disclosed to Parent and Purchaser, there is no
investment banker, broker, finder or other intermediary which has been retained
by, or is authorized to act on behalf of, the Company or any of its
Subsidiaries, and which might be entitled to any fee or commission from
Purchaser, Parent or any of Parent's other subsidiaries upon consummation of the
transactions contemplated by this Agreement.
SECTION 4.25. Confidentiality Agreements. Each prospective purchaser,
other than Parent, that has received materials from Salomon Smith Barney Inc. or
the Company within the past six months with respect to a potential business
combination has executed a confidentiality agreement (each, an "Other
Confidentiality Agreement"). Each of the Other Confidentiality Agreements
executed by such prospective purchasers includes "standstill" provisions for a
duration of at least 12 months from the execution thereof.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser jointly and severally represent and warrant to the
Company that:
SECTION 5.01. Corporate Existence and Power. Parent is a corporation
duly incorporated under the laws of the State of Delaware, Purchaser is a
corporation duly organized under the laws of the State of Delaware, and each of
them is validly existing and in good standing under the laws of its jurisdiction
of incorporation and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. Since the date of its incorporation, Purchaser has
not engaged in any activities other than in connection with or as contemplated
by this Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated hereby are within the
corporate powers of Parent and Purchaser and have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and binding
agreement of Parent and Purchaser.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (i) the filing of the Certificate of Merger in
accordance with Delaware Law, (ii) the applicable requirements of the HSR Act
and (iii) compliance with any applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated hereby do not and will not
(i) contravene or conflict with the articles or certificate of incorporation or
bylaws of Parent and Purchaser, (ii) assuming compliance with the matters
referred to in Section 5.03, contravene or conflict with any provision of law,
regulation, judgment, order or decree binding upon Parent and Purchaser, or
(iii) constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Parent or Purchaser
or to a loss of any benefit to which Parent or Purchaser is entitled under any
agreement, contract or other instrument binding upon Parent or Purchaser,
except, in the case of clauses (ii) and (iii), for any contraventions,
conflicts, defaults or other occurrences which are not, individually or in the
aggregate, reasonably likely to prevent or materially delay the consummation of
the Offer or the Merger.
SECTION 5.05. Finders' Fees. Except for Wasserstein Perella & Co.,
Inc., whose fees will be paid by Parent, there is no investment banker, broker,
finder or other intermediary who
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might be entitled to any fee or commission from the Company or any of its
affiliates upon consummation of the transactions contemplated by this Agreement.
SECTION 5.06. Financing. Parent has or will have available, prior to
the expiration of the Offer, and will provide to Purchaser on a timely basis,
sufficient funds to enable Purchaser to consummate the Offer, the Merger and the
other transactions contemplated hereby and to pay all related fees and expenses.
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company. From the date hereof until the
Effective Time, except as required to effect this Agreement or as set forth in
Section 6.01 of the Disclosure Schedule and except with the prior written
consent of Parent, which consent shall not be unreasonably delayed, conditioned
or withheld, the Company and its Subsidiaries shall conduct their business in
the ordinary course consistent with past practice and shall use their reasonable
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time:
(a) neither the Company nor any of its Subsidiaries will adopt or
propose any change in its certificate of incorporation or bylaws;
(b) neither the Company nor any of its Subsidiaries will adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its Subsidiaries (other than the Merger);
(c) neither the Company nor any of its Subsidiaries will adopt or
(except as required pursuant to any Plan) pay, grant, issue, accelerate or
accrue salary or other payments or benefits pursuant to any pension,
profit-sharing, bonus, extra compensation, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or any employment or consulting agreement with or for the benefit
of any director, officer, employee, agent or consultant, whether past or
present; or, except as required by law, amend in any material respect any such
existing plan, agreement or arrangement in a manner inconsistent with the
foregoing;
(d) neither the Company nor any of its Subsidiaries shall enter into
any contract or transaction relating to the purchase of material assets other
than in the ordinary course of business consistent with prior practices;
(e) neither the Company nor any of its Subsidiaries will (i) materially
change any of the accounting methods used by it unless required by GAAP or (ii)
make any material election relating to Taxes or change any material election
relating to Taxes already made;
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(f) neither the Company nor any of its Subsidiaries will issue,
deliver, sell, pledge, dispose of or encumber, or authorize or commit to the
issuance, sale, pledge, disposition or encumbrance of, (i) any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, but not limited to, stock appreciation rights or
phantom stock), of the Company or any of its Subsidiaries (except for the
issuance of up to approximately 1,001,785 shares of Company Common Stock
required to be issued pursuant to outstanding grants, awards and elections under
the terms of the Company's Stock Option Plans, Performance Award Plan, Employee
Stock Option (Purchase) Plan and phantom stock programs as of June 15, 1999) or
(ii) any assets of the Company or any of its Subsidiaries, except for sales of
inventory in the ordinary course of business.
(g) neither the Company nor any of its Subsidiaries shall declare, set
aside, make or pay any dividend or other distribution, whether payable in cash,
stock, property or otherwise, with respect to its capital stock;
(h) neither the Company nor any of its Subsidiaries shall reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock;
(i) neither the Company nor any of its Subsidiaries shall (i) acquire
(by merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any Person, or make any loans, advances or capital
contributions to, or investments in any other Person, in each case other than in
the ordinary course of business consistent with past practice under the
Company's existing Revolving Credit Agreement with National City Bank in an
amount such that the aggregate outstanding balance under the Revolving Credit
Agreement shall not exceed $40 million; (iii) enter into any contract or
agreement other than in the ordinary course of business consistent with past
practice that is material to the Company and its Subsidiaries, taken as a whole;
or (iv) authorize any single capital expenditure which is in excess of $500,000
or capital expenditures which are, in the aggregate, in excess of $5 million for
the Company and its Subsidiaries taken as a whole;
(j) except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect as of the date of this
Agreement, neither the Company nor any of its Subsidiaries shall increase the
compensation or fringe benefits of any of its directors, officers or employees,
except for increases in salary or wages of employees of the Company or its
Subsidiaries who are not officers of the Company in the ordinary course of
business in accordance with past practice, or grant any severance or termination
pay not currently required to be paid under existing severance plans to, or
enter into any employment, consulting or severance agreement or arrangement
with, any present or former director, officer or other employee of the Company
or any of its Subsidiaries;
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(k) neither the Company nor any of its Subsidiaries shall settle or
compromise any pending or threatened suit, action or claim which is material or
which relates to the transactions contemplated hereby;
(l) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction (i) in the ordinary course of business and consistent
with past practice of liabilities reflected or reserved against in the Financial
Statements or incurred in the ordinary course of business and consistent with
past practice and (ii) of liabilities required to be paid, discharged or
satisfied pursuant to the terms of any contract or agreement in existence on the
date hereof;
(m) the Company will not, and will not permit any of its Subsidiaries
to, (i) take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any material
respect at or as of any time prior to the Effective Time or (ii) omit or agree
or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time; and
(n) the Company will not, and will not permit any of its Subsidiaries
to, (i) take or agree or commit to take any action that would cause any of the
conditions to the Offer set forth in Annex I hereto not to be satisfied, (ii)
omit or agree or commit to omit to take any action necessary to cause any of the
conditions to the Offer set forth in Annex I hereto to be satisfied or (iii)
take, omit to take or agree to take or omit to take any action described in
Sections 6.01(a) through 6.01(m) above.
SECTION 6.02. Stockholder Meeting; Proxy Material. (a) The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger and the
transactions contemplated by this Agreement, unless a vote of stockholders of
the Company is not required by Delaware Law. The Board of Directors of the
Company shall recommend approval and, to the extent required by Delaware Law,
adoption by the Company's stockholders of this Agreement and the Merger and the
transactions contemplated by this Agreement. In connection with such meeting,
the Company (i) will promptly prepare and file with the SEC, will use its
reasonable efforts to have cleared by the SEC and will thereafter mail to its
stockholders as promptly as practicable the Company Proxy Statement (as defined
below) and all other proxy materials for such meeting, (ii) will use its
reasonable efforts to obtain the necessary approvals by its stockholders of this
Agreement, and (iii) will otherwise comply with all legal requirements
applicable to such meeting. Notwithstanding the foregoing, in the event that
Purchaser shall acquire at least 90% of the outstanding Shares, the Company
agrees, at the request of Purchaser, to take all necessary and appropriate
action to cause the Merger to become effective as soon as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders, in
accordance with Section 253 of Delaware Law.
(b) Neither the Board of Directors of the Company nor any committee
thereof will, except as expressly permitted by this Section 6.02(b) or Section
6.05, (i) withdraw, qualify or
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modify, or propose publicly to withdraw, qualify or modify, in a manner adverse
to Parent or Purchaser, the approval or recommendation of such Board of
Directors or such committee of the Merger or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any transaction
involving an Acquisition Proposal (as hereinafter defined) from a party other
than Parent or Purchaser (an "Alternative Transaction"), or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Acquisition Agreement") related
to any Alternative Transaction. Notwithstanding the foregoing, if prior to the
approval of this Agreement by the stockholders of the Company, the Board of
Directors of the Company determines in the exercise of its fiduciary duties,
after it has received a Superior Proposal (as hereinafter defined) in compliance
with Section 6.05, the Board of Directors of the Company may (subject to this
and the following sentences) inform stockholders of the Company that it no
longer believes that the Merger is advisable and no longer recommends approval
(a "Subsequent Determination") and enter into an Acquisition Agreement with
respect to a Superior Proposal, but only at a time that is after the fifth day
following delivery to Parent of written notice advising Parent that the Board of
Directors of the Company has received a Superior Proposal. Such written notice
shall specify the material terms and conditions of such Superior Proposal,
identify the Person making such Superior Proposal and state that the Board of
Directors of the Company intends to make, or is considering making, a Subsequent
Determination. During such five day period, the Company shall provide an
opportunity for Parent to proposed such adjustments to the terms and conditions
of this Agreement as would enable the Board of Directors of the Company to
proceed with its recommendation to the stockholders of the Company without a
Subsequent Determination; provided, however, that any such proposed adjustments
shall be at the discretion of the parties hereto at the time.
SECTION 6.03. Disclosure Documents. (a) Each Company Disclosure
Document, including, without limitation, the Schedule 14D-9, the Company Proxy
Statement and any amendments or supplements thereto will, when filed, comply as
to form in all material respects with the applicable requirements of the
Exchange Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
such stockholders vote on adoption of this Agreement and at the Effective Time,
the Company Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy Statement
and at the time of any distribution thereof, such Company Disclosure Document
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
obligations of the Company contained in this Section 6.03(b) will not apply to
statements or omissions included in the Company Disclosure Documents based upon
information furnished to the Company in writing by Parent or Purchaser
specifically for use therein.
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(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent or Purchaser in writing
specifically for use in the Offer Documents will not, at the time of the filing
thereof, at the time of any distribution thereof and at the time of the
consummation of the Offer, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 6.04. Access to Information. From the date hereof until the
Effective Time, upon reasonable, prior notice from Parent, the Company will give
Parent and Purchaser, their counsel, financial advisors, auditors and other
authorized representatives reasonable access during normal business hours and
without disrupting the orderly conduct of business by the Company and its
Subsidiaries to the offices, properties, books and records of the Company and
its Subsidiaries, will furnish to Parent and Purchaser, their counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct the Company's employees, counsel and financial advisors to
reasonably cooperate with Parent and Purchaser in their investigation of the
business of the Company and the Subsidiaries.
SECTION 6.05. Other Offers. From the date hereof until the termination
hereof, the Company and its Subsidiaries will not, nor shall the Company
authorize or permit any officers, directors, employees, representatives or other
agents of the Company and its Subsidiaries to, directly or indirectly, (i) take
any action to solicit, initiate or encourage any Acquisition Proposal or (ii)
engage in negotiations with, or disclose any nonpublic information relating to
the Company or any of its Subsidiaries or afford access to the properties, books
or records of the Company or any Subsidiary to, any Person that may be
considering making, or has made, an Acquisition Proposal; provided, however,
that nothing contained in this Agreement shall prevent the Company or the Board
of Directors of the Company from (a) furnishing nonpublic information to, or
affording access to the properties, books or records of the Company or any of
its Subsidiaries to, or entering into discussions or an agreement with, any
Person in connection with an unsolicited Acquisition Proposal by such Person, if
and only to the extent that (i) the Company's Board of Directors determines in
good faith after consultation with outside legal counsel that such action is
necessary to comply with their fiduciary duties to the stockholders of the
Company under applicable law; (ii) prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such Person,
the Company's Board of Directors receives from such Person an executed
confidentiality agreement with customary terms and (iii) the Board of Directors
of the Company concludes in the exercise of its fiduciary duties that the
Acquisition Proposal is a Superior Proposal, or (b) taking and disclosing to the
Company's stockholders any position, and making any related filings with the
SEC, as required by Rules14e-2 and 14d-9 under the Exchange Act with respect to
any Alternative Transaction that is a tender offer; provided, that the Company's
Board of Directors shall not recommend that the stockholders of the Company
tender their Shares in connection with any such tender offer unless the Board by
majority vote shall have determined in good faith that failing to take such
action would constitute a breach of the Board's fiduciary duties under
applicable law. The Company will promptly notify Parent after receipt of any
Acquisition Proposal or any request for nonpublic information relating to the
Company or any Subsidiary or for access to the properties, books or records of
the Company or
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any Subsidiary by any Person that has made an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request. The Company will take no action with respect to
such proposal or inquiry for five days after delivery of such notice to Parent
and will negotiate exclusively in good faith with Parent for such five day
period to make such adjustments in the terms and conditions of this Agreement as
would enable the Company to proceed with the transactions contemplated herein on
such adjusted terms; provided, however, that any such proposed adjustments shall
be at the discretion of the parties hereto at the time. Without limiting the
foregoing, it is understood that any violations of the restrictions set forth in
the first sentence of this Section 6.05 by any officer or director of the
Company or any of its Subsidiaries or any employee, representative or other
agent of the Company or any of its Subsidiaries, acting on behalf of or at the
request of the Board of Directors of the Company, shall be deemed to be a breach
of this Section 6.05 by the Company.
SECTION 6.06. Company Board Representation; Section 14(f). (a) Promptly
upon the purchase by Purchaser of more than a majority of the outstanding Shares
pursuant to the Offer, and from time to time thereafter, Purchaser shall be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as shall give Purchaser
representation on the Board of Directors equal to a majority of the Board of
Directors, and the Company shall amend, or cause to be amended its bylaws to
provide for each of the matters set forth in this Section 6.06 and shall, at
such time, promptly take all action necessary to cause Purchaser's designees to
be so elected or appointed, including either increasing the size of the Board of
Directors or securing the resignations of incumbent directors or both. At such
times, the Company will use its reasonable best efforts to cause persons
designated by Purchaser to constitute the same percentage as is on the Board of
each committee of the Board of Directors.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14F-1
promulgated thereunder. At the request of Parent, the Company shall promptly
take all actions required pursuant to Section 14(f) and Rule 14F-1 in order to
fulfill its obligations under this Section 6.06 and shall include in the
Schedule 14D-9 or a separate Rule14F-1 information statement provided to
stockholders of the Company such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14F-1 to
fulfill its obligations under this Section 6.06. Parent or Purchaser will supply
to the Company and be solely responsible for any information with respect to
either of them and their nominees, officers, directors and Affiliates required
by Section 14(f) and Rule 14F-1.
(c) Following the election or appointment of Purchaser's designees
pursuant to this Section 6.06 and prior to the Effective Time, the concurrence
of a majority of the directors of the Company then in office who are neither
designated by Purchaser nor are employees of the Company (the "Disinterested
Directors") will be required to authorize any amendment, or waiver of any term
or condition, of this Agreement or the certificate of incorporation or bylaws of
the Company, any termination of this Agreement by the Company, any extension by
the Company of the time for the performance of the obligations or other acts of
Purchaser or waiver or assertion of any of the Company's rights hereunder, and
any other consent or action by the Board of
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Directors with respect to this Agreement. Notwithstanding Section 6.06(a)
hereof, the number of Disinterested Directors shall not be less than two.
(d) Prior to the Effective Time, the Company shall cause each of the
incumbent directors of the Company (other than Purchaser's designees pursuant to
this Section 6.06) to deliver letters of resignation from the Board of Directors
of the Company, such resignations to be effective as of the Effective Time.
ARTICLE VII
COVENANTS OF PARENT AND PURCHASER
SECTION 7.01. Confidentiality. Prior to the Effective Time and after
any termination of this Agreement, Parent and Purchaser will hold, and will
cause their respective officers, directors, employees, accountants, lenders,
counsel, consultants, advisors and agents to hold, in confidence, all
confidential documents and information concerning the Company and its
Subsidiaries furnished to Parent or Purchaser in connection with the
transactions contemplated by this Agreement in accordance with the provisions of
the Confidentiality Agreement.
SECTION 7.02. Obligations of Purchaser. Parent will take all action
necessary to cause Purchaser to perform its obligations under this Agreement and
to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 7.03. Disclosure Documents. (a) The information with respect to
Parent and its subsidiaries that Parent furnishes to the Company in writing
specifically for use in any Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, at the time the
stockholders vote on adoption of this Agreement and at the Effective Time, and
(ii) in the case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof, at the time of any distribution
thereof and at the time of the consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the Exchange Act and will
not at the time of the filing thereof, at the time of any distribution thereof
or at the time of consummation of the Offer, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, provided, that this Section 7.04(b) will not apply to
statements or omissions in the Offer Documents based upon information furnished
to Parent or Purchaser in writing by the Company specifically for use therein.
SECTION 7.04. Employee Matters. (a) As of the Effective Time, the
Surviving Corporation shall employ all employees of the Company who desire
employment with the
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Surviving Corporation. With respect to each individual who is employed by the
Surviving Corporation as of the Effective Time, Parent shall, at its option,
either (i) cause the Surviving Corporation to continue to provide for such
individual's participation in each medical, surgical, hospitalization and other
"welfare" plan, fund or program (within the meaning of Section 3(l) of ERISA) of
the Company on the same terms as immediately prior to the Effective Time or (ii)
permit such individual to participate in an employee welfare plan sponsored by
Parent or any Affiliate of Parent (a "Purchaser Plan") which provides
substantially similar benefits as prior to the Effective Time, on the same terms
and to the same extent as similarly situated employees of Parent's Lithonia
Lighting unit; provided, that if Parent elects to permit such employee to
participate in a Purchaser Plan pursuant to clause (ii) above, such employee
shall (A) not be subject to any preexisting condition provision or waiting
period under any Purchaser Plan which provides medical, dental, vision or
prescription drug benefits; and (B) to the extent permitted by applicable law,
be credited with prior service with the Company for all purposes related to
eligibility and vesting under any Purchaser Plan in which such employee
participates.
(b) With respect to any employee of the Company as of the date hereof
who is not employed by the Surviving Corporation as of the Effective Time, the
Surviving Corporation shall be responsible for providing continuation coverage
to such employee (and his or her dependents), as required under the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Further, with respect to
any former employee of the Company (or their dependents) who is receiving
continuation coverage under COBRA as of the Effective Time, the Surviving
Corporation shall be responsible to maintain such continuation coverage in
compliance with COBRA.
(c) Parent shall cause the Surviving Corporation to continue each of
the following plans and agreements in full force and effect in accordance with
their respective terms for the remaining term thereof: the Company's
Supplemental Executive Retirement Plan, as amended (the "SERP"); and the
Termination Benefit Agreements and Employment Agreements set forth in Section
4.12(a) of the Disclosure Schedule; provided, that the Surviving Corporation
shall not be obligated to make contributions pursuant to Section 3 of the SERP
or to allow participating employees of the Surviving Corporation to defer a
portion of their compensation pursuant to Section 4 of the SERP for more than
two years after the Effective Time; provided, further, that for purposes of such
Termination Benefits Agreements and Employment Agreements the Option Plans shall
be deemed to continue in full force and effect notwithstanding that such Option
Plans shall be terminated for all other purposes at the Effective Time. For at
least two years, Parent shall cause the Surviving Corporation to continue, or
shall offer a comparable plan to the following: the Company's bonus plans and
educational assistance program. Any outstanding rights under the following plans
will be fully satisfied in connection with the transactions contemplated hereby
and, upon satisfaction of those rights, the plans shall be terminated: the
Company's Employee Stock Option (Purchase) Plan and the Company's Performance
Award Program (assuming payment in full of the performance award with respect to
1999). Furthermore, Parent and the Company shall negotiate in good faith with
Paolo Minissi and Michele Seghers with respect to the effect of the Offer and
the Merger on the provisions of Section 2.02 of the MetalOptics Stock Purchase
Agreement.
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(d) As of the Effective Time, Parent shall assume and honor, and shall
cause the Surviving Corporation to assume and to honor, in accordance with their
terms all employment, severance and other compensation agreements and
arrangements listed in Section 4.19 of the Disclosure Schedule.
ARTICLE VIII
COVENANTS OF PARENT, PURCHASER
AND THE COMPANY
SECTION 8.01. Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each party will use reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 8.02. Certain Filings. (a) The Company, Parent and Purchaser
shall cooperate with one another (i) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, and (ii) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions contemplated
by this Agreement and (iii) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith or with the Company Disclosure Documents or the Offer
Documents and seeking timely to obtain any such actions, consents, approvals or
waivers. Notwithstanding any provision of this Agreement to the contrary, Parent
and Purchaser shall not be required under the terms hereof to dispose of or hold
separate all or any material portion of the businesses or assets of Parent or
any of its Subsidiaries or of the Company or any of its Subsidiaries in order to
remedy or otherwise address the written concerns of any Governmental Entity
under the HSR Act of any other antitrust statute or regulations.
(b) The Company and Parent shall file as soon as practicable
notifications under the HSR Act and respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antitrust Division
of the Department of Justice for additional information or documentation and
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity in connection with
antitrust matters. Concurrently with the filing of notifications under the HSR
Act or as soon thereafter as practicable, the Company and Parent shall each
request early termination of the HSR Act waiting period.
SECTION 8.03. Public Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint press release
acceptable to Parent and the Company. Thereafter, Parent, Purchaser and the
Company will consult with each other before issuing any press release or making
any public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement
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with any national securities exchange, will not issue any such press release or
make any such public statement prior to such consultation.
SECTION 8.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Purchaser, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Purchaser, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
SECTION 8.05. Notices of Certain Events. Each of the Company and Parent
shall promptly notify the other of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this
Agreement;
(b) any notice or other communication from any
governmental or regulatory agency or authority in connection
with the transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge threatened against,
relating to or involving or otherwise affecting Parent,
Purchaser, the Company or any of its Subsidiaries which relate
to the consummation of the transactions contemplated by this
Agreement;
(d) any event the occurrence or non-occurrence of
which would be reasonably likely to cause any representation
or warranty contained in this Agreement to be untrue in any
material respect; and
(e) any failure of the Company, Parent or Purchaser,
as the case may be, to comply with or satisfy in any material
respect any covenant, condition or agreement herein.
SECTION 8.06. Directors' and Officers' Indemnification and Insurance.
(a) The Certificate of Incorporation of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article ELEVENTH of the (Second) Restated Certificate of Incorporation of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
affect materially adversely the rights thereunder of individuals who at the
Effective Time were directors or officers of the Company, with respect to any
act or omission in
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their capacity as an officer or director of the Company occurring on or prior to
the Effective Time, unless such modification shall be required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, indemnify and hold
harmless, and after the Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, indemnify and hold harmless each
present and former director and officer of the Company (collectively, the
"Indemnified Parties") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, criminal, administrative or investigative, arising out of or directly
pertaining to any action or omission in their capacity as an officer or director
of the Company occurring on or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, for a period of six years
after the later of the Effective Time and the date hereof, in each case to the
fullest extent permitted under applicable law (and shall pay any expenses in
advance of the final disposition of such action or proceeding to each
Indemnified Party to the fullest extent permitted under applicable law, upon
receipt from the Indemnified Party to whom expenses are advanced of an
undertaking to repay such advances required under applicable law). In the event
of any such claim, action, suit, proceeding or investigation, (i) the Company or
the Surviving Corporation, as the case may be, shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties promptly after
statements therefor are received and (ii) the Company and the Surviving
Corporation shall cooperate in the defense of any such matter. In the event that
any claim for indemnification is asserted or made within such six-year period,
all rights to indemnification in respect of such claim shall continue until the
final disposition of such claim.
(c) Parent shall maintain in effect for the benefit of the Indemnified
Parties for six years after the Effective Time the current directors' and
officers' liability insurance policies maintained by the Company to cover acts
and omissions of the Indemnified Parties occurring prior to the Effective Time;
provided, that Parent may substitute therefor policies of substantially the same
coverage containing substantially comparable terms and conditions with respect
to matters occurring prior to the Effective Time; provided, further, that in no
event shall Parent be required to expend more than an amount per year equal to
400% of current annual premiums paid by the Company (which the Company
represents and warrants to be not more than $40,000) to maintain or procure such
coverage.
(d) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 8.06.
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(e) The Indemnified Parties are each intended third-party beneficiaries
of the provisions of this Section 8.06, and may enforce this Section 8.06
against the Company, the Surviving Corporation or Parent, as the case may be, as
fully and effectively as if each were a party to this Agreement.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Purchaser to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement and the transactions contemplated hereby shall have
been approved and adopted by the stockholders of the Company to the extent
required by, and in accordance with, Delaware Law and the (Second) Restated
Certificate of Incorporation and Bylaws of the Company;
(b) Purchaser or its permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; provided, however,
that this condition shall not be applicable to the obligations of Parent or
Purchaser if, in breach of this Agreement or the terms of the Offer, Purchaser
fails to purchase any Shares validly tendered and not withdrawn pursuant to the
Offer;
(c) all actions by or in respect of or filings with any governmental
body, agency, official, or authority required to permit the consummation of the
Merger shall have been obtained or made; and
(d) no Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making any the Merger illegal or otherwise
restricting, preventing or prohibiting consummation of the Merger.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company, to the extent
required by Delaware Law):
(a) by mutual written consent of Parent and the Company;
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(b) by either the Company or Parent, if the Effective Time shall not
have occurred on or before December 31, 1999; provided, however, that the right
to terminate this Agreement under this Section 10.01(b) shall not be available
to any party whose breach of this Agreement has been the primary cause of, or
resulted in, the failure of the Effective Time to occur on or before such date;
(c) by either the Company or Parent, if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their reasonable
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and non-appealable;
(d) by Parent:
(i) if Purchaser shall have terminated the Offer
without Purchaser having purchased any Shares thereunder by reason
of the failure to satisfy any condition set forth in Annex I
hereto; or
(ii) if the Company's Board of Directors shall have
(A) failed to include in the Schedule 14D-9 or the Company Proxy
Statement, its recommendation without modification or qualification
that the stockholders of the Company accept the Offer and approve
this Agreement and the Merger, (B) approved or recommended any
other Acquisition Proposal, (C) withdrawn, modified or qualified
its recommendation of the Offer, this Agreement or the Merger in a
manner adverse to the interests of Parent or Purchaser or (D)
resolved to do any of the foregoing.
(e) by the Company:
(i) if Purchaser shall have failed to commence the
Offer within five business days following the date of the initial
public announcement of the Offer;
(ii) if Purchaser shall have terminated the Offer
without having accepted any Shares for payment thereunder by reason
of the failure to satisfy any condition set forth in Annex I hereto
(unless such failure shall have been the result of the failure of
the Company to perform in any material respect any covenant or
agreement of it contained in this Agreement or the material breach
by the Company of any representation or warranty of it contained in
this Agreement);
(iii) if Purchaser shall have failed to pay for Shares
pursuant to the Offer within 90 days following the commencement of
the
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<PAGE> 35
Offer, unless such failure to pay for Shares shall have been the
result of the failure of the Company to perform in any material
respect any covenant or agreement of it contained in this Agreement
or the material breach by the Company of any representation or
warranty of it contained in this Agreement;
(iv) if any representation or warranty of Parent and
Purchaser in this Agreement shall not be true and correct in any
material respect, as if such representation or warranty was made as
of such time on or after the date of this Agreement; or Parent or
Purchaser shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement
or covenant of Parent or Purchaser to be performed or complied with
by it under this Agreement and which, in any such case, shall not
have been cured within five business days following receipt of
notice thereof; or
(v) if, prior to the purchase of Shares pursuant to
the Offer, after it has received a Superior Proposal in compliance
with Section 6.05, the Company's Board of Directors determines that
it is obligated by its fiduciary duties under applicable law to
terminate this Agreement; provided, that such termination under
this clause (v) shall not be effective until the Company has made
payment of the Termination Fee and the expense reimbursement
required by Section 10.03.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, written notice thereof shall forthwith be given to
the other party or parties specifying the provisions hereof pursuant to which
such termination is made, and this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that (a) the
agreements contained in Sections 7.01 and 10.03 shall survive the termination
hereof and (b) nothing herein shall relieve any party from liability for any
breach hereof.
SECTION 10.03. Fees and Expenses. (a) If Parent shall terminate this
Agreement pursuant to Section 10.01(d)(ii) hereof or the Company shall terminate
this Agreement pursuant to Section 10.01(e)(v), then the Company shall pay to
Parent, within five business days of such termination, a fee, in cash, in the
amount of $20,000,000 (the "Termination Fee"). In addition, the Company shall
reimburse Parent, Purchaser and their Affiliates (not later than five business
days after submission of valid statements therefor) for all actual, documented
out-of-pocket fees and expenses actually incurred by any of them or on their
behalf in connection with the Offer and the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation, fees
and disbursements payable to financing sources, investment bankers, counsel to
Purchaser or Parent or any of the foregoing, and accountants) up to a maximum
amount of $3,000,000.
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(b) If within 12 months after termination of this Agreement, the
Company shall consummate an Acquisition Proposal with a Person other than Parent
or Purchaser, then immediately prior to, and as a condition of, consummation of
such transaction the Company shall pay to Parent upon demand an amount in cash
equal to the Termination Fee to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger; provided, that no such amount shall be
payable if the Termination Fee shall have become payable or have been paid in
accordance with Section 10.03(a) of this Agreement or if this Agreement shall
have been terminated by the Company in accordance with Section 10.01(e)(iv).
(c) Except as otherwise specifically provided in this Section 10.03,
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
(d) Notwithstanding anything to the contrary in this Agreement, in no
event shall there be more than one payment of the Termination Fee by the Company
or Parent.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context clearly requires
otherwise:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Acquisition Proposal" shall mean any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its material Subsidiaries or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company or any of
its material Subsidiaries, other than the transactions contemplated by this
Agreement.
"Alternative Transaction" shall have the meaning set in Section 6.02
hereof.
"Associate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Balance Sheet" shall mean the most recent balance sheet of the Company
and its consolidated subsidiaries included in the Financial Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Company Agreement" shall mean any note, bond, mortgage, indenture,
ease, license, contract, agreement or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of them or any
of their properties or assets may be bound.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Company Disclosure Documents" shall mean each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement.
"Company's knowledge" or "knowledge of the Company" shall mean the
actual knowledge of the executive officers of the Company.
"Company Proxy Statement" shall mean the proxy or information statement
of the Company, if any, to be filed with the SEC in connection with the Merger.
"Company SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Company since January
1, 1996 under the Exchange Act or the Securities Act, including any amendment to
such document, whether or not such amendment is required to be so filed.
"Company Stock Option" shall have the meaning set forth in Section 2.05
hereof.
"Confidentiality Agreement" shall mean the letter agreement dated as of
March 31, 1999, between the Company and Parent.
"Copyrights" shall mean U.S. and foreign registered and unregistered
copyrights (including, but not limited to, those in computer software and
databases), rights of publicity and all registrations and applications to
register the same.
"Delaware Law" shall mean the General Corporation Law of the State of
Delaware.
"Dissenting Shares" shall have the meaning set forth in Section 2.04
hereof.
"Environmental Claim" shall mean any claim, action, investigation or
notice by any person or entity alleging potential liability for investigatory,
cleanup or governmental or third party response costs, or natural resources or
property damages, or personal injuries, attorneys' and consultants' fees and
expenses or penalties relating to (i) the presence, or release into the
environment, of any Hazardous Materials at any location owned or operated by the
Company or any of its Subsidiaries, now or in the past, or (ii) any violation,
or alleged violation, of any Environmental Law.
"Environmental Law" shall mean each federal, state, local and foreign
law and regulation relating to pollution, protection or preservation of public
or employee health or the environment, including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata, and natural
resources, and including, without limitation, each law and regulation relating
to emissions, discharges, releases or threatened releases of Hazardous
Materials, or otherwise relating to the generation, storage, treatment,
containment (whether above ground or underground), disposal, transport or
handling of Hazardous Materials, or the preservation of the environment or
mitigation of adverse effects thereon and each law and regulation with regard to
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record keeping, notification, disclosure and reporting requirements respecting
Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 2.03
hereof.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency.
"Hazardous Materials" shall mean pollutants, contaminants, toxic or
hazardous substances, materials and wastes, petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, radon and
lead or lead-based paints and materials or any other material regulated by or
subject to Environmental Laws.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Intellectual Property" shall mean all of the following: material
Trademarks, Patents, Copyrights, Trade Secrets and Licenses.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset.
"Material Adverse Effect" shall mean an effect that (A) is materially
adverse to the financial condition, business, assets or results of operations of
the Company and its Subsidiaries taken as a whole, excluding in all cases: (i)
events or conditions generally affecting the industry in which the Company and
the Company's Subsidiaries operate or arising from changes in general business
or economic conditions; (ii) any change or effect resulting from any change in
law or generally accepted accounting principles, which generally affect entities
such as the Company; and (iii) any change or effect resulting from the execution
and/or announcement of this Agreement or compliance by the Company with the
terms of this Agreement or any agreement contemplated hereby, or (B) would
prevent or materially delay the consummation of the Offer or the Merger.
"Merger" shall mean the merger of the Purchaser into the Company
referred to in the Recitals.
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"Merger Consideration" shall have the meaning set forth in Section
2.02(c) hereof.
"MetalOptics Stock Purchase Agreement" means the Stock Purchase
Agreement dated as of August 31, 1996 between the Company and Paolo Minissi and
Michele Seghers.
"Minimum Tender Condition" shall have the meaning set forth in Section
1.01 hereof.
"Offer Documents" shall mean a Tender Offer Statement on Schedule 14D-l
which will contain the offer to purchase and the form of the related letter of
transmittal, together with any supplements or amendments thereto.
"Option Plans" shall have the meaning set forth in Section 2.05 hereof.
"Patents" shall mean issued U.S. and foreign patents and pending patent
applications, patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and extension thereof, any
counterparts claiming priority therefrom, utility models, patents of
importation/confirmation, certificates of invention and like statutory rights.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
"Plan" shall have the meaning set forth in Section 4.12(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall have the meaning set forth in Section 1.01 hereof.
"Subsequent Determination" shall have the meaning set forth in Section
6.02 hereof.
"Subsidiary" shall mean, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are directly or indirectly owned by such Person.
"Superior Proposal" shall mean any proposal (on its most recently
amended or modified terms, if amended or modified) made by any Person other than
Parent or its Affiliates to enter into an Alternative Transaction which the
Company's Board of Directors determines in its good faith judgment to be more
favorable to the Company's stockholders than the Merger, taking into account all
relevant factors, including, but not limited to, whether, in the good faith
judgment of
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the Board of Directors of the Company, after consultation with the Company's
independent financial advisor, the third party is reasonably able to finance the
transaction, and any proposed changes to this Agreement that may be proposed by
Parent in response to such Alternative Transaction.
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local or foreign
Tax Authority.
"Tax Authority" shall mean any Governmental Authority responsible for
the imposition of Taxes.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or other statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"Termination Fee" shall have the meaning set forth in Section 10.03
hereof.
"Title IV Plan" shall mean a Plan that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code.
"Trademarks" shall mean U.S. and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names and
all registrations and applications to register the same.
"Trade Secrets" shall mean all categories of trade secrets as defined
in the Uniform Trade Secrets Act, including, but not limited to, business
information.
SECTION 11.02. Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested),
to the respective parties at the following addresses (or at such other address
as shall be specified in a notice given in accordance with this Section 11.02):
if to Parent or Purchaser, to:
National Service Industries, Inc.
NSI Center
1420 Peachtree Street, NE
Atlanta, Georgia 30309-3002
Attn: Stewart A. Searle, III
Telecopy: (404) 853-1211
with a copy to:
Kenyon W. Murphy, Esq.
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National Service Industries, Inc.
NSI Center
1420 Peachtree Street, NE
Atlanta, Georgia 30309-3002
Telecopy: (404) 853-1015
with an additional copy to:
Russell B. Richards
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Telecopy: (404) 572-5100
if to the Company, to:
Holophane Corporation
250 E. Broad Street, 14th Floor
Columbus, Ohio 43215
Attn: John R. DallePezze
Telecopy: (614) 341-2142
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with a copy to:
Ronald A. Robins, Jr.
Vorys, Sater, Seymour and Pease LLP
52 E. Gay Street
Columbus, Ohio 43215
Telecopy: (614) 719-4296
SECTION 11.03. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement pursuant to Section 10.01,
except that (a) the agreements and obligations set forth in Sections 7.01 and
10.03 shall survive any termination hereof and (b) the agreements and
obligations set forth in Articles II and XI and Sections 7.04 and 8.06 shall
survive the Effective Time in accordance with their respective terms.
SECTION 11.04. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended prior to the Effective Time if, and only if, such
amendment is in writing and signed by the Company, Parent and Purchaser;
provided, that after the approval and adoption of this Agreement by the
stockholders of the Company, to the extent required by Delaware Law, no such
amendment shall be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger, would amend the certificate of incorporation of the Surviving
Corporation, would impose conditions to the Merger other than those set forth in
Sections 9.01 and 9.02 hereof or would otherwise amend or change the terms and
conditions of the Merger in a manner adverse to the holders of the Shares;
provided, further, that any amendment shall be approved by a majority of the
Company's Board of Directors.
(b) At any time prior to the Effective Time, any party hereto may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in any representation or warranty
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing signed by the
party to be bound thereby and, in the case of any extension or waiver by which
the Company is to be bound, only if approved by a majority of Company's Board of
Directors.
(c) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or
38
<PAGE> 43
obligations under this Agreement without the consent of the other parties hereto
except that Purchaser may transfer or assign, in whole or from time to time in
part, to one or more of its subsidiaries, the right to purchase Shares pursuant
to the Offer, but any such transfer or assignment will not relieve Purchaser of
its obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
SECTION 11.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware without giving
effect to the principles of conflicts of laws thereof.
SECTION 11.07. Severability. Any term or provision of this Agreement
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
SECTION 11.08. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
[Signature page follows]
39
<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HOLOPHANE CORPORATION
By:
---------------------------------------
Name: John R. DallePezze
Title: Chairman, President and CEO
NATIONAL SERVICE INDUSTRIES, INC.
By:
---------------------------------------
Name: Stewart A. Searle III
Title: Senior Vice President, Planning
and Development
NSI ENTERPRISES, INC.
By:
---------------------------------------
Name: Stewart A. Searle III
Title: Senior Vice President
40
<PAGE> 45
ANNEX I
Notwithstanding any other term or provision of the Offer, the Purchaser
will not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, to pay for any Shares tendered pursuant to the Offer
and may postpone the acceptance for payment or, subject to any applicable rules
and regulations of the SEC, payment for any Shares tendered pursuant to the
Offer, and, in its good faith discretion, may amend or terminate the Offer, to
the extent provided in this Agreement, unless the Minimum Tender Condition shall
have been satisfied or waived in accordance with the terms hereof. Furthermore,
notwithstanding any other term or provision of the Offer, the Purchaser will not
be required to accept for payment or, subject as aforesaid, to pay for any
Shares not theretofore accepted for payment or paid for, and may postpone the
acceptance for payment or, subject to any applicable rules and regulations of
the SEC, payment for any Shares tendered pursuant to the Offer, and, in its good
faith discretion, may terminate or amend the Offer, to the extent provided in
this Agreement, if, at any time on or after the date of this Agreement, and
before the acceptance of such Shares for payment or, subject to any applicable
rules and regulations of the SEC, the payment therefor, any of the following
conditions exists:
(a) an order shall have been entered (or any Governmental Entity shall
have threatened in writing to seek an order) in any action or proceeding before
any federal or state court or governmental agency or other regulatory body or a
permanent injunction by any federal or state court of competent jurisdiction in
the United States shall have been issued and remain in effect (i) making illegal
the purchase of, or payment for, any Shares by Purchaser, Parent or any of
Parent's other subsidiaries; (ii) otherwise preventing the consummation of the
Offer or the Merger; (iii) imposing limitations on the ability of Purchaser,
Parent or any of Parent's other subsidiaries to exercise effectively full rights
of ownership of any Shares, including, without limitation, the right to vote any
Shares acquired by Purchaser pursuant to the Offer on all matters properly
presented to the Company's stockholders; (iv) prohibiting or materially limiting
the ownership or operation by the Company or any of its Subsidiaries, or Parent
or any of its subsidiaries, of all or any material portion of the business or
assets of the Company and its Subsidiaries, or Parent and its subsidiaries, or
compelling Parent or any of its subsidiaries to dispose of all or any material
portion of the businesses or assets of the Company or its Subsidiaries, or
Parent or its subsidiaries, as a result of the transactions contemplated by the
Offer or this Agreement; or (v) requiring divestiture by Parent or Purchaser of
any Shares.
(b) there shall have been any federal or state statute, rule or
regulation enacted, enforced, promulgated, amended or made applicable to the
Company, Purchaser, Parent or any other Affiliate of Parent or the Company or
the Offer or the Merger on or after the date of the Offer by any Governmental
Entity that could reasonably be expected to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) (i) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Agreement, which
breach shall not have been cured or waived within the earlier or (A) five
business days after receipt of notice thereof by the
<PAGE> 46
Company or (B) two business days prior to the date on which the Offer expires;
provided, that if notice of such breach is received by the Company within such
two business day period, Purchaser agrees to extend the Offer by at least two
business days or (ii) any of the representations and warranties of the Company
set forth in the Agreement (disregarding any qualifications contained therein
regarding materiality or Material Adverse Effect) shall be not be true and
correct when made or at any time prior to consummation of the Offer as if made
at and as of such time, except to the extent that such breach would not be
reasonably likely to have a Material Adverse Effect; or
(d) this Agreement shall have been terminated in accordance with its
terms or the Offer shall have been terminated with the consent of the Company;
(e) there shall have occurred any event that is reasonably likely to
result in a Material Adverse Effect;
(f) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or Purchaser the
approval or recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any Alternative Transaction, (ii) any person or group
shall have entered into a definitive agreement or an agreement in principle with
the Company with respect to an Alternative Transaction, or (iii) the Board of
Directors of the Company or any committee thereof shall have resolved to do any
of the foregoing;
(g) any waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated; or
(h) any consent required to be filed or obtained in connection with the
Offer, the failure or which to be so filed or obtained would have a Material
Adverse Effect, shall not have been obtained.
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Purchaser, Parent or
any of Parent's other subsidiaries) giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to any
condition (including any action or inaction by Purchaser or any of its
Affiliates) or may be waived by Purchaser in whole or in part at any time and
from time to time in its sole discretion. The failure by Purchaser at any time
to exercise any of the foregoing rights shall not be deemed a waiver of such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time from time to time.
I-2
<PAGE> 1
Exhibit (c)(2)
CONFIDENTIALITY AGREEMENT
March 31, 1999
National Service Industries
1420 Peachtree St. N. E.
Atlanta, GA 30309
Attention: Mr. Stewart A. Searle
Senior VP, Planning & Development
Ladies and Gentlemen:
You have indicated to Holophane Corporation (the "Company") that you are
interested in discussing a possible merger or other business combination or sale
of all or a substantial portion of the Company's assets (a "Transaction"). The
Company is furnishing you with information concerning the Company on which to
base your decision whether to present a proposal with respect to a Transaction.
You recognize and agree that such information is the property of the Company and
is being furnished to you in reliance by the Company upon your undertakings made
herein.
As a condition to your being furnished such information, you agree to treat all
information which has been furnished and any information which will be
furnished, directly or indirectly, to you in this connection (herein
collectively referred to as the "Evaluation Material") confidentially and in
accordance with the provisions of this letter agreement. The term Evaluation
Material does not include information which (i) at the time of disclosure to
you, was generally available to the public, (ii) was already known by you prior
to its disclosure to you in connection with your consideration of a Transaction,
(iii) becomes available to you in writing on a non-confidential basis from a
third party, provided that such third party is not known by you to be in breach
of an obligation of confidentiality to the Company or (iv) becomes generally
available to the public after the time of disclosure to you other than as a
result of a breach of this letter by you or a breach of an obligation of
confidentiality to the Company by a third party; or (v) is independently
developed by you without violating the provisions of this agreement.
You also agree (i) to take all reasonable precautions necessary to safeguard the
Evaluation Material from disclosure to anyone other than those limited numbers
of your officers, agents, advisors or prospective lenders who are directly
involved in your decision whether to present a proposal with respect to a
Transaction (each such person to whom you disclose the Evaluation material
referred to herein as a "Related Party") and who have a need to have access to
the
<PAGE> 2
National Service Industries
March 31, 1999
Page 2
Evaluation Material (it being understood that such Related Parties will be
informed by you of the confidential nature of such information and will be
directed by you to treat such information confidentially, and will be advised
that by receiving such information they are agreeing to be bound by the terms of
this letter agreement) and (ii) not to use the Evaluation Material for any
purpose other than to assist you in your consideration of a possible
Transaction. You specifically acknowledge that use of the Evaluation Material
for the direct or indirect purpose of soliciting the business of customers of
the Company is prohibited pursuant to this paragraph.
For a period of three years following termination by the Company of the
negotiations contemplated hereby, neither you nor any of your affiliates (as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) under your control will, directly or indirectly, (or will
assist or encourage others to), unless specifically requested in writing in
advance by the Board of Directors of the Company:
(i) acquire or agree, offer, seek or propose to acquire (or
request permission to do so), ownership (including, but not
limited to, beneficial ownership as defined in Rule 13d-3
under the Exchange Act) of any of the capital stock or other
securities (or direct or indirect rights, warrants or options
to acquire any securities) or assets of the Company (other
than in the ordinary course of business) or businesses of the
Company;
(ii) solicit proxies from stockholders of the Company or otherwise
seek to influence or control the management or policies of the
Company;
(iii) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect
to any voting securities of the Company;
(iv) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to the
foregoing; or
(v) disclose any intention, plan or arrangement inconsistent with
the foregoing.
You also agree during such period not to (1) request the Company (or any of its
directors, officers, employees or agents), directly or indirectly, to waive any
provisions of this paragraph (including this sentence) or (2) take any action
that might require the Company to make a public announcement regarding the
possibility of a Transaction. Notwithstanding the foregoing, nothing contained
herein shall restrict you from (x) soliciting the interest of the Board of
Directors of the Company on a confidential, non-public basis to request you to
offer to acquire all of the capital stock or assets of the Company or (y) from
making a tender offer for all of the outstanding capital stock of the Company
after such time as an unrelated third party has commenced, within
<PAGE> 3
National Service Industries
March 31, 1999
Page 3
the meaning of Rule 14d-2 of the Exchange Act, an unsolicited tender offer for
the Company at a value lower than would be offered by you in such tender offer.
In connection with the foregoing, you hereby represent that neither you nor any
of your affiliates under your control beneficially own any shares of the common
stock of the Company, except any de minimis amounts owned as passive
investments.
If at any time during such three-year period, you are approached by any third
party concerning your or their participation in a transaction (other than in the
ordinary course of business) involving the capital stock, assets or businesses
of the Company, you will promptly inform the Company in writing of the nature of
such contact and the parties thereto.
You will be responsible for any breach of terms hereunder by you, by any of your
affiliates under your control or by any Related Party. You will make all
reasonably necessary and appropriate efforts to safeguard the Evaluation
Material from disclosure to anyone other than as permitted hereby. In the event
that you are requested pursuant to, or required by, applicable law or regulation
or by legal process to disclose any Evaluation Material, you agree that you will
provide the Company with prompt notice of such request(s) to enable the Company
to seek an appropriate protective order. In the event that such protective order
or other remedy is not obtained, you agree to furnish only that portion of the
Evaluation Material which, in the opinion of counsel, you are legally compelled
to disclose and to use your reasonable efforts at the Company's expense to
obtain assurance that, if possible, confidential treatment will be accorded the
Evaluation Material disclosed.
Without the prior written consent of the Company, you will not, except as
required by law or the opinion of counsel, and you will direct any Related Party
who has had access to the Evaluation Material not to, disclose to any person the
fact that the Evaluation Material has been made available to you, the fact that
you have inspected any portion of the Evaluation Material, the fact that
discussions between the Company and you are taking place or other facts with
respect to these discussions. The term "person" as used in this paragraph shall
be broadly interpreted to include, without limitation, any corporation, limited
liability company, partnership, individual or group.
You also agree that if you decide that you have no further serious interest in
considering proposing a possible Transaction with the Company or if you do not
proceed with the possible Transaction that is the subject of this letter
agreement within a reasonable period of time, or if the Company so requests at
any time, you will return promptly to the Company all written material
containing or reflecting any information contained in the Evaluation Material
(whether prepared by the Company or otherwise) and neither you nor any Related
Party will retain any originals, copies, extracts or other reproductions, in
whole or in part, of such written material (except that one copy of such
materials may be retained in the sealed files of your outside legal counsel
solely for purposes of complying with applicable laws and regulations and for
defending or maintaining
<PAGE> 4
National Service Industries
March 31, 1999
Page 4
any litigation, including any administrative proceeding, relating to this
Agreement). All documents, memoranda, notes and other writings whatsoever
prepared by you or Related Parties based on the information contained in the
Evaluation Material shall be destroyed. Neither you nor any Related Party shall
use any of the Evaluation Material with respect to your business or their
business (except in negotiation of any proposed Transaction), or the business of
anyone else, whether or not in competition with the Company, or for any other
purpose whatsoever.
In consideration of the Evaluation Material being furnished to you, you also
agree that neither you nor any of your affiliates under your control will,
directly or indirectly, solicit or accept for employment any key employee of the
Company or any subsidiary of the Company for a period of two years after the
date of your execution of this letter agreement without obtaining the prior
written consent of the Company. For purposes hereof, a "key employee" shall mean
any officer of the Company or any subsidiary of the Company, any employee of the
Company or any subsidiary of the Company making a salary of $50,000 or more per
year or any employee of the Company or any subsidiary of the Company employed in
the areas of research and development, marketing or sales. Subject to the two
preceding sentences, nothing contained herein shall preclude general
solicitation of employment through advertisements or similar means not targeted
specifically to the Company and its employees.
Although you understand that the Company has endeavored to include in the
Evaluation Material information which it believes to be relevant for the purpose
of your investigation, you further understand that neither the Company nor its
affiliates, agents or representatives makes any representation or warranty as to
the accuracy or completeness of the Evaluation Material. You agree that none of
the Company nor any of its affiliates, agents or representatives shall have any
liability to you or any Related Party resulting from the use of the Evaluation
Material by you or such Related Party. Only those representations and warranties
that may be made to you or your affiliates in a definitive Transaction Agreement
(as defined below), when, as and if executed and subject to such limitations and
restrictions as may be specified therein, shall have any legal effect, and you
agree that if you determine to engage in a Transaction such determination will
be based solely on the terms of such definitive Transaction Agreement and on
your own investigation, analysis and assessment of the Company. You understand
and agree that no contract or agreement providing for a Transaction with the
Company shall be deemed to exist between you and the Company unless and until a
definitive Transaction Agreement has been executed and delivered. You also agree
that unless a definitive Transaction Agreement between the Company and you has
been executed and delivered, the Company has no legal obligation of any kind
whatsoever with respect to any such Transaction by virtue of this letter
agreement or any other written or oral expression with respect to such
Transaction except, in the case of this letter agreement, for the matters
specifically agreed to herein. For purposes of this paragraph, the term
"definitive Transaction Agreement" means an agreement with respect to all
material terms of a Transaction that, in accordance with its terms, is
specifically intended by the parties thereto to be a binding contract with
respect to such Transaction or any letter of intent or similar
<PAGE> 5
National Service Industries
March 31, 1999
Page 5
document to the extent the parties expressly state an intention to be bound by
any part thereof. Except as set forth herein, the term "definitive Transaction
Agreement" does not include an executed letter of intent or any other
preliminary written agreement, nor does it include any written or verbal
acceptance of an offer or bid on the part of the Company.
You understand that (a) the Company shall be free to conduct any process with
respect to a possible Transaction as the Company in its sole discretion shall
determine (including, without limitation, by negotiating with any prospective
party and entering into a definitive Transaction Agreement without prior notice
to you or any other person), (b) procedures relating to such Transaction may be
changed at any time without notice to you or any other person and (c) you shall
not have any claim whatsoever against the Company or any of its directors,
officers, stockholders, employees, affiliates, agents, advisors or other
representatives (including, but not limited to, Salomon Smith Barney Inc.)
arising out of or relating to any possible or actual Transaction (other than
those as against parties to a definitive Transaction Agreement with you in
accordance with the terms thereof).
You hereby agree to indemnify and hold harmless the Company and its directors,
officers, stockholders, owners, affiliates and representatives from any damage,
loss, cost (including reasonable legal fees and the cost of enforcing this
indemnity) or liability arising out of or resulting from any breach by you, any
of your affiliates or any Related Party of your or their obligations under this
letter agreement. You hereby agree and confirm that money damages would not be a
sufficient remedy for any breach of this letter agreement and, therefore, in
addition to all other remedies that the Company may be entitled to as a matter
of law, the Company shall be entitled to specific performance and any other form
of equitable relief to enforce the provisions of this letter agreement. You
further agree that the rights of the Company under this letter agreement may be
assigned in whole or in part to any purchaser of the Company, which may enforce
this letter agreement to the same extent and in the same manner as the Company
can enforce this letter agreement.
If any of the conditions set forth in this letter agreement relative to your
being furnished with the Evaluation Material is not enforceable, in whole or in
part, the remaining conditions set forth in this letter agreement shall be
enforceable notwithstanding the invalidity of any other condition. Any condition
not enforceable in part shall be enforced to the extent valid and enforceable.
No failure or delay by the Company in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder. The agreements set forth in this
letter agreement may be modified or waived only by a separate writing signed by
the Company and you expressly so modifying or waiving such agreements. This
letter agreement shall be governed by and interpreted in accordance with the
laws of the State of Ohio, without giving effect to its conflict of laws
principles or rules.
<PAGE> 6
National Service Industries
March 31, 1999
Page 6
It is understood and agreed that the Company shall be entitled to enforce the
terms of this letter agreement and that all rights hereunder shall inure to the
benefit of the Company and its assigns.
This letter agreement replaces and supersedes any previous letter agreement
regarding the contents hereof between the Company and you.
If you provide the Company with information concerning your business, affairs,
operations, or financial condition with this agreement, the Company agrees that
the non-disclosure and other obligations applicable to you under this agreement
shall apply to the Company and its representatives, officers, and employees, and
the Company further agrees that you shall be entitled to all of the rights and
remedies for enforcement of such obligations as are available to the Company
under this agreement. In addition, the Company agrees that it shall not disclose
to any other party that you are reviewing the Evaluation Material or that you
and the Company are involved in negotiations concerning a Transaction.
The obligations under this agreement shall terminate five (5) years from the
date hereof.
<PAGE> 7
National Service Industries
March 31, 1999
Page 7
Please confirm your agreement with the foregoing by signing this letter in the
space provided below and returning an executed copy to the undersigned.
Sincerely,
HOLOPHANE CORPORATION
By:_____________________________________
John R. DallePezze
Chief Executive Officer
Agreed to and accepted as of the date above:
NATIONAL SERVICE INDUSTRIES
By:______________________________
Stewart A. Searle
Senior VP, Planning & Development
<PAGE> 1
Exhibit (c)(4)
HOLOPHANE CORPORATION
SECOND AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Section 1. PURPOSE - This Second Amended and Restated Plan, which supersedes and
replaces the Amended and Restated Holophane Corporation Supplemental Executive
Retirement Plan that was adopted effective as of November 1, 1995, is maintained
by Holophane Corporation primarily for the purpose of providing deferred
compensation benefits for a select group of highly compensated employees.
Benefits under this Plan will be provided on an unfunded basis and will be paid
as needed solely from the general assets of the Employer. It is intended that
this Plan be exempt from the funding, participation, vesting and fiduciary
provisions of Title I of ERISA.
Section 2. CERTAIN DEFINITIONS - As used in this Plan, the following capitalized
terms shall have the meanings specified below.
"Adjustment Date" means the last day of each Plan Year.
"Beneficiary" means the person or persons designated in writing as such
and filed with the Employer at any time by a Participant. Any such designation
may be withdrawn or changed in writing (without the consent of the Beneficiary)
by completing Part C of a Participation Agreement, but only the last designation
on file with the Employer shall be effective.
"Change of Control" means the occurrence of any of the following events
after the Effective Date (i) the acquisition by any individual, entity or group
[within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")] (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of twenty percent (20%) or more of the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors ("Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control (A) any
acquisition by the Employer, (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Employer or any corporation
controlled by the Employer, or (C) any acquisition by any Person who on the
Effective Date was the beneficial owner of twenty percent (20%) or more of the
combined voting power of the Voting Securities of the Employer outstanding on
such date; or (ii) a change in the composition of a majority of the Board of
Directors of the Employer within a three (3) year period, which change shall not
have been approved by a majority of the persons then surviving as Directors who
also comprised the Board of Directors of the Employer immediately prior to the
commencement of such period; or (iii) the consummation of any reorganization,
merger or consolidation other than a reorganization, merger or consolidation
which would result in the Voting Securities of the Employer outstanding
immediately prior thereto continuing to represent (either by
<PAGE> 2
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least sixty percent (60%) of the combined voting power of
the Voting Securities of the Employer or such surviving entity outstanding
immediately after such reorganization, merger or consolidation; or (iv) the
consummation of a plan of complete liquidation of the Employer or of an
agreement for the sale or disposition by the Employer (in one transaction or a
series of transactions) of all or substantially all of the Employer's assets.
"Compensation" shall have the meaning assigned to that term in the
Qualified Retirement Plan.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Deferred Compensation Account" means the separate Deferred
Compensation Account established for each Participant pursuant to Section 4 of
this Plan.
"Effective Date" means, for this second amendment and restatement, June
1, 1999.
"Employee" means an individual employed by the Employer.
"Employer" means Holophane Corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
may be amended from time to time.
"Gross Compensation" means, with respect to any Participant for any
Plan Year, the sum of (i) such Participant's Compensation for such Plan Year
plus (ii) the amount, if any, allocated to such Participant's Deferred
Compensation Account as of the last day of such Plan Year pursuant to Section
4.D(i) hereof.
"Participant" means, for any Plan Year, (i) an Employee (A) selected
for participation in the Plan by the Board of Directors of the Employer, (B) who
was a participant in the Qualified Retirement Plan as of the last day of such
Plan Year and (ii) any former Employee until he or she receives the full Plan
benefit to which he or she is entitled.
"Participation Agreement" means the form attached to this Plan.
"Plan" means the Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan, as reflected in this document, as the
same may be amended or amended and restated from time to time after the
Effective Date.
-2-
<PAGE> 3
"Plan Administrator" means the Employer.
"Plan Year" means the calendar year.
"Qualified Retirement Plan" means the Holophane Corporation Thrift and
Retirement Plan originally effective as of July 1, 1989, as the same has been or
may be amended or amended and restated from time to time thereafter.
"Supplemental Retirement Account" means the separate Supplemental
Retirement Account established for each Participant pursuant to Section 3 of
this Plan.
"Terminated for Cause" means, and shall have occurred if, an Employee's
employment with the Employer is terminated because of (i) the Employee being
convicted of a felony involving moral turpitude provided that such conviction
would at the time have a material adverse effect on the Employer in the
reasonable opinion of the Employer's Board of Directors, (ii) gross and willful
misconduct by the Employee which is deemed to be injurious to the Employer by
the Employer's Board of Directors, (iii) a finding of gross dishonesty of the
Employee, (iv) willful malfeasance or gross negligence, or failure to act
involving material nonfeasance, provided that in the case of such gross
negligence or material nonfeasance it would at the time have a material adverse
effect on the Employer in the reasonable opinion of the Employer's Board of
Directors or (v) insubordination or refusal to perform assigned duties
consistent with the duties of the Employee prior to the occurrence of any Change
of Control.
Section 3. SUPPLEMENTAL RETIREMENT ACCOUNTS
A. Establishment of Supplemental Retirement Accounts. The
Employer shall establish a Supplemental Retirement Account for each Participant.
B. Supplemental Retirement Contributions. Effective as of each
Adjustment Date falling on or after December 31, 1993, the Employer will
allocate to the Supplemental Retirement Account of each Participant, in
accordance with the procedures specified in Section 3.C. below, such amount as
the Employer in good faith determines to be substantially equivalent to the
aggregate additional amount, if any, which, based on his Gross Compensation,
such participant would have received from the Employer in respect of the Plan
Year then ending by way of profit sharing contributions and/or 401(k) matching
contributions under the Qualified Retirement Plan but for the direct or indirect
benefit limitations then applicable under the Code, including without
limitations, those contained in Code Sections 401(a)(17), 401(a)(30), 401(k)(3),
402(g)(1) or 415(c).
C. Adjustment of Supplemental Retirement Account Balances.
Effective as of each Adjustment Date, the Employer will adjust the balance of
each Participant's Supplemental Retirement Account as follows:
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<PAGE> 4
(i) the Employer will first allocate to the Supplemental
Retirement Account an amount equal to the investment returns earned on the
Participant's Supplemental Retirement Account since the last prior Adjustment
Date; and
(ii) the Employer will then allocate to the Supplemental
Retirement Account any amount called for under Section 3.B. above.
D. Rights in Supplemental Retirement Accounts. An individual's
only right with respect to his Supplemental Retirement Account (and amounts
allocated thereto) will be to receive payments in accordance with the provisions
of Section 5 of this Plan.
Section 4. DEFERRED COMPENSATION ACCOUNTS
A. Establishment of Deferred Compensation Accounts. The
Employer may also establish a Deferred Compensation Account for each
Participant.
B. Election of Participant. (i) For each Plan Year, if any, in
respect of which the Employer permits Participants to do so, each Participant
may elect to have a portion, not exceeding any amount limitations established by
Employer from time to time, of any bonuses which would otherwise have been paid
to him in such Plan Year allocated to his Deferred Compensation Account and paid
on a deferred basis pursuant to the terms of this Plan. To exercise such an
election for any Plan Year, a Participant must advise the Employer of his
election, in writing, on a form prescribed by the Employer ("Deferral Notice")
not less than 15 days prior to the commencement of the Plan Year in which such
bonuses would otherwise have been paid to him.
(ii) Each Participant also may elect to defer payment of
any cash that otherwise would have been paid to him under the terms of his
employment contract, termination agreement or any other similar agreement on
account of a Change of Control (as defined in such employment contract,
termination agreement or other similar agreement). Amounts deferred under this
subsection will be credited to the Participant's Deferred Compensation Account
and paid pursuant to the terms of this Plan. To exercise such an election, a
Participant must advise the Employer of his election, in writing, by completing
Part A of a Participation Agreement prior to the occurrence of any Change of
Control.
(iii) Each Participant may elect to defer any gain
otherwise recognized on the exercise (in any manner permitted by the plan or
program under which the option is extended) of any nonqualified stock option
issued to a Participant under any stock option or stock incentive plan or
program maintained by the Employer ("Nonqualified Stock Option"). If such an
election is made, any gain that the Participant
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<PAGE> 5
otherwise would have received on the exercise of the Nonqualified Stock Option
will be credited to the Participant's Deferred Compensation Account. To exercise
such an election, a Participant must advise the Employer of his election, in
writing, by completing a Part B of a Participation Agreement prior to the
occurrence of any Change of Control.
C. Employer Contributions. Each time a Deferral Notice is
submitted to the Employer in accordance with Section 4.B. above, effective as of
the Adjustment Date of the Plan Year in respect of which the Participant's
election is made, the Employer will allocate to the Participant's Deferred
Compensation Account, in accordance with the procedures specified in Section
4.D. below, the amount specified in the Deferral Notice.
D. Adjustment of Deferred Compensation Account Balances.
Effective as of each Adjustment Date, the Employer will adjust the balance of
each Participant's Deferred Compensation Account as follows:
(i) first, the Employer will allocate to the Deferred
Compensation Account any amount called for under Section 4.C. above; and
(ii) then, the Employer will allocate to the Deferred
Compensation Account an amount equal to the investment returns earned on the
Participant's Deferred Compensation Account since the last prior Adjustment
Date.
E. Recognition of Deferral Notices of Terminated Employees.
Notwithstanding anything contained herein to the contrary, the Employer shall be
required to recognize and implement, in accordance with the provisions of
Sections 4.C. and 4.D. above, any Deferral Notice which it receives from any
person who is a Participant at the time such Deferral Notice is received by the
Employer, even though, whether by virtue of termination of employment or
otherwise, such person is not a Participant as of the Adjustment Date of the
Plan Year in respect of which the Deferral Notice was delivered.
F. Rights in Deferred Compensation Accounts. An individual's
only right with respect to his Additional Deferred Compensation Account (and
amounts allocated thereto) will be to receive payments in accordance with the
provisions of Section 5 of this Plan.
Section 5. DEFERRED BENEFITS.
A. Payment of Benefits - General. Subject to the limitations
in Section 5.B. below, if a Participant's employment with the Employer is
terminated for any reason, including the Participant's death, the Employer will
pay to such individual, in accordance with the provisions of Section 5.C. and
5.D. below, deferred compensation
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<PAGE> 6
benefits in an amount equal to (i) the aggregate of the balances contained in
such individual's Deferred Compensation Account and Supplemental Retirement
Account as of the date of termination of employment, plus (ii) such additional
amounts as may be allocated to such Accounts subsequent to the date of
termination and prior to the date of distribution pursuant to the provisions of
Sections 3.C(i) and 4.D of this Plan.
B. Limitations on Benefit Payments. Notwithstanding any
provisions of this Plan to the contrary, the Employer will have no obligation to
pay to any person, any amounts allocated to the Supplemental Retirement Account
of any Participant or former Participant whose (i) employment with the Employer
is Terminated for Cause or (ii) who, in the reasonable opinion of the Board of
Directors of the Employer, has breached, in any material respect, the terms of
any non-competition agreement executed for the benefit of the Employer.
C. Timing on Payment of Benefits. Prior to the occurrence of
any Change of Control, deferred compensation benefits called for under Section
5.A. of this Plan will be paid by the Employer (i) in substantially equal annual
installments over a period of ten (10) years commencing on the first day of the
Plan Year immediately following the Plan Year in which the Participant's
termination of employment occurs, or (ii) under such other payment schedule as
is mutually acceptable to the Employer and the Participant; provided, that if,
for any year, the amount which the Employer is scheduled to pay is less than
$5,000, the Employer may pay in such year up to the lesser of $5,000 or the
aggregate balance then contained in the individual's Deferred Compensation
Account or Supplemental Retirement Account. In the event of the occurrence of a
Change of Control, with respect to each Participant, any deferred compensation
benefits called for under Section 5.A. of this Plan which have not been paid as
of the date of the Change of Control, shall be paid by the Employer in full
within 30 days following the date of the (i) Change of Control or (ii)
Participant's termination of employment, whichever is later. However, a
Participant may waive the accelerated distribution provision described in the
preceding sentence by completing Part A of a Participation Agreement with the
Employer prior to the occurrence of any Change of Control. Also, the Employer
will distribute a lump sum amount equal to any amount that the Internal Revenue
Service ("IRS") conclusively establishes the Participant had "constructively"
received within the meaning of Code (delta)451; however, the Participant
receiving such a distribution is responsible for the payment of any income taxes
due on that distribution and all interest and penalties that the IRS assesses in
connection with that determination.
D. Payment of Benefits Upon Death of Participant. Subject to
the limitations in Section 5.B. above, in the event of the death of a
Participant, either before or after benefit payments have commenced under
Section 5.C. above, benefit payments called for under this Section 5 will
thereafter be made to the Participant's Beneficiary or, if there is no
Beneficiary, to the Participant's estate.
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<PAGE> 7
E. Acceleration of Distributions. At any time, a Participant
or Beneficiary may, by letter addressed to the Plan Administrator, accelerate
the date his benefit is to be distributed by electing to receive a lump sum
distribution of the amount then credited to his Supplemental Retirement Account
and his Deferred Compensation Account. In this case, the electing Participant or
Beneficiary will receive a distribution of 94% of the then-current total balance
in his Supplemental Retirement Account and his Deferred Compensation Account.
Notwithstanding anything contained herein to the contrary, if a Participant or
Beneficiary elects to receive such a distribution, (i) the amount in question
shall be distributed to the Participant or Beneficiary in one lump sum as soon
as administratively feasible after receipt of the Participant's or Beneficiary's
election; (ii) the Participant or Beneficiary shall forfeit all further rights
to his Supplemental Retirement Account and his Deferred Compensation Account and
all remaining balances therein; and (iii) the Participant or Beneficiary shall
be precluded from participating in the Plan after such distribution. Amounts
forfeited by a Participant or Beneficiary in accordance with this Section 5.E
shall be returned to the Employer.
Section 6. TRUST - The Employer will establish the Trust as a source of Plan
benefits. However, subject to the terms of the trust agreement, Trust assets
will remain the property of the Employer.
Section 7. ASSIGNMENT OR ALIENATION - The right of a Participant, Beneficiary or
other person to the payment of a benefit under this Plan may not be assigned,
transferred, pledged, or encumbered except by Will or by the laws of descent and
distribution.
Section 8. PLAN ADMINISTRATION - The Employer will have the right to interpret
and construe this Plan and to determine all questions of eligibility and of
status, rights and benefits of Participants and all other persons claiming
benefits under this Plan. In all such interpretations and constructions, the
Employer's determination will be based upon uniform rules and practices applied
in a non-discriminatory manner and will be binding upon all persons affected
thereby. Subject to the provisions of Section 9 below, any decision by the
Employer with respect to any such matters, including without limitation, the
Employer's determination of applicable amounts under Section 3.B. above, will be
final and binding on all parties. The Employer will have absolute discretion in
carrying out its responsibilities under this Section 8.
Section 9. CLAIMS PROCEDURE
(a) Filing Claims - Any Participant or Beneficiary entitled to benefits
under this Plan will file a claim request with the Employer.
(b) Notification to Claimant - If a claim request is wholly or
partially denied, the Employer will furnish to the claimant a notice of the
decision within ninety (90) days
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<PAGE> 8
in writing and in a manner calculated to be understood by the claimant, which
notice will contain the following information:
(i) The specific reason or reasons for the denial;
(ii) A specific reference to pertinent Plan provisions
upon which the denial is based;
(iii) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(iv) An explanation of the Plan's claims review procedure
describing the steps to be taken by a claimant who
wishes to submit his claims for review.
(c) Review Procedure - A claimant or his authorized representative
may, with respect to any denied claim:
(i) Request a review upon a written application filed
within sixty (60) days after receipt by the claimant
of written notice of the denial of his claim;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Employer (or its designee). The Employer (or its designee) will have the sole
responsibility for the review of any denied claim and will take all steps
appropriate in the light of its findings.
(d) Decision on Review - The Employer (or its designee) will
render a decision upon review. If special circumstances (such as the need to
hold a hearing on any matter pertaining to the denied claim) warrant additional
time, the decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review. Written
notice of any such extension will be furnished to the claimant prior to the
commencement of the extension. The decision on review will be in writing and
will include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references to the
pertinent provisions of the Plan on which the decision is based. If the decision
on review is not furnished to the claimant within the time limits prescribed
above, the claim will be deemed denied on review.
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<PAGE> 9
Section 10. UNSECURED AND UNFUNDED OBLIGATION - There shall be no contributions
required or permitted to be made by any Participant in this Plan. All payments
of benefits shall be made directly from the general assets of the Employer and
the right of a Participant or Beneficiary to any payment of such benefits shall
be solely that of an unsecured general creditor of the Employer.
Section 11. AMENDMENT OF THE PLAN - The Employer reserves the right, prior to
the occurrence of a Change of Control, to amend this Plan at any time, and from
time to time, in any manner which it deems desirable; provided that no amendment
will adversely affect the then accrued benefits of any Participant under this
Plan. Subject only to the termination rights granted under Section 12 below,
Employer agrees that, following the occurrence of a Change of Control, this Plan
shall not be amended in any way which will adversely affect the rights of any
past or then-present Participant or of any Beneficiary thereof.
Section 12. TERMINATION OF THE PLAN - The Employer reserves the right to
terminate this Plan at any time without providing any advance notice to any
Participant. However, no amendment may affect (A) the procedures then in effect
for the adjustment of Account balances under Section 3.C and 4.D, (B) any
Participant's right to exercise any election described in Section 4.B(ii),
4.B(iii) or 5.E or (C) the waiver described in Section 5.C. Also, if the
Employer terminates the Plan, the Employer may not accelerate the payment of any
amounts allocated to such Participant's Deferred Compensation Account and
Supplemental Retirement Account as of the date of termination.
Section 13. NO GUARANTEE OF PLAN PERMANENCY - This Plan does not contain any
guarantee of provisions for continued employment to any Employee or Participant
nor is it guaranteed by the Employer to be a permanent plan.
Section 14. GENDER - Any reference in this Plan made in the masculine pronoun
shall apply to both men and women.
Section 15. GOVERNING LAW - This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
Section 16. SUCCESSOR EMPLOYER - If the Employer dissolves into, reorganizes,
merges into or consolidates with another business or is acquired in a manner
that constitutes a Change of Control, the successor will continue the Plan and
the Trust established under Section 6, the successor will be substituted for the
Employer under the terms of this Plan and the Trust. The substitution of the
successor for the Employer will constitute an assumption by the successor of all
Plan liabilities and the successor will have all of the powers, duties and
responsibilities of the Employer under the Plan and Participant and
Beneficiaries will continue to enjoy all of the rights and benefits provided for
in the Plan and the Trust.
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<PAGE> 10
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
a duly authorized officer effective as of the Effective Date.
HOLOPHANE CORPORATION
Date: ________________ By: _______________________________
Its: ______________________________
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<PAGE> 11
HOLOPHANE CORPORATION
SECOND AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
PARTICIPATION AGREEMENT
This Participation Agreement supplements (but does not supercede) any earlier
elections made with respect to the Holophane Corporation Supplemental Retirement
Plan
Name: _____________________________________________________________
Soc. Sec. No.: _______________________________________________________
Date of Birth: ________________________________________________________
Address: ___________________________________________________________
____________________________________________________________________
___________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
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<PAGE> 12
PART A ELECTION TO DEFER PAYMENTS FOLLOWING A CHANGE OF CONTROL
Complete this portion of this form to defer payments that otherwise will be made
after a "Change of Control" as provided in Section 4.B(ii) and 5.C
By completing this portion of this Participation Agreement, and as permitted
under Sections 4.B(ii) and 5.C,I elect to defer the indicated benefits that I
otherwise might realize on a "Change of Control" affecting the Employer and
agree that these amounts will be distributed from the Plan as provided by its
terms.
_____ Cash change of control benefits otherwise payable under my employment,
termination or similar agreement (see Section 4.B(ii)) - CHECK IF
APPROPRIATE.
_____ Change of control benefits arising under the SERP (see Section 5.C) -
CHECK IF APPROPRIATE.
___________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
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<PAGE> 13
PART B ELECTION TO DEFER GAIN ON THE EXCHANGE OF NONQUALIFIED STOCK OPTIONS
Complete this portion of this form to defer gain on the exchange of nonqualified
stock options granted under the Holophane Corporation Incentive Stock Plan and
the Holophane Corporation 1996 Incentive Stock Plan.
By completing this portion of this Participation Agreement, I elect to defer the
gain that I otherwise might realize on the exercise in any manner permitted by
the plan or program under which the option is extended) of nonqualified stock
options under the Holophane Corporation Incentive Stock Plan or the Holophane
Corporation 1996 Incentive Stock Plan. I understand, however, that I must follow
the procedures described in Section 4.B(iii) if the Plan.
___________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
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<PAGE> 14
PART C DESIGNATION OF BENEFICIARY
Complete this portion of this form to name the person who is to receive any
death benefits payable under the Plan.
(a) Primary Beneficiary:
I designate the following persons as my Primary Beneficiary or
Beneficiaries to receive the portion of my Deferred Compensation
Account that is not distributed to me before my death. This benefit
will be paid, in the proportion specified, to:
______% to _____________________________________________________
(Name) (Relationship)
Address: _____________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
Note: You are not required to name more than one Primary Beneficiary but if you
do, the sum of these percentages must equal 100 percent.
(b) Contingent Beneficiary
If one or more of my Primary Beneficiaries dies before I die, I direct that any
Plan death benefit that might otherwise have been paid to that Beneficiary:
_____ Be paid to my other named Primary Beneficiaries in proportion
to the allocation given above (ignoring the interest allocated
to the deceased Primary Beneficiary); or
_____ Be distributed among the following Contingent Beneficiaries.
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<PAGE> 15
______% to ____________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ____________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ____________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ____________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
Note: You are not required to name more than one Contingent Beneficiary but if
you do, the sum of these percentages must equal 100 percent.
___________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
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<PAGE> 16
PART D
ACKNOWLEDGMENT
I acknowledge that (i) the Plan is unfunded and is maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees (as defined in the Employee
Retirement Income Security Act of 1974, as amended) and that I have no
right or claim to receive amounts credited to my Deferred Compensation
Account or Supplemental Retirement Account other than those
specifically granted by the terms of the Plan and (ii) I am solely
responsible for ensuring that the Committee's files contain my current
mailing address and that of my Beneficiary.
___________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
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<PAGE> 1
Exhibit (c)(5)
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PLAN
Section 1. PURPOSE - Effective June 1, 1999, Holophane Corporation adopts the
Holophane Corporation Executives' Deferred Compensation Plan ("Plan") to enable
eligible executives to defer income they otherwise might realize on the
conversion of stock options issued under the Incentive Stock Plan. Benefits
under this Plan will be provided on an unfunded basis and will be paid as needed
solely from the general assets of the Employer. It is intended that
participation in this Plan will be limited to those Employees listed in Exhibit
A and is intended to be exempt from the funding, participation, vesting and
fiduciary provisions of Title I of ERISA.
Section 2. CERTAIN DEFINITIONS - As used in this Plan, the following capitalized
terms shall have the meanings specified below.
"Adjustment Date" means the last day of each Plan Year.
"Beneficiary" means the person or persons designated in writing in a
Deferral Notice and filed with the Employer by a Participant. Any such
designation may be withdrawn or changed in writing (without the consent of the
Beneficiary), but only by filing a revised Deferral Notice with the Employer.
The last designation on file with the Employer shall be effective.
"Change of Control" means the occurrence of any of the following events
after the Effective Date (i) the acquisition for cash by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership [within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")] of twenty percent (20%) or more of the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors ("Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition by the Employer, (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Employer or any corporation
controlled by the Employer, or (C) any acquisition by any Person who on the
Effective Date was the beneficial owner of twenty percent (20%) or more of the
combined voting power of the Voting Securities of the Employer outstanding on
such date; or (ii) the consummation of a plan of complete liquidation of the
Employer or of an agreement for the sale or disposition by the Employer (in one
transaction or a series of transactions) of all or substantially all of the
Employer's assets.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Deferral Amount" means cash amounts otherwise payable to a Participant
under the Incentive Stock Plan.
<PAGE> 2
"Deferral Notice" means the form (attached as Exhibit B to this
document) by which an eligible Employee elects to participate in the Plan,
selects the time and form in which his Deferred Compensation Account is to be
distributed, designates a Beneficiary and provides the Employer with other
information required to administer the Plan.
"Deferred Compensation Accounts" means together the Vested Deferred
Compensation Account and the Nonvested Deferred Compensation Account.
"Effective Date" means June 1, 1999.
"Employee" means an individual employed by the Employer.
"Employer" means the Holophane Corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
may be amended from time to time.
"Incentive Stock Plans" means the Holophane Corporation Incentive Stock
Plan and the Holophane Corporation 1996 Incentive Stock Plan, as the same may be
amended from time to time.
"Investment Return" means the investment gains or losses earned on the
investment of each Participant's Deferred Compensation Account, as described in
the Trust Agreement.
"Participant" means an Employee selected for participation in the Plan
by the Board of Directors of the Employer and any former Employee until he or
she receives the full Plan benefit to which he or she is entitled.
"Plan" means the Holophane Corporation Executives' Deferred
Compensation Plan, as reflected in this document, as the same may be amended or
amended and restated from time to time after the Effective Date.
"Plan Administrator" means the Employer.
"Plan Year" means the calendar year.
"Trust" means the trust established under the Trust Agreement.
"Trust Agreement" means the document through which the Trust is
established.
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<PAGE> 3
Section 3. DEFERRED COMPENSATION ACCOUNTS
A. Establishment of Deferred Compensation Accounts. The Employer will
establish two Deferred Compensation Accounts for each Participant, one called
the Vested Deferred Compensation Account and the second called the Nonvested
Deferred Compensation Account.
B. Deferral of Compensation. Each Participant may elect that, upon a
Change of Control, all or any designated portion of the Deferral Amount
otherwise distributable to him under the Incentive Stock Plans will be credited
to his Vested Deferred Compensation Account, to the extent that the Deferral
Amount related to vested stock options granted under the Incentive Stock Plans,
or to his Nonvested Deferred Compensation Account, to the extent that the
Deferral Amount related to nonvested stock options granted under the Incentive
Stock Plans. This election must be made on a Deferral Notice and returned to the
Employer within 30 days after the Participant becomes eligible to participate in
this Plan.
C. Vesting of Nonvested Deferred Compensation Accounts. Deferral
Amounts credited to a Participant's Nonvested Deferred Compensation Account will
become nonforfeitable under the same schedule that was imposed under the
Incentive Stock Plans on the options that gave rise to the Deferral Amounts.
However, these amounts, once vested, will be retained in the Nonvested Deferred
Compensation Account to which they were originally credited and will not be
transferred to the Participant's Vested Deferred Compensation Account.
D. Employer Contributions. Effective as of a Change of Control, the
Employer will allocate the Deferral Amount to the electing Participant's Vested
or Nonvested Deferred Compensation Accounts (as appropriate). Subsequently, an
electing Participant's Accounts will be adjusted, as of each Adjustment Date, as
provided in Section 3.E.
E. Adjustment of Deferred Compensation Account Balances. Effective as
of each Adjustment Date, the Employer will adjust the balance of each
Participant's Vested Deferred Compensation Account and the Nonvested Deferred
Compensation Account to reflect the Investment Return earned on the
Participant's Accounts since the last prior Adjustment Date.
F. Recognition of Deferral Notices of Terminated Employees.
Notwithstanding anything contained herein to the contrary, the Employer shall be
required to recognize and implement, in accordance with the provisions of this
Section, any Deferral Notice which it receives from any person who is a
Participant at the time such Deferral Notice is received by the Employer, even
though, whether by virtue of termination of employment or otherwise, such person
is not a Participant as of the Adjustment Date of the Plan Year in respect of
which the Deferral Notice was delivered.
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<PAGE> 4
G. Rights in Deferred Compensation Accounts. An individual's only
rights with respect to his Deferred Compensation Account (and amounts allocated
thereto) will be to receive payments in accordance with the provisions of
Section 4 of this Plan.
Section 4. DEFERRED BENEFITS
A. Payment of Benefits - General. Subject to the limitations in Section
4.B. below, the Employer will pay to each Participant, in accordance with the
provisions of this Section, deferred compensation benefits in an amount equal to
(i) the aggregate of the balances contained in such individual's Deferred
Compensation Account as of the date of distribution, plus (ii) the Investment
Return allocated to such Accounts subsequent to the date of distribution and
prior to the date that the Participant's Deferred Compensation Account is fully
distributed.
B. Timing on Payment of Benefits. Deferred compensation benefits called
for under Section 4.A. of this Plan will be paid by the Employer (i) in
substantially equal annual installments over a period of ten (10) years
commencing on the first day of the Plan Year immediately following the Plan Year
in which the Participant's termination of employment occurs, or (ii) under such
other payment schedule as is mutually acceptable to the Employer and the
Participant; provided, that if, for any year, the amount which the Employer is
scheduled to pay is less than $5,000, the Employer may pay in such year up to
the lesser of $5,000 or the aggregate balance then contained in the individual's
Deferred Compensation Accounts or (iii) in a lump sum equal to any amount the
Internal Revenue Service ("IRS") conclusively establishes the Participant had
"constructively" received within the meaning of Code (delta)451; however, the
Participant receiving such a distribution is responsible for the payment of any
income taxes due on that distribution and all interest and penalties that the
IRS assesses in connection with that determination.
C. Payment of Benefits Upon Death of Participant. In the event of the
death of a Participant, either before or after benefit payments have commenced
under Section 4.B. above, benefit payments called for under this Section 4 will
thereafter be made to the Participant's Beneficiary or, if there is no
Beneficiary, to the Participant's estate.
D. Acceleration of Distributions. At any time, a Participant or
Beneficiary may, by letter addressed to the Plan Administrator, accelerate the
date his benefit is to be distributed by electing to receive a lump sum
distribution of the amount then credited to his Deferred Compensation Accounts.
In this case, the electing Participant or Beneficiary will receive a
distribution of 94% of the then-current total balance in his Deferred
Compensation Accounts. Notwithstanding anything contained herein to the
contrary, if a Participant or Beneficiary elects to receive such a distribution,
(i) the amount in question shall be distributed to the Participant or
Beneficiary in one lump sum as soon as administratively feasible after receipt
of the Participant's or
-4-
<PAGE> 5
Beneficiary's election; (ii) the Participant or Beneficiary shall forfeit all
further rights to all such Deferred Compensation Accounts and all remaining
balances therein; and (iii) the Participant or Beneficiary shall be precluded
from participating in the Plan after such distribution. Amounts forfeited by a
Participant or Beneficiary in accordance with this Section 4.D shall be returned
to the Employer.
Section 5. TRUST - The Employer will establish the Trust as a source of Plan
benefits. However, subject to the terms of the Trust Agreement, Trust assets
will remain the property of the Employer.
Section 6. ASSIGNMENT OR ALIENATION - The right of a Participant, Beneficiary or
other person to the payment of a benefit under this Plan may not be assigned,
transferred, pledged, or encumbered except by Will or by the laws of descent and
distribution.
Section 7. PLAN ADMINISTRATION - The Employer will have the right to interpret
and construe this Plan and to determine all questions of eligibility and of
status, rights and benefits of Participants and all other persons claiming
benefits under this Plan. In all such interpretations and constructions, the
Employer's determination will be based upon uniform rules and practices applied
in a non-discriminatory manner and will be binding upon all persons affected
thereby. Subject to the provisions of Section 8 below, any decision by the
Employer with respect to any such matters, will be final and binding on all
parties. The Employer will have absolute discretion in carrying out its
responsibilities under this Section 7.
Section 8. CLAIMS PROCEDURE
(a) Filing Claims - Any Participant or Beneficiary entitled to
benefits under this Plan will file a claim request with the Employer.
(b) Notification to Claimant - If a claim request is wholly or
partially denied, the Employer will furnish to the claimant a notice of the
decision within ninety (90) days in writing and in a manner calculated to be
understood by the claimant, which notice will contain the following information:
(i) The specific reason or reasons for the denial;
(ii) A specific reference to pertinent Plan provisions
upon which the denial is based;
(iii) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
-5-
<PAGE> 6
(iv) An explanation of the Plan's claims review procedure
describing the steps to be taken by a claimant who
wishes to submit his claims for review.
(c) Review Procedure - A claimant or his authorized representative
may, with respect to any denied claim:
(i) Request a review upon a written application filed
within sixty (60) days after receipt by the claimant
of written notice of the denial of his claim;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Employer (or its designee). The Employer (or its designee) will have the sole
responsibility for the review of any denied claim and will take all steps
appropriate in the light of its findings.
(d) Decision on Review - The Employer (or its designee) will
render a decision upon review. If special circumstances (such as the need to
hold a hearing on any matter pertaining to the denied claim) warrant additional
time, the decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review. Written
notice of any such extension will be furnished to the claimant prior to the
commencement of the extension. The decision on review will be in writing and
will include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references to the
pertinent provisions of the Plan on which the decision is based. If the decision
on review is not furnished to the claimant within the time limits prescribed
above, the claim will be deemed denied on review.
Section 9. UNSECURED AND UNFUNDED OBLIGATION - There shall be no contributions
required or permitted to be made by any Participant in this Plan. Subject to
Section 5, all payments of benefits shall be made directly from the general
assets of the Employer and the right of a Participant or Beneficiary to any
payment of such benefits shall be solely that of an unsecured general creditor
of the Employer.
Section 10. AMENDMENT OF THE PLAN - The Employer reserves the right, prior to
the occurrence of a Change of Control, to amend this Plan at any time, and from
time to time, in any manner which it deems desirable; provided that no amendment
will adversely affect the then accrued benefits of any Participant under this
Plan. Subject only to the termination rights granted under Section 11 below, the
Employer agrees that, following the occurrence of a Change of Control, this Plan
shall not be amended in
-6-
<PAGE> 7
any way which will adversely affect the rights of any past or then-present
Participant or of any Beneficiary thereof.
Section 11. TERMINATION OF THE PLAN - The Employer reserves the right to
terminate this Plan at any time without providing any advance notice to any
Participant. However, no amendment may affect (A) the procedures then in effect
for the adjustment of Account balances under Section 3.E or (B) any
Participant's right to exercise any election described in Section 3 or 4. Also,
if the Employer terminates the Plan, the Employer may not accelerate the payment
of any amounts allocated to such Participant's Deferred Compensation Account as
of the date of termination.
Section 12. NO GUARANTEE OF PLAN PERMANENCY - This Plan does not contain any
guarantee of provisions for continued employment to any Employee or Participant
nor is it guaranteed by the Employer to be a permanent plan.
Section 13. GENDER - Any reference in this Plan made in the masculine pronoun
shall apply to both men and women.
Section 14. GOVERNING LAW - This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
Section 15. SUCCESSOR EMPLOYER- If the Employer dissolves into, reorganizes,
merges into or consolidates with another business or is acquired in a manner
that constitutes a Change of Control, the successor will continue the Plan and
the Trust established under Section 6, the successor will be substituted for the
Employer under the terms of this Plan and the Trust. The substitution of the
successor for the Employer will constitute an assumption by the successor of all
Plan liabilities and the successor will have all of the powers, duties and
responsibilities of the Employer under the Plan and Participants and
Beneficiaries will continue to enjoy all of the rights and benefits provided for
in the Plan and the Trust.
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
a duly authorized officer effective as of the Effective Date.
HOLOPHANE CORPORATION
Date: ________________ By: _______________________________
Its: ______________________________
-7-
<PAGE> 8
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PLAN
EXHIBIT A
LIST OF ELIGIBLE EMPLOYEES
The Employees named in Column A are eligible to participate in the Holophane
Corporation Executives' Deferred Compensation Program if they return a completed
Deferral Notice (in the form attached as Exhibit B) within 30 days of the date
specified in Column B.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------- ---------------------------------------------
COLUMN A COLUMN B
NAME EFFECTIVE DATE OF PARTICIPATION
- ---------------------------------------------------------------- ---------------------------------------------
<S> <C>
John R. Dallepezze June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Bruce A. Philp June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
John W. Harvey June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
W. Timothy Weisert June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
S. Lee Keller June i, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Robert P. St. Germain June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Robert E. Taylor June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Jerome P. Henderson June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Stuart R. A. Carter June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Paolo E. Minissi June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
Robert H. Peery June 1, 1999
- ---------------------------------------------------------------- ---------------------------------------------
</TABLE>
-8-
<PAGE> 9
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PLAN
EXHIBIT B
DEFERRAL NOTICE
ENROLLMENT FORM
Name: ______________________________________________________________
Soc. Sec. No.: _____________________________________________________
Date of Birth: _____________________________________________________
Address: ___________________________________________________________
____________________________________________________________________
Eligibility Date: __________________________________________________
PART A ELECTION TO PARTICIPATE
Complete this portion of this form to participate in the Holophane Corporation
Executives' Deferred Compensation Plan. Complete Part B of this form if you do
not want to participate in this Plan.
1. By completing this Deferral Notice and subject to the terms of the
Plan, I elect to defer the specified amount that I otherwise might
realize on the conversion of stock options issued under the Incentive
Stock Plan: __________ 100% of the amount realized on the conversion of
all nonqualified and incentive stock options, whether or not vested; or
The amount realized on the conversion of the following VESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The amount realized on the conversion of the following NONVESTED
NONQUALIFIED STOCK OPTIONS:
-9-
<PAGE> 10
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The amount realized on the conversion of the following VESTED INCENTIVE
STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The amount realized on the conversion of the following NONVESTED
INCENTIVE STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
2. DESIGNATION OF BENEFICIARY.
(a) Primary Beneficiary:
I designate the following persons as my Primary Beneficiary or
Beneficiaries to receive the portion of my Deferred Compensation
Account that is not distributed to me before my death. This benefit
will be paid, in the proportion specified, to:
______% to ____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
-10-
<PAGE> 11
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
Note: You are not required to name more than one Primary Beneficiary but if you
do, the sum of these percentages must equal 100 percent.
(b) Contingent Beneficiary
If one or more of my Primary Beneficiaries dies before I die, I direct that any
Plan death benefit that might otherwise have been paid to that Beneficiary:
_____ Be paid to my other named Primary Beneficiaries in proportion
to the allocation given above (ignoring the interest allocated
to the deceased Primary Beneficiary); or
_____ Be distributed among the following Contingent Beneficiaries.
______% to ___________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ___________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ___________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
-11-
<PAGE> 12
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
Note: You are not required to name more than one Contingent Beneficiary but if
you do, the sum of these percentages must equal 100 percent.
3. ACKNOWLEDGMENT.
I acknowledge that (i) the Plan is unfunded and is maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees (as defined in the Employee
Retirement Income Security Act of 1974, as amended) and that I have no
right or claim to receive amounts credited to my Deferred Compensation
Account other than those specifically granted by the terms of the Plan
and (ii) I am solely responsible for ensuring that the Committee's
files contain my current mailing address and that of my Beneficiary.
______________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: ___________________
By: ______________________________________
The special distribution form described in Part A, Section 2 _____ is _____ is
not approved.
By: ______________________________________
-12-
<PAGE> 13
PART B WAIVER OF PARTICIPATION
Complete this portion of this form if you decide not to participate in the
Holophane Corporation Executives' Deferred Compensation Plan. Complete Part A of
this form if you want to participate in this program.
I elect to waive participation in the Holophane Corporation Executives' Deferred
Compensation Plan. In doing so, I understand that I will not earn a benefit
under this program and may not be permitted to enroll in this Plan at a later
date.
______________________________________ _______________________________________
Date Signature
_______________________________________
Name (please print)
Received by Employer on: __________________
By: ______________________________________
-13-
<PAGE> 1
Exhibit (c)(6)
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PROGRAM
Section 1. PURPOSE - Effective June 1, 1999, Holophane Corporation adopts the
Holophane Corporation Executives' Deferred Compensation Program ("Program") to
enable eligible executives to defer income they otherwise might realize on the
conversion of stock options issued under the Incentive Stock Plan. Benefits
under this Program will be provided on an unfunded basis and will be paid as
needed solely from the general assets of the Employer. It is intended that
participation in this Program will be limited to those Employees listed in
Exhibit A and is intended to be exempt from the funding, participation, vesting
and fiduciary provisions of Title I of ERISA.
Section 2. CERTAIN DEFINITIONS - As used in this Program, the following
capitalized terms shall have the meanings specified below.
"Adjustment Date" means the last day of each Program Year.
"Beneficiary" means the person or persons designated in writing in a
Deferral Notice and filed with the Employer by a Participant. Any such
designation may be withdrawn or changed in writing (without the consent of the
Beneficiary), but only by filing a revised Deferral Notice with the Employer.
The last designation on file with the Employer shall be effective.
"Change of Control" means the occurrence of any of the following events
after the Effective Date (i) the acquisition for cash by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership [within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")] of twenty percent (20%) or more of the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors ("Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition by the Employer, (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Employer or any corporation
controlled by the Employer, or (C) any acquisition by any Person who on the
Effective Date was the beneficial owner of twenty percent (20%) or more of the
combined voting power of the Voting Securities of the Employer outstanding on
such date; or (ii) the consummation of a plan of complete liquidation of the
Employer or of an agreement for the sale or disposition by the Employer (in one
transaction or a series of transactions) of all or substantially all of the
Employer's assets.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Deferral Amount" means cash amounts otherwise payable to a Participant
under the Incentive Stock Plan.
<PAGE> 2
"Deferral Notice" means the form (attached as Exhibit B to this
document) by which an eligible Employee elects to participate in the Program,
selects the time and form in which his Deferred Compensation Account is to be
distributed, designates a Beneficiary and provides the Employer with other
information required to administer the Program.
"Deferred Compensation Accounts" means together the Vested Deferred
Compensation Account and the Nonvested Deferred Compensation Account.
"Effective Date" means June 1, 1999.
"Employee" means an individual employed by the Employer.
"Employer" means the Holophane Corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
may be amended from time to time.
"Incentive Stock Plans" means the Holophane Corporation Incentive Stock
Plan and the Holophane Corporation 1996 Incentive Stock Plan, as the same may be
amended from time to time.
"Investment Return" means the investment gains or losses earned on the
investment of each Participant's Deferred Compensation Account, as described in
the Trust Agreement.
"Participant" means an Employee selected for participation in the
Program by the Board of Directors of the Employer and any former Employee until
he or she receives the full Program benefit to which he or she is entitled.
"Program" means the Holophane Corporation Executives' Deferred
Compensation Program, as reflected in this document, as the same may be amended
or amended and restated from time to time after the Effective Date.
"Program Administrator" means the Employer.
"Program Year" means the calendar year.
"Trust" means the trust established under the Trust Agreement.
"Trust Agreement" means the document through which the Trust is
established.
-2-
<PAGE> 3
Section 3. DEFERRED COMPENSATION ACCOUNTS
A. Establishment of Deferred Compensation Accounts. The Employer will
establish two Deferred Compensation Accounts for each Participant, one called
the Vested Deferred Compensation Account and the second called the Nonvested
Deferred Compensation Account.
B. Deferral of Compensation. Each Participant may elect that, upon a
Change of Control, all or any designated portion of the Deferral Amount
otherwise distributable to him under the Incentive Stock Plans will be credited
to his Vested Deferred Compensation Account, to the extent that the Deferral
Amount related to vested stock options granted under the Incentive Stock Plans,
or to his Nonvested Deferred Compensation Account, to the extent that the
Deferral Amount related to nonvested stock options granted under the Incentive
Stock Plans. This election must be made on a Deferral Notice and returned to the
Employer within 30 days after the Participant becomes eligible to participate in
this Program.
C. Vesting of Nonvested Deferred Compensation Accounts. Deferral
Amounts credited to a Participant's Nonvested Deferred Compensation Account will
become nonforfeitable under the same schedule that was imposed under the
Incentive Stock Plans on the options that gave rise to the Deferral Amounts.
However, these amounts, once vested, will be retained in the Nonvested Deferred
Compensation Account to which they were originally credited and will not be
transferred to the Participant's Vested Deferred Compensation Account.
D. Employer Contributions. Effective as of a Change of Control, the
Employer will allocate the Deferral Amount to the electing Participant's Vested
or Nonvested Deferred Compensation Accounts (as appropriate). Subsequently, an
electing Participant's Accounts will be adjusted, as of each Adjustment Date, as
provided in Section 3.E.
E. Adjustment of Deferred Compensation Account Balances. Effective as
of each Adjustment Date, the Employer will adjust the balance of each
Participant's Vested Deferred Compensation Account and the Nonvested Deferred
Compensation Account to reflect the Investment Return earned on the
Participant's Accounts since the last prior Adjustment Date.
F. Recognition of Deferral Notices of Terminated Employees.
Notwithstanding anything contained herein to the contrary, the Employer shall be
required to recognize and implement, in accordance with the provisions of this
Section, any Deferral Notice which it receives from any person who is a
Participant at the time such Deferral Notice is received by the Employer, even
though, whether by virtue of termination of employment or otherwise, such person
is not a Participant as of the
-3-
<PAGE> 4
Adjustment Date of the Program Year in respect of which the Deferral Notice was
delivered.
G. Rights in Deferred Compensation Accounts. An individual's only
rights with respect to his Deferred Compensation Account (and amounts allocated
thereto) will be to receive payments in accordance with the provisions of
Section 4 of this Program.
Section 4. DEFERRED BENEFITS
A. Payment of Benefits - General. Subject to the limitations in Section
4.B. below, the Employer will pay to each Participant, in accordance with the
provisions of this Section, deferred compensation benefits in an amount equal to
(i) the aggregate of the balances contained in such individual's Deferred
Compensation Account as of the date of distribution, plus (ii) the Investment
Return allocated to such Accounts subsequent to the date of distribution and
prior to the date that the Participant's Deferred Compensation Account is fully
distributed.
B. Timing on Payment of Benefits. Deferred compensation benefits called
for under Section 4.A. of this Program will be paid by the Employer (i) in
substantially equal annual installments over a period of ten (10) years
commencing on the first day of the Program Year immediately following the
Program Year in which the Participant's termination of employment occurs, or
(ii) under such other payment schedule as is mutually acceptable to the Employer
and the Participant; provided, that if, for any year, the amount which the
Employer is scheduled to pay is less than $5,000, the Employer may pay in such
year up to the lesser of $5,000 or the aggregate balance then contained in the
individual's Deferred Compensation Accounts or (iii) in a lump sum equal to any
amount the Internal Revenue Service ("IRS") conclusively establishes the
Participant had "constructively" received within the meaning of Code (delta)451;
however, the Participant receiving such a distribution is responsible for the
payment of any income taxes due on that distribution and all interest and
penalties that the IRS assesses in connection with that determination.
C. Payment of Benefits Upon Death of Participant. In the event of the
death of a Participant, either before or after benefit payments have commenced
under Section 4.B. above, benefit payments called for under this Section 4 will
thereafter be made to the Participant's Beneficiary or, if there is no
Beneficiary, to the Participant's estate.
D. Acceleration of Distributions. At any time, a Participant or
Beneficiary may, by letter addressed to the Program Administrator, accelerate
the date his benefit is to be distributed by electing to receive a lump sum
distribution of the amount then credited to his Deferred Compensation Accounts.
In this case, the electing Participant or Beneficiary will receive a
distribution of 94% of the then-current total balance in his Deferred
Compensation Accounts. Notwithstanding anything contained herein to the
contrary, if a Participant or Beneficiary elects to receive such a distribution,
(i) the
-4-
<PAGE> 5
amount in question shall be distributed to the Participant or Beneficiary in one
lump sum as soon as administratively feasible after receipt of the Participant's
or Beneficiary's election; (ii) the Participant or Beneficiary shall forfeit all
further rights to all such Deferred Compensation Accounts and all remaining
balances therein; and (iii) the Participant or Beneficiary shall be precluded
from participating in the Program after such distribution. Amounts forfeited by
a Participant or Beneficiary in accordance with this Section 4.D shall be
returned to the Employer.
Section 5. TRUST - The Employer will establish the Trust as a source of Program
benefits. However, subject to the terms of the Trust Agreement, Trust assets
will remain the property of the Employer.
Section 6. ASSIGNMENT OR ALIENATION - The right of a Participant, Beneficiary or
other person to the payment of a benefit under this Program may not be assigned,
transferred, pledged, or encumbered except by Will or by the laws of descent and
distribution.
Section 7. PROGRAM ADMINISTRATION - The Employer will have the right to
interpret and construe this Program and to determine all questions of
eligibility and of status, rights and benefits of Participants and all other
persons claiming benefits under this Program. In all such interpretations and
constructions, the Employer's determination will be based upon uniform rules and
practices applied in a non-discriminatory manner and will be binding upon all
persons affected thereby. Subject to the provisions of Section 8 below, any
decision by the Employer with respect to any such matters, will be final and
binding on all parties. The Employer will have absolute discretion in carrying
out its responsibilities under this Section 7.
Section 8. CLAIMS PROCEDURE
(a) Filing Claims - Any Participant or Beneficiary entitled to benefits
under this Program will file a claim request with the Employer.
(b) Notification to Claimant - If a claim request is wholly or
partially denied, the Employer will furnish to the claimant a notice of the
decision within ninety (90) days in writing and in a manner calculated to be
understood by the claimant, which notice will contain the following information:
(i) The specific reason or reasons for the denial;
(ii) A specific reference to pertinent Program provisions upon
which the denial is based;
-5-
<PAGE> 6
(iii) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(iv) An explanation of the Program's claims review
procedure describing the steps to be taken by a
claimant who wishes to submit his claims for review.
(c) Review Procedure - A claimant or his authorized representative
may, with respect to any denied claim:
(i) Request a review upon a written application filed
within sixty (60) days after receipt by the claimant
of written notice of the denial of his claim;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Employer (or its designee). The Employer (or its designee) will have the sole
responsibility for the review of any denied claim and will take all steps
appropriate in the light of its findings.
(d) Decision on Review - The Employer (or its designee) will
render a decision upon review. If special circumstances (such as the need to
hold a hearing on any matter pertaining to the denied claim) warrant additional
time, the decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review. Written
notice of any such extension will be furnished to the claimant prior to the
commencement of the extension. The decision on review will be in writing and
will include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references to the
pertinent provisions of the Program on which the decision is based. If the
decision on review is not furnished to the claimant within the time limits
prescribed above, the claim will be deemed denied on review.
Section 9. UNSECURED AND UNFUNDED OBLIGATION - There shall be no contributions
required or permitted to be made by any Participant in this Program. Subject to
Section 5, all payments of benefits shall be made directly from the general
assets of the Employer and the right of a Participant or Beneficiary to any
payment of such benefits shall be solely that of an unsecured general creditor
of the Employer.
Section 10. AMENDMENT OF THE PROGRAM - The Employer reserves the right, prior to
the occurrence of a Change of Control, to amend this Program at any time, and
from time to time, in any manner which it deems desirable; provided that no
amendment
-6-
<PAGE> 7
will adversely affect the then accrued benefits of any Participant under this
Program. Subject only to the termination rights granted under Section 11 below,
the Employer agrees that, following the occurrence of a Change of Control, this
Program shall not be amended in any way which will adversely affect the rights
of any past or then-present Participant or of any Beneficiary thereof.
Section 11. TERMINATION OF THE PROGRAM - The Employer reserves the right to
terminate this Program at any time without providing any advance notice to any
Participant. However, no amendment may affect (A) the procedures then in effect
for the adjustment of Account balances under Section 3.E or (B) any
Participant's right to exercise any election described in Section 3 or 4. Also,
if the Employer terminates the Program, the Employer may not accelerate the
payment of any amounts allocated to such Participant's Deferred Compensation
Account as of the date of termination.
Section 12. NO GUARANTEE OF PROGRAM PERMANENCY - This Program does not contain
any guarantee of provisions for continued employment to any Employee or
Participant nor is it guaranteed by the Employer to be a permanent plan.
Section 13. GENDER - Any reference in this Program made in the masculine pronoun
shall apply to both men and women.
Section 14. GOVERNING LAW - This Program shall be construed in accordance with
and governed by the laws of the State of Ohio.
Section 15. SUCCESSOR EMPLOYER- If the Employer dissolves into, reorganizes,
merges into or consolidates with another business or is acquired in a manner
that constitutes a Change of Control, the successor will continue the Program
and the Trust established under Section 6, the successor will be substituted for
the Employer under the terms of this Program and the Trust. The substitution of
the successor for the Employer will constitute an assumption by the successor of
all Program liabilities and the successor will have all of the powers, duties
and responsibilities of the Employer under the Program and Participants and
Beneficiaries will continue to enjoy all of the rights and benefits provided for
in the Program and the Trust.
IN WITNESS WHEREOF, the Employer has caused this Program to be executed
by a duly authorized officer effective as of the Effective Date.
HOLOPHANE CORPORATION
Date: ________________ By: _______________________________
Its: ______________________________
-7-
<PAGE> 8
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PROGRAM
EXHIBIT A
LIST OF ELIGIBLE EMPLOYEES
THE EMPLOYEES WHO MAY BE PARTICIPANTS ARE THOSE NAMED IN RESOLUTIONS ADOPTED BY
THE COMPANY'S BOARD OF DIRECTORS.
-8-
<PAGE> 9
HOLOPHANE CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PROGRAM
EXHIBIT B
DEFERRAL NOTICE
ENROLLMENT FORM
Name: ________________________________________________________________
Soc. Sec. No.: _______________________________________________________
Date of Birth: _______________________________________________________
Address: _____________________________________________________________
______________________________________________________________________
Eligibility Date: ____________________________________________________
PART A ELECTION TO PARTICIPATE
Complete this portion of this form to participate in the Holophane Corporation
Executives' Deferred Compensation Program. Complete Part B of this form if you
do not want to participate in this Program.
1. By completing this Deferral Notice and subject to the terms of the
Program, I elect to defer the specified amount that I otherwise might
realize on the conversion of stock options issued under the Incentive
Stock Plan: __________ 100% of the amount realized on the conversion of
all nonqualified and incentive stock options, whether or not vested; or
The amount realized on the conversion of the following VESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-9-
<PAGE> 10
The amount realized on the conversion of the following NONVESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The amount realized on the conversion of the following VESTED INCENTIVE
STOCK OPTIONS:
Date Granted Number of Options
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The amount realized on the conversion of the following NONVESTED
INCENTIVE STOCK OPTIONS:
Date Granted Number of Options
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-----------------------------------------------------------------------
-----------------------------------------------------------------------
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2. DESIGNATION OF BENEFICIARY.
(a) Primary Beneficiary:
I designate the following persons as my Primary Beneficiary or
Beneficiaries to receive the portion of my Deferred Compensation
Account that is not distributed to me before my death. This benefit
will be paid, in the proportion specified, to:
______% to _____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
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<PAGE> 11
______% to _____________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
Note: You are not required to name more than one Primary Beneficiary but if you
do, the sum of these percentages must equal 100 percent.
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<PAGE> 12
(b) Contingent Beneficiary
If one or more of my Primary Beneficiaries dies before I die, I direct that any
Program death benefit that might otherwise have been paid to that Beneficiary:
_____ Be paid to my other named Primary Beneficiaries in proportion to
the allocation given above (ignoring the interest allocated to
the deceased Primary Beneficiary); or
_____ Be distributed among the following Contingent Beneficiaries.
______% to ___________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ___________________________________________________
(Name) (Relationship)
Address: ______________________________________________________
______% to ___________________________________________________
(Name) (Relationship)
Address: _______________________________________________________
______% to _____________________________________________________
(Name) (Relationship)
Address: ________________________________________________________
Note: You are not required to name more than one Contingent Beneficiary but if
you do, the sum of these percentages must equal 100 percent.
3. ACKNOWLEDGMENT.
I acknowledge that (i) the Program is unfunded and is maintained
primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees (as defined
in the Employee Retirement Income Security Act of 1974, as amended) and
that I have no right or claim to receive amounts credited to my
Deferred Compensation Account other than those specifically granted by
the terms of the Program and (ii) I am solely responsible for ensuring
that the Committee's files contain my current mailing address and that
of my Beneficiary.
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<PAGE> 13
__________________________ __________________________________________
Date Signature
__________________________________________
Name (please print)
Received by Employer on: ___________________
By: ________________________________________
The special distribution form described in Part A, Section 2 _____ is _____ is
not approved.
By: ______________________________________
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<PAGE> 14
PART B WAIVER OF PARTICIPATION
Complete this portion of this form if you decide not to participate in the
Holophane Corporation Executives' Deferred Compensation Program. Complete Part A
of this form if you want to participate in this program.
I elect to waive participation in the Holophane Corporation Executives' Deferred
Compensation Program. In doing so, I understand that I will not earn a benefit
under this program and may not be permitted to enroll in this Program at a later
date.
__________________________ __________________________________________
Date Signature
__________________________________________
Name (please print)
Received by Employer on: __________________
By: _______________________________________
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<PAGE> 1
Exhibit (c)(7)
HOLOPHANE CORPORATION
INCENTIVE STOCK PLAN
SECTION 1. PURPOSE. The purposes of the Holophane Corporation Incentive
Stock Plan are to promote the interests of Holophane Corporation and its
stockholders by (i) attracting and retaining exceptional executive personnel and
other key employees of, and advisors and consultants to, and directors of the
Company and its Subsidiaries; (ii) motivating such employees, advisors and
consultants and Eligible Directors by means of performance--related incentives
to achieve longer--range performance goals; and (iii) enabling such employees,
advisors and consultants and Eligible Directors to participate in the long-term
growth and financial success of the Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"Award" shall mean any Option, Restricted Stock Award or Performance
Award but shall not include any Director Option.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean a committee of the Board designated by the Board
to administer the Plan and composed of not less than the minimum number of
persons from time to time required by Rule 16b-3, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "disinterested person" within the
meaning of Rule 16b-3.
"Company" shall mean Holophane Corporation, together with any successor
thereto.
"Director Option" shall mean a Non-Qualified Stock Option granted to
each Eligible Director pursuant to Section 6(e) without any action by the Board
or the Committee.
"Eligible Director" shall mean, on any date, a person who is serving as
a member of the Board but shall not include a person who is an Employee of the
Company or a Subsidiary, who is an employee of or associated or affiliated with
Acadia MGP, Inc. or Raebarn Corporation or who served as a member of the Board
on August 31, 1993.
<PAGE> 2
"Employee" shall mean (i) an employee of the Company or of any
Subsidiary and (ii) an advisor or consultant to the Company or to any
Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the fair market value of the property or
other item being valued, as determined by the Committee in its sole discretion,
provided that the fair market value of Shares of Common Stock shall be
determined by reference to the most recent closing price quotation, or, if none,
the average of the bid and asked prices, as reported as of the most recent
available date with respect to the sale of Common Stock on any quotation system
approved by the National Association of Securities Dealers then reporting sales
of Common Stock or on any national securities exchange on which the Common Stock
is then listed.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not intended
to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee selected by the Committee to
receive an Award under the Plan.
"Performance Award" shall mean any right granted under Section 8 of the
Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint--stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Plan" shall mean the Holophane Corporation Incentive Stock Plan.
"Restricted Stock" shall mean any Share granted under Section 7 of the
Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
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<PAGE> 3
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Shares" shall mean shares of Common Stock, par value $.01 per share,
of the Company, or such other securities of the Company as may be designated by
the Committee from time to time.
"Subsidiary" shall mean any corporation which, on the date of
determination, qualifies as a subsidiary corporation of the Corporation under
Section 425(f) of the Code.
"Substitute Awards" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
"Ten Percent Stockholder" shall mean any stockholder who, at the time
an Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 425(d) of the Code) more than ten percent of the voting power
of all classes of stock of the Company or a Subsidiary.
SECTION 3. ADMINISTRATION. (a) The Plan shall be administered by the Committee.
Subject to the tens of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to an eligible
Employee; (iii) determine the number of Shares to be covered by, or with respect
to which payments, rights, or other matters are to be calculated in connection
with, Awards; (iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, other Awards or other
property, or cancelled, forfeited, or suspended; (vi) determine whether, to what
extent, and under what circumstances cash, Shares, other securities, other
Awards, other property, and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the holder thereof or of
the Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Notwithstanding anything else
contained in the Plan to the contrary, neither the Committee nor the Board shall
have any discretion regarding whether an Eligible Director shall receive a
Director Option pursuant to Section 6(e) or regarding the terms of any Director
Option, including without limitation, the number of Shares subject to such
Director Option, the timing of the grant or the exercisability of such Director
Option or the exercise price per Share of such Director Option.
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<PAGE> 4
(b) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Subsidiary, any Participant, any holder or
beneficiary of any Award, any shareholder and any Employee.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Awards and Director Options may
be granted under the Plan shall be 788,000. If, after the effective date of the
Plan, any Shares covered by an Award or Director Option granted under the Plan,
or to which such an Award or Director Option relates, are forfeited, or if an
Award or Director Option otherwise terminates or is cancelled without the
delivery of Shares, then the Shares covered by such Award or Director Option, or
to which such Award or Director Option relates, or the number of Shares
otherwise counted against the aggregate number of Shares with respect to which
Awards and Director Options may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards and Director Options may be granted,
to the extent permissible under Rule 16b-3. In the event that any Option,
Director Option or other Award granted hereunder is exercised through the
delivery of Shares, the number of Shares available for Awards under the Plan
shall be increased by the number of Shares surrendered, to the extent
permissible under Rule 16b-3.
(b) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split--up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
necessary in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall proportionately adjust any or all (as necessary) of (i) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) with respect to which Awards may be granted, (ii) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
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<PAGE> 5
Section 422(b)(1) of the Code, as from time to time amended. If, pursuant to the
preceding sentence, an adjustment is made to outstanding Options held by
Participants, a corresponding adjustment shall be made to outstanding Director
Options and if, pursuant to the preceding sentence, an adjustment is made to the
number of Shares authorized for issuance under the Plan, a corresponding
adjustment shall be made to the number of Shares subject to each Director Option
thereafter granted pursuant to Section 6(e).
(c) Sources of Shares. Any Shares delivered pursuant to an Award or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, who is not a member of the
Committee, shall be eligible to be designated a Participant, except that only
Employees who are employees of the Company or a Subsidiary shall be eligible for
the grant of Incentive Stock Options. Each Eligible Director shall receive
nondiscretionary Director Options in accordance with, and only in accordance
with, Section 6(e) hereof.
SECTION 6. OPTIONS AND DIRECTOR OPTIONS.
(a) Grant. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom Options
shall be granted, the number of Shares to be covered by each Option, the option
price therefor and the conditions and limitations applicable to the exercise of
the Option. The Committee shall have the authority to grant Incentive Stock
Options, or to grant Non-Qualified Stock Options, or to grant both types of
options. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with such rules as may be prescribed
by Section 422 of the Code, as from time to time amended, and any regulations
implementing such statute, including, without limitation, the requirements of
Code Section 422(d) which limit the aggregate fair market value of Shares for
which Incentive Stock Options are exercisable for the first time to $100,000 per
calendar year. Each provision of the Plan and of each written option agreement
relating to an Option designated as an Incentive Stock Option shall be construed
so that such Option qualifies as an Incentive Stock Option, and any provision
that cannot be so construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise price at
the time each Option is granted, which price, except in the case of Options that
are Substitute Awards, shall not be less than 100% of the per Share Fair Market
Value on the date of grant. Notwithstanding any provision contained herein, in
the case of an Incentive Stock Option, the exercise price at the time such
Incentive Stock Option is granted to any Employee who, at the time of such
grant, is a Ten Percent Stockholder,
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<PAGE> 6
shall not be less than 110% of the per Share Fair Market Value on the date of
grant.
(c) Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter; provided,
in the case of an Incentive Stock Option, a Participant may not exercise such
Incentive Stock Option after (i) the date which is ten years (five years in the
case of a Participant who is a Ten Percent Stockholder) after the date on which
such Incentive Stock Option is granted, or (ii) the date which is three months
(twelve months in the case of a Participant who becomes disabled, as defined in
Section 22(e)(3) of the Code, or who dies) after the date on which he ceases to
be an employee of the Company or a Subsidiary. The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable. The Committee shall have the right to
accelerate the exercisability of any Option or outstanding Option in its
discretion.
(d) Payment. No Shares shall be delivered pursuant to any exercise of
an Option until payment in full of the option price therefor is received by the
Company. Such payment may be made in cash, or its equivalent, or, if and to the
extent permitted by the Committee, by exchanging Shares owned by the optionee
(which are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of - such tender is at least equal to such option price.
(e) Director Options. Notwithstanding anything else contained herein to
the contrary, each Eligible Director shall receive, on the first business day
after each annual meeting of stockholders of the Company, provided that the
Eligible Director is serving as a member of the Board on such date, a grant of a
Director Option to purchase 4,000 Shares at an exercise price per Share equal to
the Fair Market Value on the date of grant. A Director Option shall be
exercisable until the earlier to occur of the following two dates (i) the tenth
anniversary of the date of grant of such Director Option or (ii) three months
(twelve months in the case of an Eligible Director who becomes disabled, as
defined in Section 22(e)(3) of the Code, or who dies) after the date the
Eligible Director ceases to be a member of the Board, except that if the
Eligible Director ceases to be a member of the Board after having been convicted
of, or pled guilty or nolo contendere to, a felony, his Director Option shall be
cancelled on the date he ceases to be a member of the Board. An Eligible
Director may pay the exercise price of a Director Option in the manner described
in Section 6(d).
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<PAGE> 7
SECTION 7. RESTRICTED STOCK.
(a) Grant. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom Shares of
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Stock will vest and no longer be subject
to forfeiture to the Company, and the other terms and conditions of such Awards.
The Committee shall have the right to accelerate the vesting of any Restricted
Stock or outstanding Restricted Stock in its discretion.
(b) Transfer Restrictions. Until the lapse of applicable restrictions,
Shares of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered except as provided in the Plan or the applicable Award
Agreements. Certificates issued in respect of Shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Company. Upon the lapse
of the restrictions applicable to such Shares of Restricted Stock, the Company
shall deliver such certificates to the Participant or the Participant's legal
representative.
(c) Payment of Dividends. Dividends paid on any Shares of Restricted
Stock may be paid directly to the Participant, or may be reinvested in
additional Shares of Restricted Stock, as determined by the Committee in its
sole discretion.
SECTION 8. PERFORMANCE AWARDS.
(a) Grant. The Committee shall have sole and complete authority to
determine the Employees who shall receive a Performance Award denominated in
cash or Shares, (i) valued, as determined by the Committee, in accordance with
the achievement of such performance goals during such performance periods as the
Committee shall establish, and (ii) payable at such time and in such form as the
Committee shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be paid in a
lump sum or in installments following the close of the performance period or, in
accordance with procedures established by the Committee, on a deferred basis.
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<PAGE> 8
SECTION 9. AMENDMENT AND TERMINATION.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief from Section
16(b) of the Exchange Act for which or with which the Board deems it necessary
or desirable to qualify or comply; and, provided further that no amendment may
be made to Section 6(e) or any other provision of the Plan relating to Director
Options within six months of the last date on which any such provision was
amended, other than to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules thereunder. Notwithstanding anything to the
contrary herein, the Committee may amend the Plan, subject to any stockholder
approval required under Rule 16b-3, in such manner as may be necessary so as to
have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of any
Participant or any holder or beneficiary of any Award theretofore granted shall
not to that extent be effective without the consent of the affected Participant,
holder or beneficiary.
(c) Cancellation. Any provision of this Plan or any Award Agreement to
the contrary notwithstanding, the Committee may cause any Award granted
hereunder to be cancelled in consideration of the granting to the holder of an
alternative Award having a Fair Market Value equal to the Fair Market Value of
such cancelled Award.
SECTION 10. GENERAL PROVISIONS.
(a) Nontransferability.
(i) Each Award and each Director Option, and each right under
any Award or any Director Option, shall be exercisable during the
Participant's or the Eligible Director's lifetime only by the
Participant or the Eligible Director or, if permissible under
applicable law, by the Participant's or the Eligible Director's
guardian or legal representative or a transferee receiving such Award
pursuant to a qualified domestic relations order ("QDRO"), as
determined by the Committee.
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<PAGE> 9
(ii) No Award or Director Option that constitutes a "derivative
security", for purposes of Section 16 of the Exchange Act, may be
assigned, alienated, pledged, attached, sold or otherwise transferred
or encumbered by a Participant or Eligible Director otherwise than by
will or by the laws of descent and distribution or pursuant to a QDRO,
and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against
the Company or any Subsidiary; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.
(b) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(c) Share Certificates. All certificates for Shares or other securities
of the Company or any Subsidiary delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange or national
securities association upon which such Shares or other securities are then
listed, and any applicable Federal or state laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company or
any Subsidiary, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify or waive rights with respect to, or to alter,
discontinue, suspend, or terminate Awards held by, Employees who are not
officers or directors of the Company for purposes of Section 16 of the Exchange
Act, or any successor section thereto, or who are otherwise not subject to such
Section.
(e) Withholding. A Participant or Eligible Director may be required to
pay to the Company or any Subsidiary and the Company or any Subsidiary shall
have the right and is hereby authorized to withhold from any Award or Director
Option, from any payment due or transfer made under any Award or any Director
Option or under the Plan or from any compensation or other amount owing to a
participant or Eligible Director the amount of any applicable withholding taxes
in respect of an Award or a Director Option, its exercise, or any payment or
transfer under an Award, under a Director Option or under the Plan and to take
such other action
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<PAGE> 10
as may be necessary in the opinion of the Company to satisfy all obligations for
the payment of such taxes. With respect to participants who are not subject to
Section 16 of the Exchange Act, the withholding may be in the form of cash,
shares, other securities, other Awards or other property as the Committee may
allow. With respect to Participants and Eligible Directors who are subject to
Section 16 of the Exchange Act, the withholding shall be in cash or in any other
property permitted by Rule 16b-3 as the Committee may allow. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from the grant, vesting, exercise or payments of any Award.
(f) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the death, retirement
or other termination of employment of a Participant and the effect, if any, of a
change in control of the Company.
(g) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Subsidiary from adopting or continuing
in effect other compensation arrangements, which may, but need not, provide for
the grant of options, restricted stock, Shares and other types of Awards
provided for hereunder (subject to shareholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Subsidiary. Further, the Company or a Subsidiary may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock
hereunder, the applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Stock.
(j) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Delaware.
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<PAGE> 11
(k) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(l) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such rights
shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary.
(n) Rule 16b-3 Compliance. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply with
all applicable terms and conditions of Rule 16b-3 and any successor provisions.
To the extent that any provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
(o) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
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<PAGE> 12
(p) No Impact on Benefits. Plan Awards shall not be treated as
compensation for purposes of calculating an Employee's rights under any employee
benefit plan.
(q) Indemnification. Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction of any
judgment in any such action, suit, or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or By--laws, by
contract, as a matter of law, or otherwise.
SECTION 11. TERM OF THE PLAN.
(a) Effective Date. The Plan shall be effective as of October 7, 1993,
the date of its approval by the shareholders of the Company.
(b) Expiration Date. No Award shall be granted under the Plan after
October 7, 2003, the ten year anniversary of the effective date of the Plan.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after October 7, 2003.
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<PAGE> 13
1999 AMENDMENT
TO
HOLOPHANE CORPORATION
INCENTIVE STOCK PLAN
WHEREAS, effective October 7, 1993, Holophane Corporation ("Company") adopted
the Holophane Corporation Incentive Stock Plan ("Plan");
WHEREAS, the Company wants to amend the Plan;
NOW, THEREFORE, the following amendments are adopted effective June 1, 1999.
1. Section 2 of the Plan is amended by adding the following new
definition:
"Change of Control" means the occurrence of any of the following events
after June 1, 1999 (i) the acquisition by any individual, entity or
group [within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")] (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
("Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control (A) any
acquisition by the Company, (B) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any acquisition by any
Person who on June 1, 1999 was the beneficial owner of twenty percent
(20%) or more of the combined voting power of the Voting Securities of
the Company outstanding on such date; or (ii) a change in the
composition of a majority of the Board of Directors of the Company
within a three (3) year period, which change shall not have been
approved by a majority of the persons then surviving as Directors who
also comprised the Board of Directors of the Company immediately prior
to the commencement of such period; or (iii) the consummation of any
reorganization, merger or consolidation other than a reorganization,
merger or consolidation which would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least sixty percent (60%)
of the combined voting power of the Voting Securities of the Company or
such surviving entity outstanding immediately after such
reorganization, merger or consolidation; or (iv) the consummation of a
plan of complete liquidation
<PAGE> 14
of the Company or of an agreement for the sale or disposition by the
Company (in one transaction or a series of transactions) of all or
substantially all of the Company's assets.
2. Section 6(d) is amended by the addition of the following two new
sentences:
If the option price for a nonqualified stock option is paid by
exchanging Shares owned by the optionee, the optionee also may elect to
defer any gain on that exchange (or on the exercise of the option) by
instructing the Company to credit that gain to the optionee's account
under the Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan (or any successor to that plan)
or the Holophane Corporation Fee Deferral Plan for Non-Employee
Directors (or any successor plan). This election may be made by
following procedures prescribed in that plan.
3. Section 6 is further amended by the addition of the following two new
paragraphs:
(f) In the event of a Change of Control in which voting shares of the
Company are exchanged for cash, each optionee may direct that all or a
portion of the proceeds received under this paragraph 6(f) be
transferred to the Holophane Corporation Executives' Deferred
Compensation Plan, the Holophane Corporation Executives' Deferred
Compensation Program or the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors (or any successor plan)., whichever is
appropriate. This election, if made, must be made by completing a
Deferral Notice, in the form attached as Exhibit A and by returning the
notice to the Company before a Change of Control occurs.
IN WITNESS WHEREOF, the Company has caused this amendment to be executed by a
duly authorized officer effective June 1, 1999.
HOLOPHANE CORPORATION
DATE: _________, 1999 BY: ______________________
ITS: _____________________
<PAGE> 15
EXHIBIT A
1999 AMENDMENT
TO
HOLOPHANE CORPORATION
INCENTIVE STOCK PLAN
DEFERRAL NOTICE
Name: _____________________________________________________________
Soc. Sec. No.: ____________________________________________________
Date of Birth: ____________________________________________________
Address: __________________________________________________________
___________________________________________________________________
PART A
ELECTION TO PARTICIPATE
Complete this portion of this form to defer part or all of the cash received on
the conversion of stock options in connection with a Change of Control. Complete
Part B of this form if you do not want to participate in this Plan.
By completing this Deferral Notice and subject to the terms of the
Plan, I direct that the cash received, in connection with a Change of
Control, on the conversion of the options described below be
transferred to the Holophane Corporation Executives' Deferred
Compensation Plan, the Holophane Corporation Executives' Deferred
Compensation Program or the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors, as appropriate:
__________ 100% of the amount realized on the conversion of all
nonqualified and incentive stock options, whether or not vested; or
<PAGE> 16
The amount realized on the conversion of the following VESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------
The amount realized on the conversion of the following NONVESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------
The amount realized on the conversion of the following VESTED INCENTIVE
STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------
<PAGE> 17
The amount realized on the conversion of the following NONVESTED
INCENTIVE STOCK OPTIONS:
Date Granted Number of Options
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------
<PAGE> 18
PART B
ELECTION TO DEFER GAIN ON TRANSFER OF HOLOPHANE SHARES AS
PART OF EXERCISE OF STOCK OPTION
SIGN BELOW IF YOU WANT TO DEFER GAIN YOU OTHERWISE WOULD REALIZE IF YOU EXERCISE
A STOCK OPTION BY SURRENDERING SHARES OF HOLOPHANE STOCK YOU OWN INSTEAD OF
PAYING CASH TO EXERCISE THAT OPTION AND TO DEFER THE GAIN OTHERWISE RECOGNIZED
ON THAT TRANSACTION BY HAVING IT TRANSFERRED TO THE HOLOPHANE CORPORATION SECOND
AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.
________________________________ _____________________________________________
Date Signature
_____________________________________________
Name (please print)
Received by Employer on: ___________________
<PAGE> 19
PART C
WAIVER OF PARTICIPATION
Complete this portion of this form if you do not want to defer any portion of
the cash received on the conversion of stock options in connection with a Change
of Control. Complete Part A of this form if you do want to defer part or all of
the cash received on the conversion of stock options in connection with a Change
of Control.
I elect to waive any right to defer receipt of any portion of the cash received
on the conversion of stock options in connection with a Change of Control.
________________________________ _____________________________________________
Date Signature
_____________________________________________
Name (please print)
Received by Employer on: ___________________
By: ________________________________________
<PAGE> 1
Exhibit (c)(8)
HOLOPHANE CORPORATION
1996 INCENTIVE STOCK PLAN
SECTION l. PURPOSES. The purposes of the Holophane Corporation 1996
Incentive Stock Plan are to promote the interests of Holophane Corporation and
its stockholders by (a) attracting and retaining exceptional executive personnel
and other key employees of, and advisors and consultants to, and directors of
the Company and its Subsidiaries; (b) motivating such employees, advisors and
consultants and Eligible Directors by means of performance-related incentives to
achieve longer-range performance goals; and (c) enabling such employees,
advisors and consultants and Eligible Directors to participate in the long-term
growth and financial success of the Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"Award" shall mean any Option, Restricted Stock Award or Performance
Award but shall not include any Director Option.
"Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award which may, but need not, be executed
or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean a committee of the Board designated by the Board
to administer the Plan which shall satisfy the requirements contained in Section
1.162-27(c)(4) of the Final Regulations. The Committee shall be composed of not
less than the minimum number of persons from time to time required by Rule
16b-3, each of whom shall be (a) a person from time to time permitted by the
rules promulgated under Section 16 of the Act in order for grants of Awards to
be exempt transactions under said Section 16; and (b) receiving remuneration in
no other capacity than as a director, except as permitted under Section
1.162-27(e)(3) of the Final Regulations.
"Company" shall mean Holophane Corporation, a Delaware corporation,
together with any successor thereto.
"Covered Employee" shall mean any individual who, on the last day of
the Company's taxable year, is
(a) the chief executive officer of the Company or is acting in
such capacity; or
(b) among the four highest compensated officers (other than
the chief executive officer).
For this purpose, whether an individual is the chief executive officer or one of
the four highest compensated officers of the Company shall be determined
pursuant to the executive compensation disclosure rules under the Exchange Act.
"Director Option" shall mean a Non-Qualified Stock Option granted to
each Eligible Director pursuant to Section 6(e) without any action by the Board
or the Committee.
"Eligible Director" shall mean, on any date, a person who is serving as
a member of the Board but shall not include a person who is an Employee of the
Company or a Subsidiary.
<PAGE> 2
"Employee" shall mean (a) an employee of the Company or of any
Subsidiary; and (b) an advisor or consultant to the Company or to any
Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the fair market value of the property or
other item being valued, as determined by the Committee in its sole discretion,
provided that the fair market value of Shares of Common Stock shall be
determined by reference to the most recent closing price quotation or, if none,
the average of the bid and asked prices, as reported as of the most recent
available date with respect to the sale of Common Stock on any quotation system
approved by the National Association of Securities Dealers then reporting sales
of Common Stock or on any national securities exchange on which the Common Stock
is then listed.
"Final Regulations" shall mean the final regulations promulgated by the
Internal Revenue Service under Section 162(m) of the Code.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not intended
to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee selected by the Committee to
receive an Award under the Plan.
"Performance Award" shall mean any right granted under Section 8 of the
Plan.
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"Plan" shall mean the Holophane Corporation 1996 Incentive Stock Plan.
"Restricted Stock" shall mean any Share granted under Section 7 of the
Plan.
"Rule l6b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Shares" shall mean shares of Common Stock, par value $.0l per share,
of the Company or such other securities of the Company as may be designated by
the Committee from time to time.
"Subsidiary" shall mean any corporation which, on the date of
determination, qualified as a subsidiary corporation of the Corporation under
Section 425(f) of the Code.
"Substitute Awards" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
"Ten Percent Stockholder" shall mean any stockholder who, at the time
an Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 425(d) of the Code) more than ten percent of the voting power
of all classes of stock of the Company or a subsidiary.
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<PAGE> 3
SECTION 3. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. Subject
to the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to an eligible Employee;
(iii) determine the number of Shares to be covered by, or with respect to which
payments, rights or other matters are to be calculated in connection with
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property or
canceled, forfeited or suspended; (vi) determine whether, to what extent and
under what circumstances cash, Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Notwithstanding anything else
contained in the Plan to the contrary, neither the Committee nor the Board shall
have any discretion regarding whether an Eligible Director shall receive a
Director Option pursuant to Section 6(e) or regarding the terms of any Director
Option, including, without limitation, the number of Shares subject to such
Director Option, the timing of the grant or the exercisability of such Director
Option or the exercise price per Share of such Director Option.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all Persons, including the Company, any subsidiary, any Participant, any
holder or beneficiary of any Award, any stockholder and any Employee.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in
Section 4(b), the number of Shares with respect to which Awards and Director
Options may be granted under the Plan shall be 800,000. If, after the effective
date of the Plan, any Shares covered by an Award or Director Option granted
under the Plan, or to which such an Award or Director Option relates, are
forfeited, or if an Award or Director Option otherwise terminates or is canceled
without the delivery of Shares, then the Shares covered by such Award or
Director Option, or to which such Award or Director Option relates, or the
number of Shares otherwise counted against the aggregate number of Shares with
respect to which Awards and Director Options may be granted, to the extent of
any such settlement, forfeiture, termination or cancellation, shall again be, or
shall become, Shares with respect to which Awards and Director Options may be
granted, to the extent permissible under Rule l6b-3. In the event that any
Option, Director Option or other Award granted hereunder is exercised through
the delivery of Shares, the number of Shares available for Awards under the Plan
shall be increased by the number of Shares surrendered, to the extent
permissible under Rule l6b-3.
(b) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
necessary in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall proportionately adjust any or all (as necessary) of (i) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) with respect to which Awards may be granted; (ii) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards; and (iii) the grant or
exercise price with respect to any Award; provided, in each case, that with
respect to Awards of Incentive Stock Options, no such adjustment shall be
authorized to the extent that such
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<PAGE> 4
authority would cause the Plan to violate Section 422(b)(l) of the Code, as from
time to time amended. If, pursuant to the preceding sentence, an adjustment is
made to outstanding Options held by Participants, a corresponding adjustment
shall be made to outstanding Director Options and if, pursuant to the preceding
sentence, an adjustment is made to the number of Shares authorized for issuance
under the Plan, a corresponding adjustment shall be made to the number of Shares
subject to each Director Option thereafter granted pursuant to Section 6(e).
(c) Sources of Shares. Any Shares delivered pursuant to an
Award or Director Option may consist, in whole or in part, of authorized and
unissued Shares or of Treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, who is not a member of the
Committee, shall be eligible to be designated a Participant, except that only
Employees who are Employees of the Company or a subsidiary shall be eligible for
the grant of Incentive Stock Options. Each Eligible Director shall receive
nondiscretionary Director Options in accordance with, and only in accordance
with, Section 6(e) hereof.
SECTION 6. OPTIONS AND DIRECTOR OPTIONS.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Employees to
whom Options shall be granted, the number of Shares to be covered by each
Option, the option price therefor and the conditions and limitations applicable
to the exercise of the Option. The Committee shall have the authority to grant
Incentive Stock Options or to grant Non-Qualified Stock Options or to grant both
types of options. In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to, and comply with, such rules as
may be prescribed by Section 422 of the Code, as from time to time amended, and
any regulations implementing such statute, including, without limitation, the
requirements of Code Section 422(d) which limit the aggregate Fair Market Value
of Shares for which Incentive Stock Options are exercisable for the first time
to $100,000 per calendar year. Each provision of the Plan and of each written
option agreement relating to an Option designated as an Incentive Stock Option
shall be construed so that such Option qualifies as an Incentive Stock Option,
and any provision that cannot be so construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise
price at the time each Option is granted, which price, except in the case of
Options that are substitute Awards, shall not be less than 100% of the per Share
Fair Market Value on the date of grant. Notwithstanding any provision contained
herein, in the case of an Incentive Stock Option, the exercise price at the time
such Incentive stock Option is granted to any Employee who, at the time of such
grant, is a Ten Percent Stockholder, shall not be less than 110% of the per
Share Fair Market Value on the date of grant.
(c) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter; provided,
in the case of an Incentive Stock Option, a Participant may not exercise such
Incentive Stock Option after (i) the date which is ten years (five years in the
case of a Participant who is a Ten Percent Stockholder) after the date on which
such Incentive Stock Option is granted; or (ii) the date which is three months
(twelve months in the case of a Participant who becomes disabled, as defined in
Section 22(e)(3) of the Code, or who dies) after the date on which he ceases to
be an Employee of the Company or a Subsidiary. The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable. The Committee shall have the right to
accelerate the exercisability of any Option or outstanding Option in its
discretion.
(d) Payment. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the option price therefor is
received by the Company. Such payment may be made in cash, or its equivalent or,
if and to the extent permitted by the Committee, by exchanging Shares owned by
the optionee (which are not the subject of any pledge or other security
interest) or by a combination of the foregoing, provided that the combined value
of all cash and cash equivalents and the Fair Market Value of any such Shares so
tendered to the Company as of the date of such tender is at least equal to such
option price.
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<PAGE> 5
(e) Director Options. Notwithstanding anything else contained
herein to the contrary, each Eligible Director shall receive, on the first
business day after each annual meeting of stockholders of the Company beginning
with the 1997 annual meeting, provided that the Eligible Director is serving as
a member of the Board on such date, a grant of a Director Option to purchase
4,000 Shares at an exercise price per Share equal to the Fair Market Value on
the date of grant. A Director Option shall be exercisable until the earlier to
occur of the following two dates: (i) the tenth anniversary of the date of grant
of such Director Option; or (ii) three months (twelve months in the case of an
Eligible Director who becomes disabled, as defined in Section 22(e)(3) of the
Code or who dies) after the date the Eligible Director ceases to be a member of
the Board, except that if the Eligible Director ceases to be a member of the
Board after having been convicted of, or pled guilty or nolo contendere to, a
felony, his Director Option shall be canceled on the date he ceases to be a
member of the Board. An Eligible Director may pay the exercise price of a
Director Option in the manner described in Section 6(d).
SECTION 7. RESTRICTED STOCK.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine to whom Shares of
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Stock will vest and no longer be subject
to forfeiture to the Company and the other terms and conditions of such Awards.
The Committee shall have the right to accelerate the vesting of any Restricted
Stock or outstanding Restricted Stock in its discretion.
(b) Transfer Restrictions. Until the lapse of applicable
restrictions, Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered except as provided in the Plan or the applicable
Award Agreements. Certificates issued in respect of Shares of Restricted Stock
shall be registered in the name of the Participant and deposited by such
Participant, together with a stock power endorsed in blank, with the Company.
Upon the lapse of the restrictions applicable to such Shares of Restricted
Stock, the Company shall deliver such certificates to the Participant or the
Participant's legal representative.
(c) Payment of Dividends. Dividends paid on any Shares of
Restricted Stock may be paid directly to the Participant, or may be reinvested
in additional Shares of Restricted Stock, as determined by the Committee in its
sole discretion.
SECTION 8. PERFORMANCE AWARDS.
(a) Grant. The Committee shall have sole and complete
authority to determine who shall receive a Performance Award denominated in cash
or Shares; (i) valued, as determined by the Committee, in accordance with the
achievement of such performance goals during such performance periods as the
Committee shall establish; and (ii) payable at such time and in such form as the
Committee shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount and kind
of any payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be
paid in a lump sum or in installments following the close of the performance
period or, in accordance with procedures established by the Committee, on a
deferred basis.
SECTION 9. CODE SECTION 162(m) LIMITATIONS.
(a) General Limitations. Any Awards issued under this Plan to
Covered Employees must satisfy the requirements of this Section 9.
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<PAGE> 6
(b) Requirements For All Awards. Any award issued to a
Covered Employee shall constitute qualified performance-based compensation. For
this purpose, an Award shall constitute qualified performance-based compensation
to the extent that:
(i) it is granted by the Committee on account of the
attainment of one or more preestablished, objective
performance goals established by the Committee, in accordance
with the provisions of Section 1.162-27(e)(2) of the Final
Regulations;
(ii) the material terms of the performance goal under
which the Award is issued are disclosed to and subsequently
approved by the stockholders of the Company, in accordance
with the provisions of Section 1.162-27(e)(4) of the Final
Regulations; and
(iii) the Committee certifies, in writing, prior to the
payment of any compensation under the Award, that the
performance goals and any other material terms were in fact
satisfied.
(c) Special Rules For Options. The grant of an Option to
a Covered Employee under this Plan shall satisfy the requirements of Section
9(b)(i) above to the extent that the following requirements are satisfied:
(i) subject to the provisions of Section 4(b), no
Employee shall receive Options for more than 100,000 Shares
over any one-year period. For this purpose, to the extent that
any Option is canceled (as described in Section
1.162-27(e)(2)(vi)(B) of the Final Regulations), such canceled
Option shall continue to be counted against the maximum number
of Shares for which Options may be granted to a Covered
Employee under the Plan; and
(ii) under the terms of the Option, the amount of
compensation that the Covered Employee may receive is based
solely on an increase in the value of the Shares after the
grant of the Option, unless the grant of such Option is
contingent upon the attainment of a performance goal that
otherwise satisfies the requirements of Section 9(b)(i) above.
SECTION 10. AMENDMENT AND TERMINATION.
(a) Amendments to the Plan. The Board may amend, alter,
suspend, discontinue or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement, including for these
purposes any approval requirement which is a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act for which or with which the Board deems
it necessary or desirable to qualify or comply; and, provided further, that no
amendment may be made to Section 6(e) or any other provision of the Plan
relating to Director Options within six months of the last date on which any
such provision was amended, other than to comport with changes in the Code, the
Employee Retirement Income Security Act or the rules thereunder. Notwithstanding
anything to the contrary herein, the Committee may amend the Plan, subject to
any stockholder approval required under Rule l6b-3, in such manner as may be
necessary so as to have the Plan conform with local rules and regulations in any
jurisdiction outside the United States.
(b) Amendments to Awards. Subject to the provisions of
Section 9, the Committee may waive any conditions or rights under, amend any
terms of, or alter, suspend, discontinue, cancel or terminate any Award
therefore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or
beneficiary of any Award therefore granted shall not to that extent be effective
without the consent of the affected Participant, holder or beneficiary.
(c) Cancellation. Any provision of this Plan (except
Section 9) or any Award Agreement to the contrary notwithstanding, the Committee
may cause any Award granted hereunder to be canceled in
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<PAGE> 7
consideration of the granting to the holder of an alternative Award having a
Fair Market Value equal to the Fair Market Value of such canceled Award.
SECTION 11. GENERAL PROVISIONS.
(a) Nontransferability.
(i) Each Award and each Director Option, and each
right under any Award or any Director Option, shall be
exercisable during the Participant's or the Eligible
Director's lifetime only by the Participant or the Eligible
Director or, if permissible under applicable law, by the
Participant's or the Eligible Director's guardian or legal
representative or a transferee receiving such Award pursuant
to a qualified domestic relations order ("QDRO"), as
determined by the Committee.
(ii) No Award or Director Option that constitutes a
"derivative security," for purposes of Section 16 of the
Exchange Act, may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant
or Eligible Director otherwise than by will or by the laws of
descent and distribution or pursuant to a QDRO, and any such
purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable
against the Company or any Subsidiary; provided that the
designation of a beneficiary shall not constitute an
assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.
(b) No Rights to Awards. No Employee, Participant or
other Person shall have any claim to be granted any Award, and there is no
obligation for uniformity of treatment of Employees, Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the same
with respect to each recipient.
(c) Share Certificates. All certificates for Shares or
other securities of the Company or any Subsidiary delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations and other requirements of the SEC, any stock
exchange or national securities association upon which such Shares or other
securities are then listed and any applicable federal or state laws; and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(d) Withholding. A Participant or Eligible Director may
be required to pay to the Company or any Subsidiary and the Company or any
Subsidiary shall have the right and is hereby authorized to withhold from any
Award or Director Option, from any payment due or transfer made under any Award
or any Director Option or under the Plan or from any compensation or other
amount owing to a Participant or Eligible Director the amount of any applicable
withholding taxes in respect of an Award or a Director Option, its exercise or
any payment or transfer under an Award, under a Director Option or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. With respect
to Participants who are not subject to Section 16 of the Exchange Act, the
withholding may be in the form of cash, shares, other securities, other Awards
or other property as the Committee may allow. With respect to Participants and
Eligible Directors who are subject to Section 16 of the Exchange Act, the
withholding shall be in cash or in any other property permitted by Rule 16b-3 as
the Committee may allow. The Committee may provide for additional cash payments
to holders of Awards to defray or offset any tax arising from the grant,
vesting, exercise or payments of any Award.
(e) Award Agreements. Each Award hereunder shall be
evidenced by an Award Agreement which shall be delivered to the Participant and
shall specify the terms and conditions of the Award and any rules applicable
thereto, including but not limited to the effect on such Award of the death,
retirement or other termination of employment of a Participant and the effect,
if any, of a change in control of the Company.
(f) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Subsidiary from adopting
or continuing in effect other compensation arrangements,
-7-
<PAGE> 8
which may, but need not, provide for the grant of options, restricted stock,
Shares and other types of Awards provided for hereunder (subject to stockholder
approval if such approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases.
(g) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Subsidiary. Further, the Company or a Subsidiary may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(h) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock
hereunder, the applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Stock.
(i) Governing Law. The validity, construction and effect of
the Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Delaware.
(j) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(k) Other Laws. The Committee may refuse to issue or transfer
any Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
(l) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such rights
shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary
(m) Rule l6b-3 Compliance. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable terms and conditions of Rule 16b-3 and any successor
provisions. To the extent that any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
(n) Headings. Headings are given to the sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
(o) No Impact on Benefits. Plan Awards shall not be treated as
compensation for purposes of calculating an Employee's rights under any employee
benefit plan.
-8-
<PAGE> 9
(p) Indemnification. Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction of any
judgment in any such action, suit or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or By-laws, by
contract, as a matter of law, or otherwise.
SECTION 12. TERM OF THE PLAN.
(a) Effective Date. The Plan shall be effective as of February
20, 1996, the date of its approval by the directors of the Company, subject to
the approval of the stockholders of the Company within 12 months of such date.
(b) Expiration Date. No Award shall be granted under the Plan
after February 20, 2006, the ten year anniversary of the effective date of the
Plan. Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after February 20, 2006.
-9-
<PAGE> 10
1999 AMENDMENT
TO
HOLOPHANE CORPORATION
1996 INCENTIVE STOCK PLAN
WHEREAS, effective February 20, 1996, Holophane Corporation ("Company") adopted
the Holophane Corporation 1996 Incentive Stock Plan ("Plan");
WHEREAS, the Company wants to amend the Plan;
NOW, THEREFORE, the following amendments are adopted effective June 1, 1999.
1. Section 2 of the Plan is amended by adding the following new
definition:
"Change of Control" means the occurrence of any of the following events
after June 1, 1999 (i) the acquisition by any individual, entity or
group [within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")] (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
("Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control (A) any
acquisition by the Company, (B) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any acquisition by any
Person who on June 1, 1999 was the beneficial owner of twenty percent
(20%) or more of the combined voting power of the Voting Securities of
the Company outstanding on such date; or (ii) a change in the
composition of a majority of the Board of Directors of the Company
within a three (3) year period, which change shall not have been
approved by a majority of the persons then surviving as Directors who
also comprised the Board of Directors of the Company immediately prior
to the commencement of such period; or (iii) the consummation of any
reorganization, merger or consolidation other than a reorganization,
merger or consolidation which would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least sixty percent (60%)
of the combined voting power of the Voting Securities of the Company or
such surviving entity outstanding immediately after such
reorganization, merger or consolidation; or (iv) the consummation of a
plan of complete liquidation
<PAGE> 11
of the Company or of an agreement for the sale or disposition by the
Company (in one transaction or a series of transactions) of all or
substantially all of the Company's assets.
2. Section 6(d) is amended by the addition of the following two new
sentences:
If the option price for a nonqualified stock option is paid by
exchanging Shares owned by the optionee, the optionee also may elect to
defer any gain on that exchange (or on the exercise of the option) by
instructing the Company to credit that gain to the optionee's account
under the Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan (or any successor to that plan)
or the Holophane Corporation Fee Deferral Plan for Non-Employee
Directors. This election may be made by following procedures prescribed
in that plan.
3. Section 6 is further amended by the addition of the following new
paragraph (f):
(f) In the event of a Change of Control in which voting securities of
the Company are exchanged for cash, each optionee may direct that all
or a portion of the proceeds received under this paragraph 6(f) be
transferred to either the Holophane Corporation Executives' Deferred
Compensation Plan, the Holophane Corporation Executives' Deferred
Compensation Program or the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors, whichever is appropriate. This election, if
made, must be made by completing a Deferral Notice, in the form
attached as Exhibit A and by returning the notice to the Company before
a Change of Control occurs.
IN WITNESS WHEREOF, the Company has caused this amendment to be executed by a
duly authorized officer effective June 1, 1999.
HOLOPHANE CORPORATION
DATE: _________, 1999 BY: ______________________
ITS: _____________________
<PAGE> 12
EXHIBIT A
1999 AMENDMENT
TO
HOLOPHANE CORPORATION
1996 INCENTIVE STOCK PLAN
DEFERRAL NOTICE
Name: ____________________________________________________________
Soc. Sec. No.: ___________________________________________________
Date of Birth: ___________________________________________________
Address: _________________________________________________________
__________________________________________________________________
<PAGE> 13
PART A
ELECTION TO PARTICIPATE
Complete this portion of this form to defer part or all of the cash received on
the conversion of stock options in connection with a Change of Control. Complete
Part C of this form if you do not want to participate in this Program.
1. By completing this Deferral Notice and subject to the terms of the
Plan, I direct that the cash received, in connection with a Change of
Control, on the conversion of the options described below be
transferred to the Holophane Corporation Executives' Deferred
Compensation Plan, the Holophane Corporation Executives' Deferred
Compensation Program or the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors, as appropriate:
__________ 100% of the amount realized on the conversion of all
nonqualified and incentive stock options, whether or not vested; or
The amount realized on the conversion of the following VESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------
The amount realized on the conversion of the following NONVESTED
NONQUALIFIED STOCK OPTIONS:
Date Granted Number of Options
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------
<PAGE> 14
The amount realized on the conversion of the following VESTED INCENTIVE
STOCK OPTIONS:
Date Granted Number of Options
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------
The amount realized on the conversion of the following NONVESTED
INCENTIVE STOCK OPTIONS:
Date Granted Number of Options
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------
<PAGE> 15
PART B
ELECTION TO DEFER GAIN ON TRANSFER OF HOLOPHANE SHARES AS
PART OF EXERCISE OF STOCK OPTION
SIGN BELOW IF YOU WANT TO DEFER GAIN YOU OTHERWISE WOULD REALIZE IF YOU EXERCISE
A STOCK OPTION BY SURRENDERING SHARES OF HOLOPHANE STOCK YOU OWN INSTEAD OF
PAYING CASH TO EXERCISE THAT OPTION AND TO DEFER THE GAIN OTHERWISE RECOGNIZED
ON THAT TRANSACTION BY HAVING IT TRANSFERRED TO THE HOLOPHANE CORPORATION SECOND
AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.
____________________________________ _________________________________________
Date Signature
_________________________________________
Name (please print)
Received by Employer on: ___________________
<PAGE> 16
PART C
WAIVER OF PARTICIPATION
Complete this portion of this form if you do not want to defer any portion of
the cash received on the conversion of stock options in connection with a Change
of Control. Complete Part A of this form if you do want to defer part or all of
the cash received on the conversion of stock options in connection with a Change
of Control.
I elect to waive any right to defer receipt of any portion of the cash received
on the conversion of stock options in connection with a Change of Control.
____________________________________ _________________________________________
Date Signature
_________________________________________
Name (please print)
Received by Employer on: ___________________
By: ________________________________________
<PAGE> 1
Exhibit (c)(9)
HOLOPHANE CORPORATION
FEE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS
Section 1. PURPOSE - This Plan is maintained primarily for the purpose of
providing an arrangement for deferred director's fees for non-employee directors
of the Company. Benefits under this Plan will be provided on an unfunded basis
and will be paid as needed solely from the general assets of the Company.
Section 2. CERTAIN DEFINITIONS - As used in this Plan, the following capitalized
terms shall have the meanings specified below.
"Adjustment Date" means the last day of each Plan Year.
"Alternate Investment Option(s)" means, for any Plan Year, the
alternative investment options which the Company designates as being available
for selection by Participants for purposes of establishing a Participant's Rate
of Return for such Plan Year.
"Beneficiary" means the person or persons designated in writing as
such and filed with the Company at any time by a Participant. Any such
designation may be withdrawn or changed in writing (without the consent of the
Beneficiary), but only the last designation on file with the Company shall be
effective.
"Board" means the Board of Directors of the Company.
"Company" means Holophane Corporation.
"Deferred Director Fee Account" means the separate Deferred Director
Fee Account established for each Participant pursuant to Section 3 of this Plan.
"Effective Date" means November 10, 1994.
"Participant" means, for any Plan Year, a member of the Board who is
not an employee of either the Company or any of its subsidiaries.
"Plan" means the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors, as reflected in this document, as the same may be
amended or amended and restated from time to time after the Effective Date.
"Plan Administrator" means the Company.
"Plan Year" means the calendar year.
"Rate of Return" means, for any Participant and for any Plan Year,
the rate of return -- or, if appropriate, the effective aggregate rate of return
- -- which accrued on such Participant's Selected Investment Option(s) for such
Plan Year.
<PAGE> 2
"Selected Investment Option(s)" means, for any Participant and for
any Plan Year, the Alternate Investment Option(s) which, not less than 15 days
prior to the commencement of such Plan Year, the Participant notifies the
Company in writing, on a form prescribed by the Company, that he has selected
for purposes of establishing his Rate of Return for such Plan Year. If any such
written notice is delivered to the Company, the Participant's Selected
Investment Option(s) specified therein shall remain in effect from year to year
until changed by subsequent written notice.
Section 3. DEFERRED DIRECTOR FEE ACCOUNTS
A. Establishment of Deferred Director Fee Accounts. The Company will
establish a Deferred Director Fee Account for each Participant.
B. Election of Participant. For each Plan Year, if any, in respect of
which the Company permits Participants to do so, each Participant may elect to
have a portion -- not exceeding any amount limitations established by the
Company from time to time -- of any director's fees which would otherwise have
been paid to him with respect to such Plan Year allocated to his Deferred
Director Fee Account and paid on a deferred basis pursuant to the terms of this
Plan. To exercise such an election for any Plan Year, a Participant must advise
the Company of his election, in writing, on a form prescribed by the Company
(each, a "Deferral Notice") not less than 15 days prior to the commencement of
the Plan Year.
C. Company Allocations. Each time a Deferral Notice is submitted to
the Company in accordance with Section 3.B. above, effective as of the
Adjustment Date of the Plan Year in respect of which the Participant's election
is made, the Company will allocate to the Participant's Deferred Director Fee
Account, in accordance with the procedures specified in Section 3.D. below, the
amount of director's fees specified in the Deferral Notice.
D. Adjustment of Account Balances. Effective as of each Adjustment
Date, the Company will adjust the balance of each Participant's Deferred
Director Fee Account as follows:
(i) first, the Company will allocate to the Account any
amount called for under Section 3.C. above; and
(ii) then, the Company will allocate to the Account an amount
equal to the product obtained when (a) the balance of the Account which exists
immediately following the allocation made under paragraph 3.D. (i) is multiplied
by (b) the Participant's applicable Rate of Return.
E. Rights in Accounts. A Participant's only right with respect to his
Deferred Director Fee Account (and amounts allocated thereto) will be to receive
payments in accordance with the provisions of Section 4 of this Plan.
Section 4. DEFERRED FEES.
A. Payment of Benefits - General. If a Participant ceases to
be a member of the Board for any reason, including the Participant's death, the
Company will pay to such individual, in accordance with the provisions of
Sections 4.B. and 4.C. below, deferred director's
-2-
<PAGE> 3
fees in an amount equal to (i) the balance contained in such individual's
Deferred Director Fee Account as of the date such individual ceases to be a
member of the Board, plus (ii) such additional amounts as may be allocated to
such Account pursuant to the provisions of Section 3.D(ii) of this Plan prior to
distribution.
B. Timing on Payment of Benefits. Deferred Director Fees
called for under Section 4.A. of this Plan will be paid by the Company (i) in
substantially equal annual installments over a period of ten (10) years
commencing on the first day of the Plan Year immediately following the Plan Year
in which the Participant ceases to be a member of the Board, or (ii) under such
other payment schedule as is mutually acceptable to the Company and the
Participant; provided, that if, for any year, the amount which the Company is
scheduled to pay is less than $5,000, the Company may pay in such year up to the
lesser of $5,000 or the aggregate balance then contained in the individual's
Deferred Director Fee Account.
C. Payment of Benefits Upon Death of Participant. In the event
of the death of a Participant, either before or after payments have commenced
under Section 4.B. above, payments called for under this Section 4 will
thereafter be made to the Participant's Beneficiary or, if there is no
Beneficiary, to the Participant's estate.
Section 5. NO TRUST -- Nothing contained in this Plan and no action taken
pursuant to the provisions of this Plan shall create or be construed to create a
trust of any kind, or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person.
Section 6. ASSIGNMENT OR ALIENATION -- The right of a Participant, Beneficiary
or other person to the payment of a benefit under this Plan may not be assigned,
transferred, pledged, or encumbered except by Will or by the laws of descent and
distribution.
Section 7. PLAN ADMINISTRATION -- The Company will have the right to interpret
and construe this Plan and to determine all questions of eligibility and of
status, rights and benefits of Participants and all other persons claiming
benefits under this Plan. In all such interpretations and constructions, the
Company's determination will be based upon uniform rules and practices applied
in a non-discriminatory manner and will be binding upon all persons affected
thereby. Any decision by the Company with respect to any such matters, including
without limitation, the Company's determination of applicable Rates of Return,
will be final and binding on all parties. The Company will have absolute
discretion in carrying out its responsibilities under this Section 7.
Section 8. UNSECURED AND UNFUNDED OBLIGATION -- There shall be no contributions
required or permitted to be made by any Participant in this Plan. All payments
of benefits shall be made directly from the general assets of the Company and
the right of a Participant or Beneficiary to any payment of such benefits shall
be solely that of an unsecured general creditor of the Company. No assets of the
Company shall be set aside, earmarked, placed in trust or escrow, or represented
as being specifically set aside to provide for Plan benefits.
Section 9. AMENDMENT OF THE PLAN -- The Company reserves the right to amend this
Plan at any time, and from time to time, in any manner which it deems desirable;
provided that no amendment will adversely affect the then accrued benefits of
any Participant under this Plan.
-3-
<PAGE> 4
Section 10. TERMINATION OF THE PLAN -- The Company reserves the right to
terminate this Plan at any time without providing any advance notice to any
Participant; provided, that in the event of any such termination, the Company
shall distribute to each Participant (or to such Participant's Beneficiary or
estate, as applicable) on demand all amounts allocated to such Participant's
Deferred Director Fee Account as of the date of termination.
Section 11. GENDER -- Any reference in this Plan made in the masculine pronoun
shall apply to both men and women.
Section 12. GOVERNING LAW -- This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
by a duly authorized officer as of the Effective Date.
HOLOPHANE CORPORATION
By: _________________________
Its: ________________________
-4-
<PAGE> 5
AMENDMENT TO
HOLOPHANE CORPORATION
FEE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS
WHEREAS, effective November 10, 1994, the Holophane Corporation ("Company")
established the Holophane Corporation Fee Deferral Plan for Non-Employee
Directors ("Plan"); and
WHEREAS, the Company wants to amend the Plan;
NOW, THEREFORE, effective June 1, 1999, ("Effective Date") the Plan is amended
as follows:
1. Section 2 is amended by the addition of the following new definition:
"Change of Control" means the occurrence of any of the
following events after the Effective Date (i) the acquisition by any
individual, entity or group [within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")] (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
percent (20%) or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors ("Voting Securities"); provided, however,
that the following acquisitions shall not constitute a Change of
Control (A) any acquisition by the Company, (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (C) any
acquisition by any Person who on the Effective Date was the beneficial
owner of twenty percent (20%) or more of the combined voting power of
the Voting Securities of the Company outstanding on such date; or (ii)
a change in the composition of a majority of the Board of Directors of
the Company within a three (3) year period, which change shall not have
been approved by a majority of the persons then surviving as Directors
who also comprised the Board of Directors of the Company immediately
prior to the commencement of such period; or (iii) the consummation of
any reorganization, merger or consolidation other than a
reorganization, merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least
sixty percent (60%) of the combined voting power of the Voting
Securities of the Company or such surviving entity outstanding
immediately after such reorganization, merger or consolidation; or (iv)
the consummation of a plan of complete liquidation of the Company or of
an agreement for the
<PAGE> 6
sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's assets.
2. Section 3 is amended by the addition of the following new paragraph:
F. Each Participant may elect to defer any gain otherwise
recognized on the exercise (in any manner permitted by the plan or
program under which the option is extended) of any stock option issued
to a Participant under any stock option or stock incentive plan or
program maintained by the Company ("Stock Option"). If such an election
is made, any gain that the Participant otherwise would have received on
the exercise of the Stock Option will be credited to the Participant's
Deferred Director Fee Account. To exercise such an election, a
Participant must advise the Company of his election, in writing, by
completing Part B of a Participation Agreement prior to the occurrence
of any Change of Control.
3. Section 4.B is amended to read, in its entirety, as follows:
B. Timing on Payment of Benefits. Prior to the occurrence of
any Change of Control, deferred compensation benefits called for under
Section 4.A. of this Plan will be paid by the Company (i) in
substantially equal annual installments over a period of ten (10) years
commencing on the first day of the Plan Year immediately following the
Plan Year in which the Participant ceases to be a member of the Board,
or (ii) under such other payment schedule as is mutually acceptable to
the Company and the Participant; provided, that if, for any year, the
amount which the Company is scheduled to pay is less than $5,000, the
Company may pay in such year up to the lesser of $5,000 or the
aggregate balance then contained in the individual's Deferred Director
Fee Account. In the event of the occurrence of a Change of Control,
with respect to each Participant, any deferred compensation benefits
called for under Section 4.A. of this Plan which have not been paid as
of the date of the Change of Control, shall be paid by the Company in
full within 30 days following the date of the (i) Change of Control or
(ii) Participant's termination as a member of the Board, whichever is
later. However, a Participant may waive the accelerated distribution
provision described in the preceding sentence by completing Part A of a
Participation Agreement with the Company prior to the occurrence of any
Change of Control. Also, the Company will distribute a lump sum amount
equal to any amount that the Internal Revenue Service ("IRS")
conclusively establishes the Participant had "constructively" received
within the meaning of Code Section 451; however, the Participant
receiving such a distribution is responsible for the payment of any
income taxes due on that distribution and all interest and penalties
that the IRS assesses in connection with that determination.
<PAGE> 7
4. Section 4 is amended by the addition of the following new paragraph:
D. Acceleration of Distributions. At any time, a Participant
or Beneficiary may accelerate the date his benefit is to be distributed
by electing to receive a lump sum distribution of the amount then
credited to his Deferred Director Fee Account. In this case, the
electing Participant or Beneficiary will receive a distribution of 94%
of the then-current total balance in his Deferred Director Fee Account.
Notwithstanding anything contained herein to the contrary, if a
Participant or Beneficiary elects to receive such a distribution, (i)
the amount in question shall be distributed to the Participant or
Beneficiary in one lump sum as soon as administratively feasible after
receipt of the Participant's or Beneficiary's election; (ii) the
Participant or Beneficiary shall forfeit all further rights to all such
Accounts and all remaining balances therein; and (iii) the Participant
or Beneficiary shall be precluded from participating in the Plan after
such distribution. Amounts forfeited by a Participant or Beneficiary in
accordance with this Section 4.D shall be returned to the Company.
5. Section 5 is amended to read, in its entirety, as follows:
Section 5. TRUST - The Company will establish the Trust as a source of
Plan benefits. However, subject to the terms of the Trust Agreement,
Trust assets will remain the property of the Company.
6. Section 10 is amended to read, in its entirety, as follows:
Section 10. TERMINATION OF THE PLAN - The Company reserves the right to
terminate this Plan at any time without providing any advance notice to
any Participant. However, no amendment may affect (i) the procedures
then in effect for the adjustment of Account balances under the Plan,
(ii) any Participant's right to exercise any election described in
Section 3.B or 3.F or (iii) the waiver described in Section 4.B. Also,
if it terminates the Plan, the Company may not accelerate the payment
of any amounts allocated to such Participant's Deferred Director Fee
Account as of the date of termination.
7. New Section 13 is added to the Plan to read as follows:
Section 13. SUCCESSOR COMPANY - If the Company dissolves into,
reorganizes, merges into or consolidates with another business or is
acquired in a manner that constitutes a Change of Control, the
successor will continue the Plan and the Trust established under
Section 5, the successor will be substituted for the Company under the
terms of this Plan and the Trust. The substitution of the successor for
the Company will constitute an assumption by the successor of all Plan
liabilities and the
<PAGE> 8
successor will have all of the powers, duties and responsibilities of
the Company under the Plan and Participants and Beneficiaries will
continue to enjoy all of the rights and benefits provided for in the
Plan and the Trust.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
a duly authorized officer effective as of the Effective Date.
HOLOPHANE CORPORATION
Date: ________________ By: _______________________
Its: ______________________
<PAGE> 9
HOLOPHANE CORPORATION
FEE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS
PARTICIPATION AGREEMENT
This Participation Agreement supplements (but does not supercede) any earlier
elections made with respect to the Holophane Corporation Fee Deferral Plan for
Non-Employee Directors
Name: ___________________________________________________________
Soc. Sec. No.: __________________________________________________
Date of Birth: __________________________________________________
Address: ________________________________________________________
_________________________________________________________________
__________________________________ _____________________________
Date Signature
_____________________________
Name (please print)
Received by Company on: __________________
By: ______________________________________
<PAGE> 10
PART A ELECTION TO DEFER DIRECTOR FEES FOLLOWING A CHANGE OF CONTROL
Complete this portion of this form to defer payments that otherwise will be made
upon a "Change of Control."
By completing this portion of this Participation Agreement, I elect to defer the
cash benefits that I otherwise might realize on a "Change of Control" affecting
the Company and agree that these amounts will be distributed from the Plan as
provided by its terms.
__________________________________ _____________________________
Date Signature
_____________________________
Name (please print)
Received by Company on: ___________________
By: ______________________________________
<PAGE> 11
PART B ELECTION TO DEFER GAIN ON THE EXCHANGE OF NONQUALIFIED STOCK OPTIONS
Complete this portion of this form to defer gain on the exchange of nonqualified
stock options granted under the Holophane Corporation Incentive Stock Plan and
the Holophane Corporation 1996 Incentive Stock Plan.
By completing this portion of this Participation Agreement, I elect to defer the
gain that I otherwise might realize on the exercise in any manner permitted by
the plan or program under which the option is extended) of nonqualified stock
options under the Holophane Corporation Incentive Stock Plan or the Holophane
Corporation 1996 Incentive Stock Plan. I understand, however, that I must follow
the procedures described in Section 3.F. of the Plan.
__________________________________ _____________________________
Date Signature
_____________________________
Name (please print)
Received by Company on: ___________________
By: ______________________________________
<PAGE> 12
PART C DESIGNATION OF BENEFICIARY
Complete this portion of this form to name the person who is to receive any
death benefits payable under the Plan.
(a) Primary Beneficiary:
I designate the following persons as my Primary Beneficiary or
Beneficiaries to receive the portion of my Deferred Director Fee
Account that is not distributed to me before my death. This benefit
will be paid, in the proportion specified, to:
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
Note: You are not required to name more than one Primary Beneficiary but if you
do, the sum of these percentages must equal 100 percent.
(b) Contingent Beneficiary
If one or more of my Primary Beneficiaries dies before I die, I direct that any
Plan death benefit that might otherwise have been paid to that Beneficiary:
_____ Be paid to my other named Primary Beneficiaries in proportion
to the allocation given above (ignoring the interest allocated
to the deceased Primary Beneficiary); or
<PAGE> 13
_____ Be distributed among the following Contingent Beneficiaries.
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
______% to _________________________________________________
(Name) (Relationship)
Address: ___________________________________________________
Note: You are not required to name more than one Contingent Beneficiary but if
you do, the sum of these percentages must equal 100 percent.
__________________________________ _____________________________
Date Signature
_____________________________
Name (please print)
Received by Company on: __________________
By: ______________________________________
<PAGE> 14
PART D
ACKNOWLEDGMENT
I acknowledge that (i) the Plan is unfunded and is maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees (as defined in the Employee
Retirement Income Security Act of 1974, as amended) and that I have no
right or claim to receive amounts credited to my Deferred Director Fee
Account other than those specifically granted by the terms of the Plan
and (ii) I am solely responsible for ensuring that the Company's files
contain my current mailing address and that of my Beneficiary.
__________________________________ _____________________________
Date Signature
_____________________________
Name (please print)
Received by Company on: __________________
By: ______________________________________
<PAGE> 1
Exhibit (c)(10)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and
entered into as of this __th day of August, 1993, by and between HOLOPHANE
COMPANY, INC., a Delaware corporation and HOLOPHANE HOLDINGS CORPORATION, a
Delaware corporation (collectively referred to as the "Company"), and John R.
DallePezze (the "Employee").
W I T N E S S E T H:
WHEREAS, pursuant to a written employment agreement dated
October 24, 1989 (the "Prior Agreement"), the Employee has been employed as the
President and Chief Executive Officer of the Company since such date and as the
Company's Chairman since February, 1992; and
WHEREAS, the Company and the Employee desire to enter into a
new employment agreement that shall supersede said existing agreement; and
WHEREAS, the Employee desires to continue his employment with
the Company and to serve the Company as its President, Chairman and Chief
Executive Officer; and
WHEREAS, the Company desires to continue to retain the
services of the Employee as its President, Chairman and Chief Executive Officer;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee agree as set forth below.
1. Employment and Duties. The Company agrees to and does
hereby employ the Employee, and the Employee does hereby accept employment with
the Company, as the President, Chairman and Chief Executive Officer of Holophane
Company, Inc. and Holophane Holdings Corporation, to operate and manage the
business and operations of the Company with all the authority customarily
afforded to a chief executive officer subject to the normal supervision and
authority of the Board of Directors of the Company, and to perform such other
duties which are consistent with such position as are from time to time
delegated to the Employee by the Board of Directors of the Company. The Employee
will perform all services and acts necessary in such capacities to properly
manage and the Employee shall endeavor in good faith
<PAGE> 2
to perform his duties in an efficient, faithful and businesslike manner.
2. Term of Agreement. The provisions of this Agreement shall
remain in full force and effect and the employment of the Employee with the
Company shall continue until terminated by a written Notice of Termination [as
described in Section 6(c)] provided by either the Company or the Employee. In
addition, notwithstanding the previous sentence, this Agreement may be
terminated at any time by mutual agreement of the parties hereto or by the
Company at any time following the date on which the Employee attains age
sixty-five (65) (hereinafter termination of this Agreement by the Company after
the Employee has attained age sixty-five (65) shall be referred to as
"Retirement").
3. Compensation. During the term of this Agreement, the
Employee shall be paid a base salary, payable in accordance with the Company's
normal payroll practice. The Employee's initial base salary shall be Two Hundred
Seventy-Three Thousand Dollars ($273,000) per year. The base salary payable to
the Employee shall be reviewed annually for increase effective each July 1st
during the term of this Agreement. In addition, the Employee shall participate
in the Holophane Bonus Plan, as may be amended by the Company from time to time
(the "Bonus Plan"), a copy of which is attached hereto as Exhibit A. Any bonus
payable shall be determined under the provisions of the Bonus Plan, based upon
participation at 70% of the Employee's base salary and shall be payable as soon
as practical after determination of the bonus amount, but not later than
seventy-five (75) days after the end of the Company's fiscal year.
4. Other Employee Fringe Benefits.
a. In General. The Company shall further provide the
Employee with all health and life insurance coverages, sick leave and disability
programs, tax-qualified retirement plan contributions, stock option plans, paid
holidays and vacations, perquisites, and such other fringe benefits of
employment as the Company may provide from time to time to actively employed,
disabled, deceased, retired, or otherwise terminated, as applicable, senior
executives of the Company.
b. Supplemental Benefits. The Company shall also
provide the Employee with the following supplemental benefits:
(i) Vacation. The Employee will be entitled to total
vacation leave during the term of this Agreement of four
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<PAGE> 3
(4) weeks per year at such time as agreed between the Employee and the Company.
(ii) Automobile. The Company shall provide the
Employee during the term of this Agreement a Cadillac DeVille automobile, or an
automobile equivalent thereto.
(iii) Club Memberships. The Company shall, during the
term of this Agreement, pay initiation fees and periodic dues and assessments
for the Employee's membership in country and business clubs, provided the
aggregate initiation fees do not exceed $20,000, and the aggregate annual dues
and assessments do not exceed $6,000.
(iv) SERP. The Employee will be entitled to
participate, at a level commensurate with his position and his base salary, in
the Company's Supplemental Executive Retirement Plan, as may be amended from
time to time (the "SERP"), a copy of which is attached hereto as Exhibit B. The
Employee's participation in and benefit under the SERP shall be determined in
accordance with the terms and conditions of the SERP.
(v) Stock Option Plan. The Employee will be entitled
to participate, at a level commensurate with his position and his base salary,
in the Holophane Holdings Corporation Incentive Stock Plan, as may be amended
from time to time (the "Stock Plan"), a copy of which is attached hereto as
Exhibit C. The Employee's participation in the Stock Plan shall be determined in
accordance with the terms and conditions of the Stock Plan.
5. Employee Stock Purchase. Under the terms of the Prior
Agreement, the Company sold to the Employee 4,000 shares (the "Shares") of the
Common Stock, par value $.01 per share, of Holophane Holdings Corporation, for
the purchase price and on the terms set forth in that certain Stock Purchase and
Stockholders Agreement, dated June 30, 1989, by and among Holophane Holdings
Corporation and each of the other stockholders thereto, to which the Employee
was concurrently made a party (the "Stockholders Agreement"). Pursuant to
Section 6 of the Prior Agreement, certain terms of the Shares were to be set
forth in a side letter (the "Side Letter") to be executed by an authorized
officer of Holophane Holdings Corporation, a copy of which is attached hereto as
Exhibit D. During the term of this Agreement, the terms and conditions set forth
in the Side Letter shall remain in full force and effect until they lapse in
accordance with the provisions of the Side Letter; provided, however, to the
extent that the Employee's employment is terminated by the Company
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<PAGE> 4
without Cause [as defined in Section 6(a)(ii)] or by the Employee for Good
Reason [as defined in Section 6(b)], for purposes of Paragraph (1) of the Side
Letter, the Employee will be credited with one (1) additional year of service
following the Date of Termination [as defined in Section 6(d)].
6. Termination of Employment.
a. Termination of Employment By The Company. The Employee's
employment hereunder may be terminated by the Company without any breach of this
Agreement only under the following circumstances:
(i) Death, Disability or Retirement. The Employee's
employment hereunder shall terminate upon his death and may be terminated by the
Company in the event of his Disability or Retirement. For purposes of this
Agreement, the term "Disability" shall mean the inability of the Employee due to
illness (mental or physical), accident, or otherwise, to perform his duties for
any period of ninety (90) consecutive days, as determined by an independent
physician selected by the Company and reasonably acceptable to the Employee (or
his legal representative), provided that the Employee does not return to work on
substantially a full-time basis within thirty (30) days after Notice of
Termination is given by the Company pursuant to the provisions of Sections 6(c)
and 6(d)(ii).
(ii) Cause. The Company may terminate the Employee's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Employee's employment hereunder only upon
(a) his conviction of a felony involving moral turpitude, provided that such
conviction would at the time have a material adverse effect on the Company in
the reasonable opinion of the Board of Directors of the Company, (b) gross and
willful misconduct by the Employee which is deemed, by the Company's Board of
Directors, to be injurious to the Company, (c) a finding of gross dishonesty of
the Employee, (d) willful malfeasance or gross negligence, or failure to act
involving material non-feasance, provided that in the case of such gross
negligence or material non-feasance it would at the time have a material adverse
effect on the Company in the reasonable opinion of the Board of Directors of the
Company, (e) insubordination or refusal to perform assigned duties consistent
with those contained in Section 1, or (f) the Employee's material breach of his
obligations contained in Section 9.
b. Termination of Employment by Employee. The Employee may
terminate his employment at any time. However, he
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<PAGE> 5
shall be deemed to have terminated his employment for "Good Reason" only if he
terminated his employment by giving Notice of Termination pursuant to Sections
6(c) and 6(d)(iii) within ninety (90) days after the occurrence of any of the
following events (provided the Company does not cure such event within thirty
(30) days following its receipt of the Employee's Notice of Termination):
i. Without the Employee's prior written consent, the
Company assigns the Employee to duties materially inconsistent in any respect
with his position, authority, duties or responsibilities as set forth in Section
1, or takes any other action that results in a material diminution in such
position, authority, duties, or responsibilities, including, but not limited to,
failing to reappoint or reelect the Employee to any such position (other than
upon Retirement).
ii. The Employee's base salary, or his annual or
long-term Bonus Award under the Bonus Plan, is reduced for any reason other than
in connection with the termination of his employment. For this purpose, the
Employee's Bonus Award shall include (A) the Employee's share of the annual or
long term bonus pool in the Bonus Plan and/or (B) the terms and conditions of
the Bonus Plan.
iii. After a Change in Control (as defined in Section
8), within each twelve- (12-) month period (as described in Section 3), the
Company increases the base salary for senior executive officers of the Company
generally without similarly increasing the base salary of the Employee.
iv. For any reason other than in connection with the
termination of the Employee's employment, the Company materially reduces fringe
benefits provided to the Employee under Section 4, unless the Company agrees, as
evidenced by the Employee's written consent, to fully compensate the Employee
for any such material reduction.
v. The assignment of the Employee, without his prior
written consent, to a Company office located outside of the Central Ohio area.
vi. The Company's failure to obtain an agreement from
any successor or assign of the Company to assume and to agree to perform this
Agreement.
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<PAGE> 6
vii. The Company otherwise materially breaches its
obligations to make payments to the Employee under this Agreement.
c. Notice of Termination. Any termination of the Employee's
employment by the Company hereunder, or by the Employee other than termination
upon the Employee's death, shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" means a notice that shall indicate the specific termination
provision in this Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Employee's employment under the provision so indicated.
d. Date of Termination. For purposes of this Agreement, an
applicable "Date of Termination" means:
i. If the Employee's employment is terminated by his
death, the date of his death.
ii. If the Employee's employment is terminated by the
Company as a result of Disability or Retirement pursuant to Section 6(a)(i) or
for Cause pursuant to Section 6(a)(ii), the date that is thirty (30) days after
Notice of Termination is given (provided that in the case of termination for
Disability, the Employee shall not have returned to the performance of his
duties on a full-time basis during such thirty- (30-) day period).
iii. If the Employee terminates his employment for
Good Reason pursuant to Section 6(b), the date that is thirty (30) days after
Notice of Termination is given (provided that the Company does not cure such
event during that thirty- (30-) day period).
iv. If the Employee terminates his employment other
than for Good Reason, the date that is one (1) month after Notice of Termination
is given.
v. If the Employee's employment is terminated by the
Company other than for Cause, the date that is one (1) month after Notice of
Termination is given.
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<PAGE> 7
7. Amounts Payable Upon Termination of Employment or During
Disability.
a. Death or Retirement. If the Employee's employment is
terminated by his death or at Retirement, the Employee's beneficiary (in the
case of death) (as designated by the Employee in writing with the Company prior
to his death) or the Employee (in the case of Retirement) shall be entitled to
the following payments and benefits: (i) any portion of the Employee's base
salary that is accrued but unpaid, any vacation that is accrued but unused, and
any business expenses that are unreimbursed -- all, determined as of the Date of
Termination and payable within thirty (30) days of such date; (ii) a single lump
sum payment equal to a pro rata award under the Bonus Plan (both annual and
long-term bonus), with proration based on the Employee's service completed
during the period for which the award is determined and the results as of the
Date of Termination, and payable within thirty (30) days of the Date of
Termination and (iii) any benefits resulting from the fringe benefits described
in Section 4 upon the Employee's death or Retirement (whichever is applicable)
in accordance with the provisions of the plan or program that provides each
applicable fringe benefit. In the absence of a beneficiary designation by the
Employee, or, if the Employee's designated beneficiary does not survive the
Employee, benefits described in this Section 7(a) shall be paid to the
Employee's estate.
b. Disability.
i. During any period that the Employee fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness ("Disability Period"), the Employee shall continue to receive his base
salary and bonus (both annual and long-term) at the rate then in effect for such
period until his employment is terminated pursuant to Section 6(a)(i); provided,
however, that payments of base salary and bonus so made to the Employee shall be
reduced by the sum of the amounts, if any, that were payable to the Employee at
or before the time of any such salary or bonus payment under any disability
benefit plan or plans of the Company and that were not previously applied to
reduce any payment of base salary or bonus.
ii. Upon his termination of employment because of
Disability [as defined in Section 6(a)(i)], the Employee shall be entitled to
the following payments and benefits:
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<PAGE> 8
A. Those described in Section 7(a);
B. For a period of thirty-six (36)
months following his Date of
Termination, severance pay, paid
monthly, equal to his base salary
in effect at the Date of
Termination;
C. For a period of thirty-six (36)
months following his Date of
Termination, monthly payments equal
to one-twelfth (1/12th) of the
Employee's annual target bonus,
determined under the provisions of
the Bonus Plan, based upon his base
salary at the Date of Termination;
D. For a period of thirty-six (36)
months following his Date of
Termination, continuation of all
fringe benefits described in
Section 4, except for group medical
insurance, in effect at the Date of
Termination; and
E. For a period of forty-eight (48)
months following his Date of
Termination, continuation of the
Company's group medical insurance
for the Employee and his
dependents, as in effect at the
Date of Termination.
Notwithstanding any provision of this Section 7(b)(ii),
severance payments made to the Employee pursuant to Sections 7(b)(ii)(B) or (C)
shall be reduced by the sum of the amounts, if any, that were payable to the
Employee at or before the time of any such severance payment under any
disability benefit plan or plans of the Company and that were not previously
applied to reduce either any such severance payment or any payment of base
salary or bonus under Section 7(b)(i).
c. Termination by Company Without Cause, or Termination by
Employee for Good Reason. In the event that the Company terminates the
Employee's employment without Cause or the Employee terminates his employment
for Good Reason, the Employee shall be entitled to the following payments and
benefits:
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<PAGE> 9
i. Those described in Section 7(b)(ii);
ii. As of his Date of Termination, the Employee
shall become fully vested in all employee
benefit programs (other than any tax
qualified retirement or savings plan, the
Employee's interest in which shall vest in
accordance with such plan's terms),
including, without limitation, all stock
options and awards under the Stock Plan and
all benefits under the SERP, in which he was
a participant at the time of the termination
of his employment;
iii. Reimbursement of all expenses incurred by
the Employee through the use of any
executive out-placement services to assist
him to seek other employment, which shall
include, but not be limited to (A)
secretarial services, use of an office,
phone, office supplies and office services
comparable to the level of such services and
supplies available to the Employee prior to
the Date of Termination and (B) all
unreimbursed travel expenses incurred by the
Employee to seek other employment up to a
maximum amount of Five Thousand Dollars
($5,000); and
iv. A single lump sum payment, payable within
thirty (30) days of the Date of Termination,
equal to the Employee's non-vested interest
under any tax qualified retirement or
savings plan maintained by the Company which
is forfeited by the Employee under such
plan's terms upon his termination of
employment.
d. Termination by Employee Other Than for Good Reason or
Termination by Company for Cause. In the event that the Employee terminates his
employment other than for Good Reason or the Company terminates his employment
for Cause, the Employee shall not be entitled to any compensation except as set
forth below:
i. Any base salary that is accrued but unpaid,
any vacation that is accrued but unused, and
any business expenses that are unreimbursed
-- all, as of the Date of Termination;
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<PAGE> 10
ii. In the case of termination by the Employee
other than for Good Reason, a pro rata award
under the Bonus Plan [as described in
Section 7(a)(ii)]; and
iii. Any other rights and benefits (if any)
provided under plans and programs of the
Company, determined in accordance with the
applicable terms and provisions of such
plans and programs.
e. Mitigation of Damages. Following any Date of Termination,
the Employee shall have no obligation to seek other employment. However, except
in cases of termination of employment after a Change in Control, as described in
Section 8, to the extent that the Employee becomes employed following his
termination of employment with the Company without Cause or for Good Reason, the
payments and benefits described in Section 7(c) shall be reduced as follows:
i. Severance payments [as described in Sections
7(b)(ii)(B) and (C)] shall be reduced by
fifty cents (50(cent)) for every one dollar
($1) in compensation (either base salary or
bonus) that the Employee receives through
his new employment; provided, however,
during the first twelve (12) months
following the Employee's Date of
Termination, such severance payments shall
not be reduced pursuant to this provision by
more than fifty percent (50%); and
ii. The fringe benefits provided by the Company
to the Employee at the Date of Termination
[as described in Sections 7(b)(ii)(D) and
(E)] shall terminate upon the earlier of (A)
the Employee's re-employment and (B) the
applicable date specified under either
Section 7(b)(ii)(D) or (E); provided,
however, that the Employee's coverage and/or
the coverage of his dependents under the
Company's group medical insurance shall
continue in effect following the Employee's
reemployment with respect to claims excluded
by reason of any pre-existing condition
clause in the group medical plan maintained
by the Employee's new employer until the
earlier of (1) the applicable date specified
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<PAGE> 11
in Section 7(b)(ii)(E) or (2) the date on
which such pre-existing condition exclusion
is no longer applicable to the Employee or,
to the extent that coverage is continued
pursuant to this provision for a dependent
of the Employee, such dependent.
8. Change In Control.
(a) Occurrence of Change in Control. Immediately upon the
occurrence of a "Change in Control," the Employee shall become fully vested in
all employee benefit programs (other than any tax qualified retirement or
savings plan, the Employee's interest in which shall vest in accordance with
such plan's terms), including without limitation, all stock options and all
benefits under the SERP, in which he was a participant at the time of the Change
in Control. For purposes of this Agreement, the term "change in Control" shall
mean the occurrence of any of the following events after the date of this
Agreement (i) the acquisition by any individual, entity or group [(within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")] (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent
(20%) or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors ("Voting Securities"); provided, however, that the following
acquisitions shall not constitute a change in control (A) any acquisition by the
Company, (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (C) any acquisition by the Employee (or a group including the
Employee) or (D) any acquisition by any Person who on the date of this Agreement
was the beneficial owner of twenty percent (2)%) or more of the combined voting
power of the Voting Securities of the Company outstanding on such date; or (ii)
a change in the composition of a majority of the Board of Directors of the
Company within a three (3) year period, which change shall not have been
approved by a majority of the persons then surviving as Directors who also
comprised the Board of Directors of the Company immediately prior to the
commencement of such period; or (iii) the consummation of any reorganization,
merger or consolidation other than a reorganization, merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least sixty percent (60%) of the combined voting power of the Voting
Securities of the Company or
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<PAGE> 12
such surviving entity outstanding immediately after such reorganization, merger
or consolidation; or (iv) the consummation of a plan of complete liquidation of
the Company or of an agreement for the sale or disposition by the Company (in
one transaction or a series of transactions) of all or substantially all of the
Company's assets.
b. Termination of Employment. If, at any time within two (2)
years following a Change in Control, the Company terminates the Employee's
employment without Cause or the Employee terminates his employment for Good
Reason, the provisions of this Section 8(b) shall be applicable, instead of the
provisions of Section 7(c). To the extent that the provisions of this Section
8(b) are applicable, the Employee shall be entitled to the following payments
and benefits without any mitigation under Section 7(e) hereof:
i. Those described in Section 7(a), provided
all cash payments required under such
section shall be made within five (5) days
of the Date of Termination;
ii. Continuation of fringe benefits, as
described in Sections 7(b)(ii)(D) and (E);
iii. A single lump sum payment, payable within
five (5) days of the Date of Termination,
equal to the sum of (A) twice the Employee's
base salary in effect upon the Date of
Termination, plus (B) twice the Employee's
target annual bonus, determined under the
Bonus Plan, based upon the Employee's base
salary at the Date of Termination, plus (C)
the maximum three-year bonus payment
possible under the terms of the Bonus Plan
minus amounts already paid to the Employee
with respect to such three-year period.
iv. Those described in Sections 7(c)(iii) and
(iv); and
v. Reimbursement for any excise tax incurred by
the Employee under Section 4999 of the
Internal Revenue Code due to any payment
under this section, plus reimbursement for
any additional income taxes incurred by the
Employee resulting from the reimbursement by
the Company of such excise tax.
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<PAGE> 13
9. Confidential Information and Covenant Not to Compete.
(a) The Employee hereby agrees that, during the term
of the Agreement and thereafter, he will not disclose to any person or otherwise
use or exploit any of the proprietary or confidential information, including,
without limitation, trade secrets, processes, records of research, proposals,
programming, budgets or customer lists, regarding the Company, its business,
properties, or affairs obtained by him at any time prior to or subsequent to the
execution of this Agreement, except to the extent required by his performance of
assigned duties for the Company.
(b) Notwithstanding any provision of the Stockholders
Agreement, the Employee hereby agrees that during the term hereof and, unless
his employment is terminated by the Company without Cause or is terminated by
the Employee for Good Reason, for a period of two (2) years after his
termination of employment (including upon Retirement), he will not:
(i) authorize his name to be used by any
person, partnership, corporation or other business entity; or
(ii) engage in or carry on, directly or
indirectly, whether as advisor, principal, agent, partner,
officer, director, employee, stockholder, associate or
consultant of any person, partnership, corporation or other
business entity which is in material competition with any
business carried on, directly or indirectly (through one or
more subsidiaries or otherwise), by the Company prior to the
date hereof or hereafter conducted by the Company during the
term of this Agreement, directly or indirectly (through one or
more subsidiaries or otherwise) in any county of the State of
Ohio or any other county of any state in the United States or
municipality of a foreign country where business is then
carried on or conducted by the Company.
The Employee shall be deemed to be engaged or concerned with a
duty or pursuit which is contrary to any provision of this Agreement only if he
receives written notice to such effect, setting forth with reasonable
specificity the basis of such claim, from the Company. If, within thirty (30)
days from the date of his receipt of any such written notice, the Employee
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<PAGE> 14
shall take such steps as shall eliminate his engagement in or concern with
such duties or pursuits as are specified in such notice as being contrary to
this Agreement, the Employee shall not be deemed to have breached any of the
provisions of this Agreement in connection therewith or with respect thereto.
(c) The Employee agrees that the remedy at law for
any breach by him or any of the covenants and agreements set forth in this
Section 9 will be inadequate and that in the event of any such breach, the
Company may, in addition to the other remedies which may be available to it at
law, obtain injunctive relief prohibiting him (together with all those persons
associated with him) from the breach of such covenants and agreements.
(d) The parties hereto agree that the duration and
area for which the covenant not to compete is set forth in subparagraph (b)
above is to be effective are reasonable. In the event that any court determines
that the time period and/or the area covered thereby are unreasonable and that
such covenant is to that extent unenforceable, the parties hereto agree that the
covenant shall remain in full force and effect would not render it
unenforceable. The parties intend that this covenant shall be deemed to be a
series of separate covenants, one for each and every county of each and every
state within the United States of America and one for each municipality of any
foreign country where this covenant is intended to be effective.
(e) The employee will sign separate agreements,
policies or certifications regarding Intellectual Property, Ethical Business
Practices and Conflicts of Interest, on such forms as are adopted by the Company
from time to time for its executives.
10. General Provisions.
(a) Notices. Any notice to be given pursuant to this
Agreement shall be in writing and shall be deemed duly given three (3) days
after deposit in the mail, certified mail, return receipt requested, to the
party to receive such notice at the address specified below:
If to the Company, to: Holophane Company, Inc.
250 East Broad Street
Columbus, Ohio 43215
If to the Employee, to: John R. DallePezze
490 S. Third St.
Columbus, Ohio 43215
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<PAGE> 15
Either party may change its name and/or address for purposes of this
Section by giving the other written notice of the new name and/or address in the
manner set forth above.
(b) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
executors, administrators, heirs, personal representatives, successors and
assigns, but neither this Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary or any other person, nor be
subject to alienation, anticipation, sale, pledge, encumbrance, execution, levy
or other legal process of any kind against the Employee, his beneficiary, or any
other person. Notwithstanding the foregoing, the Company will assign this
Agreement to any corporation or other business entity succeeding to
substantially all of the business and assets of the Company by merger,
consolidation, sale of assets, or otherwise and shall obtain the assumption of
this Agreement by such successor.
(c) Waiver of Breach. The waiver by the Company or
the Employee of a breach of any provision of this Agreement by the other shall
not operate or be construed as a waiver of any subsequent breach by the other.
(d) Nonexclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Employee's continuing or future
participation in any incentive, fringe benefit, deferred compensation, or other
plan or program provided by the Company and for which the Employee may qualify,
nor shall anything herein limit or reduce such rights as the Employee may have
under any other agreements with the Company. Amounts that are vested benefits or
that the Employee is otherwise entitled to receive under any plan or program of
the Company at or after the Date of Termination, shall be payable in accordance
with such plan or program.
(e) Entire Agreement/Modification. This Agreement,
shall supersede any and all other agreements, either oral or written, between
the parties hereto with respect to the employment of the Employee by the
Company. Each party to this Agreement acknowledges that no other
representations, inducements, promises or agreements, orally or otherwise, have
been made by any party or anyone acting on behalf of any party, and that no
other agreement, statement or promise with respect to the employment of the
Employee by the Company not contained in this Agreement shall be valid or
binding. Any modification of this
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<PAGE> 16
Agreement will be effective only if it is in writing, signed by the party to be
charged.
(f) Partial Invalidity. If any provision of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way.
(g) Governing Law. The validity of this Agreement and
the interpretation and performance of all of its terms shall be governed by the
laws of the State of Ohio.
(h) Arbitration. Any controversy, claim or dispute
between the parties directly or indirectly concerning this Agreement or the
breach hereof, or the subject matter hereof (except in instances where only
injunctive relief is sought by the Company), shall be finally settled by
arbitration held in Columbus, Ohio. Any legal expenses incurred by the Company
in connection with any such claim or dispute shall be paid by the Company. To
the extent that the Employee prevails in any claim or dispute to enforce or
defend his rights under this Agreement, any legal expenses incurred by the
Employee in such claim or dispute shall be paid by the Company; provided that,
in addition, if the Employee does not prevail in any claim or dispute to enforce
or defend his rights under this Agreement following a Change in Control, the
Company shall nevertheless pay fifty percent (50%) of any legal expenses
incurred by the Employee in such claim or dispute.
(i) Captions. The captions in this Agreement are for
convenience and for identification purposes only, are not an integral part of
this Agreement and are not to be considered in the interpretation of any part
hereof.
(j) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but
together which shall constitute one and the same document.
-16-
<PAGE> 17
IN WITNESS WHEREOF, Holophane Company, Inc. and Holophane
Holdings Corporation, have each caused this Agreement to be executed by the
members of its Compensation Committee and the Employee has executed the same as
of the day and year first above written.
HOLOPHANE COMPANY, INC.
a Delaware corporation
HOLOPHANE HOLDINGS CORPORATION
a Delaware corporation
By:
---------------------------
By:
---------------------------
------------------------------
John R. DallePezze
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<PAGE> 18
EXHIBIT A
---------
[Holophane Bonus Plan]
-18-
<PAGE> 19
EXHIBIT B
---------
[Holophane SERP]
-19-
<PAGE> 20
EXHIBIT C
---------
[Incentive Stock Plan]
-20-
<PAGE> 21
EXHIBIT D
---------
[Side Letter]
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<PAGE> 22
AMENDMENT
TO
EMPLOYMENT AGREEMENT
BETWEEN
HOLOPHANE COMPANY, INC
(PREDECESSOR TO HOLOPHANE CORPORATION)
AND
JOHN R. DALLEPEZZE
WHEREAS, Holophane Company, Inc., predecessor to Holophane Corporation,
("Company") and John R. DallePezze ("Employee") entered into an employment
agreement dated August 30, 1993 ("Agreement");
WHEREAS, Company and Employee want to modify the Agreement as provided in this
amendment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
Company and Employee agree to the following amendments this 1st day of June,
1999.
Effective immediately, Section 8 of the Agreement is amended by the
addition of new subsection 8(c) to read, in its entirety, as follows:
(c) Regardless of any other provision of this section
or Agreement, Employee may elect to defer the date that any or
all of the cash benefits described in Section 8(b)(i) and
(iii) are paid. This election must be made in writing and
delivered to the Company at the address given in Section 10(a)
before the occurrence of a "Change in Control" (as defined in
Section 8(a)). If this election is filed, the Company will
transfer to the Holophane Corporation Second Amended and
Restated Supplemental Executive Retirement Plan ("SERP"), the
cash amount that otherwise would be distributed to Employee
under Section 8(b)(i) and (iii). These amounts will be
credited to the Employee's Deferred Compensation Account under
the SERP and distributed under the terms of that program.
However, any other benefits provided under Section 8(b) will
be unaffected by this election and will be provided or paid as
provided in Section 8(b) without regard to this paragraph.
<PAGE> 23
IN WITNESS WHEREOF, Holophane Corporation, as successor to Holophane Company,
Inc. and Holophane Holdings Corporation has caused this Agreement to be executed
by the members of its Compensation Committee and the Employee has executed the
same as of the day and year first above written.
HOLOPHANE CORPORATION
By:
--------------------------
By:
--------------------------
Accepted:
-----------------------------
John R. DallePezze
<PAGE> 24
SAMPLE NOTICE TO BE FILED BY AN AFFECTED OFFICER ELECTING TO DEFER SERP BENEFITS
PAYABLE UPON A CHANGE IN CONTROL. THIS LETTER SHOULD BE REPRODUCED ON EACH
OFFICER'S STATIONERY.
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[Date]
Holophane Corporation
250 East Broad Street
Columbus, Ohio 43215
Re: Election to Defer Change in Control Benefits
Dear Sir:
Previously, I entered into an employment agreement with Holophane Company, Inc.
and Holophane Holding Company (the "Agreement"), predecessors to Holophane
Corporation. Under the terms of the Agreement, I am permitted to continue my
participation in the Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan (the "SERP") for a specified time after
my termination of employment following a change in control. Effective June 1,
1999, the SERP was amended to allow eligible participants to defer payment of
cash amounts payable under the Agreement in the event of a change in control. If
deferred, these amounts will be credited to my Deferred Compensation Account
under the SERP and distributed under the terms of that program.
By signing below, I hereby elect:
o To defer ____% of any cash benefits that may become payable to me
under the Agreement on account of a change in control occurring after
the date of this letter; and
o To receive those amounts under the terms of the SERP.
Please let me know that you have received this election by returning to me a
signed copy of this letter.
Cordially,
<PAGE> 25
Received and accepted on behalf of the Holophane Corporation.
By:
-------------------------------------
Date accepted:
--------------------------
<PAGE> 1
Exhibit (c)(11)
TERMINATION BENEFITS AGREEMENT
This Termination Benefits agreement (the "Agreement") is made and
entered into as of this 15th day of September, 1993, by and between HOLOPHANE
COMPANY, INC., a Delaware corporation, and HOLOPHANE HOLDINGS CORPORATION, a
Delaware corporation (collectively referred to as the "Company", and Bruce A.
Philp, (the "Executive")
W I N E S S E T H:
WHEREAS, the Executive has served the Company in the past and is
expected to continue to serve the Company in the future as a key Executive
officer and to make a major contribution to the profitability, growth and
financial strength of the Company; and
WHEREAS, the Company desires to provide income security upon the terms
and subject to the conditions contained herein in the event that the Executive's
employment with the Company is terminated after a Change in Control either
voluntarily by the Executive for Good Reason or involuntarily by the Company
without Cause;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Executive agree as set forth below.
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings contained herein:
(a) Bonus Plan. The term "Bonus Plant" shall mean the Holophane Bonus
Plan, as may be amended by the Company from time to time, a copy of which is
attached hereto as Exhibit A.
(b) Cause. The term "Cause" shall mean (i) the Executive being
convicted of a felony involving moral turpitude, provided that such conviction
would at the time have a material adverse effect on the Company in the
reasonable opinion of the Board of Directors of the Company, (ii) gross and
willful misconduct by the Executive which is deemed to be injurious to the
Company by the Company's Board of Directors, (iii) a finding of gross dishonesty
of the Executive, (iv) willful malfeasance or gross negligence, or failure to
act involving material nonfeasance, provided that in the case of such gross
negligence or material nonfeasance it would at the time have a material adverse
effect on the Company in the reasonable opinion of the Board of Directors of the
Company, (v) insubordination or refusal to perform assigned duties consistent
with the duties of the Executive prior to the occurrence of any Change in
Control or (vi) the Executive's material breach of his obligations contained in
Section 14 (Trade Secrets and Confidential Information; Non--competition
Agreement) of that certain Stock Purchase and Stockholders Agreement, dated June
30, 1989, by and among
<PAGE> 2
Holophane Holdings Corporation and each of the other stockholders thereto, to
which the Executive was concurrently made a party.
(c) Change in Control. The term "Change in Control" shall mean the
occurrence of any of the following events after the date of this Agreement (i)
the acquisition by any individual, entity or group [within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")] (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or
more of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors ("Voting
Securities"); provided, however, that the following acquisitions shall not
constitute a Change in Control (A) any acquisition by the Company, (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, (C) any
acquisition by the Executive (or a group including the Executive) or (D) any
acquisition by any Person who on the date of this Agreement was the beneficial
owner of twenty percent (20%) or more of the combined voting power of the Voting
Securities of the Company outstanding on such date; or (ii) a change in the
composition of a majority of the Board of Directors of the Company within a
three (3) year period, which change shall not have been approved by a majority
of the persons then surviving as Directors who also comprised the Board of
Directors of the Company immediately prior to the commencement of such period;
or (iii) the consummation of any reorganization, merger or consolidation other
than a reorganization, merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least sixty percent (60%) of the combined
voting power of the Voting Securities of the Company or such surviving entity
outstanding immediately after such reorganization, merger or consolidation; or
(iv) the consummation of a plan of complete liquidation of the Company or of an
agreement for the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the Company's assets.
(d) Date of Termination. The term "Date of Termination" shall mean (i)
if the Executive terminates his employment for Good Reason, the date that is
thirty (30) days after Notice of Termination (as defined in Section 6) is given
(provided that the Company does not cure such event during that thirty- (30-)
day period); and (ii) if the Executive's employment is terminated by the Company
other than for Cause, death or Disability the date that is one (1) month after
Notice of Termination (as defined in Section 6) is given.
(e) Disability. The term "Disability" shall mean the inability of the
Executive due to illness (mental or physical), accident, or otherwise, to
perform his duties for any period of ninety (90) consecutive days, as determined
by an independent
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<PAGE> 3
physician selected by the Company and reasonably acceptable to the Executive or
his legal representative.
(f) Good Reason. The term "Good Reason" shall mean, without the
Executive's written consent, (i) the Company assigns the Executive to duties
materially inconsistent in any respect with his position, authority, duties or
responsibilities or takes any other action that results in a material diminution
in such position, authority, duties or responsibilities (ii) the Executive's
base salary, or his annual or long term bonus award under the Bonus Plan, is
reduced for any reason other than in connection with the termination of his
employment (for this purpose, the Executive's bonus award shall include (A) the
Executive's share of the annual or long term bonus pool in the Bonus Plan and/or
(B) the terms and conditions of the Bonus Plan), (iii) the Company increases the
base salary for senior executive officers of the Company generally without
similarly increasing the base salary of the Executive; (iv) for any reason other
than in connection with the termination of the Executive's employment, the
Company materially reduces fringe benefits provided to the Executive prior to
the Change in Control, unless the Company agrees, as evidenced by the
Executive's written consent, to fully compensate the Executive for any such
material reduction; (v) the assignment of the Executive1 without his prior
written consent, to a Company office located outside of the central Ohio area;
and (vi) the Company's failure to obtain an agreement from any successor or
assign of the Company to assume and to agree to perform this Agreement.
2. Eligibility for Benefits. The Company agrees to pay to the Executive
the benefits specified in Section 3 hereof if (a) there is a Change in Control
and (b) within two (2) years after the Change in Control occurs (i) the Company
terminates the employment of the Executive for any reason other than Cause,
death, or Disability, or (ii) the Executive voluntarily terminates employment
with the Company for Good Reason. In addition, at the time of the occurrence of
a Change in Control, the Executive shall become fully vested in all employee
benefit programs (other than any tax qualified retirement or savings plan, the
Executive's interest in which shall vest in accordance with such plan's terms),
including without limitation, all stock options, in which he was a participant
at the time of the Change in Control.
3. Benefits Upon Termination of Employment . If the Executive is
entitled to benefits pursuant to Section 2 hereof, the Company agrees to pay to
the Executive as termination compensation the following:
(a) a single lump sum payment, payable within five (5) days of the
Date of Termination, equal to the sum of (i) any portion of the Executive's base
salary that is accrued but unpaid, any vacation that is accrued but unused, and
any business expenses that are unreimbursed--all, determined as of the Date of
Termination; and (ii) a pro rata award under the Bonus Plan (both annual and
long-term bonus), with proration based on the Executive's service completed
during the period for which the
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<PAGE> 4
award is determined and the results as of the Date of Termination;
(b) For a period of eighteen (18) months following the Date of
Termination, continuation of all fringe benefits to which the Executive was
entitled at the Date of Termination;
(c) A single lump sum payment, payable within five (5) days of the
Date of Termination, equal to the sum of (i) one and one-half times the
Executive's base salary in effect upon the Date of Termination, plus (ii) one
and one-half times the Executive's target annual bonus, determined under the
Bonus Plan, based upon the Executive's base salary at the Date of Termination,
plus (iii) the maximum three-year bonus payment possible under the terms of the
Bonus Plan minus amounts already paid to the Executive with respect to such
three-year period;
(d) Reimbursement of all expenses incurred by the Executive through
the use of any executive out-placement services to assist him to seek other
employment, which shall include, but not be limited to (i) secretarial services,
use of an office, phone, office supplies and office services comparable to the
level of such services and supplies available to the Executive prior to the Date
of Termination and (ii) all unreimbursed travel expenses incurred by the
Executive to seek other employment up to a maximum amount of Five Thousand
Dollars ($5,000);
(e) A single lump sum payment, payable within five (5) days of the
Date of Termination, equal to the Executive's non-vested interest under any tax
qualified retirement or savings plan maintained by the Company which is
forfeited by the Executive under such plan's terms upon his termination of
employment; and
(f) Reimbursement for any excise tax incurred by the Executive under
Section 4999 of the Internal Revenue Code due to any payment under this
Agreement, plus reimbursement for any additional income taxes incurred by the
Executive resulting from the reimbursement by the Company of such excise tax.
4. Enforcement of Agreement. If, following a Change in control, the
Executive becomes involved in any legal proceeding to either enforce or defend
his rights under this Agreement, all legal expenses incurred by the Executive in
such action shall be paid by the Company to the extent that the Executive
prevails in such action and fifty percent (50%) of the legal expenses incurred
by the Executive in such action shall be paid by the Company to the extent that
the Executive does not prevail.
5. No Duty to Mitigate. The amounts payable to the Executive under this
Agreement shall not be treated as damages but as severance compensation to which
the Executive is entitled by reason of termination of employment in the
circumstances contemplated by this Agreement. The Company shall not be entitled
to set off against the amounts payable to the Executive of any amounts earned by
the Executive from other employment after
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<PAGE> 5
termination of employment with the Company, or any amounts which might have been
earned by the Executive from other employment had other such employment been
sought.
6. Notice of Termination. Any purported termination of employment by
the Company or by the Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 7 hereof. With
respect to any termination of employment by the Executive for Good Reason, the
Executive shall have ninety (90) days following the occurrence of any event
described in Section 1(f) to provide the Company with Notice of Termination. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so indicated.
7. Notices. Any notice to be given pursuant to this Agreement shall be
in writing and shall be deemed duly given three (3) days after deposit in the
mail, certified mail, return receipt requested, to the party to receive such
notice at the address specified below:
If to the Company: Holophane Company, Inc.
250 East Broad Street
Columbus, Ohio 43215
Attention: Corporate Secretary
If to the Executive: Bruce A. Philp
657 Whitetail Drive
Gahanna, Ohio 43230
Either party may change its name and/or address for purposes of this
section by giving the other written notice of the new name and/or address in the
manner set forth above.
8. Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective executors, administrators,
heirs, personal representatives, successors and assigns, but neither this
Agreement nor any right hereunder may be assigned or transferred by either party
hereto, any beneficiary or any other person, nor be subject to alienation,
anticipation, sale, pledge, encumbrance, execution, levy or other legal process
of any kind against the Executive, his beneficiary, or any other person.
Notwithstanding the foregoing, the Company will assign this Agreement to any
corporation or other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation, sale of assets, or
otherwise and shall obtain the assumption of this Agreement by such successor.
9. Waiver of Breach. The waiver by the Company or the Executive of a
breach of any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach by the other.
-5-
<PAGE> 6
10. Entire Agreement/Modification. This Agreement, shall supersede any
and all other agreements, either oral or written, between the parties hereto
with respect to the subject matter hereof. Each party to this Agreement
acknowledges that no other representations, inducements, promises or agreements,
orally or otherwise, have been made by any party or anyone acting on behalf of
any party, and that no other agreement, statement or promise with respect to the
subject matter hereof not contained in this Agreement shall be valid or binding.
Any modification of this Agreement will be effective only if it is in writing,
signed by the party to be charged.
11. Partial Invalidity. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
12. Governing Law. The validity of this Agreement and the
interpretation and performance of all of its terms shall be governed by the laws
of the State of Ohio.
13. Captions. The captions in this Agreement are for convenience and
for identification purposes only, are not an integral part of this Agreement and
are not to be considered in the interpretation of any part hereof.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but together shall
constitute one and the same document.
IN WITNESS WHEREOF, Holophane Company, Inc. and Holophane Holdings
Corporation have each caused this Agreement to be executed by the members of its
Compensation Committee and the Executive has executed the same as of the day and
year first above written.
HOLOPHANE COMPANY, INC.
HOLOPHANE HOLDINGS CORPORATION
By:_____________________
Title: Chairman, CEO
--------------------------
Bruce A. Philp
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<PAGE> 7
AMENDMENT TO
TERMINATION BENEFITS AGREEMENT
BETWEEN
HOLOPHANE COMPANY, INC
(PREDECESSOR TO HOLOPHANE CORPORATION)
AND
------------------------------
WHEREAS, Holophane Company, Inc., predecessor to Holophane Corporation,
("Company") and _________________ ("Employee") entered into a Termination
Benefits Agreement dated ________________ ("Agreement");
WHEREAS, Company and Employee want to modify the Agreement as provided in this
amendment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
Company and Employee agree to the following amendments this 1st day of June,
1999.
Effective immediately, Section 3 of the Agreement is amended by the
addition of new subsection 3(g), to read, in its entirety, as follows:
(g) Regardless of any other provision of this section
or Agreement, Employee may elect to defer the date that any or
of the all cash benefits described in Section 3(a) and (c) are
paid. This election must be made in writing and delivered to
the Company at the address given in Section 7 before the
occurrence of a "Change in Control" (as defined in Section
1(c)). If this election is filed, the Company will transfer to
the Holophane Corporation Second Amended and Restated
Supplemental Executive Retirement Plan ("SERP"), the cash
amount that otherwise would be distributed to Employee under
Section 3(a) and (c). These amounts will be credited to the
Employee's Deferred Compensation Account under the SERP and
distributed under the terms of that program. However, any
other benefits provided under Section 3 will be unaffected by
this election and will be provided or paid as provided in
Section 3 without regard to this paragraph.
Effective immediately, Section 3(b) of the Agreement is amended to
read, in its entirety, as follows:
(b) For a period of eighteen (18) months following the
Date of Termination, continuation of all fringe
benefits to which the Employee was entitled at the
Date of Termination. For purposes of
<PAGE> 8
this Agreement, "fringe benefits" includes all
health and life insurance coverages, sick leave and
disability programs, tax-qualified retirement plan
contributions, stock option plans, participation in
the Company's Supplemental Executive Retirement
Plan, the Company's Executive Deferred Compensation
Plan or Executive Deferred Compensation Program,
whichever is appropriate, and any club memberships
reimbursed by the Company on the Date of
Termination.
IN WITNESS WHEREOF, Holophane Corporation, as successor to Holophane Company,
Inc. and Holophane Holdings Corporation has caused this Agreement to be executed
by the members of its Compensation Committee and the Employee has executed the
same as of the day and year first above written.
HOLOPHANE CORPORATION
By: __________________________
By: __________________________
Accepted:
______________________________
<PAGE> 9
SAMPLE NOTICE TO BE FILED BY AN AFFECTED OFFICER ELECTING TO DEFER SERP BENEFITS
PAYABLE UPON A CHANGE IN CONTROL. THIS LETTER SHOULD BE REPRODUCED ON EACH
OFFICER'S STATIONERY.
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[Date]
Holophane Corporation
250 East Broad Street
Columbus, Ohio 43215
Re: Election to Defer Change in Control Benefits
Dear Sir:
Previously, I entered into a Termination Benefits Agreement with Holophane
Company, Inc., and Holophane Holding Company (the "Agreement"), predecessors to
Holophane Corporation. Under the terms of the Agreement, I am permitted to
continue my participation in the Holophane Corporation Second Amended and
Restated Supplemental Executive Retirement Plan (the "SERP") for a specified
time after my termination of employment following a change in control. Effective
June 1, 1999, the SERP was amended to allow eligible participants to defer
payment of cash amounts payable under the Agreement in the event of a change in
control. If deferred, these amounts will be credited to my Deferred Compensation
Account under the SERP and distributed under the terms of that program.
By signing below, I hereby elect:
o To defer ____% of any cash benefits that may become payable to me under
the Agreement on account of a change in control occurring after the
date of this letter; and
o To receive those amounts under the terms of the SERP.
Please let me know that you have received this election by returning to me a
signed copy of this letter.
Cordially,
Received and accepted on behalf of the Holophane Corporation.
By: ________________________________
Date accepted: _____________________
