<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
3-D GEOPHYSICAL, INC.
(NAME OF SUBJECT COMPANY)
WAI ACQUISITION CORP.
WESTERN ATLAS INC.
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
88553V107
(CUSIP NUMBER OF CLASS OF SECURITIES)
JAMES E. BRASHER, ESQ.
WAI ACQUISITION CORP.
C/O WESTERN ATLAS INC.
10205 WESTHEIMER ROAD
P.O. BOX 1407
HOUSTON, TEXAS 77251
(713) 266-5700
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF BIDDER)
COPIES TO:
DANIEL A. NEFF, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212)
403-1000
<PAGE> 2
CALCULATION OF FILING FEE
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Transaction Valuation* Amount of Filing Fee**
$114,995,829 $23,000
- --------------------------------------------------------------------------------
</TABLE>
* For purposes of calculating the filing fee only. Based upon 11,916,666
shares of Common Stock, par value $.01 per share, of 3-D Geophysical, Inc.
outstanding on March 2, 1998.
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate
Transaction Valuation.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid None
Form of Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
</TABLE>
2
<PAGE> 3
CUSIP No. 88553V107 14D-1
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WAI Acquisition Corp. (Pending)
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds
AF
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each
Reporting Person
1,748,306*
- --------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7) 14.7%
- --------------------------------------------------------------------------------
10. Type of Reporting Person CO
- --------------------------------------------------------------------------------
- --------------
* On March 8, 1998, Western Atlas Inc. ("Parent") entered into support
agreements (the "Support Agreements") with each member of the Board of Directors
of 3-D Geophysical, Inc. (the "Company") and one officer who is not a director
(collectively, the "Stockholders"). Pursuant to the Support Agreements, upon the
terms set forth therein, the Stockholders generally have agreed to tender, in
accordance with the terms of the tender offer described in this statement (the
"Offer") 1,748,306 shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"). In addition, the Stockholders have granted an
irrevocable proxy with respect to such shares of Common Stock to Parent, which
shares are reflected in Rows 7 and 9 of pages 3 and 4 of this Schedule 14D-1.
The Support Agreements are described in more detail in Section 11 of the Offer
to Purchase dated March 13, 1998.
3
<PAGE> 4
CUSIP No. 88553V107 14D-1
- --------------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Western Atlas Inc. 95-3894675
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds
BK, OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each
Reporting Person
1,748,306
- --------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7)
Excludes Certain Shares [ ]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
14.7%
- --------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- --------------------------------------------------------------------------------
4
<PAGE> 5
This Schedule 14D-1 Tender Offer Statement relates to the offer by WAI
Acquisition Corp. (the "Purchaser"), a Delaware corporation and a wholly-owned
subsidiary of Western Atlas Inc., a Delaware corporation ("Parent"), to purchase
all outstanding shares of Common Stock, par value $.01 per share (the "Shares"),
of 3-D Geophysical, Inc., a Delaware corporation (the "Company"), and the
associated preferred share purchase rights (the "Rights") issued pursuant to the
Share Purchase Rights Agreement, dated as of July 17, 1997, between the Company
and American Securities Transfer & Trust, Inc., as Rights Agent (as the same may
be amended, the "Rights Agreement"), at a purchase price of $9.65 per Share (and
associated Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal (which together constitute the "Offer"), which
are annexed to and filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2),
respectively. This Schedule 14D-1 is being filed on behalf of the Purchaser and
Parent.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is 3-D Geophysical, Inc. The address
of its principal executive offices is 8226 Parker Meadows Drive, Littleton,
Colorado 80124.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of the
Offer; the Merger Agreement; the Support Agreements; Appraisal Rights; Plans for
the Company; the Rights") of the Offer to Purchase, which is incorporated herein
by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) This Statement is being filed on behalf of Parent and the
Purchaser for purposes of the Schedule 14D-1. Reference is hereby made to the
information set forth in the "Introduction," Section 9 ("Certain Information
Concerning Parent and the Purchaser") and Schedule I (Directors and Executive
Officers of Parent and the Purchaser) of the Offer to Purchase, which is
incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best of their knowledge, any of their respective executive officers and
directors listed in Schedule I (Directors and Executive Officers of Parent and
the Purchaser) of the Offer to Purchase, which is incorporated herein by
reference, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or State
securities laws or finding any violation of such laws.
(g) Reference is hereby made to the information set forth in Schedule I
(Directors and Executive Officers of Parent and the Purchaser) of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer; the Merger Agreement; the Support
Agreements; Appraisal Rights; Plans for the Company; the Rights") of the Offer
to Purchase, which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to the information set forth in Section 12
("Source and Amount of Funds") of the Offer to Purchase, which is incorporated
herein by reference.
5
<PAGE> 6
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Nasdaq Quotation; Exchange Act Registration; Margin Regulations"),
Section 10 ("Background of the Offer; Contacts with the Company"), Section 11
("Purpose of the Offer; the Merger Agreement; the Support Agreements; Appraisal
Rights; Plans for the Company; the Rights") and Section 13 ("Dividends and
Distributions") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") and Schedule I
(Directors and Executive Directors of Parent and the Purchaser) of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company"),
Section 11 ("Purpose of the Offer; the Merger Agreement; the Support Agreements;
Appraisal Rights; Plans for the Company; the Rights") and Section 15 ("Certain
Legal Matters; Required Regulatory Approvals") of the Offer to Purchase, which
is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16
("Certain Fees and Expenses") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
"Introduction," Section 10 ("Background of the Offer; Contacts with the
Company") and Section 11 ("Purpose of the Offer; the Merger Agreement; the
Support Agreements; Appraisal Rights; Plans for the Company; the Rights") of the
Offer to Purchase, which is incorporated herein by reference.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; the Merger Agreement; the
Support Agreements; Appraisal Rights; Plans for the Company; the Rights") and
Section 15 ("Certain Legal Matters; Required Regulatory Approvals") of the Offer
to Purchase, which is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effects of the Offer on the Market for the Shares; Nasdaq Quotation;
Exchange Act Registration; Margin Regulations") of the Offer to Purchase, which
is incorporated herein by reference.
(e) Reference is hereby made to the information set forth in Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase, which is incorporated herein by reference.
6
<PAGE> 7
(f) Reference is hereby made to the entire texts of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated March 13, 1998.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) -- Text of press release issued by Parent and the Company on March 9, 1998.
(a)(8) -- Form of Summary Advertisement, dated March 13, 1998.
(c)(1) -- Agreement and Plan of Merger, dated as of March 8, 1998 by and among the Company, the
Purchaser and Parent.
(c)(2) -- Form of Support Agreement entered between Parent and Robert P. Andrews, Ralph M. Bahna,
Douglas W. Brandrup, Richard Davis, Arthur Emil, P. Dennis O'Brien and Emir L. Tavella.
(c)(3) -- Form of Support Agreement between Parent and Wayne P. Widynowski.
(c)(4) -- Form of Support Agreement between Parent and Ronald L. Koons.
(c)(5) -- Consulting Agreement and Non-Compete Agreement, dated as of March 8, 1998 among Parent,
Friedman Enterprises Inc. and Joel Friedman.
(c)(6) -- Consulting and Non-Compete Agreement, dated as of March 8, 1998 among Parent and Luis H.
Ferran Arroyo.
(c)(7) -- Letter Agreement, dated as of January 20, 1998 between the Company and Parent, as amended
(c)(8) -- Confidentiality Agreement, dated as of July 18, 1997 between the Company and Parent
(c)(9) -- Confidentiality Agreement, dated as of December 19, 1997 between the Company and Parent
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
7
<PAGE> 8
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT THE
INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: March 13, 1998
WESTERN ATLAS INC.
By: /s/ JAMES E. BRASHER
_________________________________
Name: James E. Brasher
Title: Senior Vice President
WAI ACQUISITION CORP.
By: /s/ JAMES E. BRASHER
_________________________________
Name: James E. Brasher
Title: Vice President
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
(a)(1) -- Offer to Purchase, dated March 13, 1998.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) -- Text of press release issued by Parent and the Company on March 9, 1998.
(a)(8) -- Form of Summary Advertisement, dated March 13, 1998.
(c)(1) -- Agreement and Plan of Merger, dated as of March 8, 1998 by and among the Company, the
Purchaser and Parent.
(c)(2) -- Form of Support Agreement entered between Parent and Robert P. Andrews, Ralph M. Bahna,
Douglas W. Brandrup, Richard Davis, Arthur Emil, P. Dennis O'Brien and Emir L. Tavella.
(c)(3) -- Form of Support Agreement between Parent and Wayne P. Widynowski.
(c)(4) -- Form of Support Agreement between Parent and Ronald L. Koons.
(c)(5) -- Consulting Agreement and Non-Compete Agreement, dated as of March 8, 1998 among Parent,
Friedman Enterprises Inc. and Joel Friedman.
(c)(6) -- Consulting and Non-Compete Agreement, dated as of March 8, 1998 among Parent and Luis H.
Ferran Arroyo.
(c)(7) -- Letter Agreement, dated as of January 20, 1988 between the Company and Parent, as amended
(c)(8) -- Confidentiality Agreement, dated as of July 18, 1997 between the Company and Parent
(c)(9) -- Confidentiality Agreement, dated as of December 19, 1997 between the Company and Parent
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
9
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
AT
$9.65 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN), ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER AND
ADOPTED THE MERGER AGREEMENT AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE
COMPANY'S STOCKHOLDERS.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK OF
THE COMPANY ON A FULLY DILUTED BASIS BEING VALIDLY TENDERED PRIOR TO THE
EXPIRATION OF THE OFFER AND NOT PROPERLY WITHDRAWN AND CERTAIN OTHER CONDITIONS.
SEE SECTION 14.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) either should (a) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver it together with the certificate(s)
representing tendered Shares and any other required documents to the Depositary
or tender such Shares pursuant to the procedures for book-entry transfer set
forth in Section 3 or (b) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect such transaction. A stockholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if such stockholder desires to tender such
Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures 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 the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks, trust companies and other nominees.
------------------------
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
MARCH 13, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Introduction..................................................... 1
1. Terms of the Offer.......................................... 2
2. Acceptance for Payment and Payment.......................... 4
3. Procedures for Tendering Shares............................. 5
4. Withdrawal Rights........................................... 8
5. Certain Tax Consequences.................................... 8
6. Price Range of the Shares; Dividends........................ 9
7. Possible Effects of the Offer on the Market for the Shares;
Nasdaq Quotation; Exchange Act Registration; Margin
Regulations............................................... 9
8. Certain Information Concerning the Company.................. 11
9. Certain Information Concerning Parent and the Purchaser..... 13
10. Background of the Offer; Contacts with the Company.......... 14
11. Purpose of the Offer; the Merger Agreement; the Support
Agreements; Appraisal Rights; Plans for the Company; the
Rights.................................................... 15
12. Source and Amount of Funds.................................. 26
13. Dividends and Distributions................................. 26
14. Certain Conditions of the Offer............................. 26
15. Certain Legal Matters; Required Regulatory Approvals........ 28
16. Certain Fees and Expenses................................... 30
17. Miscellaneous............................................... 31
SCHEDULE I Directors and Executive Officers of Parent and the
Purchaser...................................................... I-1
</TABLE>
<PAGE> 3
To: All Holders of Shares of Common Stock of 3-D Geophysical, Inc.:
INTRODUCTION
WAI Acquisition Corp. (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Western Atlas Inc., a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Shares"), of 3-D Geophysical, Inc., a Delaware
corporation (the "Company"), and the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of July 17,
1997, between the Company and American Securities Transfer & Trust, Inc., as
Rights Agent (as the same may be amended, the "Rights Agreement"), at a purchase
price of $9.65 per Share (and associated Right), net to the seller in cash,
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
together constitute the "Offer"). Unless the context otherwise requires, all
references to Shares shall include the associated Rights.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of The
Bank of New York, as Depositary (the "Depositary"), and Georgeson & Company
Inc., as Information Agent (the "Information Agent"), incurred in connection
with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN) ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER AND
ADOPTED THE MERGER AGREEMENT AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Smith Barney Inc. and Salomon Brothers Inc, collectively doing business as
Salomon Smith Barney ("SSB"), has delivered to the Board of Directors of the
Company a written opinion dated March 8, 1998 to the effect that, as of such
date and based upon and subject to certain matters stated in such opinion, the
$9.65 per Share cash consideration to be received by the holders of Shares
(other than Shares held by Parent or its affiliates), pursuant to the Offer and
the Merger was fair, from a financial point of view, to such holders. A copy of
SSB's written opinion dated March 8, 1998 is included with the Company's
Solicitation/ Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being mailed to stockholders concurrently herewith, and stockholders
are urged to read such opinion carefully in its entirety for a description of
the assumptions made, matters considered and limitations of the review
undertaken by SSB.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST A MAJORITY OF
THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN) AND NOT PROPERLY
WITHDRAWN (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
TERMS AND CONDITIONS. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 9, 1998, UNLESS EXTENDED. SEE SECTIONS 1, 14, AND 15.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of March 8, 1998 (the "Merger Agreement"), by and among the Company, the
Purchaser and Parent pursuant to which, following the consummation of the Offer
and the satisfaction or waiver of certain conditions, the Purchaser will be
merged with and into the Company (the "Merger"), with the Company continuing as
the surviving corporation (the "Surviving Corporation"). In the Merger, each
outstanding Share (other than Shares held by Parent, the Purchaser or any
wholly-owned subsidiary of Parent or the Purchaser or in the treasury of the
Company or by any wholly-owned subsidiary of the Company, which Shares will be
canceled with no payment being made with respect thereto, and other than Shares,
if any, held by stockholders who perfect their appraisal rights under Delaware
law ("Dissenting Shares")) will, by virtue of the Merger and without any action
by the holder thereof, be converted into the right to receive $9.65 in cash (the
"Merger Consideration"), payable to the holder thereof, without interest
thereon, upon the surrender of the certificate formerly representing such Share.
The Merger Agreement is more fully described in Section 11 below. Certain
federal
1
<PAGE> 4
income tax consequences of the sale of Shares pursuant to the Offer and the
Merger, as the case may be, are described in Section 5 below.
If the Minimum Condition and the other conditions to the Offer are
satisfied and the Offer is consummated, the Purchaser will own a sufficient
number of Shares to ensure that the Merger will be approved. Under the Delaware
General Corporation Law (the "GCL"), if after consummation of the Offer the
Purchaser owns at least 90% of the Shares then outstanding, the Purchaser will
be able to cause the Merger to occur without a vote of the Company's
stockholders. If, however, after consummation of the Offer, the Purchaser owns
less than 90% of the then outstanding Shares, a vote of the Company's
stockholders will be required under the GCL to approve the Merger, and a
significantly longer period of time will be required to effect the Merger. See
Section 11.
Concurrently with the execution of the Merger Agreement, Parent entered
into Support Agreements (the "Support Agreements") with each member of the Board
of Directors of the Company and one of its executive officers who is not a
director. Pursuant to the Support Agreements, such directors or officers have
agreed (except for one officer-director who owns 3,000 Shares), among other
things, to tender, in accordance with the terms of the Offer, all of the Shares
owned (beneficially or of record) by them. In the aggregate, approximately
1,748,306 Shares are subject to the Support Agreements, representing
approximately 14.7% of the outstanding Shares. See Section 11.
The Company has informed the Purchaser that, as of March 2, 1998, there
were 11,916,666 Shares issued and outstanding and 790,002 Shares reserved for
issuance upon the exercise of outstanding stock options ("Options") granted
under the Company's stock option or similar plans or agreements.
Based on the foregoing and assuming no additional Shares (or warrants,
options or rights exercisable for, or securities convertible into, Shares), have
been issued (other than Shares issued pursuant to such options and rights
referred to above) if the Purchaser were to acquire approximately 6,353,334
Shares pursuant to the Offer (including the Shares which pursuant to the Support
Agreements are required to be tendered in response to the Offer), the Minimum
Condition would be satisfied.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and thereby purchase all
Shares validly tendered on or prior to the Expiration Date and not withdrawn in
accordance with the procedures set forth in Section 4, as soon as practicable
after such Expiration Date; provided that, if all the conditions to the Offer
are satisfied or waived and at least 70% but less than 90% of the of the
outstanding Shares have been validly tendered and not withdrawn in the Offer,
the Purchaser reserves the right, in its sole discretion, to extend the Offer
from time to time for up to a maximum of ten additional business days in the
aggregate for all such extensions, notwithstanding the prior satisfaction of the
conditions to the Offer. The Offer will remain open until 12:00 midnight, New
York City time, on Thursday, April 9, 1998 (the "Expiration Date"), unless and
until the Purchaser extends the period of time for which the Offer is open, in
which event the term "Expiration Date" will mean the time and date at which the
Offer, as so extended by the Purchaser, will expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"). See Section 14. If, at any Expiration Date, the conditions to
the Offer described in Section 14 hereof shall not have been satisfied or waived
and the Merger Agreement is still
2
<PAGE> 5
in effect, the Purchaser will, and Parent will cause the Purchaser to, cause the
Offer not to expire, subject however to Parent's and the Purchaser's rights of
termination under the Merger Agreement. During any extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares. See Section 4. Under no circumstances will interest be paid on the
purchase price for tendered Shares, whether or not the Offer is extended.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), the Purchaser expressly reserves the right, in
its sole discretion, at any time or from time to time, to (i) in addition to its
termination rights relating to fulfillment of the Minimum Condition and
expiration or termination of HSR Act waiting periods, terminate the Offer if at
any time prior to the time of payment for Shares pursuant to the Offer any of
the other circumstances referred to in Section 14 exist; (ii) waive any
condition; or (iii) except as set forth in the Merger Agreement and discussed
below, otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such termination, waiver or amendment to the Depositary. In
the Merger Agreement, the Purchaser has agreed that without the prior written
consent of the Company, it will not (i) decrease the price per Share or change
the form of consideration payable in the Offer, (ii) decrease the number of
Shares sought to be purchased in the Offer, (iii) impose additional conditions
to the Offer, (iv) modify or amend the conditions to the Offer or any other term
of the Offer in a manner adverse to the holders of Shares or (v) except as
otherwise provided in the Merger Agreement, extend the Offer if all of the
conditions to the Offer are satisfied or waived.
Any such extension, termination or amendment will be followed as promptly
as practicable by public announcement thereof. In the case of an extension, Rule
14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires that the announcement be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rule
14e-1 under the Exchange Act. Subject to applicable law (including Rules
14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material
change in the information published, sent or given to stockholders in connection
with the Offer be promptly disseminated to stockholders in a manner reasonably
designed to inform stockholders of such change), and without limiting the manner
in which the Purchaser may choose to make any public announcement, the Purchaser
will not have any obligation to publish, advertise or otherwise communicate any
such public announcement other than by making a release to the Dow Jones News
Service. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act. The rights reserved by the Purchaser
in the preceding paragraph are in addition to the Purchaser's rights pursuant to
Section 14.
If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 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 percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality of the changes. In the Commission's view, an offer should remain
open for a minimum of five business days from the date the material change is
first published, sent or given to stockholders, and, if material changes are
made with respect to information that approaches the significance of price and
the percentage of securities sought, a minimum of ten business days may be
required to allow for adequate dissemination and investor response. With respect
to a change in price, a minimum ten business day period from the date of such
change is generally required under applicable Commission rules and regulations
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.
As of the date of this Offer to Purchase, the Rights are evidenced by the
certificates representing Shares and do not trade separately. Accordingly, by
tendering a certificate representing Shares, a stockholder is automatically
tendering a similar number of associated Rights. If, however, pursuant to the
Rights Agreement or for any other reason, the Rights detach and separate
certificates representing rights ("Rights Certificates")
3
<PAGE> 6
are issued, stockholders will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by the Purchaser to record holders of
Shares and will be furnished by the Purchaser to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the securityholder lists 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.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), the Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered and not properly withdrawn (in
accordance with Section 4) prior to the Expiration Date promptly after the
Expiration Date. In addition, subject to applicable rules of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, to delay
acceptance for payment of, or payment for, Shares in order to comply with
applicable law, including the HSR Act. See Sections 1 and 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Shares ("Share Certificates") or timely confirmation (a
"Book-Entry Confirmation") of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3; (ii) the appropriate Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees or 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 a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation 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 withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to validly tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY THE PURCHASER.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of Stockholders promptly
after the termination or withdrawal of the Offer.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to
4
<PAGE> 7
the procedures set forth in Section 3, such Shares will be credited to an
account maintained within such Book-Entry Transfer Facility), as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE PURCHASED PURSUANT
TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN
CONSIDERATION.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to assign, in whole or from time to time in part, to one or more of
Parent's subsidiaries or affiliates the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, but no such assignment will relieve
Parent of any liability under the Merger Agreement for any breach of the Merger
Agreement by any such assignee.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), 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 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 representing tendered Shares must be received by the
Depositary or tendered pursuant to the procedure for book-entry transfer set
forth below and Book-Entry Confirmation must be received by the Depositary, in
each case on or prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with. No alternate, conditional or
contingent tenders will be accepted.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A 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.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer. Any financial institution that is a participant in any of the Book-Entry
Transfer Facilities' systems may make book-entry delivery of Shares by causing
such Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (an "Eligible Institution"), unless the Shares
tendered thereby are tendered (i) by a registered holder of Shares who has not
completed either the box labeled
5
<PAGE> 8
"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 Instruction 1 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 to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares or Rights may nevertheless be
tendered if all of the following guaranteed delivery procedures are duly
complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation)
representing all tendered Shares, in proper form for transfer together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of
Guaranteed Delivery. A "Nasdaq trading day" is any day on which the Nasdaq
National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or, of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or 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 appropriate Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when Share Certificates are
received by the Depositary or Book-Entry Confirmations of such Shares are
received into the Depositary's account at a Book-Entry Transfer Facility.
Backup Withholding. Under the backup federal income tax withholding laws
applicable to certain stockholders (other than certain exempt stockholders,
including, among others, all corporations and certain foreign individuals), the
Depositary may be required to withhold 31% of the amount of any payments made to
such stockholders pursuant to the Offer or the Merger. To prevent backup federal
income tax withholding, each such stockholder must provide the Depositary with
such stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 9 of the Letter of Transmittal.
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<PAGE> 9
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's agents, attorneys-in-fact and 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 and other securities or rights issued or issuable in
respect of such Shares on or after the date of this Offer to Purchase. All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by such stockholder with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given by
such stockholder (and, if given, will not be deemed effective). The designees of
the Purchaser will, with respect to the Shares and such other securities and
rights for which such appointment is effective, be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders, or
any adjournment or postponement thereof, or by consent in lieu of any such
meeting or otherwise. In order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, the Purchaser or its
designee must be able to exercise full voting rights with respect to such Shares
and other securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders determined by
it not to be in proper form or the acceptance of or payment for which may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right to waive any of the conditions of the Offer to the extent
permitted by applicable law and the Merger Agreement or any 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.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
Purchaser that (a) such stockholder has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 under the Exchange Act and (b) the
tender of such Shares complies with Rule 14e-4. It is a violation of Rule 14e-4
for a person, directly or indirectly, to tender Shares for such person's own
account unless, at the time of tender, the person so tendering (i) has a net
long position equal to or greater than the amount of (x) Shares tendered or (y)
other securities immediately convertible into or exchangeable or exercisable for
the Shares tendered and such person will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will cause such Shares to be delivered
in accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person.
The Purchaser's interpretation of the terms and conditions of the Offer
will be final and binding. No tender of Shares will be deemed to have been
validly made until all defects and irregularities with respect to such tender
have been cured or waived by the Purchaser. None of Parent, the Purchaser or any
of their respective affiliates or assigns, the Depositary, the Information Agent
or any other person or entity will be under any duty to give any notification of
any defects or irregularities in tenders or incur any liability for failure to
give any such notification.
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.
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<PAGE> 10
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. 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 as provided herein, may also be withdrawn at
any time after May 11, 1998.
If, for any reason whatsoever, acceptance for payment of 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, 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 this Section 4.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the Shares
as set forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will
be deemed not validly tendered for purposes of the Offer, but may be tendered at
any subsequent time prior to the Expiration Date by following any of the
procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Parent, the
Purchaser or any of their respective affiliates or assigns, the Depositary, the
Information Agent or any other person or entity will be under any duty to give
any notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
federal income tax purposes, each selling or exchanging stockholder would
generally recognize gain or loss equal to the difference between the amount of
cash received and such stockholder's tax basis for the sold or exchanged Shares.
Such gain or loss will be capital gain or loss (assuming the Shares are held as
a capital asset) and any such capital gain or loss will be long term capital
gain if the stockholder held the Shares for more than one year. In the case of a
stockholder who is an individual, such capital gain will be subject to tax at a
maximum rate of 28% if the stockholder's holding period is more than one year
but not more than 18 months and at a maximum rate of 20% if the stockholder's
holding period is more than 18 months.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States and foreign corporations, or
entities that are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended (such as insurance companies, tax-exempt
entities and regulated investment companies). This discussion does not address
all aspects of federal income taxation that may be relevant to a particular
stockholder in light of such
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<PAGE> 11
stockholder's personal investment circumstances nor does it address any aspect
of foreign, state, local or estate and gift taxation that may be applicable to a
stockholder.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND MERGER,
INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are traded on the Nasdaq National Market under the symbol
"TDGO." The following table sets forth, for the periods indicated, the reported
high and low sale prices for the Shares on the Nasdaq National Market since the
initial public offering in February 1996 of the Shares as reported in publicly
available sources.
3-D GEOPHYSICAL, INC.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1996
First Quarter (February 8 through March 31)................. $10 3/8 $7 7/16
Second Quarter.............................................. $12 1/2 $8 1/2
Third Quarter............................................... $11 3/4 $6 3/4
Fourth Quarter.............................................. $10 $7 1/2
1997
First Quarter............................................... $10 3/4 $5 3/8
Second Quarter.............................................. $ 6 7/8 $4 3/4
Third Quarter............................................... $ 7 1/2 $3 5/8
Fourth Quarter.............................................. $ 8 7/8 $5
1998
First Quarter (through March 12, 1998)...................... $ 9 15/32 $5 3/4
</TABLE>
On March 6, 1998, the last full day of trading prior to the announcement of
the execution of the Merger Agreement, according to publicly available sources,
the reported closing price on the Nasdaq National Market for the Shares was
$8 7/8 per Share. On March 12, 1998, the last full day of trading prior to the
commencement of the Offer, according to publicly available sources, the reported
closing price on the Nasdaq National Market for the Shares was $9 15/32 per
Share. The Company has not declared or paid any dividends on the Shares since
public trading of the Shares commenced on February 8, 1996.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ
QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase
of Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. 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
therefor.
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<PAGE> 12
Nasdaq Quotation. The purchase of Shares pursuant to the Offer will reduce
the number of holders of Shares and the number of Shares that might otherwise
trade publicly and could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion in the Nasdaq
National Market. According to published guidelines, the Shares would not be
eligible for continued inclusion if, among other things, the number of publicly
held Shares falls below 750,000, the number of holders of round lots of Shares
falls below 400 or the aggregate market value of such publicly held Shares falls
below $5,000,000. If these standards are not met, the Shares might nevertheless
continue to be included in the Nasdaq Small Cap Market but if, among other
things, the number of holders of Shares falls below 300, or if the number of
publicly held Shares falls below 500,000, or if the aggregate market value of
such publicly held Shares falls below $1,000,000 or if there are not at least
two market makers (one of which may be a market maker entering a stability bid),
Nasdaq Stock Market rules provide that the Shares would no longer qualify for
inclusion in the Nasdaq Stock Market and the Nasdaq Stock Market would cease to
provide any quotations. Shares held directly or indirectly by an officer or
director of the Company, or by any beneficial owner of more than 10% of the
Shares, ordinarily will not be considered as being publicly held for this
purpose.
In the event the Shares are no longer eligible for Nasdaq Stock Market
quotation, quotations might still be available from other sources. The extent of
the public market for the Shares and the availability of such quotations would,
however, depend upon the number of holders of such shares remaining at such
time, the interest in maintaining a market in such Shares on the part of
securities firms, the possible termination of registration of such Shares under
the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the 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 by the Company to the
Commission if the Shares are not listed on a "national securities exchange" and
there are fewer than 300 record holders of Shares. Termination of registration
of the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its stockholders and the Commission
and would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirements of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) or 14(c) and the related requirement of an annual report, no longer
applicable to the Company. If the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Company.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended, may be
impaired or, with respect to certain persons, eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for stock exchange listing or Nasdaq reporting.
The Purchaser believes that the purchase of the Shares pursuant to the Offer may
result in the Shares becoming eligible for deregistration under the Exchange
Act, and it would be the intention of the Purchaser to cause the Company to make
an application for termination of registration of the Shares as soon as possible
after successful completion of the Offer if the Shares are then eligible for
such termination.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will no longer be eligible for Nasdaq quotation and the registration
of the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which have the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors such as the number of record holders of the Shares and the number and
market value of publicly held Shares, following the purchase of Shares pursuant
to the Offer, the Shares might no longer constitute "margin securities" for
purposes of the Federal
10
<PAGE> 13
Reserve Board's margin regulations and, therefore, could no longer be used as
collateral for Purpose Loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 7076 South Alton Way, Building 4, Englewood, Colorado 80112. The
following description of the Company's business has been taken from, and is
qualified in its entirety by reference to, the Form 10-K filed by the Company
for the year ended December 31, 1996 (the "Form 10-K"):
3-D Geophysical, Inc. was formed in March 1995 and is one of the
leading providers of land-based and shallow water 3-D and 2-D seismic data
acquisition services to the oil and gas industry in the Western Hemisphere.
As of February 28, 1997 the Company's 10 crews operated land-based and
shallow water seismic data acquisition systems, primarily utilizing
state-of-the-art, 24-bit equipment, with a total of approximately 18,000
channels in Alaska, the Rocky Mountains, West Coast and Appalachian regions
and in Canada and Mexico.
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Form 10-K
and from the Form 10-Q filed by the Company for the nine months ended September
30, 1997. More comprehensive financial and other information is included in such
report (including management's discussion and analysis of financial condition
and results of operations) and in other reports and documents filed by the
Company with the Commission. The financial information set forth below is
qualified in its entirety by reference to such reports and documents filed with
the Commission and the financial statements and related notes contained therein.
These reports and other documents may be examined and copies thereof may be
obtained in the manner set forth below.
11
<PAGE> 14
3-D GEOPHYSICAL, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------------
1997 1996 1995 1994
STATEMENT OF OPERATIONS: ------------- ----------- ------------- -------------
(SUCCESSOR) (PREDECESSOR) (PREDECESSOR)
<S> <C> <C> <C> <C>
Net sales..................................... $69,569 $51,754 $9,825 $17,660
Expenses
Cost of data acquisition.................... 55,623 40,032 5,968 11,004
Depreciation and amortization............... 7,282 4,106 662 1,468
General and administrative expenses......... 6,825 6,002 1,038 1,814
------- ------- ------ -------
69,730 50,140 7,668 14,286
------- ------- ------ -------
Operating income (loss)....................... (161) 1,614 2,157 3,374
Other income (expense):
Interest income............................. -- 461 265 165
Interest expense............................ (1,061) (1,021) (803) (466)
Foreign currency transaction (losses)
gain..................................... 221 (91) (120) (92)
Miscellaneous............................... 962 336 238 (77)
------- ------- ------ -------
122 (315) (420) (470)
------- ------- ------ -------
Income before provision for income taxes and
extraordinary item.......................... (39) 1,299 1,737 2,904
Provision for income taxes.................... 67 470 130 1,000
------- ------- ------ -------
Income (loss) before extraordinary item....... (106) 829 1,607 1,904
Extraordinary item, net of tax expense of
$36......................................... -- 57 -- --
------- ------- ------ -------
Net (loss) income............................. $ (106) $ 886 $1,607 $ 1,904
======= ======= ====== =======
Income per share before extraordinary item.... $ (.01) $ 0.11
Extraordinary item per share, net of tax
expense..................................... -- .01
------- -------
Net earnings per share........................ $ (.01) $ .12
======= =======
Weighted average common shares outstanding.... 11,960 7,224
======= =======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ----------------------------
1997 1996 1995
------------- ----------- -------------
(SUCCESSOR) (PREDECESSOR)
<S> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Current assets........................................ $32,616 $34,034 $2,792
Property and Equipment, net........................... 42,188 35,529 1,746
Goodwill, net......................................... 8,288 6,115 --
Other assets.......................................... 945 1,588 9
Total assets.......................................... 84,037 77,266 4,547
Current liabilities................................... 23,567 23,567 2,189
Deferred income taxes................................. 2,098 937 530
Long-term debt........................................ 5,055 4,597 --
Stockholders' equity.................................. 53,317 48,165 1,828
</TABLE>
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
12
<PAGE> 15
particular dates, concerning the Company's business, principal physical
properties, capital structure, material pending legal proceedings, operating
results, financial condition, directors and officers (including their
remuneration and the stock options granted to them), the principal holders of
the Company's securities, any material interests of such persons in transactions
with the Company and certain other matters is required to be disclosed in proxy
statements and annual reports distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at 500 West Madison Street, Chicago,
Illinois 60606 and 7 World Trade Center, New York, New York 10048. Copies of
such material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material may be obtained
electronically by visiting the Commission's web site on the Internet at
http://www.sec.gov. The Shares are traded on the Nasdaq National Market.
Reports, proxy statements and other information concerning the Company should
also be available for inspection at the National Association of Securities
Dealers, Inc., at 1735 K Street, N.W., Washington D.C. 20006.
Although neither Parent nor the Purchaser has any knowledge that any such
information is untrue, neither Parent nor the Purchaser takes any responsibility
for the accuracy or completeness of information contained in this Offer to
Purchase with respect to the Company or any of its subsidiaries or affiliates or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent is a Delaware corporation whose principal executive offices are
located at 10205 Westheimer Road, Houston, Texas 77042. It was incorporated in
1984 and operated as a subsidiary of Litton Industries, Inc. ("Litton") until
March 17, 1994, when Litton effected a pro rata distribution of all of Parent's
outstanding shares of common stock to the holders of Litton stock on a
one-for-one basis (the "Litton Distribution"). On October 31, 1997 Parent
distributed all of its shares of UNOVA, Inc. ("UNOVA"), its then wholly-owned
industrial automation systems subsidiary to its stockholders of record as of
October 24, 1997 (the "UNOVA Spin-Off"). Parent has operated as an independent
publicly-held entity since the Litton Distribution and is a leading supplier of
oilfield services and reservoir information technologies for the worldwide oil
and gas industry. It operates primarily through three divisions: Western
Geophysical, Western Atlas Logging Services, and E&P Services. The Company
specializes in land, marine and transition-zone seismic data acquisition and
processing services; well-logging and completion services; and reservoir
characterization and project management services. Parent has approximately
10,600 employees and had revenues in 1997 of approximately $1.7 billion.
On March 9, 1998 Parent announced that it had agreed to acquire WEDGE
DIA-LOG Inc., from WEDGE Energy Group L.L.C. for approximately $218,000,000 in
cash and about $33,000,000 in debt assumption (the "WEDGE Acquisition"). In
addition, on March 11, 1998, Parent filed two registration statements on Form
S-3 relating to the Units Offering and Notes Offering (as such terms are defined
herein). See Section 12.
The Purchaser's principal executive offices are located care of Western
Atlas Inc., 10205 Westheimer Road, Houston, Texas 77042. The Purchaser is a
newly formed Delaware corporation and a wholly-owned subsidiary of Parent. The
Purchaser has not conducted any business other than in connection with the Offer
and the Merger.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates,
13
<PAGE> 16
concerning Parent's business, principal physical properties, capital structure,
material pending legal proceedings, operating results, financial condition,
directors and officers (including their remuneration and stock options granted
to them), the principal holders of Parent's securities, any material interests
of such persons in transactions with Parent and certain other matters is
required to be disclosed in proxy statements and annual reports distributed to
Parent's stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected and copied at the Commission's
public reference facilities and should also be available for inspection at the
New York Stock Exchange, 20 Broad Street, New York, New York 10005. Such
material may be obtained electronically by visiting the Commission's website on
the Internet at http://www.sec.gov.
Except as set forth elsewhere in this Offer to Purchase or Schedule I
hereto: (i) neither Parent nor the Purchaser nor, to the knowledge of Parent or
the Purchaser, any of the persons listed in Schedule I hereto or any associate
or majority-owned subsidiary of Parent or the Purchaser or any of the persons so
listed, beneficially owns or has a right to acquire any Shares or any other
equity securities of the Company; (ii) neither Parent nor the Purchaser nor, to
the knowledge of Parent or the Purchaser, any of the persons or entities
referred to in clause (i) above or any of their executive officers, directors or
subsidiaries has effected any transaction in the Shares or any other equity
securities of the Company during the past 60 days; (iii) neither Parent nor the
Purchaser nor, to the knowledge of Parent or the Purchaser, any of the persons
listed in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations); (iv) since January 1, 1995, there have been no transactions
which would require reporting under the rules and regulations of the Commission
between Parent or the Purchaser or any of their respective subsidiaries or, to
the knowledge of Parent or the Purchaser, any of the persons listed in Schedule
I hereto, on the one hand, and the Company or any of its executive officers,
directors or affiliates, on the other hand; and (v) since January 1, 1995, there
have been no contacts, negotiations or transactions between Parent or the
Purchaser or any of their respective subsidiaries or, to the knowledge of Parent
or the Purchaser, any of the persons listed in Schedule I hereto, on the one
hand, and the Company or any of its subsidiaries or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
Initial contacts between the Company and Parent began in early July 1997
when Richard C. White, President of the Western Geophysical division of Western
Atlas International, Inc., a subsidiary of Parent ("WAII"), telephoned Joel
Friedman, Chairman of the Board of the Company, to discuss the possibility of
meeting to explore a business combination. On July 15, 1997 Mr. Friedman met
with Mr. White and Jesse Perez, Senior Vice President of Finance and
Administration of Western Geophysical. Although specific terms were not
discussed, the parties entered into a confidentiality agreement relating to the
exchange of confidential information.
After signing the confidentiality agreement, the Company provided Parent
with certain confidential information relating to the Company and its
businesses. Following several general discussions concerning possible structures
and potential valuations, both parties agreed that further discussions at such
time would not be pursued. On July 30, 1997, Mr. Perez sent a letter to Mr.
Friedman returning the confidential information which had previously been
provided.
In early November 1997, Mr. White contacted Mr. Friedman to reiterate
Parent's continued interest in a possible transaction, and later that month, on
behalf of the Company, SSB which was acting as financial advisor to the Company
with respect to a possible transaction, contacted and had further discussions
with Mr. White. In early December 1997, Will Honeybourne, a Senior Vice
President of WAII, met with Mr. Friedman and Luis Ferran, Executive Vice
President of the Company. The discussions at this meeting related primarily to
the Company's and the industry's outlook and each party's potential interest in
pursuing a business combination. On December 19, 1997, the Company and Parent
entered into a new confidentiality
14
<PAGE> 17
agreement. The Company then began to supply Parent with additional financial and
operational data and responded to Parent's inquiries in connection with its
preliminary financial review.
On January 13, 1998, representatives of the Company and Parent met to
discuss a possible transaction. At this meeting, Parent's representatives
indicated that Parent was willing to consider proposing an acquisition of the
Company for cash but that Parent would need to conduct a detailed due diligence
investigation of the Company before it would be in a position to make or proceed
with any such proposal. Parent's representatives said that, for Parent to
continue with the necessary due diligence investigation, it would require the
Company to enter into an agreement obligating it to negotiate exclusively with
Parent for a limited period of time during which Parent would continue due
diligence. Parent's representatives indicated a cash price of $10 per Share
based on its initial financial analysis of the proposed transaction. As a result
of these discussions, the Company and Parent entered into an Exclusivity
Agreement dated January 20, 1998 which initially provided that the Company would
negotiate exclusively with Parent until February 11, 1998 (the "Exclusivity
Period").
Parent continued its due diligence investigation through the remainder of
January, and in February representatives of Parent and the Company held numerous
telephonic meetings to discuss the information learned through Parent's due
diligence investigation. During the course of these discussions the Exclusivity
Period was extended several times. On February 12, 1998, representatives of
Parent met with Messrs. Friedman and Ferran, other senior executives of the
Company, three of its outside directors and a representative of SSB to discuss
the results of Parent's due diligence investigation to such date.
Following the meeting on February 12, representatives of the Company and
Parent held a number of telephonic meetings concerning such results of, and
concerns raised by, Parent's due diligence and the impact of such results on the
price per Share Parent would be willing to pay. As a result of these
negotiations, each party's representatives ultimately expressed their
willingness to recommend to their respective companies a compromise per Share
price of $9.65, subject to negotiation and execution of definitive documentation
and board approval thereof. On February 25, 1998, Parent furnished the Company
with a draft Merger Agreement. Additional meetings and telephone discussions
between Parent, the Company and their respective advisors occurred between
February 25 and March 8 during which the significant terms of the Merger
Agreement, Support Agreements and Consulting Agreements were negotiated and
substantially revised. On March 4, 1998 a form of the Merger Agreement was
presented to, and approved by, the Executive Committee of the Board of Directors
of Parent (acting with the authority of the full Board of Directors) and on
March 8, 1998 the Merger Agreement was presented to, and unanimously approved
by, the Board of Directors of the Company.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE SUPPORT AGREEMENTS;
APPRAISAL RIGHTS; PLANS FOR THE COMPANY; THE RIGHTS.
(a) Purpose
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all the
Shares. The purpose of the Merger is to acquire all capital stock of the Company
not purchased pursuant to the Offer or otherwise.
The following is a summary of certain provisions of the Merger Agreement
and the Support Agreements. This summary is qualified in its entirety by
reference to the Merger Agreement and the Support Agreements which are
incorporated by reference and copies or forms of which have been filed with the
Commission as exhibits to the Schedule 14D-1. The Merger Agreement and the
Support Agreements may be examined and copies may be obtained at the places set
forth in Section 8. Defined terms used herein and not defined herein shall have
the respective meanings assigned to those terms in the Merger Agreement.
(b) The Merger Agreement
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to prior satisfaction or waiver
of the conditions of the Offer, as set forth in Section 14, the Purchaser will
purchase all Shares validly tendered pursuant to the Offer. The Merger Agreement
provides
15
<PAGE> 18
that, without the prior written consent of the Company, the Purchaser will not
(i) impose additional conditions to the Offer, (ii) modify or amend the
conditions to the Offer or any other term of the Offer in a manner adverse to
the holders of Shares pursuant to the Offer, (iii) reduce the number of Shares
subject to the Offer, (iv) reduce the amount offered per Share pursuant to the
Offer, (v) except as provided in the following sentence, extend the Offer, if
all of the conditions to the Offer are satisfied or waived, or (vi) change the
form of consideration payable in the Offer. Notwithstanding the foregoing, the
Purchaser may, without the consent of the Company, extend the Offer at any time,
and from time to time, (i) if at the then scheduled Expiration Date of the Offer
any of the conditions to Purchaser's obligation to accept for payment and pay
for all Shares shall not have been satisfied or waived; (ii) for any period
required by any rule, regulation, interpretation or position of the Commission
or its staff applicable to the Offer; or (iii) if all conditions to the Offer
are satisfied or waived but the number of Shares tendered is at least equal to
70%, but less than 90%, of the then outstanding number of Shares, for an
aggregate period of not more than 10 business days (for all such extensions)
beyond the latest Expiration Date that would be permitted under clause (i) or
(ii).
RECOMMENDATION. The Company has represented to Parent in the Merger
Agreement that the Board of Directors of the Company (the "Company Board"), at a
meeting duly called and held, has (i) determined by unanimous vote of its
directors that the Offer and the Merger are fair to and in the best interests of
the Company and its stockholders, (ii) approved the Offer and adopted the Merger
Agreement in accordance with the GCL, (iii) recommended acceptance of the Offer
and approval of the Merger Agreement by the Company's stockholders (if such
approval is required by applicable law), and (iv) taken all other action
necessary to render Section 203 of the GCL and the Rights inapplicable to the
Offer, the Merger and the Support Agreements; provided, however, that such
recommendation and approval may be withdrawn, modified or amended to the extent
that the Company Board determines in good faith and on a reasonable basis, after
consultation with its outside legal counsel, that failure to take such action
would be a breach of the Company Board's fiduciary obligations under applicable
law. The Company further represented that, prior to the execution of the Merger
Agreement, SSB has delivered to the Company Board its opinion, and as of the
date of execution of the Merger Agreement (March 8, 1998) delivered its written
opinion, to the effect that, as of the date of the Merger Agreement, the cash
consideration to be received by the holders of the Shares (other than Shares
held by Parent or its affiliates, in the treasury of the Company or by any
wholly-owned subsidiary of the Company) pursuant to the Offer and the Merger is
fair to such holders from a financial point of view.
The Merger Agreement provides that Parent, upon the payment by the
Purchaser for Shares pursuant to the Offer, and from time to time thereafter, is
entitled to designate such number of directors, rounded up to the next whole
number, on the Company Board as is equal to the product of the total number of
directors on the Company Board (determined after giving effect to the directors
so elected pursuant to such provision) multiplied by the percentage that the
aggregate number of Shares beneficially owned by Parent or its affiliates bears
to the total number of Shares then outstanding. The Company shall, upon request
of Parent, promptly take all actions necessary to cause Parent's designees to be
so elected, including, if necessary, seeking the resignations of one or more
existing directors; provided, however, that prior to the time the Merger becomes
effective (the "Effective Time"), the Company Board shall always have at least
two members who are neither officers, directors, shareholders or designees of
the Purchaser or any of its affiliates ("Purchaser Insiders"). If the number of
directors who are not Purchaser Insiders is reduced below two prior to the
Effective Time, the remaining director who is not a Purchaser Insider will be
entitled to designate a person to fill such vacancy who is not a Purchaser
Insider and who will be a director not deemed to be a Purchaser Insider for all
purposes of the Merger Agreement. Following the election or appointment of
Parent's designees and prior to the Effective Time, any amendment or termination
of the Merger Agreement by the Company, any extension by the Company of the time
for performance of any of the obligations or other acts of Parent or the
Purchaser or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of the directors of the Company then in office who are
not Purchaser Insiders (or in the case where there are two or fewer directors
who are not Purchaser Insiders, the concurrence of one director who is not a
Purchaser Insider) if such amendment, termination, extension or waiver would
have an adverse effect on the minority stockholders of the Company.
16
<PAGE> 19
THE MERGER. The Merger Agreement provides that, at the Effective Time, the
Purchaser will be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser will cease and the Company will
continue as the Surviving Corporation.
The Company has agreed pursuant to the Merger Agreement that, if required
by applicable law in order to consummate the Merger, it will (i) convene a
special meeting of its stockholders as soon as practicable following the
acceptance for payment of and payment for Shares by the Purchaser pursuant to
the Offer for the purpose of considering and taking action upon the Merger
Agreement; (ii) prepare and file with the Commission a preliminary proxy
statement relating to the Merger Agreement, and use its reasonable best efforts
(x) to obtain and furnish the information required to be included by the
Commission in the Proxy Statement (as defined herein) and, after consultation
with Parent, to respond as soon as practicable to any comments made by the
Commission with respect to the preliminary proxy statement and to cause a
definitive proxy statement (the "Proxy Statement") to be mailed to its
stockholders and (y) to obtain the necessary approvals of the Merger and
adoption of the Merger Agreement by its stockholders; and (iii) include in the
Proxy Statement the recommendation of the Company Board that stockholders of the
Company vote in favor of the approval and adoption of the Merger and the Merger
Agreement. Parent has agreed in the Merger Agreement that it will vote, or cause
to be voted, all of the Shares then owned by it, the Purchaser or any of its
other subsidiaries in favor of the approval of the Merger and the Merger
Agreement.
The Merger Agreement further provides that, notwithstanding the foregoing,
if the Purchaser acquires at least 90% of the outstanding Shares of the Company
pursuant to the Offer, the parties to the Merger Agreement will take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the acceptance for payment of and payment for the Shares by
the Purchaser pursuant to the Offer without a meeting of the stockholders of the
Company, in accordance with Section 253 of the GCL.
CHARTER, BYLAWS, DIRECTORS AND OFFICERS. The Certificate of Incorporation
of the Purchaser, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with the provisions thereof and of the Merger Agreement
and applicable law. The By-Laws of the Purchaser in effect at the time of the
Effective Time shall be the By-Laws of the Surviving Corporation until amended,
subject to the provisions of the Merger Agreement which provide that all rights
to indemnification now existing in favor of directors and officers of the
Company and its subsidiaries as provided in their respective charters or by-laws
shall survive the Merger and continue in effect for not less than six years
thereafter. Subject to applicable law, the directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and will hold office until their respective successors are
duly elected and qualified, or their earlier death, resignation or removal, and
the officers of the Purchaser immediately prior to the Effective Time shall be
the initial officers of the Surviving Corporation.
CONVERSION OF SECURITIES. By virtue of the Merger and without any action
on the part of the holders thereof, at the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than (i) any Shares
held by Parent, the Purchaser, any wholly-owned subsidiary of Parent or the
Purchaser, in the treasury of the Company or by any wholly-owned subsidiary of
the Company, which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, will be canceled and retired and will cease to exist
with no payment being made with respect thereto and (ii) Dissenting Shares) will
be canceled and retired and will be converted into the right to receive $9.65
net per Share in cash, payable to the holder thereof, without interest thereon
(the "Merger Price"), upon surrender of the certificate formerly representing
such Share. At the Effective Time, each share of common stock of the Purchaser,
par value $.01 per share, issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
The Merger Agreement provides that, prior to the consummation of the Offer,
the Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and take all other actions necessary to provide for the
cancellation, effective at the Effective Time, of all the outstanding stock
options (the "Options") granted under any stock option or similar plan of the
Company (the "Stock Plans") or under any
17
<PAGE> 20
agreement, without any payment therefor except as otherwise discussed in this
Section 11. Immediately prior to the Effective Time, all Options (whether vested
or unvested) will be canceled (and to the extent exercisable shall no longer be
exercisable) and will entitle each holder thereof, in cancellation and
settlement therefor, to a payment, if any, in cash by the Company (less any
applicable withholding taxes), as soon as practicable following the Effective
Time, equal to the product of (i) the total number of Shares subject to such
Option and (ii) the excess, if any, of the Merger Price over the exercise price
per Share subject to such Option (the "Cash Payments").
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to the Parent and the
Purchaser with respect to, among other matters, its organization and
qualification, capitalization, authority, required filings, consents and
approvals, financial statements, public filings, litigation, compliance with
law, employee benefit plans, intellectual property, environmental matters,
material contracts, opinion of financial advisor, information to be included in
the Proxy Statement, tax status, condition of assets, relationships with
customers and employees and the absence of any material adverse effects on the
Company. The Parent and the Purchaser have made customary representations and
warranties to the Company with respect to, among other matters, its
organization, qualifications, authority, required filings, consents and
approvals, and availability of funds.
COVENANTS. The Merger Agreement obligates the Company and its
subsidiaries, from the date of the Merger Agreement until the Effective Time, to
conduct their operations only in the ordinary and usual course of business
consistent with past practice and obligates the Company and its subsidiaries to
use their reasonable best efforts to preserve intact their business
organizations, to keep available the services of their present officers and key
employees and to preserve the good will of those having business relationships
with them. The Merger Agreement also contains specific restrictive covenants as
to certain impermissible activities of the Company prior to the Effective Time,
which provide that the Company will not (and will not permit any of its
subsidiaries to) take certain actions without the prior written consent of
Parent including, among other things, amendments to its certificate of
incorporation or by-laws, issuances or sales of its securities, changes in
capital structure, dividends and other distributions, repurchases or redemptions
of securities, material acquisitions or dispositions, increases in compensation
or adoption of new benefit plans and certain other material events or
transactions.
ACCESS TO INFORMATION. The Merger Agreement provides that, until the
Effective Time, the Company will give Parent and the Purchaser and their
representatives full access, upon reasonable notice and during normal business
hours, to the offices and other facilities and to the books and records of the
Company and its subsidiaries.
EFFORTS. Subject to the terms and conditions provided in the Merger
Agreement, each of the Company, Parent and the Purchaser shall cooperate and use
their respective reasonable commercial efforts to take or cause to be made all
filings reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
the Merger Agreement.
Each of the parties also has agreed to use its reasonable commercial
efforts to obtain as promptly as practicable all Consents (as defined in the
Merger Agreement) of any Governmental Entity or any other person required in
connection with, and waivers of any Violations (as defined in the Merger
Agreement) that may be caused by, the consummation of the transactions
contemplated by the Offer and the Merger Agreement.
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that the Company, on
the one hand, and Parent and the Purchaser, on the other hand, agree to consult
promptly with each other prior to issuing any press release or otherwise making
any public statement with respect to the Offer, the Merger and the other
transactions contemplated by the Merger Agreement, agree to provide to the other
party for review a copy of any such press release or statement, and shall not
issue any such press release or make any such public statement prior to such
consultation and review, unless required by applicable law or any listing
agreement with a securities exchange.
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EMPLOYEE BENEFIT ARRANGEMENTS. With respect to employee benefit matters,
the Merger Agreement provides that the Company will, and Parent will cause the
Company and, from and after the Effective Time, the Surviving Corporation to,
honor all obligations under specified employment and severance agreements.
Notwithstanding the foregoing, from and after the Effective Time, the Surviving
Corporation will have the right to amend, modify, alter or terminate any Plan,
provided that any such action will not affect any rights for which the agreement
of the other party or a beneficiary is required. The Merger Agreement also
provides that employees of the Surviving Corporation immediately following the
Effective Time who immediately prior to the Effective Time were employees of the
Company or any Company subsidiary will be given credit for purposes of
eligibility and vesting under each employee benefit plan, program, policy or
arrangement of Parent or the Surviving Corporation in which such employees
participate subsequent to the Effective Time for all service with the Company
and any Company subsidiary prior to the Effective Time (to the extent such
credit was given by the Company or any Company subsidiary) for purposes of
eligibility and vesting. The Company has agreed that it will not take any action
which could prevent or impede the termination of the Company's 1995 Long-Term
Incentive Compensation Plan, the 1997 Long-Term Stock Incentive Plan, and all
other Stock Plans and any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any subsidiary of the Company in each case effective prior to the
Effective Time. The Company has agreed to take all necessary action so that none
of Parent, the Company or any of their respective subsidiaries is or will be
bound by any Options, other options, warrants, rights or agreements which would
entitle any person, other than Parent or its affiliates, to own any capital
stock of the Surviving Corporation or any of its subsidiaries or to receive any
payment in respect thereof as of the Effective Time and to obtain all necessary
consents so that after the Effective Time, holders of Options will have no
rights other than the rights of the holders of Options to receive the Cash
Payment, if any, in cancellation and settlement thereof.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Pursuant to the
Merger Agreement, Parent has agreed that from and after the Effective Time all
rights to indemnification existing at the date of the Merger Agreement in favor
of directors or officers of the Company or any of its subsidiaries as set forth
in the Certificate of Incorporation or By-Laws of the Company and its
subsidiaries shall survive the Merger and shall continue in full force and
effect for a period of six years following the Effective Time. The Merger
Agreement further provides that the Company shall, and from and after the
Effective Time, the Surviving Corporation shall, cause to be maintained in
effect for not less than four years (except as provided below) from the
Effective Time the current policies of the directors' and officers' liability
insurance maintained by the Company; provided that the Surviving Corporation may
substitute therefor other policies not less advantageous (other than to a de
minimus extent) to the beneficiaries for the current policies and provided that
such substitution shall not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time; and provided, further,
that the Surviving Corporation shall not be required to pay an annual premium in
excess of 175% of the last annual premium paid by the Company prior to the date
hereof (which the Company represents to be $100,000 for the 12-month period
ending December 31, 1998) and if the Surviving Corporation is unable to obtain
such insurance it shall obtain as much comparable insurance as possible for an
annual premium equal to such maximum amount. Notwithstanding the foregoing, at
any time on or after the first anniversary of the Effective Time, Parent may, at
its election, provide funds to the Surviving Corporation to the extent necessary
so that the Surviving Corporation may self-insure with respect to the level of
insurance coverage required in lieu of causing to remain in effect any
directors' and officers' liability insurance policy.
Any indemnified party under the Merger Agreement wishing to claim such
indemnification, upon learning of any such claim, action, suit, proceeding or
investigation, must promptly notify Parent thereof (but any such failure or
delay will not relieve Parent of liability except to the extent Parent is
actually prejudiced as a result of such failure or delay). In the event of any
such claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) Parent or the Surviving Corporation will have the
right, from and after the purchase of Shares pursuant to the Offer, to assume
the defense thereof and Parent will not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Parties in connection with the defense thereof,
(ii) the Indemnified Parties will cooperate in the defense of any such matter
and (iii) Parent will not be liable for any
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settlement effected without its prior written consent, provided that Parent
shall not have any obligation hereunder to any indemnified party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final, that such person is not entitled to
indemnification under applicable law. The Merger Agreement provides that any
Indemnified Party may retain its own separate counsel reasonably satisfactory to
Parent if there is a conflict of interest requiring separate representation
under applicable principles of professional responsibility and may participate
in (but not, except with respect to matters relating to such conflict, control)
the defense of such claim, action, suit, proceeding or investigation and the
Indemnifying Party will be responsible for any reasonable legal expenses or any
other reasonable expenses subsequently incurred by such Indemnified Party in
connection with such participation or defense to the extent such Indemnified
Party is entitled to be indemnified therefrom. The Merger Agreement further
provides that Parent will not settle any claim, action, suit, proceeding, or
investigation unless the Indemnifying Party will be fully released and
discharged.
NOTIFICATION OF CERTAIN MATTERS. Parent and the Company have agreed to
promptly notify each other of (i) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (A) to cause any representation or
warranty contained in the Merger Agreement to be untrue or inaccurate in any
material respect at any time prior to the Effective Time or (B) to cause any
covenant, condition or agreement under the Merger Agreement not to be complied
with or satisfied in any material respect and (ii) any failure of the Company or
Parent, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Merger Agreement in
any material respect; provided, however, that no such notification will affect
the representations or warranties of any party or the conditions to the
obligations of any party. Each of the Company, Parent and the Purchaser is also
required to give prompt notice to the other parties of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by the
Merger Agreement.
RIGHTS AGREEMENT. The Company covenants and agrees in the Merger Agreement
that it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii)
take any action which would allow any Person (as defined in the Rights
Agreement) other than Parent or the Purchaser to acquire beneficial ownership of
15% or more of the Shares without causing a Distribution Date or a Triggering
Event (as such terms are defined in the Rights Agreement) to occur.
STATE TAKEOVER LAWS. The Merger Agreement provides that the Company will,
upon the request of the Purchaser, take all reasonable steps to assist in any
challenge by the Purchaser to the validity or applicability to the transactions
contemplated by the Merger Agreement, including the Offer and the Merger, of any
state takeover law.
NO SOLICITATION. The Merger Agreement requires the Company, its affiliates
and their respective officers, directors, employees, representatives and agents
to immediately cease any existing discussions or negotiations, with any parties
with respect to any acquisition or exchange of all or any material portion of
the assets of, or any equity interest in, the Company or any of its subsidiaries
or any business combination with the Company or any of its subsidiaries. The
Merger Agreement further provides that, prior to the Effective Time, the Company
will not authorize or permit any of its subsidiaries or any of its or its
subsidiaries' directors, officers, employees, agents or representatives,
directly or indirectly, to solicit, initiate, encourage or facilitate, or
furnish or disclose non-public information in furtherance of, any inquiries or
the making of any proposal with respect to any merger, liquidation,
recapitalization, consolidation or other business combination involving the
Company or its subsidiaries or acquisition of any capital stock or any material
portion of the assets of the Company or of its subsidiaries, or any combination
of the foregoing (an "Acquisition Transaction") or negotiate, explore or
otherwise engage in discussions with any person (other than the Purchaser,
Parent or their respective directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by the
Merger Agreement; provided that the Company may furnish information to, and
negotiate or otherwise engage in discussions with, any party who delivers a bona
fide written proposal for an Acquisition Transaction if the Company Board
determines in good faith and on a reasonable basis by a majority vote, after
consultation with its outside legal counsel and
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SSB, that (i) such Acquisition Transaction is reasonably likely to be more
favorable to the stockholders of the Company from a financial point of view than
the transactions contemplated by the Merger Agreement and (ii) that failing to
take such action would thus constitute a breach of the fiduciary duties of the
Company Board. The Merger Agreement further provides that, from and after the
execution of the Merger Agreement, the Company will, as soon as practicable,
advise the Purchaser in writing of the receipt, directly or indirectly, of any
discussions, negotiations, proposals or substantive inquiries relating to an
Acquisition Transaction, identify the offeror and furnish to the Purchaser a
copy of any such proposal or inquiry, if it is in writing, or a written summary
of any oral proposal or inquiry relating to an Acquisition Transaction, and that
the Company will promptly advise Parent in writing of any development relating
to such proposal, including results of any discussions or negotiations with
respect thereto.
CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger
Agreement, the respective obligations of Parent, the Purchaser and the Company
to consummate the Merger are subject to the satisfaction, at or before the
Effective Time, of each of the following conditions: (i) the stockholders of the
Company shall have duly approved the transactions contemplated by the Merger
Agreement, if required by applicable law; (ii) the Purchaser shall have accepted
for payment and paid for Shares pursuant to the Offer in accordance with the
terms of the Merger Agreement; (iii) the consummation of the Merger is not
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction or any Governmental Entity and there
is not any statute, rule or regulation enacted, promulgated or deemed applicable
to the Merger by any Governmental Entity which prevents the consummation of the
Merger or has the effect of making the purchase of Shares illegal; and (iv) any
waiting period (and any extension thereof) under the HSR Act applicable to the
Merger shall have expired or terminated.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding approval
thereof by the stockholders of the Company (with any termination by Parent also
being an effective termination by the Purchaser):
(a) by the mutual written consent of the Company, by action of its
Board of Directors and Parent;
(b) by the Company if (i) the Purchaser fails to commence the Offer by
March 13, 1998, (ii) the Purchaser has not accepted for payment and paid
for the Shares pursuant to the Offer in accordance with the terms of the
Offer on or before June 30, 1998, provided that if any applicable waiting
period under the HSR Act shall not have expired or been terminated prior to
June 30, 1998, then the Company may not terminate this Agreement pursuant
to this provision until August 31, 1998 or (iii) the Purchaser fails to
purchase validly tendered Shares in violation of the terms of the Merger
Agreement;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any Shares being purchased thereunder;
provided, however, that neither Parent nor the Company may terminate the
Merger Agreement pursuant to this provision of the Merger Agreement if such
party shall have materially breached the Merger Agreement or, in the case
of Parent, if it or the Purchaser is in material violation of the terms of
the Offer;
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued an order, decree, judgment or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree or ruling or other action shall have
become final and nonappealable;
(e) by the Company if, prior to the purchase of Shares pursuant to the
Offer in accordance with the terms of the Merger Agreement, the Company
Board approves an Acquisition Transaction, on terms which a majority of the
members of the Company Board have determined in good faith and on a
reasonable basis after consultation with its outside counsel and SSB, that
(i) such Acquisition Transaction is more favorable to the Company and its
stockholders from a financial point of view than the transactions
contemplated by the Merger Agreement and (ii) failure to approve such
proposal and terminate the Merger Agreement would thus constitute a breach
of fiduciary duties of the Company Board under applicable law; provided
that the termination described in this subparagraph (e) shall not be
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effective unless and until the Company shall have paid to Parent the
Termination Fee, as described below under "Fees and Expenses."
(f) by Parent if the Company breaches its covenant in Section 6.08 of
the Merger Agreement (relating to the Rights Agreement);
(g) by Parent prior to the purchase of the Shares pursuant to the
Offer, if the Company Board shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Purchaser its
approval or recommendation of the Offer, the Merger Agreement or the
Merger, shall have approved or recommended another offer or transaction, or
shall have resolved to effect any of the foregoing;
(h) by Parent if any Management Stockholder who is a party to a
Support Agreement shall have failed to perform or comply with any of his
obligations, covenants or agreements in any material respect under a
Support Agreement;
(i) by Parent prior the purchase of the Shares pursuant to the Offer
if the Minimum Condition shall not have been satisfied by the expiration
date of the Offer and on or prior to such date (A) a third party shall have
made a proposal or public announcement or communication to the Company with
respect to (i) the acquisition of the Company by merger, tender offer or
otherwise; (ii) the acquisition of 50% or more of the assets of the Company
and its subsidiaries, taken as a whole; (iii) the acquisition of 15% or
more of the outstanding Shares; (iv) the adoption by the Company of a plan
of liquidation or the declaration or payment of an extraordinary dividend;
or (v) the repurchase by the Company or any of its subsidiaries of 15% or
more of the outstanding Shares at a price in excess of the Offer Price or
(B) any person (including the Company or any of its affiliates or
subsidiaries), other than Parent or any of its affiliates, shall have
become the beneficial owner of more than 15% of the Shares; or
(j) by Parent if Purchaser shall not have accepted for payment and
paid for Shares pursuant to the Offer in accordance with the terms thereof
on or before June 30, 1998.
In the event of the termination of the Merger Agreement in accordance with
its terms, the Merger Agreement will become void and have no effect, without any
liability on the part of any party or its directors, officers, employees or
stockholders, other than certain specified provisions, which shall survive any
such termination; provided that no party would be relieved from liability for
any breach of the Merger Agreement.
FEES AND EXPENSES. Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated by the Merger Agreement will
be paid by the party incurring such expenses. In the event that the Merger
Agreement is terminated pursuant to subparagraphs (e), (f), (g) or (h) of
"Termination" as described above (or is terminated pursuant to paragraph (c) as
a result of the failure to satisfy the conditions set forth in paragraph (d) of
Section 14) then the Company will within one business day after such termination
(except for a termination under subparagraph (e) in which case payment is to be
made upon or prior to such termination) pay Parent a termination fee of
$5,500,000 (the "Termination Fee") in immediately available funds by wire
transfer to an account designated by Parent. In the event that the Agreement is
terminated pursuant to subparagraph (i) of "Termination" and within six months
of such termination the Company shall have entered into a definitive agreement
or a written agreement in principle providing for an Acquisition Transaction,
the Company shall pay Parent the Termination Fee at or prior to execution of
such agreement or agreement in principle in immediately available funds by wire
transfer to an account designated by Parent. In the event the Merger Agreement
is terminated pursuant to subparagraph (c) of "Termination" as a result of the
failure to satisfy the conditions set forth in subparagraph (f) or (g)(1) of
Section 14, then the Company shall promptly (and in any event within one
business day after such termination) reimburse Parent for the fees and expenses
of Parent and the Purchaser (including reasonable printing fees, filing fees and
reasonable fees and expenses of its legal and financial advisors) related to the
Offer, the Merger Agreement, the transactions contemplated by the Merger
Agreement and any related financing up to a maximum of $1,500,000 (collectively
"Expenses") in immediately available funds by wire transfer to an account
designated by Parent. The prevailing party in any legal action undertaken to
enforce the Merger Agreement or any provision thereof
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will be entitled to recover from the other party the costs and expenses
(including attorneys and expert witness fees) incurred in connection with such
action.
AMENDMENT. The Merger Agreement may be amended by the Company, Parent and
the Purchaser at any time before or after any approval of the Merger Agreement
by the stockholders of the Company but, after any such approval, no amendment
will be made which decreases the price to be paid in the Merger, changes the
consideration to be received or which otherwise adversely affects the rights of
the Company's stockholders thereunder without the approval of such stockholders.
The Merger Agreement provides that any amendment or termination of the Merger
Agreement following the election of Parent's designees to the Company Board
requires the concurrence of a majority of the directors of the Company Board who
are not Purchaser Insiders (or in the case where there are two or fewer
directors who are not Purchaser Insiders, the concurrence of one director who is
not a Purchaser Insider).
EXTENSION; WAIVER. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of any other party thereto, (ii) waive any inaccuracies in the
representations and warranties contained therein of any other party thereto or
in any document, certificate or writing delivered pursuant to the Merger
Agreement by any other party thereto or (iii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations. The
Merger Agreement provides that following the election or appointment of Parent's
designees to the Company Board and prior to the Effective Time, any extension by
the Company of the time for the performance of any of the obligations or other
acts of Parent or the Purchaser or waiver of any of the Company's rights under
the Merger Agreement, will require the concurrence of a majority of the
directors of the Company then in office who are not Purchaser Insiders (or in
the case where there are two or fewer directors who are not Purchaser Insiders,
the concurrence of one director who is not a Purchaser Insider) if such
extension or waiver would have an adverse effect on the minority stockholders of
the Company.
(c) The Support Agreements
Concurrently with the execution of the Merger Agreement, Parent entered
into Support Agreements with each member of the Board of Directors of the
Company and one executive officer who is not a director. In the aggregate, such
stockholders owned 1,748,306 Shares representing approximately 14.7% of the
Shares outstanding as of March 8, 1998.
Pursuant to the Support Agreements the stockholder(s) have agreed to tender
(except for one officer-director who owns 3,000 Shares) and not withdraw their
Shares pursuant to the Offer. Each also agreed that, for so long as the Support
Agreement was in effect, at any meeting of the stockholders of the Company,
however called, he would vote his Shares in favor of the Merger, against any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement, and against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer.
Each of these stockholders also granted representatives of Parent an
irrevocable proxy to vote his Shares in favor of the Merger and other
transactions contemplated by the Merger Agreement, against any Acquisition
Transaction and otherwise as contemplated by the preceding paragraph.
In addition each of the stockholders who is a party to a Support Agreement
agreed not to (i) transfer any or all of his Shares (except for one
officer-director who owns 3,000 Shares and who may transfer his Shares to the
Company), (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of his Shares (except
for such officer-director who owns 3,000 Shares and who may enter into a
contract with the Company with respect to such Shares), (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to his Shares, (iv)
deposit his Shares into a voting trust or enter into a voting agreement or
arrangement with respect to his Shares or (v) take any other action that would
in any way restrict, limit or interfere with the performance of his obligations
under the Support Agreements or by the Merger Agreement or which would make any
representation or warranty of such stockholder under the Support Agreement
untrue or incorrect.
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Each further agreed that he would not, and would not permit or authorize
any of his affiliates, representatives or agents to, directly or indirectly,
encourage, solicit, explore, participate in or initiate discussions or
negotiations with, or provide or disclose any information to, any corporation,
partnership, person or other entity or group (other than Parent, the Purchaser,
any of their affiliates or representatives) concerning any Acquisition
Transaction or enter into any agreement, arrangement or understanding requiring
the Company to abandon, terminate or fail to consummate the Merger or any other
transactions contemplated by the Merger Agreement. Each such stockholder also
agreed to immediately cease any existing activities, discussions or negotiations
with any parties with respect to any Acquisition Transaction and to immediately
advise Parent in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Transaction, identify the offeror and furnish to parent a copy of any such
proposal or inquiry, if it is in writing, or a written summary of any oral
proposal or inquiry relating to an Acquisition Transaction and to promptly
advise Parent in writing of any development relating to such proposal, including
the results of any discussions or negotiations with respect thereto. The Support
Agreements provide, however, that any action taken by the Company or any member
of the Board of Directors of the Company (including, if applicable, such
stockholder acting in such capacity) in accordance with the proviso set forth in
the second sentence of "No Solicitation" will be deemed not to violate the
provisions described in this paragraph.
The agreements and proxy contained in each Support Agreement will terminate
on the earlier of payment for the Shares pursuant to the Offer and the
termination of the Merger Agreement in accordance with its terms.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. If the Merger is consummated, however, stockholders of the Company who
have not tendered their Shares will have certain rights under the GCL to dissent
and demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Stockholders who perfect such rights by complying with the
procedures set forth in Section 262 of the GCL ("Section 262") will have the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
from the Surviving Corporation. In addition, such dissenting stockholders would
be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme court stated that "no 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. The Weinberger court also noted that under Section
262, fair value is to be determined "exclusive of any element of value arising
from the accomplishment of exception of the merger." In Cede & Co. v.
Technicolor, Inc., however, the Delaware Supreme Court stated that, in the
context of a two-step cash merger, "to the extent that value has been added
following a change in majority control before cash-out, it is still value
attributable to the going concern," to be included in the appraisal process. As
a consequence, the fair value determined in any appraisal proceeding could be
more or less than the consideration to be paid in the Offer and the Merger.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than the price paid in the Merger. In this regard, stockholders should
be aware that opinions of investment banking firms as to the fairness from a
financial point of view (including SSB's opinion described herein) are not
necessarily opinions as to "fair value" under Section 262.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE GCL.
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Plans for the Company. In connection with the Offer, Parent and the
Purchaser have reviewed, and will continue to review various possible business
strategies that they might consider in the event that the Purchaser acquires
control of the Company, whether pursuant to this Offer, the Merger or otherwise.
Such strategies could include, among other things, changes in the Company's
business, corporate structure, capitalization or management.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger. However, Rule
13e-3 would be inapplicable if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination or (ii) the
Merger or other business combination is consummated within one year after the
purchase of the Shares pursuant to the Offer and the amount paid per Share in
the Merger or other business combination is at least equal to the amount paid
per Share in the Offer. If applicable, Rule 13e-3 requires, among other things,
that certain financial information concerning the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the Commission and disclosed to stockholders prior to
the consummation of the transaction.
The Rights. According to the Company's Current Report on Form 8-K dated
July 17, 1997 (together with subsequent filings relating to the Rights
Agreement, the "Company 8-K"), on July 17, 1997, the Company declared a dividend
distribution of one Right for each outstanding Share, which entitles the
registered holder to purchase from the Company one one-thousandth of a share of
a Junior Participating Preferred Stock, par value $0.01 per share, of the
Company (the "Preferred Stock") at an exercise price of $50.00 per one
one-thousandth of a share of Preferred Stock (the "Exercise Price"), subject to
adjustment.
The Rights Agreement provides that in the event that a person becomes the
beneficial owner of 15% or more (20% or more in the case of certain
institutional investors) of the outstanding Shares, each holder of a Right can
receive upon exercise that number of Shares (or other securities) of the Company
having at the time of such transaction a market value equal to two times the
Exercise Price. In the event that the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
corporation or where 50% or more of the assets or earning power is sold or
transferred, each holder of a Right can receive common stock of the acquiring
company having a value equal to two times the Exercise Price. As a condition of
the Offer and pursuant to the Merger Agreement, the Company has taken all
actions necessary to make the Rights inapplicable to the Offer, the Merger and
the Support Agreements.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Company 8-K and
the text of the Rights Agreement as set forth as an exhibit thereto filed with
the Commission, copies of which may be obtained in the manner set forth in
Section 8.
STOCKHOLDERS ARE REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. IF THE DISTRIBUTION
DATE (AS DEFINED IN THE RIGHTS AGREEMENT) DOES NOT OCCUR PRIOR TO THE EXPIRATION
DATE, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
SEE SECTIONS 1 AND 3.
Certain Consulting Arrangements. Joel Friedman, the Chairman of the Board
of the Company, and Luis H. Ferran Arroyo, the Executive Vice President for
Latin American Operations of the Company, have each entered into consulting and
non-compete agreements with Western Atlas which will become effective upon
consummation of the Merger. The agreements with Messrs. Friedman and Arroyo
provide for annual fees of $250,000 and $125,000, respectively, over a 4-year
term. During their consultancy, and until the later of the end of the 4-year
term or 12 months following the termination of their consultancy, each will be
prohibited from engaging in the Company's primary businesses of seismic data
acquisition and data processing and from soliciting employees and customers of
Western Atlas and its affiliates (including the Company).
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<PAGE> 28
12. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$120 million. Parent will ensure that the Purchaser has sufficient funds to
acquire all the outstanding Shares pursuant to the Offer and the Merger. On
March 11, 1998, Parent filed two registration statements on Form S-3 with the
Commission, one with respect to an offering of $400 million of Adjustable
Conversion Equity Security Units (the "Units Offering") and the other with
respect to an offering of $200 million of Senior Notes (the "Notes Offering")
due in the year 2008. A portion of the proceeds of the Units Offering and/or the
Notes Offering is to be used to fund the Offer, the Merger and the WEDGE
Acquisition. The registration statements for the Units Offering and the Notes
Offering have not become effective and Parent cannot sell such securities prior
to the time that such applicable registration statements become effective.
Neither the Units Offering nor the Notes Offering is conditional upon the
consummation of the other offering. If neither the Units Offering nor the Notes
Offering is consummated prior to the time of consummation of the Offer, then the
funds necessary to consummate the Offer and Merger will be obtained pursuant to
short-term bank financing in the ordinary course of business.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that without the prior written consent of
Parent, the Company will not, and will not permit any of its subsidiaries to,
prior to the Effective Time, (i) issue, reissue or sell, or authorize the
issuance, reissuance or sale of (A) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any rights,
warrants or options to acquire any convertible securities or capital stock,
other than the issuance of Shares (and the related Rights), in accordance with
the terms of the instruments governing such issuance on the date hereof,
pursuant to the exercise of Options outstanding on the date of the Agreement, or
(B) any other securities in respect of, in lieu of, or in substitution for, the
Shares or any other capital stock of any class outstanding on the date hereof or
make any other changes in its capital structure, (ii) declare, set aside or pay
any dividend or other distribution (whether in cash, securities or property or
any combination thereof) in respect of any class or series of its capital stock
other than between any of the Company and any of its wholly owned subsidiaries
or (iii) split, combine, subdivide, reclassify or redeem, purchase or otherwise
acquire or propose to redeem or purchase or otherwise acquire, any shares of its
capital stock, or any of its other securities.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or pay for any tendered Shares and may
terminate or, subject to the terms of the Merger Agreement, amend the Offer, if
(i) there shall not be validly tendered and not properly withdrawn prior to the
Expiration Date that number of Shares which represents at least a majority of
the total number of outstanding Shares on a fully diluted basis on the date of
purchase (not taking into account the Rights) (the "Minimum Condition"), (ii)
any applicable waiting period under the HSR Act shall not have expired or been
terminated, or (iii) at any time on or after March 8, 1998 and prior to the time
of payment for any Shares, any of the following events (each, an "Event") shall
exist:
(a) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, ruling, judgment, order or injunction enacted,
enforced, promulgated, amended, issued or deemed applicable to the Offer,
by any legislative body, court, government or governmental, administrative
or regulatory authority or agency, domestic or foreign, that would
reasonably be expected to, directly or indirectly: (1) make illegal or
otherwise prohibit or materially delay consummation of the Offer or the
Merger or seek to obtain material damages or make materially more costly
the making of the Offer, (2) prohibit or materially limit the ownership or
operation by Parent or the Purchaser of all or any portion of the business
or assets of the Company or any of its subsidiaries or that is material to
the Company and its subsidiaries taken as a whole, or compel Parent or the
Purchaser to dispose of or hold separately all or any portion of the
business or assets of Parent or the Purchaser or the Company or any of its
subsidiaries, or seek to impose any material limitation on the ability of
Parent or the Purchaser to conduct its business or own such assets, (3)
impose material limitations on the ability of Parent or the Purchaser
effectively to
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<PAGE> 29
acquire, hold or exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or
owned by the Purchaser or Parent on all matters properly presented to the
Company's stockholders, (4) require divestiture by Parent or the Purchaser
of any Common Shares, or (5) result in a Material Adverse Effect; or
(b) there shall be instituted or pending any action or proceeding by
any Governmental Entity seeking, or by any third party that would
reasonably be expected to result in, any of the consequences referred to in
clauses (1) through (5) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving prospective
change) in the business, assets, liabilities, (financial condition),
results of operations or prospects of the Company or any of its
subsidiaries that has, or would reasonably be expected to have, a Material
Adverse Effect on the Company; or
(d) (1) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph (d) as set forth in Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the outstanding Shares has been
acquired by any person (including the Company or any of its subsidiaries or
affiliates) or group (as defined in Section 13(d)(3) under the Exchange
Act), (2) the Company Board or any committee thereof shall have withdrawn,
or shall have modified or amended in a manner adverse to Parent or the
Purchaser, the approval, adoption or recommendation, as the case may be, of
the Offer or the Merger Agreement, or approved or recommended any other
takeover proposal or other acquisition of Shares other than the Offer and
the Merger, (3) a third party shall have entered into a definitive
agreement or a written agreement in principle with the Company with respect
to the acquisition of a majority of the Company's assets a tender offer or
exchange offer to be made to holders of Shares or a merger, consolidation
or other business combination with or involving the Company or any of its
subsidiaries, or (4) the Company Board or any committee thereof shall have
resolved to do any of the foregoing; or
(e) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement, when read without any exception or qualification
as to materiality or Material Adverse Effect, shall not be true and
correct, as if such representations and warranties were made at the time of
such determination (except as to any such representation or warranty which
speaks as of a specific date, which must be untrue or incorrect as of such
specific date), except where the failure or failures to be so true and
correct would not, individually or in the aggregate, reasonably be expected
to (i) have a Material Adverse Effect, (ii) prevent or materially delay the
consummation of the Offer, or (iii) materially increase the cost of the
Offer to the Purchaser; or
(g) (1) the Company shall have failed to perform or to comply with any
of its obligations, covenants or agreements under the Merger Agreement in
any material respect or (2) any Management Stockholder shall have failed to
perform or to comply in any material respect with any of his obligations,
covenants or agreements under a Support Agreement; or
(h) any Consent set forth in Section 4.05 of the Company Disclosure
and identified thereon as a "required Consent" shall not have been filed or
obtained or shall not have occurred, as the case may be; or
(i) there shall have occurred, and continued to exist, (1) any general
suspension of, or limitation on prices for, trading in securities on the
New York Stock Exchange or on the over-the-counter stock market, as
reported by the Nasdaq National Market, (2) any decline of at least 25% in
either the Dow Jones Average of Industrial Stocks or the Standard & Poor's
500 Index from the close of business on the last trading day immediately
preceding the date of the Merger Agreement, (3) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (4) a commencement of a war, armed hostilities or other national or
international crisis directly or indirectly involving the
27
<PAGE> 30
United States, with the exception of one military action directed against
the nation of Iraq or a material limitation (whether or not mandatory) by
any Governmental Entity on the extension of credit by banks or other
lending institutions, or (5) in the case of any of the foregoing clauses
(1) through (4) existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof.
The foregoing conditions (including those set forth in clauses (i) and (ii)
of the initial paragraph) are for the benefit of Parent and the Purchaser and
may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or the Purchaser,
in whole or in part, at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
General. Except as set forth in this Offer to Purchase, based on its
review of publicly available filings by the Company with the Commission, neither
Parent nor the Purchaser is aware of any licenses or regulatory permits that
appear to be material to the business of the Company and its subsidiaries, taken
as a whole, and that might be adversely affected by the Purchaser's acquisition
of Shares (and the indirect acquisition of the stock of the Company's
subsidiaries) as contemplated herein, or any filings, approvals or other actions
by or with any domestic, foreign or supranational governmental authority or
administrative or regulatory agency that would be required for the acquisition
or ownership of the Shares (or the indirect acquisition of the stock of the
Company's subsidiaries) by the Purchaser pursuant to the Offer as contemplated
herein. Should any such approval or other action be required, it is presently
contemplated that such approval or action would be sought except as described
below under "State Takeover Laws." Should any such approval or other action be
required, there can be no assurance that any such approval or action would be
obtained without substantial conditions or that adverse consequences might not
result to the Company's or its subsidiaries' businesses, or that certain parts
of the Company's, Parent's, the Purchaser's or any of their respective
subsidiaries' businesses might not have to be disposed of or held separate or
other substantial conditions complied with in order to obtain such approval or
action or in the event that such approvals were not obtained or such actions
were not taken. The Purchaser's obligation to purchase and pay for Shares is
subject to certain conditions, including conditions with respect to litigation
and governmental actions. See Introduction and Section 14.
State Takeover Laws. A number of states (including Delaware where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Merger, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Statute, which as a matter of state securities
law made takeovers of corporations meeting certain requirements more difficult.
The reasoning in such decision is likely to apply to certain other state
takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America,
the Supreme Court of the United States held that the State of Indiana could as a
matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex
Corp., a Federal district court in Oklahoma ruled that the Oklahoma statutes
were unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal district court in Florida held, in Grand
Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated
Transactions Act
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<PAGE> 31
and Florida Control Share Acquisition Act were unconstitutional as applied to
corporations incorporated outside of Florida.
Section 203 of the DGCL prevents certain "business combinations" with an
"interested stockholder" (generally, any person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) for a period of
three years following the time such person became an interested stockholder,
unless, among other things, prior to the time the interested stockholder became
such, the board of directors of the corporation approved either the business
combination or the transaction in which the interested stockholder became such.
The Board of Directors of the Company has unanimously approved the Offer, the
Merger and the Merger Agreement and the transactions contemplated thereby for
the purposes of Section 203 of DGCL.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger although, pursuant to the Merger
Agreement, the Company has represented that the Company Board has taken
appropriate action to render Section 203 of the GCL inapplicable to the Offer,
the Merger and the transactions contemplated by the Merger Agreement. The
Purchaser reserves the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer or the Merger, and nothing in this
Offer to Purchase nor any action taken in connection herewith is intended as a
waiver of that right. In the event that it is asserted that one or more takeover
statutes apply to the Offer or the Merger, and it is not determined by an
appropriate court that such statute or statutes do not apply or are invalid as
applied to the Offer or the Merger, as applicable, the Purchaser may be required
to file certain documents with, or receive approvals from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or purchase
Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for purchase, or pay for, any Shares tendered. See Section 14.
United States Antitrust Approvals. Under the HSR Act, and the rules and
regulations that have been promulgated thereunder by the Federal Trade
Commission (the "FTC"), certain acquisition transactions may not be consummated
until certain information and documentary material has been furnished for review
by the FTC and the Antitrust Division of the Department of Justice (the
"Antitrust Division") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer and the Merger is
subject to such requirements.
Under the provisions of the HSR Act applicable to the Offer and the Merger,
the purchase of Shares pursuant to the Offer and the Merger may not be
consummated until the expiration of a 15-calendar-day waiting period following
the filing of certain required information and documentary material with respect
to the Offer with the FTC and the Antitrust Division, unless such waiting period
is earlier terminated by the FTC and the Antitrust Division. Parent expects to
file a Premerger Notification and Report Form with the FTC and the Antitrust
Division in connection with the purchase of Shares pursuant to the Offer and the
Merger under the HSR Act on March 13, 1998, and the required waiting period with
respect to the Offer and the Merger would expire at 12:00 a.m., New York City
time, on March 28, 1998, unless earlier terminated by the FTC or the Antitrust
Division or Parent receives a request for additional information or documentary
material prior thereto. If within such 15-calendar-day waiting period either the
FTC or the Antitrust Division were to request additional information or
documentary material from Parent, the waiting period with respect to the Offer
and the Merger would be extended for an additional period of 10 calendar days
following the date of substantial compliance with such request by Parent. Only
one extension of the waiting period pursuant to a request for additional
information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of Parent. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. Although the Company is
required to file certain information and documentary material with the FTC and
the Antitrust Division in connection with the Offer, neither the Company's
failure to make such filings nor a request made to the Company from the FTC or
the Antitrust Division for additional information or documentary material will
extend the waiting period with respect to the purchase of Shares pursuant to the
Offer and the Merger.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any
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<PAGE> 32
time before or after the Purchaser's purchase of Shares, the FTC or the
Antitrust Division could take such action under the antitrust laws as either
deems necessary or desirable in the public interest, including seeking to enjoin
the purchase of Shares pursuant to the Offer and the Merger, the divestiture of
Shares purchased pursuant to the Offer or the divestiture of substantial assets
of Parent, the Purchaser, the Company or any of their respective subsidiaries or
affiliates. Private parties as well as state attorneys general may also bring
legal actions under the antitrust laws under certain circumstances. See Section
14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser believes that the
acquisition of Shares pursuant to the Offer and the Merger should not violate
the applicable antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made, or,
if such challenge is made, what the result will be. See Section 14.
Foreign Approvals. According to publicly available information, the
Company conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer or the Merger, the laws of certain of those foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval or consent of, governmental authorities in such countries and
jurisdictions. The governments in such countries and jurisdictions might attempt
to impose additional conditions on the Company's operations conducted in such
countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Merger. If such approvals or consents are found to
be required the parties intend to make the appropriate filings and applications.
In the event such a filing or application is made for the requisite foreign
approvals or consents, there can be no assurance that such approvals or consents
will be granted and, if such approvals or consents are received, there can be no
assurance as to the date of such approvals or consents. In addition, there can
be no assurance that the Purchaser will be able to cause the Company or its
subsidiaries to satisfy or comply with such laws or that compliance or
noncompliance will not have adverse consequences for the Company or any
subsidiary after purchase of the Shares pursuant to the Offer or the Merger.
Litigation. On or about March 9, 1998, a putative class action complaint,
on behalf of the Company's stockholders, was filed in the Court of Chancery in
the State of Delaware in and for New Castle County against the Company, the
members of the Company Board, and Parent (the "Chancery Court Action"). The
complaint in the Chancery Court Action alleges that the directors of the Company
breached their fiduciary duties by agreeing to the merger contemplated by the
Merger Agreement without making the requisite effort to obtain the best offer
possible. The complaint seeks declaratory and injunctive relief, as well as
unspecified damages and attorneys' fees. Parent intends to defend such action
vigorously.
16. CERTAIN FEES AND EXPENSES.
Georgeson & Company Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith.
In addition, The Bank of New York has been retained as the Depositary. The
Purchaser will pay the Depositary reasonable and customary compensation for its
services in connection with the Offer, will reimburse the Depositary for its
reasonable out-of-pocket expenses in connection therewith and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including certain liabilities under the federal securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
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<PAGE> 33
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company, except that copies
will not be available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer shall under any circumstances create any implication that there has
been no change in the affairs of Parent, the Purchaser, the Company or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
WAI ACQUISITION CORP.
March 13, 1998
31
<PAGE> 34
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers of
Parent are set forth below. Unless otherwise indicated, the business address of
each such director and each such executive officer is 10205 Westheimer Road,
Houston, Texas 77042. Unless otherwise indicated below, each occupation set
forth opposite an individual's name refers to employment with Parent. Unless
otherwise indicated below, all directors and executive officers listed below are
citizens of the United States.
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH PARENT; BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---- --- ---------------------------------------------------
<S> <C> <C>
Paul Bancroft, III............ 68 Independent venture capitalist and consultant. Director of
Parent since 1994. Chair of the Compensation Committee and
member of the Audit and Compliance Committee and the
Nominating Committee.
Mr. Bancroft was President, Chief Executive Officer, and a
director of Bessemer Securities Corporation from 1976 until
1988. He is a director of several investment funds sponsored
by Scudder, Kemper Investments.
Alton J. Brann................ 56 Chairman of the Board of Parent since 1994. Member of the
Executive Committee and the Nominating Committee.
Mr. Brann has served as Chairman of the Board and Chief
Executive Officer of UNOVA since 1997. He served as Chief
Executive Officer of Parent from 1994 until the UNOVA
Spin-Off. Mr. Brann was elected President of Litton in 1990
and became its Chief Executive Officer in 1992, which
positions he held until the date of the Litton Distribution.
Mr. Brann is a director and Chairman of the Executive
Committee of the Board of Litton.
William C. Edwards............ 69 Venture capital investor; partner of Bryan & Edwards since
1968 and general partner of Ritter Partners and Banner
Partners, venture capital partnerships, since 1962. Director
of Parent since 1994. Chair of the Nominating Committee and
member of the Audit and Compliance Committee and the
Compensation Committee.
Mr. Edwards is Chairman of the Board of Xeruca Corporation
and a director of Trust Company of the West and CellNet Data
Systems. He is also a director and treasurer of Population
Action International.
Claire W. Gargalli............ 55 Vice Chairman, Diversified Search and Diversified Health
Search Companies (executive search consultants) since 1990.
Director of Parent since 1994. Chair of the Audit and
Compliance Committee and member of the Compensation
Committee and the Nominating Committee.
Orion L. Hoch................. 69 Director of Parent since 1994. Member of the Nominating
Committee.
Dr. Hoch served as Chief Executive Officer of Litton from
1988 to 1994 and Chairman of the Executive Committee of
UNOVA since 1997. Dr. Hoch is a director and Chairman
Emeritus of Litton and a director of Bessemer Trust Company,
New Jersey, and of Bessemer Trust Company, N.A., New York.
</TABLE>
I-1
<PAGE> 35
<TABLE>
<CAPTION>
POSITION WITH PARENT; BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---- --- ---------------------------------------------------
<S> <C> <C>
Joseph T. Casey............... 66 Director of Parent since 1994. Member of the Executive
Committee and the Nominating Committee. Consultant to Parent
since October 1, 1996.
Mr. Casey served as Vice Chairman and Chief Financial
Officer of Parent and Litton from the date of the
Distribution and from 1988, respectively to his retirement
on September 30, 1996. He is also a director of Litton and
PSI, Inc.
John R. Russell............... 59 President and Chief Executive Officer of Parent since the
UNOVA Spin-Off on October 31, 1997. Member of the Executive
Committee and the Nominating Committee.
Mr. Russell served as Executive Vice President and Chief
Operating Officer, Oilfield Services, of Parent from 1990
until the UNOVA Spin-off when he was named President and
Chief Executive Officer of Parent. Mr. Russell served as
Chief Executive Officer of Western Atlas International,
Inc., the Company's principal operating subsidiary ("WAII")
from 1991 to 1994, and, since 1991, has served as WAII's
President. Mr. Russell was Senior Vice President of Litton
from 1991 to 1994.
EXECUTIVE OFFICERS
John R. Russell............... 59 President and Chief Executive Officer of Parent since the
UNOVA Spin-Off. (For further information, see the
information set forth above concerning directors.)
Orval F. Brannan.............. 58 Senior Vice President of Parent since 1994 and President of
E&P Services division of WAII since 1995. Senior Vice
President of WAII since 1997.
James E. Brasher.............. 49 Senior Vice President and General Counsel of Parent since
the UNOVA Spin-Off. Prior thereto, Vice President of Parent
from 1996 to 1997 and Vice President and Group Counsel of
WAII from 1994 to 1997. Secretary and General Counsel of
WAII from 1987 to 1994.
William H. Flores............. 44 Senior Vice President and Chief Financial Officer of Parent
since the UNOVA Spin-off. Chief Financial Officer for WAII
since August 1997. Prior thereto, served as an officer of
Marine Drilling Companies, Inc. or its predecessors since
1980, most recently as Executive Vice President and Chief
Financial Officer.
Damir S. Skerl................ 58 Senior Vice President of Parent since 1994 and President of
the Western Atlas Logging Services division of WAII from
1992 to 1997. Executive Vice President of WAII since 1996.
Richard C. White.............. 42 Senior Vice President of Parent since May 7, 1996 and
President of Western Geophysical division of WAII since
1995. Prior thereto, Vice President of Parent from 1995 to
1996. Senior Vice President of WAII since 1995. Chief
Operating Officer from 1994 to 1995 and Senior Vice
President of Western Geophysical since 1993.
</TABLE>
I-2
<PAGE> 36
<TABLE>
<CAPTION>
POSITION WITH PARENT; BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---- --- ---------------------------------------------------
<S> <C> <C>
Thomas B. Hix, Jr............. 50 Vice President of Finance and Administration of Parent since
the UNOVA Spin-Off. Vice President Finance of WAII since
1994. Prior thereto, Vice President Finance and Chief
Financial Officer of WAII from 1990 to 1994.
Gary E. Jones................. 43 Vice President of Parent and President of the Western Atlas
Logging Services division of WAII since 1997. Prior thereto,
Vice President of Business Development of WAII from 1996 to
1997. Vice President of Latin America Operations of the
Western Geophysical division from 1992 to 1996.
</TABLE>
I-3
<PAGE> 37
DIRECTORS AND EXECUTIVE OFFICERS
OF THE PURCHASER
The name, business address, present principal occupation or employment and
five-year history of each of the directors and executive officers of the
Purchaser are set forth below. Unless otherwise indicated, the business address
of each such director and each such executive officer is 10205 Westheimer Road,
Houston, Texas 77042. Unless otherwise indicated, all directors and executive
officers listed below are citizens of the United States.
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER; BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---- --- --------------------------------------------------------
<S> <C> <C>
James E. Brasher.............. 49 Director since 1998. (For further information, see the
information set forth above concerning Parent.)
William H. Flores............. 44 Director since 1998. (For further information, see the
information set forth above concerning Parent.)
Lourdes T. Hernandez.......... 42 Director since 1998. Corporate Secretary of Parent since
September 1997. For more than five years prior thereto,
assistant general counsel of NL Industries, Inc., a publicly
traded international producer of titanium dioxide pigments.
EXECUTIVE OFFICERS
William H. Flores............. 44 President since 1998. (For further information, see the
information set forth above concerning Parent.)
Thomas B. Hix, Jr............. 50 Vice President and Treasurer since 1998. (For further
information, see the information set forth above concerning
Parent.)
Lourdes T. Hernandez.......... 42 Secretary since 1998. (For further information, see the
information set forth above concerning directors of the
Purchaser.)
Richard C. White.............. 42 Vice President since 1998. (For further information, see the
information set forth above concerning Parent.)
James E. Brasher.............. 49 Vice President and Assistant Secretary since 1998. (For
further information, see the information set forth above
concerning Parent.)
Will Honeybourne.............. 46 Vice President since 1998. Senior Vice President Marketing &
Business Development of WAII and Vice President of Parent
since September 1996. Prior thereto, President and Chief
Executive Officer of Computalog Ltd., Calgary from September
1993 through November 1995, Vice President and General
Manager of Baker Hughes INTEQ from March 1993 through August
1993 and President of EXLOG INC., a division of Baker Hughes
Inc., from March 1984 through March 1993. Mr. Honeybourne is
a citizen of the United Kingdom and a permanent resident of
the United States.
</TABLE>
I-4
<PAGE> 38
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Tender & Exchange Department
P.O. Box 11248 Institutions Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
For Information Telephone:
(800) 507-9357
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at the Purchaser's expense. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
(LOGO)
Wall Street Plaza
New York, New York 10005
BANKS AND BROKERS CALL COLLECT (212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 13, 1998
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
WESTERN ATLAS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Tender & Exchange Department
P.O. Box 11248 Institutions Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
For Information Telephone:
(800) 507-9357
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined in the Offer to Purchase dated March 13,
1998 (the "Offer to Purchase")) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of
Shares are to be made by book-entry transfer to an account maintained by The
Bank of New York (the "Depositary") at The Depository Trust Company ("DTC") or
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively referred to as the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3 of the Offer to Purchase.
Stockholders who tender 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 on or prior to
the Expiration Date (as defined in the Offer to Purchase) or who cannot complete
the procedures for book-entry transfer on a timely basis, must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. See Instruction 2.
<PAGE> 2
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:-----------------------------------------------
Name of Book-Entry Transfer Facility:----------------------------------------
(CHECK ONE)
[ ] The Depository Trust Company (DTC) [ ] Philadelphia Depository Trust
Company (PDTC)
Account Number:-----------------------Transaction Code Number:---------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):---------------------------------------------
Window Ticket Number (if any):-----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:--------------------------
Name of Institution which Guaranteed Delivery:-------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR ON SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
SHARE CERTIFICATE(S) TENDERED) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------
SHARE TOTAL NUMBER OF NUMBER
CERTIFICATE SHARES REPRESENTED BY OF SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it will be assumed that all Shares represented by Share Certificates delivered to
the Depositary are being tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to WAI Acquisition Corp. (the "Purchaser"),
a Delaware corporation and a wholly-owned subsidiary of Western Atlas Inc., a
Delaware corporation ("Parent"), the above described shares of Common Stock, par
value $.01 per share (the "Shares"), of 3-D Geophysical, Inc., a Delaware
corporation (the "Company"), and the associated preferred share purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of July 17,
1997, between the Company and American Securities Transfer & Trust, Inc., as
Rights Agent (as the same may be amended, the "Rights Agreement"), pursuant to
the Purchaser's offer to purchase all outstanding Shares at a price of $9.65 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which together with
the Offer to Purchase constitute the "Offer"). Unless the context otherwise
requires, all references to Shares shall include the associated Rights. 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 direct or
indirect subsidiaries or affiliates the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, as used herein, the term "Purchaser"
shall, if applicable, include any such subsidiary and affiliate.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered hereby in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities,
the issuance of rights for the purchase of any securities, or any cash dividends
that are declared or paid by the Company on or after the date of the Offer to
Purchase and are payable or distributable to stockholders of record on a date
prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer (collectively, "Distributions"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Shares (and Distributions) with full power of substitution (such
power of attorney and proxy being deemed to be irrevocable and coupled with an
interest), to (a) deliver Share Certificates (and Distributions), or transfer
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facilities, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price, (b) present such Shares (and Distributions) 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 Distributions), all in accordance with
the terms of the Offer.
The undersigned hereby irrevocably appoints designees of the Purchaser, and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote in such manner as each such attorney and
proxy or his or her substitute shall, in his or her sole discretion, deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of such vote or action (and Distributions) which the
undersigned is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned meeting), or by
written consent in lieu of such meeting, or otherwise. This power of attorney
and proxy is coupled with an interest in the Company and in the Shares and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney or proxy granted by the undersigned at any
time with respect to such Shares (and Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned understands
that the Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of such Shares, the Purchaser is able to exercise full voting rights with
respect to such Shares and Distributions, including voting at any meeting of
stockholders.
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and Distributions), that the undersigned own(s) the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such
tender of Shares complies with Rule 14e-4 under the Exchange Act and that when
the same are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The undersigned, upon request, will execute and deliver any
additional documents reasonably 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 Distributions). In addition, the undersigned shall
promptly remit and transfer to the Depositary for the account of the Purchaser
any and all other Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer and, pending such
remittance or appropriate assurance thereof, the Purchaser shall be entitled to
all rights and privileges as owner of such Distributions and may withhold the
entire purchase price or deduct from the purchase price of Shares tendered
hereby the amount or value thereof, as determined by the Purchaser in its sole
discretion.
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares 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
pursuant to the Offer, may also be withdrawn at any time after May 11, 1998. See
Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return certificates to, the person or persons so indicated. Stockholders
tendering Shares by book-entry transfer may request that any Shares not accepted
for payment be returned by crediting such account maintained at such Book-Entry
Transfer Facility as such stockholder may designate by making an appropriate
entry under "Special Payment Instructions." The undersigned recognizes that the
Purchaser has no obligation pursuant to the "Special Payment Instructions" to
transfer any Shares from the name of the registered holder thereof if the
Purchaser does not accept for payment any of such Shares.
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of Shares purchased are
to be issued in the name of someone other than the undersigned, or if
Shares tendered by book-entry transfer which are not purchased are to be
returned by credit to an account maintained at a Book-Entry Transfer
Facility other than that designated on the front cover.
Issue check and/or certificates to:
Name --------------------------------------------------------------
(PLEASE PRINT)
Address------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
[ ] Credit unpurchased Shares tendered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
[ ] DTC [ ] PDTC
------------------------------------------------------------
(ACCOUNT NUMBER)
============================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of Shares purchased are
to be sent to someone other than the undersigned, or to the undersigned at
an address other than that shown on the front cover.
Mail check and/or certificate to:
Name --------------------------------------------------------------
(PLEASE PRINT)
Address -----------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
------------------------------------------------------------
<PAGE> 6
IMPORTANT -- SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated:-------------------------------------------------------------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the necessary information.
See Instruction 5.)
Name(s):------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------------
Address:------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:-------------------------------------------------
Tax Identification or
Social Security No.:------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:-----------------------------------------------------------
Name (Please print):------------------------------------------------------------
Name of Firm:-------------------------------------------------------------------
Address:------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:-------------------------------------------------
Dated:------------------------ , 1998
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of the Shares tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
inside front cover hereof or (ii) if such Shares are tendered for the account of
a firm that is a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in the case of a
book-entry delivery, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date. 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 procedures 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 procedures set
forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i)
such tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser, must be received by the Depositary on or
prior to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), with any required signature guarantees (or, in the case of a
book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of Guaranteed
Delivery. A "Nasdaq trading day" is any day on which Nasdaq National Market is
open for business. If Share Certificates are forwarded separately to the
Depositary, a properly completed and duly executed Letter of Transmittal (or
facsimile hereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal or facsimile hereof, waive any right to receive any
notice of the acceptance of their 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 schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any 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 case, new
certificate(s) for the remainder of the Shares that were evidenced by your old
certificate(s) will be sent to you, unless otherwise provided in the appropriate
box marked "Special Payment Instructions" and/or "Special Delivery Instructions"
on this Letter of Transmittal, as soon as practicable after the Expiration Date.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
other change whatsoever.
<PAGE> 8
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any 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, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered owner(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 purchased are to be issued in the name
of a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price received
by such person(s) pursuant to this Offer (i.e., such purchase price will be
reduced) unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/ or certificates for unpurchased Shares are to be returned
to, a person other than the person(s) signing this Letter of Transmittal or if a
check is to be sent and/or such certificates are to be returned to someone other
than the person(s) signing this Letter of Transmittal or to an address other
than that shown on the front cover hereof, the appropriate boxes on this Letter
of Transmittal should be completed. Book-Entry Stockholders may request that
Shares not purchased be credited to such account maintained at such Book-Entry
Transfer Facility as such Book-Entry Stockholder may designate hereon. If no
such instructions are given, such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered 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, and 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, it 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> 9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing a Substitute Form W-9 certifying (i) that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and
(ii) that (a) such stockholder is exempt from backup withholding, (b) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (c) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN but has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN of the record
holder 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. LOST, DESTROYED, MUTILATED, OR STOLEN CERTIFICATES. If any
certificate(s) representing Shares has been lost, destroyed, mutilated, or
stolen, the stockholder should promptly notify the Depositary. The stockholder
will then be instructed as to the steps that must be taken in order to replace
the certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, mutilated, or destroyed
certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR
TO THE EXPIRATION DATE.
<PAGE> 10
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
PAYOR'S NAME: CITIBANK, N.A.
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- Please provide your name, address and PART 3 -- Social Security Number or
FORM W-9 TIN and certify by signing and dating below Employer ID Number
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE Name: ------------------------------------------
-----------------------------------
Address:----------------------------------------- Awaiting TIN [ ]
-------------------------------------------------
-------------------------------------------------
------------------------------------------------------------------------------------------
PAYOR'S REQUEST FOR PART 2 -- CERTIFICATIONS -- Under penalties of perjury, I certify that:
TAXPAYER IDENTIFICATION (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
NUMBER ("TIN") waiting for a number to be issued to me and have checked the box in Part 3) and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am
no longer subject to backup withholding.
- ---------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) of Part II above if you have been notified by the IRS that you are
currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you
are no longer subject to backup withholding, do not cross out such item (2).
- ---------------------------------------------------------------------------------------------------------------------------------
Signature ----------------------------------------------------------------------------------- Date ----------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</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.
<PAGE> 11
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 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: ---------------, 1998
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OF
THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Tender & Exchange Department
P.O. Box 11248 Institutions Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
For Information Telephone:
(800) 507-9357
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number listed below. Additional copies of the
Offer to Purchase, the Letter of Transmittal and other tender offer materials
may be obtained from the Information Agent as set forth below, and will be
furnished promptly at the Purchaser's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Toll Free (800) 223-2064
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE> 1
EXHIBIT (a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
AT
$9.65 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
March 13, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by WAI Acquisition Corp., a Delaware corporation
(the "Purchaser"), and Western Atlas Inc., a Delaware corporation ("Parent"), to
act as Information Agent in connection with the Purchaser's offer to purchase
all outstanding shares of Common Stock, par value $.01 per share (the "Shares"),
of 3-D Geophysical, Inc., a Delaware corporation (the "Company"), and the
associated preferred share purchase rights at a purchase price of $9.65 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated March 13,
1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED
BASIS BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE
OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER
TO PURCHASE
<PAGE> 2
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated March 13,1998.
2. The Letter of Transmittal for your use to tender Shares and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
The Bank of New York (the "Depositary") by the Expiration Date (as defined
in the Offer to Purchase) or if the procedure for book-entry transfer
cannot be completed by the Expiration Date.
5. A letter to stockholders from the Secretary of the Company
accompanied by the Company's Solicitation/Recommendation Statement on
Schedule 14D-9.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 9, 1998, UNLESS
THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The
Purchaser will, however, upon request, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Purchaser will pay or cause to be paid any stock transfer
taxes payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
2
<PAGE> 3
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed material may be obtained from, the
undersigned.
Very truly yours,
GEORGESON & COMPANY INC.
as Information Agent
Wall Street Plaza
New York, New York 10005
(212) 440-9800
(Call Collect)
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
AT
$9.65 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
March 13, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated March 13,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by WAI Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Western Atlas Inc., a Delaware corporation, to purchase all outstanding shares
of Common Stock, par value $.01 per share (the "Shares"), of 3-D Geophysical,
Inc., a Delaware corporation (the "Company"), and the associated preferred share
purchase rights (the "Rights"), at a purchase price of $9.65 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal enclosed herewith. Unless the context otherwise requires, all
references to Shares shall include the associated Rights. 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 on or prior to the Expiration Date
(as defined in the Offer to Purchase), or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
<PAGE> 2
Please note the following:
1. The tender price is $9.65 per Share, net to you in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Offer is conditioned upon, among other things, Shares
representing at least a majority of the total number of outstanding Shares
on a fully diluted basis being validly tendered and not properly withdrawn
prior to the expiration of the Offer. The Offer is also subject to other
terms and conditions contained in the Offer to Purchase. See the
Introduction and Sections 1, 14 and 15 of the Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by
the Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, April 9, 1998, unless the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by The Bank of New York (the
"Depositary") of (a) Share Certificates or timely confirmation of the
book-entry transfer of such Shares into the account maintained by the
Depositary at The Depository Trust Company or Philadelphia Depository Trust
Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, (b) the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or an Agent's Message (as
defined in the Offer to Purchase), in connection with a book-entry
delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering
stockholders at the same time, depending upon when Share Certificates or
confirmations of book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility are actually received by the
Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE
ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase, dated March 13, 1998 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together with the Offer to Purchase constitute the
"Offer") in connection with the offer by WAI Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Western Atlas
Inc., a Delaware corporation, to purchase all outstanding shares of Common
Stock, par value $.01 per share (the "Shares"), of 3-D Geophysical, Inc., a
Delaware corporation, and the associated preferred share purchase rights, at a
purchase price of $9.65 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: -------------------- Shares*
- --------------------------------------------------------------------------------
SIGN BELOW
Account Number: ------------------------- Signature(s)--------------------------
Dated: ------------------------------ , 1998
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT NAME(S)
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT ADDRESS(ES) HERE
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)
* Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
3
<PAGE> 1
EXHIBIT (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
TO
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
WESTERN ATLAS INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates ("Share
Certificates") representing shares of Common Stock, par value $.01 per share
(the "Shares"), of 3-D Geophysical, Inc., a Delaware corporation (the
"Company"), and the associated Rights (as defined in the Offer to Purchase), are
not immediately available, if time will not permit all required documents to
reach The Bank of New York (the "Depositary") on or prior to the Expiration Date
(as defined in the Offer to Purchase), or if the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or sent by facsimile transmission
or mail to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Information Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to WAI Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Western Atlas
Inc., a Delaware corporation, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 13, 1998 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer"), receipt of each of which is hereby acknowledged, the number of Shares
(including the associated preferred share purchase rights) indicated below
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares Name(s) of Record Holder(s):
- ----------------------------------------------------- -----------------------------------------------------
- ----------------------------------------------------- -----------------------------------------------------
Please Print
Certificate Nos. (if available) Address(es): ---------------------------------------
- ----------------------------------------------------- -----------------------------------------------------
Zip Code
Check ONE box if Shares will be tendered by
book-entry transfer (including through DTC's ATOP): Area Code and Tel. No.: --------------------------
[ ] The Depository Trust Company Signature(s): ---------------------------------------
[ ] Philadelphia Depository Trust Company -----------------------------------------------------
Account Number: ---------------------------------- Dated: ------------------------ , 1998
</TABLE>
<PAGE> 3
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, hereby guarantees to deliver to
the Depositary at one of its addresses set forth above either the certificates
representing all tendered Shares, in proper form for transfer, a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Shares, an Agent's Message (as defined in the Offer to Purchase), and any other
documents required by the Letter of Transmittal within three NASDAQ trading days
after the date of execution of this Notice of Guaranteed Delivery. A "NASDAQ
trading day" is any day on which The Nasdaq Stock Market, Inc.'s Nasdaq National
Market is open for business.
<TABLE>
<S> <C>
- ----------------------------------------------------- -----------------------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ----------------------------------------------------- -----------------------------------------------------
ADDRESS TITLE
- ----------------------------------------------------- Name: ----------------------------------------------
ZIP CODE PLEASE PRINT
Area Code and Tel. No.: -------------------------- Date: ------------------------ , 1998
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payor.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor or
committee for a designated ward, incompetent
minor or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
9. A valid trust, estate or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your social security number or your employer identification
number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under Sections 6041 and 6041A of the Internal Revenue Code of 1986, as amended
(the "Code") are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except a corporation that provides medical
and health care services or bills and collects payments for such services is not
exempt from backup withholding or information reporting. Only payees described
in items (2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends and payments by certain fishing boat
operators.
(1) A corporation.
(2) An organization exempt from tax under Section 501(a) of the Code, an IRA or
a custodial account under Section 403(b)(7) of the Code.
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under Section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries, Inc.
Nominee List.
(15) A trust exempt from tax under Section 664 or described in Section 4947 of
the Code.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.
- - Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payor's trade or business and you have not provided your
correct taxpayer identification number to the payor.
- - Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).
- - Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
- - Payments on tax-free covenant bonds under Section 1451 of the Code.
- - Payments made by certain foreign organizations.
- - Payments of mortgage interest to you.
- - Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYOR. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYOR A COMPLETED
INTERNAL REVENUE SERVICE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, 6050A and 6050N of
the Code and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of
dividend, interest or other payments to give taxpayer identification numbers to
payors who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payors must be given the numbers whether or not
recipients are required to file tax returns. Payors must generally withhold 31%
of taxable interest, dividend and certain other payments to a payee who does not
furnish a taxpayer identification number to a payor. Certain penalties may
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payor, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS.
<PAGE> 1
Exhibit (a)(7)
WESTERN ATLAS SIGNS MERGER AGREEMENT WITH 3-D GEOPHYSICAL
HOUSTON and LITTLETON, Colo., March 9 /PRNewswire/ -- Western Atlas Inc. (NYSE:
WAI-news) and 3-D Geophysical, Inc. (Nasdaq: TDGO - news) announced today that
they have signed a definitive merger agreement providing for Western Atlas to
acquire 3-D Geophysical, a Colorado-based supplier of seismic data acquisition
services.
Western Atlas will offer 3-D Geophysical shareholders $9.65 per common share in
an all-cash tender offer that will commence within the next five business days.
Following consummation of the tender offer, 3-D Geophysical shares not purchased
in the tender offer will be acquired for $9.65 per share in cash in a subsequent
merger. 3-D Geophysical has approximately 11.9 million outstanding shares.
The offer will be subject to the tender of a majority of 3-D Geophysical's
outstanding shares, expiration of the Hart-Scott-Rodino Act waiting period, and
other customary conditions. The tender offer and the merger have been
unanimously approved by 3-D Geophysical's Board of Directors, which has received
a fairness opinion from its financial advisor, Salomon Smith Barney. Revenues of
3-D Geophysical are expected to exceed $100 million for 1997. The company will
become part of the Western Geophysical division of Western Atlas Inc.
"The acquisition of 3-D Geophysical will accelerate the growth of Western Atlas
as a leading supplier of seismic services," said Western Atlas President and CEO
John Russell. "It will not impact Western Atlas' 1998 earnings, but will be
accretive for 1999 onward."
"3-D Geophysical has a strong presence in North America," said Richard White,
president of Western Geophysical. "The employees of 3-D Geophysical are highly
skilled and experienced, and we're pleased to be including them in Western
Geophysical. They will be a valued addition to our team. Bringing these two
organizations together increases our seismic data acquisition capabilities in
the U.S., strengthens our business in Alaska and certain areas in Latin America,
and expands our presence in Canada."
"We at 3-D Geophysical look forward to joining the Western team," said Joel
Friedman, chairman and CEO of 3-D Geophysical, Inc. "This combination with
Western satisfies our three primary goals: enhancing shareholder value,
providing the best service to our clients, and offering the most opportunity for
personal growth to our employees."
3-D Geophysical has 11 crews operating land-based and shallow-water seismic data
acquisition systems utilizing state-of-the-art recording equipment with
approximately 26,000 channels. The company also offers data processing services
in Mexico. Following its initial public offering in February 1996, the company
acquired several established seismic data acquisition businesses: Northern
Geophysical of America Inc., Geoevaluaciones, S.A. de C.V., Kemp Geophysical
Corporation, Paragon Geophysical, PIASA (a Mexican seismic data processing
company), and Calgary-based J.R.S. Exploration Co. Ltd., which extended the
company's services into Canada.
<PAGE> 2
Western Atlas Inc., based in Houston, Texas is one of the world's leading
oilfield services companies, providing seismic, well-logging, and reservoir
information services to the energy industry.
The statements in this release relating to matters that are not historical
facts, including, without limitations, statements regarding the demand for the
Company's services, are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such forward-looking statements involve and
are dependent upon certain risks and uncertainties, including, but not limited
to, the following which are beyond the Company's control: dependence on energy
industry spending; worldwide prices and demand for oil and gas; the presence of
competitors with greater financial and other resources; technological changes
and developments; operating risks inherent in the oilfield services industry;
regulatory uncertainties; worldwide political stability and economic conditions;
operating risks associated with international activities; and other risks and
uncertainties described more fully in the Company's filings with the Securities
and Exchange Commission.
-2-
<PAGE> 1
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated March
13, 1998, and the related Letter of Transmittal, and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in
which the making of the Offer or the acceptance thereof would not
be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of WAI Acquisition Corp. by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
3-D GEOPHYSICAL, INC.
BY
WAI ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
WESTERN ATLAS INC.
AT
$9.65 NET PER SHARE
WAI Acquisition Corp. (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Western Atlas Inc., a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of 3-D Geophysical, Inc., a Delaware
corporation (the "Company"), and the associated preferred share purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of July 17,
1997, between the Company and American Securities Transfer & Trust, Inc., as
Rights Agent (as the same may be amended, the "Rights Agreement"), at a purchase
price of $9.65 per Share (and
<PAGE> 2
associated Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 13, 1998 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"). Unless the context
otherwise requires, all references to Shares herein and in the Offer to Purchase
shall include the associated Rights.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 8, 1998 (the "Merger Agreement"), by and among the Company, the
Purchaser and Parent pursuant to which, following the consummation of the Offer
and the satisfaction of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation. On the effective date of the Merger, each outstanding
Share (other than any Shares held by Parent, the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company, and other than Shares, if any, held by
stockholders who perfect their appraisal rights under Delaware law) will be
converted into the right to receive an amount equal to $9.65 in cash (without
interest).
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND
ITS STOCKHOLDERS, HAS APPROVED THE OFFER AND ADOPTED THE MERGER AGREEMENT AND
RECOMMENDS ACCEPTANCE OF THE OFFER BY THE COMPANY'S STOCKHOLDERS.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST A MAJORITY OF
THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER TO
PURCHASE.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to validly tendering stockholders. Under no
circumstances will interest on the purchase price for Shares be paid by the
Purchaser. In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates
representing Shares (the "Share Certificates") for such Shares or timely
confirmation of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company or Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities") pursuant to the
-2-
<PAGE> 3
procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of
Transmittal delivered with the Offer to Purchase (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer of Shares and (iii) any other documents required by the
Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion
(subject to the terms and conditions of the Merger Agreement), at any time and
from time to time, to extend the period during which the Offer is open for any
reason, including the existence of any of the conditions specified in Section 14
of the Offer to Purchase, by giving oral or written notice of such extension to
the Depositary. Any such extension will be followed as promptly as practicable
by public announcement thereof, and such announcement will be made no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date (as defined below).
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 as provided
in the Offer to Purchase, may also be withdrawn at any time after May 11, 1998.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Thursday, April 9, 1998, unless and until the Purchaser, subject to the terms of
the Merger Agreement, shall have further extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the time
and date at which the Offer, as so extended by the Purchaser, shall expire. In
order for a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any such notice
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn, and (if Share Certificates have
been tendered) the name of the registered holder of the Shares as set forth in
the Share Certificate, if different from that of the person who tendered such
Shares. If Share Certificates have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
tendering stockholder must submit the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by a firm that is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents Medallion Program (an "Eligible
Institution"), except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3 of the Offer to Purchase, the
notice of withdrawal must specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in this paragraph. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination shall be final and binding. Any Shares properly withdrawn will be
deemed not validly tendered for purposes of the Offer, but may be tendered at
any subsequent time prior to the Expiration Date by following any of the
procedures described in Section 3 of the Offer to Purchase.
-3-
<PAGE> 4
The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii)
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended, is contained in the Offer to Purchase, and is incorporated herein by
reference.
The Company is providing the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant materials will be mailed to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number listed below. Additional copies of the
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained at the Purchaser's expense from the
Information Agent or from brokers, dealers, commercial banks and trust
companies. Neither Parent nor the Purchaser will pay any fees or commissions to
any broker, dealer or other person for soliciting tenders of Shares pursuant to
the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
March 13, 1998
-4-
<PAGE> 1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
WESTERN ATLAS INC.,
WAI ACQUISITION CORP.
and
3-D GEOPHYSICAL, INC.
dated as of
March 8, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER
SECTION 1.1. The Offer............................................ 2
SECTION 1.2. Company Actions...................................... 3
SECTION 1.3. Directors............................................ 4
ARTICLE II
THE MERGER
SECTION 2.1. The Merger........................................... 5
SECTION 2.2. Effective Time....................................... 5
SECTION 2.3. Effects of the Merger................................ 6
SECTION 2.4. Certificate of Incorporation and By-Laws
of the Surviving Corporation....................... 6
SECTION 2.5. Directors............................................ 6
SECTION 2.6. Officers............................................. 6
SECTION 2.7. Conversion of Common Shares.......................... 6
SECTION 2.8. Conversion of Purchaser Common Stock................. 6
SECTION 2.9. Options; Stock Plans................................. 7
SECTION 2.10. Stockholders' Meeting................................ 7
SECTION 2.11. Merger Without Meeting of Stockholders............... 8
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1. Dissenting Shares.................................... 8
SECTION 3.2. Payment for Common Shares............................ 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. Organization and Qualification; Subsidiaries......... 10
SECTION 4.2. Charter; By-Laws and Rights Agreement................ 10
SECTION 4.3. Capitalization; Subsidiaries......................... 11
SECTION 4.4. Authority............................................ 12
SECTION 4.5. No Conflict; Required Filings and Consents........... 12
SECTION 4.6. SEC Reports and Financial Statements................. 13
SECTION 4.7. Environmental Matters................................ 14
SECTION 4.8. Compliance with Applicable Laws...................... 16
SECTION 4.9. Change of Control.................................... 16
<PAGE> 3
Page
SECTION 4.10. Litigation........................................... 17
SECTION 4.11. Information.......................................... 17
SECTION 4.12. Certain Approvals.................................... 17
SECTION 4.13. Employee Benefit Plans............................... 18
SECTION 4.14. Intellectual Property................................ 20
SECTION 4.15. Taxes................................................ 21
SECTION 4.16. Absence of Certain Changes........................... 22
SECTION 4.17. Labor Matters........................................ 22
SECTION 4.18. Rights Agreement..................................... 23
SECTION 4.19. Condition of Assets.................................. 23
SECTION 4.20. Brokers.............................................. 23
SECTION 4.21. Opinion of Financial Advisor......................... 23
SECTION 4.22. Employees............................................ 24
SECTION 4.23. Customers............................................ 24
SECTION 4.24. Material Contracts................................... 24
SECTION 4.25. Affiliated Transactions.............................. 25
SECTION 4.26. Omission of Material Facts........................... 25
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
SECTION 5.1. Organization and Qualification....................... 25
SECTION 5.2. Authority............................................ 26
SECTION 5.3. No Conflict; Required Filings and Consents........... 26
SECTION 5.4. Information.......................................... 27
SECTION 5.5. Financing............................................ 27
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of the Company................... 27
SECTION 6.2. Access to Information................................ 30
SECTION 6.3. Efforts.............................................. 30
SECTION 6.4. Public Announcements................................. 31
SECTION 6.5. Employee Benefit Arrangements........................ 31
SECTION 6.6. Indemnification...................................... 32
SECTION 6.7. Notification of Certain Matters...................... 33
SECTION 6.8. Rights Agreement..................................... 33
SECTION 6.9. State Takeover Laws.................................. 33
SECTION 6.10. No Solicitation...................................... 34
-ii-
<PAGE> 4
Page
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions........................................... 35
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1. Termination.......................................... 35
SECTION 8.2. Effect of Termination................................ 37
SECTION 8.3. Fees and Expenses.................................... 37
SECTION 8.4. Amendment............................................ 38
SECTION 8.5. Extension; Waiver.................................... 38
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Non-Survival of Representations and Warranties....... 38
SECTION 9.2. Entire Agreement; Assignment......................... 39
SECTION 9.3. Validity............................................. 39
SECTION 9.4. Notices.............................................. 39
SECTION 9.5. Governing Law........................................ 40
SECTION 9.6. Descriptive Headings................................. 40
SECTION 9.7. Counterparts......................................... 40
SECTION 9.8. Parties in Interest.................................. 40
SECTION 9.9. Certain Definitions.................................. 40
SECTION 9.10. Specific Performance................................. 41
Signatures ..................................................... 40
ANNEX I Conditions to the Offer
ANNEX II Form of Support Agreement
ANNEX III Form of Consulting and Noncompete Agreement
with Joel Friedman
ANNEX IV Form of Consulting and Noncompete Agreement
with Luis H. Ferran Arroyo
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 8,
1998, by and among Western Atlas Inc., a Delaware corporation ("Parent"), WAI
Acquisition Corp., a Delaware corporation and a subsidiary of Parent (the
"Purchaser"), and 3-D Geophysical, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and
the Company have approved the acquisition of the Company on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to this Agreement the Purchaser has agreed to commence a
tender offer (the "Offer") to purchase all of the outstanding shares of the
Company's common stock, par value $.01 per share (the "Common Shares")
(including the associated preferred share purchase rights (the "Rights") issued
pursuant to the Share Purchase Rights Agreement, dated as of July 17, 1997,
between the Company and American Securities Transfer & Trust, Inc., as Rights
Agent (the "Rights Agreement"), which Rights together with the Common Shares are
hereinafter referred to as the "Shares"), at a price per Share of $9.65 net to
the seller in cash (the "Offer Price");
WHEREAS, the Board of Directors of the Company (the "Company Board") has
(i) approved the Offer and (ii) adopted and approved this Agreement and is
recommending that the Company's stockholders accept the Offer, tender their
Shares to the Purchaser and approve this Agreement;
WHEREAS, the respective Boards of Directors of the Purchaser and the
Company have approved the merger of the Purchaser with and into the Company, as
set forth below (the "Merger"), in accordance with the General Corporation Law
of Delaware (the "GCL") and upon the terms and subject to the conditions set
forth in this Agreement, whereby each of the issued and outstanding Common
Shares not owned directly or indirectly by Parent, the Purchaser or the Company
will be converted into the right to receive $9.65 in cash;
WHEREAS, as a condition and inducement to Parent's and the Purchaser's
willingness to enter into this Agreement, upon the execution and delivery of
this Agreement, Robert P. Andrews, Ralph M. Bahna, Douglas W. Brandrup, Richard
D. Davis, Arthur D. Emil, P. Dennis O'Brien and Emir L. Tavella (the "Director
Stockholders") and Luis H. Ferran Arroyo, Joel Friedman, Ronald L. Koons and
Wayne P. Widynowski (the "Management Stockholders") are simultaneously entering
into and delivering support agreements (the "Support Agreements") in the form
attached hereto as Annex II;
WHEREAS, as a condition and inducement to Parent's and the Purchaser's
willingness to enter into this Agreement, Joel Friedman and Luis H. Ferran
Arroyo are simultaneously entering into and delivering Consulting and Noncompete
Agreements in the forms of Annex III and IV attached hereto;
<PAGE> 6
WHEREAS, Parent, the Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII hereof and none of the events set forth in Annex I
hereto (the "Tender Offer Conditions") shall have occurred, as promptly as
practicable but in no event later than the fifth business day from the date of
this Agreement, the Purchaser shall, and Parent shall cause Purchaser to,
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (including the rules and regulations promulgated thereunder,
the "Exchange Act")) an offer to purchase all outstanding Shares at the Offer
Price and shall file all necessary documents with the Securities and Exchange
Commission (the "SEC") in connection with the Offer (the "Offer Documents"). The
obligation of the Purchaser to accept for payment or pay for any Shares tendered
pursuant thereto will be subject only to the satisfaction of the conditions set
forth in Annex I hereto.
(b) Without the prior written consent of the Company, Purchaser shall not
(i) impose conditions to the Offer in addition to the Tender Offer Conditions,
(ii) modify or amend the Tender Offer Conditions or any other term of the Offer
in a manner adverse to the holders of Common Shares, (iii) reduce the number of
Shares subject to the Offer, (iv) reduce the Offer Price, (v) except as provided
in the following sentence, extend the Offer, if all of the Tender Offer
Conditions are satisfied or waived, or (vi) change the form of consideration
payable in the Offer. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, extend the Offer at any time, and from time to time, (i)
if at the then scheduled expiration date of the Offer any of the conditions to
Purchaser's obligation to accept for payment and pay for all Shares shall not
have been satisfied or waived; (ii) for any period required by any rule,
regulation, interpretation or position of the SEC or its staff applicable to the
Offer; or (iii) if all Tender Offer Conditions are satisfied or waived but the
number of Common Shares tendered is at least equal to 70%, but less than 90%, of
the then outstanding number of Common Shares, for an aggregate period of not
more than 10 business days (for all such extensions) beyond the latest
expiration date that would be permitted under clause (i) or (ii) of this
sentence. So long as this Agreement is in effect, the Offer has been commenced
and the Tender Offer Conditions have not been satisfied or waived, Purchaser
shall, and Parent shall cause Purchaser to, cause the Offer not to expire,
subject however to Purchaser's and Parent's rights of termination under this
Agreement.
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<PAGE> 7
Parent and Purchaser shall comply with the obligations respecting prompt payment
pursuant to Rule 14e-1(c) under the Exchange Act.
(c) Parent and Purchaser represent that the Offer Documents will comply in
all material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or the Purchaser with respect to information
supplied by the Company in writing for inclusion in the Offer Documents. Each of
Parent and the Purchaser, on the one hand, and the Company, on the other hand,
agrees promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect and the Purchaser further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to stockholders of the Company, in each case, as and to
the extent required by applicable federal securities laws.
SECTION 1.2. Company Actions.
(a) The Company shall file with the SEC and mail to the holders of Common
Shares, as promptly as practicable on the date of the filing by Parent and the
Purchaser of the Offer Documents, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto, the
"Schedule 14D-9") reflecting the recommendation of the Company Board that
holders of Shares tender their Shares pursuant to the Offer and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby
represents, that the Company Board, at a meeting duly called and held, has (i)
determined by unanimous vote of its directors that the Offer and the Merger, is
fair to and in the best interests of the Company and its stockholders, (ii)
approved the Offer and adopted this Agreement in accordance with the GCL, (iii)
recommended acceptance of the Offer and approval of this Agreement by the
Company's stockholders (if such approval is required by applicable law), and
(iv) taken all other action necessary to render Section 203 of the GCL and the
Rights inapplicable to the Offer, the Merger and the Support Agreements;
provided, however, that such recommendation and approval may be withdrawn,
modified or amended to the extent that the Company Board determines in good
faith and on a reasonable basis, after consultation with its outside counsel,
that failure to take such action would be a breach of the Company Board's
fiduciary obligations under applicable law. The Company further represents that,
prior to the execution hereof, Salomon Smith Barney ("SSB"), the Company's
financial advisor, has delivered to the Company Board its opinion, and as of the
date hereof will deliver its written opinion, to the effect that, as of the date
of this Agreement, the cash consideration to be received by the holders of
Common Shares (other than Common Shares held by Parent or any of its affiliates,
in the treasury of the Company or by any wholly-owned subsidiary of the Company)
pursuant to the Offer and the Merger is fair to such holders from a financial
point of view. The Company further represents and warrants that it has been
authorized by SSB to permit, subject to prior review and consent by SSB (such
consent not to be unreasonably withheld), the inclusion of such opinion (or a
reference thereto) in the Offer Documents and
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<PAGE> 8
in the Schedule 14D-9. The Company hereby consents to the inclusion in the Offer
Documents of the recommendations of the Company Board described in this Section
1.2(a).
(b) The Company represents that the Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of
the Company, on the one hand, and Parent and the Purchaser, on the other hand,
agree promptly to correct any information provided by either of them for use in
the Schedule 14D-9 if and to the extent that it shall have become false or
misleading, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of Shares, in each case, as and to the extent
required by applicable federal securities law.
(c) In connection with the Offer, the Company will promptly furnish the
Purchaser with mailing labels, security position listings, any non-objecting
beneficial owner lists and any available listing or computer list containing the
names and addresses of the record holders of the Common Shares as of the most
recent practicable date and shall furnish the Purchaser with such additional
information (including, but not limited to, updated lists of holders of Common
Shares and their addresses, mailing labels and lists of security positions and
non-objecting beneficial owner lists) and such other assistance as the Purchaser
or its agents may reasonably request in communicating the Offer to the Company's
record and beneficial stockholders.
SECTION 1.3. Directors.
(a) Subject to compliance with applicable law, promptly upon the payment
by the Purchaser for the Common Shares pursuant to the Offer, and from time to
time thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board as is equal to the
product of the total number of directors on the Company Board (determined after
giving effect to the directors elected pursuant to this sentence) multiplied by
the percentage that the aggregate number of Common Shares beneficially owned by
Parent or its affiliates bears to the total number of Common Shares then
outstanding, and the Company shall, upon request of Parent, promptly take all
actions necessary to cause Parent's designees to be so elected, including, if
necessary, seeking the resignations of one or more existing directors; provided,
however, that prior to the Effective Time (as defined herein), the Company Board
shall always have at least two members who are neither officers, directors or
designees of the Purchaser or any of its affiliates ("Purchaser Insiders"). If
the number of directors who are not Purchaser Insiders is reduced below two
prior to the Effective Time, the remaining director who is not a Purchaser
Insider shall be entitled to designate a person to fill such vacancy who is not
a Purchaser Insider and who shall be a director not deemed to be a Purchaser
Insider for all purposes of this Agreement.
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<PAGE> 9
(b) The Company's obligations to appoint Parent's designees to the Company
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section 1.3
and shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under such Section and
Rule in order to fulfill its obligations under this Section 1.3. Parent will
supply any information with respect to itself, and its officers, directors and
affiliates required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's designees pursuant
to this Section 1.3 and prior to the Effective Time (as defined herein), any
amendment or termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or the Purchaser or waiver of any of the Company's rights hereunder,
will require the concurrence of a majority of the directors of the Company then
in office who are not Purchaser Insiders (or in the case where there are two or
fewer directors who are not Purchaser Insiders, the concurrence of one director
who is not a Purchaser Insider) if such amendment, termination, extension or
waiver would have an adverse effect on the minority stockholders of the Company.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the satisfaction or
waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the GCL, at the Effective Time the Purchaser
shall be merged with and into the Company. Following the Merger, the separate
corporate existence of the Purchaser shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation").
SECTION 2.2. Effective Time. As soon as practicable after the satisfaction
of the conditions set forth in Sections 7.1(a) and 7.1(b), but subject to
Sections 7.1(c) and 7.1(d), the Company shall execute, in the manner required by
the GCL, and deliver to the Secretary of State of the State of Delaware a duly
executed and verified certificate of merger, and the parties shall take such
other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time."
SECTION 2.3. Effects of the Merger. The Merger shall have the effects set
forth in the GCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and the Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the
Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
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<PAGE> 10
SECTION 2.4. Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) Subject to the provisions of Section 6.6 of this Agreement, the
By-Laws of the Purchaser in effect at the Effective Time shall be the By-Laws of
the Surviving Corporation until amended in accordance with the provisions
thereof and applicable law.
SECTION 2.5. Directors. Subject to applicable law, the directors of the
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.6. Officers. The officers of the Purchaser immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.7. Conversion of Common Shares. At the Effective Time, by virtue
of the Merger and without any action on the part of the holders thereof, each
Common Share issued and outstanding immediately prior to the Effective Time
(other than (i) any Common Shares held by Parent, the Purchaser, any wholly
owned subsidiary of Parent or the Purchaser, in the treasury of the Company or
by any wholly owned subsidiary of the Company, which Common Shares, by virtue of
the Merger and without any action on the part of the holder thereof, shall be
cancelled and retired and shall cease to exist with no payment being made with
respect thereto and (ii) Dissenting Shares (as defined herein)), shall be
cancelled and retired and shall be converted into the right to receive $9.65 in
cash (the "Merger Price"), payable to the holder thereof, without interest
thereon, upon surrender of the certificate formerly representing such Common
Share.
SECTION 2.8. Conversion of Purchaser Common Stock. The Purchaser has
outstanding 1,000 shares of common stock, par value $.01 per share, all of which
are entitled to vote with respect to approval and adoption of this Agreement. At
the Effective Time, each share of common stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and
non-assessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
SECTION 2.9. Options; Stock Plans. Prior to the consummation of the Offer,
the Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and take all other actions necessary to provide for the
cancellation, effective at the Effective Time, of all the outstanding stock
options (the "Options") heretofore granted under any stock option or similar
plan of the Company (the "Stock Plans") or under any agreement, without any
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<PAGE> 11
payment therefor except as otherwise provided in this Section 2.9. Immediately
prior to the Effective Time, all Options (whether vested or unvested) which are
listed in Section 4.3 of the disclosure schedule delivered to Parent by the
Company prior to the date hereof (the "Company Disclosure Schedule") (or were
inadvertently omitted from such schedule and for which the related Cash Payments
are de minimus in the aggregate) shall be cancelled (and to the extent formerly
so exercisable shall no longer be exercisable) and shall entitle each holder
thereof, in cancellation and settlement therefor, to a payment, if any, in cash
by the Company (less any applicable withholding taxes), at the Effective Time,
equal to the product of (i) the total number of Common Shares subject to such
Option (whether vested or unvested) and (ii) the excess, if any, of the Merger
Price over the exercise price per Common Share subject to such Option (the "Cash
Payments"). The Company represents and warrants that the Company Board has taken
all necessary action to terminate the Company's 1995 Long-Term Incentive
Compensation Plan, as amended, the Company's 1997 Long-Term Stock Incentive Plan
and all other Stock Plans and any other plan, program or arrangement providing
for the issuance or grant of any other interest in respect of the capital stock
of the Company or any subsidiary in each case effective prior to the Effective
Time.
SECTION 2.10. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through the Company Board, shall, in accordance with applicable
law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
the acceptance for payment of and payment for Common Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking
action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to this Agreement, and use reasonable best efforts (A) to obtain
and furnish the information required to be included by the SEC in the
Proxy Statement (as hereinafter defined) and, after consultation with
Parent, to respond as soon as practicable to any comments made by the SEC
with respect to the preliminary proxy statement and cause a definitive
proxy statement (the "Proxy Statement") to be mailed to its stockholders
and (B) to obtain the necessary approvals of the Merger and adoption of
this Agreement by its stockholders; and
(iii) include in the Proxy Statement the recommendation of the
Company Board that stockholders of the Company vote in favor of the
approval and adoption of the Merger and of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Common Shares then owned by it, the Purchaser or any of its other subsidiaries
in favor of the approval of the Merger and of this Agreement.
SECTION 2.11. Merger Without Meeting of Stockholders. Notwithstanding
Section 2.10, in the event that the Purchaser shall acquire at least 90% of the
outstanding Com-
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<PAGE> 12
mon Shares pursuant to the Offer, the parties hereto agree to take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment of and payment for Common Shares by
the Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1. Dissenting Shares. Notwithstanding Section 2.7, Common 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 Common Shares in accordance with the GCL
("Dissenting Shares") shall not be converted into a right to receive the Merger
Price, unless such holder fails to perfect or withdraws or otherwise loses such
holder's right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses such holder's right to appraisal, such Common
Shares shall be treated as if they had been converted as of the Effective Time
into a right to receive the Merger Price. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Common Shares,
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, or otherwise negotiate, any such demands.
SECTION 3.2. Payment for Common Shares.
(a) From and after the Effective Time, The Bank of New York or such other
bank or trust company as shall be mutually acceptable to Parent and the Company
shall act as paying agent (the "Paying Agent") in effecting the payment of the
Merger Price in respect of certificates (the "Certificates") that, prior to the
Effective Time, represented Common Shares entitled to payment of the Merger
Price pursuant to Section 2.7. At the Effective Time, Parent or the Purchaser
shall deposit, or cause to be deposited, in trust with the Paying Agent the
aggregate Merger Price to which holders of Common Shares shall be entitled at
the Effective Time pursuant to Section 2.7.
(b) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of Certificates a form of letter of transmittal which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent and instructions for use in surrendering such Certificates and
receiving the Merger Price in respect thereof. Upon the surrender of each such
Certificate, the Paying Agent shall pay the holder of such Certificate the
Merger Price multiplied by the number of Common Shares formerly represented by
such Certificate, in consideration therefor, and such Certificate shall
forthwith be cancelled. Until so surrendered, each such Certificate (other than
Certificates representing Common Shares held by Parent or the Purchaser, any
wholly owned subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly owned subsidiary of the Company or Dissenting Shares)
shall represent solely the right to receive the
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<PAGE> 13
aggregate Merger Price relating thereto. No interest or dividends shall be paid
or accrued on the Merger Price. If the Merger Price (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Certificate surrendered is registered, it shall be a condition to such right to
receive such Merger Price that the Certificate so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the person
surrendering such Common Shares shall pay to the Paying Agent any transfer or
other taxes required by reason of the payment of the Merger Price to a person
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such taxes have been paid
or are not applicable. In the event any Certificate shall have been lost, stolen
or destroyed, the Paying Agent shall be required to pay the full Merger Price in
respect of any Common Shares represented by such Certificate; however, Parent
may require the owner of such lost, stolen or destroyed Certificate to execute
and deliver to the Paying Agent a form of affidavit claiming such Certificate to
be lost, stolen or destroyed in form and substance reasonably satisfactory to
Parent and the posting by such owner of a bond in such amount as Parent may
determine is reasonably necessary as indemnity against any claim that may be
made against Parent or the Paying Agent.
(c) Promptly following the date which is 180 days after the Effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in consideration therefor the aggregate Merger Price
relating thereto, without any interest or dividends thereon. Notwithstanding the
foregoing, none of Parent, the Purchaser, the Company or the Paying Agent shall
be liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered immediately prior to such date on
which any payment pursuant to this Article III would otherwise escheat to or
become the property of any Governmental Entity, the cash payment in respect of
such Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any person previously entitled thereto.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Common Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent, they shall be surrendered and cancelled in return for the payment of the
aggregate Merger Price relating thereto, as provided in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser that
except as set forth in the Company Disclosure Schedule:
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<PAGE> 14
SECTION 4.1. Organization and Qualification; Subsidiaries. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of the Company's subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. The Company and each of its
subsidiaries has the requisite corporate power and authority to own, operate or
lease its properties and to carry on its business as it is now being conducted,
and is duly qualified or licensed to do business, and is in good standing, in
each jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
necessary, except where the failure to have such power or authority, or the
failure to be so qualified, licensed or in good standing, would not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect. The term "Material Adverse Effect," as used in this Agreement, means any
change in or effect on the business, assets, liabilities, financial condition,
results of operations or prospects of the Company or any of its subsidiaries
that would reasonably be expected to be materially adverse to the Company and
its subsidiaries taken as a whole (except for changes or effects that (i) affect
the seismic exploration or oilfield service industries as a whole or (ii) result
from performance by the Company or any of its subsidiaries pursuant to and in
compliance with the terms of the agreement between the Company and Maxus Bolivia
as set forth in the accepted proposal dated December 18, 1997 (other than losses
or liabilities resulting from any breach of contract, negligence or violation of
law in connection with performance of such contract).
SECTION 4.2. Charter; By-Laws and Rights Agreement. The Company has
heretofore made available to Parent and the Purchaser a complete and correct
copy of the certificate of incorporation and the by-laws or comparable
organizational documents, each as amended to the date hereof, of the Company and
each of its subsidiaries and a complete and correct copy of the Rights Agreement
as amended to the date hereof.
SECTION 4.3. Capitalization; Subsidiaries. The authorized capital stock of
the Company consists of 25,000,000 Common Shares and 1,000,000 shares of
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of which
100,000 shares are designated Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Junior Preferred Stock"). As of the close of business
on March 2, 1998, 11,916,666 Common Shares were issued and outstanding, all of
which are entitled to vote on this Agreement, and no Common Shares were held in
treasury. As of the close of business on March 2, 1998 there were no shares of
Preferred Stock issued and outstanding. The Company has no shares reserved for
issuance, except that, as of March 2, 1998, there were 790,002 Common Shares
reserved for issuance pursuant to outstanding Options and rights granted under
the Stock Plans or agreements providing for the grant of Options and 100,000
shares of Junior Preferred Stock reserved for issuance upon exercise of the
Rights. Section 4.3 of the Company Disclosure Schedule sets forth the holders of
all outstanding Options and the number, exercise prices and expiration dates of
each grant to such holders. Since September 30, 1997, the Company has not issued
any shares of capital stock except pursuant to the exercise of Options
outstanding as of such date and except pursuant to the exchange of exchangeable
non-voting shares (the "Exchangeable Shares") of 3-D Geophysical Canada, Inc.
("3-D Canada") outstanding as of such date for Common Shares. All the
outstanding Common Shares are, and all the Common Shares which may be issued
pursuant to the exercise of out-
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<PAGE> 15
standing Options will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and nonassessable and are
not subject to, nor were they issued in violation of, any preemptive rights.
There are no bonds, debentures, notes or other indebtedness having general
voting rights (or convertible into securities having such rights) ("Voting
Debt") of the Company or any of its subsidiaries issued and outstanding. Except
as set forth above or in Section 4.3 of the Company Disclosure Schedule or for
the Rights and except for the transactions contemplated by this Agreement, there
are no existing options, warrants, calls, subscriptions or other rights,
agreements, arrangements or commitments of any character, relating to the issued
or unissued capital stock of the Company or any of its subsidiaries, obligating
the Company or any of its subsidiaries to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or Voting Debt of, or
other equity interest in, the Company or any of its subsidiaries or securities
convertible into or exchangeable for such shares or equity interests and neither
the Company nor any of its subsidiaries is obligated to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except as contemplated by this Agreement or the
Rights Agreement, there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Common Shares or the capital stock of the Company or any of its
subsidiaries. Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and such shares of the Company's subsidiaries are owned by the
Company or by a subsidiary of the Company in each case free and clear of any
lien, claim, option, charge, security interest, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien") except as set
forth in Section 4.3 of the Company Disclosure Schedule. Set forth in Section
4.3 of the Company Disclosure Schedule is a complete and correct list of each
subsidiary (direct or indirect) of the Company and any joint ventures,
partnerships or similar arrangements in which the Company or any of its
subsidiaries has an interest (and the amount and percentage of any such
interest). No entity in which the Company or any of its subsidiaries owns,
directly or indirectly, less than a 50% equity interest is, individually or when
taken together with all such other entities, material to the business of the
Company and its subsidiaries taken as a whole.
SECTION 4.4. Authority. The Company has all necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Company Board and no other corporate proceedings on the part of the Company are
necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the affirmative vote of the holders
of a majority of the then outstanding Common Shares entitled to vote thereon, to
the extent required by applicable law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Parent and the
Purchaser, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
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SECTION 4.5. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), are made and the
waiting periods thereunder have been terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable state securities, "blue sky"
or takeover law are met, (iii) the filing of the certificate of merger and other
appropriate merger documents, if any, as required by the GCL, is made and (iv)
approval of this agreement by the holders of a majority of the Common Shares, if
required by the GCL, is received, none of the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will (i) conflict with or violate the Certificate of Incorporation or
By-Laws of the Company or the comparable organizational documents of any of its
subsidiaries, (ii) except as disclosed in the SEC Reports (as hereinafter
defined) or specifically disclosed in Section 4.5(a) of the Company Disclosure
Schedule, result in a breach or violation of, a default under or the triggering
of any payment or the increase in any other obligations pursuant to, any of the
Company's existing Employee Benefit Arrangements (as hereinafter defined) or any
grant or award made under any of the foregoing, (iii) conflict with or violate
any statute, ordinance, rule, regulation, order, judgment, decree, permit or
license applicable to the Company or any of its subsidiaries, or by which any of
them or any of their respective properties or assets may be bound or affected,
or (iv) except as disclosed in Section 4.5(a) of the Company Disclosure
Schedule, result in a violation or breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any benefit, the triggering of any
payment by, or the increase in any other obligation of, the Company or any of
its subsidiaries or the creation of any material Lien on any of the property or
assets of the Company or any of its subsidiaries (any of the foregoing referred
to in clause (ii), (iii) or this clause (iv) being a "Violation") pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties may be bound or affected,
except in the case of clauses (ii), (iii) and (iv) where such Violations would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) None of the execution and delivery of this Agreement by the Company,
the consummation by the Company and its subsidiaries of the transactions
contemplated hereby or compliance by the Company and it subsidiaries with any of
the provisions hereof will require any consent, waiver, approval, authorization
or permit of, or registration or filing with or notification to (any of the
foregoing being a "Consent"), any government or subdivision thereof, domestic,
foreign or supranational or any administrative, governmental or regulatory
authority, agency, commission, tribunal or body, domestic, foreign or
supranational (a "Governmental Entity"), except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a certificate of
merger pursuant to the GCL, (iii) compliance with the HSR Act, and (iv) such
filings, authorizations, orders and approvals, if any, as set forth in Section
4.5(b) of the Company Disclosure Schedule, as are required under foreign laws
except in the case of clause (iv) for fil-
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<PAGE> 17
ings, authorizations, orders and approvals the failure of which to make or
obtain would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
SECTION 4.6. SEC Reports and Financial Statements.
(a) The Company and its subsidiaries have filed with the SEC all forms,
reports, schedules, registration statements and definitive proxy statements
required to be filed by them with the SEC since February 9, 1996 (as amended
since the time of their filing, collectively, the "SEC Reports") and has
heretofore made available to Parent complete and correct copies of all such
forms, reports, schedules, registration statements, and proxy statements. As of
their respective dates, the SEC Reports (including, but not limited to, any
financial statements or schedules included or incorporated by reference therein)
complied in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended, including the rules and regulations of
the SEC promulgated thereunder (the "Securities Act") applicable, as the case
may be, to such SEC Reports, and none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(b) The (i) consolidated balance sheets as of December 31, 1996 (the
"12/31/96 Balance Sheet") and December 31, 1995 and the consolidated statements
of operations, stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1996 (including the related notes and schedules
thereto) of the Company (or its predecessors) contained in the Company's Form
10-K for the fiscal year ended December 31, 1996 and (ii) the unaudited
consolidated balance sheet as of September 30, 1997 (the "9/30/97 Balance
Sheet") and the unaudited consolidated statements of operations, stockholders'
equity and cash flows for the three- and nine-month periods ended September 30,
1997 of the Company contained in the Company's Form 10-Q for the three-month
period ended September 30, 1997 present fairly the consolidated financial
position and the consolidated results of operations and cash flows of the
Company and its subsidiaries as of the dates or for the periods presented
therein and were prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied during the periods involved
except as otherwise disclosed therein (subject, in the case of unaudited
statements, to recurring audit adjustments normal in nature and amount).
(c) Except as reflected or reserved against in the 9/30/97 Balance Sheet
or as disclosed in the notes thereto or as set forth in Section 4.6(c) of the
Company Disclosure Schedule, as of the date hereof, neither the Company nor any
of its subsidiaries have any liabilities or obligations (absolute, accrued,
fixed, contingent or otherwise) that are material to the Company and its
subsidiaries taken as a whole, other than liabilities incurred in the ordinary
course of business consistent with past practice since September 30, 1997.
(d) The Company has heretofore furnished to Parent a complete and correct
copy of any amendments or modifications which have not yet been filed with the
SEC to agreements, documents or other instruments which previously had been
filed by the Company with the SEC pursuant to the Securities Act or the Exchange
Act.
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SECTION 4.7. Environmental Matters.
(a) Except as set forth in Section 4.7 of the Company Disclosure Schedule,
the operations of the Company and its subsidiaries comply with all applicable
material Environmental Laws, except for such failures to comply which would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. The Company and its subsidiaries have obtained all
Environmental Permits necessary for the operation of the business, and all such
Environmental Permits are in good standing and the Company and its subsidiaries
are in compliance with all material terms and conditions of such Environmental
Permits, except for such failures to obtain or comply which would not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries is subject to any
ongoing investigation by, order from or written claim by any Person (including
without limitation any current or prior owner or operator of any of the Company
Property) respecting (i) any Environmental Law, (ii) any Remedial Action or
(iii) any claim, demand, complaint or other action arising from the Release or
threatened Release of a Hazardous Material into the environment which
individually or in the aggregate would reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any of its subsidiaries is
subject to any judicial or administrative proceeding, or outstanding order,
judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law, which upon resolution would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) There have been no Releases by the Company or any of its subsidiaries
of any Hazardous Materials (i) into, on or under any Company Property, or (ii)
into, on or under any other properties, including landfills in which Hazardous
Materials have been Released or properties on or under which the Company or any
of its subsidiaries has performed services, in any case in such a way as to
create any material unpaid liability (including the costs of required
remediation) under any applicable Environmental Law. As used in this Agreement,
the term "Knowledge" means the actual Knowledge of the officers and directors of
the Company. Except as set forth in Section 4.7(b) of the Company Disclosure
Schedule, no Company Property has been used at any time as a landfill or as a
treatment, storage or disposal facility for any Hazardous Material. To the
Knowledge of the Company there is no, and there has not been, any underground
storage tank, surface impoundment, landfill, waste pile or leachfield on or in
any Company Property.
(c) Any asbestos-containing material which is on or part of any Company
Property does not create any unpaid material liability (including the costs of
required remediation) under any applicable Environmental Law. No claims have
been made, and no suits or proceedings are pending or, to the Knowledge of the
Company, threatened by any employee against the Company or any of its
subsidiaries that are premised on exposure to asbestos or asbestos-containing
material, which would reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect.
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<PAGE> 19
(d) For purposes of this Section:
(i) "Company Property" means any real or personal property, plant,
building, facility, structure, underground storage tank, equipment, fixture or
unit, or other asset owned, leased or operated by the Company or any of its
subsidiaries.
(ii) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any rules and regulations
promulgated thereunder.
(iii) "Environmental Law" means all applicable United States
federal, state and local laws or regulations and all foreign laws or regulations
governing the protection of the environment, and employee health or safety,
including but not limited to CERCLA, OSHA and RCRA and any state or foreign
equivalent thereof.
(iv) "Hazardous Materials" means, collectively, (a) any petroleum or
petroleum products, flammable explosives, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials,
substances or wastes which are defined as or included in the definition of
"hazardous materials," "hazardous wastes" or "toxic substances" under applicable
Environmental Law.
(v) "Environmental Permits" means all approvals, authorizations,
consents, permits, licenses, registrations and certificates required by any
applicable Environmental Law.
(vi) "OSHA" means the Occupational Safety and Health Act, as
amended, and any rules and regulations promulgated thereunder.
(vii) "RCRA" means the Resource Conservation and Recovery Act, as
amended, and any rules and regulations promulgated thereunder.
(viii) "Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of
Hazardous Materials into the environment or into or out of any Company Property,
including the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or Company Property.
(ix) "Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way remediate any Hazardous Material; (b) prevent
the release of Hazardous Materials so that they do not migrate or endanger or
threaten to endanger public health or welfare or the environment; or (c) perform
studies, investigations and care related to any such Hazardous Material.
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<PAGE> 20
SECTION 4.8. Compliance with Applicable Laws. Except with respect to
Environmental Laws which are covered in Section 4.7, the Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities (the "Permits") except for such Permits
as would not reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect. The Company and its subsidiaries are in compliance
with the terms of the Permits which it holds except for such Permits as would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Except with respect to Environmental Laws which are
covered in Section 4.7, the operations of the Company and its subsidiaries have
been conducted in compliance with all laws, ordinances and regulations of any
Governmental Entity (except where lack of compliance would not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect).
SECTION 4.9. Change of Control. Except as set forth in Section 4.09 of the
Company Disclosure Schedule, the transactions contemplated by this Agreement
will not constitute a "change of control" under, require the consent from or the
giving of notice to a third party pursuant to, cause termination pursuant to the
terms thereof or permit a third party to terminate or accelerate vesting or
repurchase rights under the terms, conditions or provisions of any (i) note,
bond, mortgage, indenture, license, lease, 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,
(ii) Permit, except for such Permits as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, or
(iii) employment, compensation, termination or severance agreement, instrument,
obligation or other Plan (as defined in Section 4.13(a)) of the Company or any
of its subsidiaries. The total amounts payable to the executives identified in
Section 4.9 of the Company Disclosure Schedule, as a result of the transactions
contemplated by this Agreement and/or any subsequent employment termination
(including any cash-out or acceleration of options and restricted stock and any
other payments with respect thereto or in connection therewith), based on
compensation data applicable as of the date hereof, calculated assuming
effective tax rates of 39.6%, will not exceed the amount set forth on such
schedule.
SECTION 4.10. Litigation. Except as set forth in Section 4.10 of the
Company Disclosure Schedule or Section 4.7, there is no suit, claim, action,
proceeding or investigation pending or, to the Knowledge of the Company,
threatened, against the Company or any of its subsidiaries, which, if adversely
determined, would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or could prevent or materially delay the
consummation of the transactions contemplated by this Agreement. Except as set
forth in Section 4.10 of the Company Disclosure Schedule neither the Company nor
any of its subsidiaries is subject to any outstanding order, writ, injunction or
decree which, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect or could prevent or materially delay the
consummation of the transactions contemplated hereby.
SECTION 4.11. Information. None of the information supplied by the Company
for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the
Proxy Statement or (iii) any other document to be filed with the SEC or any
other Governmental Entity in connection with the transactions contemplated by
this Agreement (the "Other Filings") will, at
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<PAGE> 21
the respective times filed with the SEC or other Governmental Entity and, in
addition, in the case of the Proxy Statement, at the date it or any amendment or
supplement is mailed to stockholders, at the time of the Special Meeting and at
the Effective Time, 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 light of the circumstances under which they
were made, not misleading. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act, except that no
representation is made by the Company with respect to statements made therein
based on information supplied by Parent or the Purchaser in writing specifically
for inclusion in the Proxy Statement.
SECTION 4.12. Certain Approvals. The Company Board has taken any and all
necessary and appropriate action to render inapplicable to the Offer, the Merger
and the transactions contemplated by this Agreement and the Support Agreements
the provisions of Section 203 of the GCL. No other state takeover statute or
similar domestic or foreign statute or regulation applies or purports to apply
to the Offer, the Merger or the transactions contemplated by this Agreement or
the Support Agreements.
SECTION 4.13. Employee Benefit Plans.
(a) Section 4.13(a) of the Company Disclosure Schedule includes a complete
list of all employee benefit plans, programs, agreements and other arrangements
providing benefits to any former or current employee, officer or director of the
Company or any of its subsidiaries or any beneficiary or dependent thereof,
whether or not written, and whether covering one person or more than one person,
sponsored or maintained by the Company or any of its subsidiaries or to which
the Company or any of its subsidiaries contributes or is obligated to contribute
("Plans"). Without limiting the generality of the foregoing, the term "Plans"
includes all employee welfare benefit plans within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder ("ERISA") and all employee pension benefit
plans within the meaning of Section 3(2) of ERISA and all other employee
benefit, employment, bonus, incentive, profit sharing, thrift, compensation,
restricted stock, retirement, savings, deferred compensation, stock purchase,
stock option, termination, severance, change in control, fringe benefit and
other similar plans, programs, agreements or arrangements.
(b) With respect to each Plan, the Company has made available to Parent a
true, correct and complete copy of: (i) each writing constituting a part of such
Plan, including, without limitation, all plan documents, benefit schedules,
trust agreements, and insurance contracts and other funding vehicles; (ii) the
most recent Annual Report (Form 5500 Series) and accompanying schedule, if any;
(iii) the current summary plan description (and any material modification to
such description), if any; (iv) the most recent annual financial report, if any;
(v) the most recent actuarial report, if any; and (vi) the most recent
determination letter from the Internal Revenue Service (the "IRS"), if any.
Except as specifically provided in the foregoing documents made available to
Parent, there are no material amendments to any Plan (or the establishment of
any new Plan), other than those required by law, that have been adopted or
approved nor has the Company or any of its subsidiaries undertaken or committed
to make any such material amend-
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<PAGE> 22
ments or to adopt or approve any new Plans, except any such amendment to a Plan
or establishment of a new Plan, which would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
(c) Section 4.13(c) of the Company Disclosure Schedule identifies each
Plan that is intended to be a "qualified plan" within the meaning of Section
401(a) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder (the "Code") ("Qualified Plans"). Except as provided in
Section 4.13(c) of the Company Disclosure Schedule, the IRS has issued a
favorable determination letter with respect to each Qualified Plan that has not
been revoked, and there are no existing circumstances nor any events that have
occurred that could adversely affect the qualified status of any Qualified Plan
or the related trust. No Plan is intended to meet the requirements of Section
501(c)(9) of the Code.
(d) Except as provided in Section 4.13(d) of the Company Disclosure
Schedule, all contributions required to be made to any Plan by applicable law or
regulation or by any plan document or other contractual undertaking, and all
premiums due or payable with respect to insurance policies funding any Plan have
been timely made or paid in full or, to the extent not required to be made or
paid on or before the date hereof, have been fully reflected in the financial
statements of the Company included in the SEC Reports to the extent required
under GAAP.
(e) Except as provided in Section 4.13(e) of the Company Disclosure
Schedule, (i) the Company and each of its subsidiaries have complied, and are
now in compliance, in all material respects, with all provisions of ERISA, the
Code and all laws and regulations applicable to the Plans; (ii) there is not
now, nor do any circumstances exist that could give rise to, any requirement for
the posting of security with respect to a Plan or the imposition of any Lien on
the assets of the Company or any of its subsidiaries under ERISA or the Code;
and (iii) no prohibited transaction has occurred with respect to any Plan,
except for such noncompliance, requirements for the posting of security, liens
or prohibited transactions which would not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.
(f) (i) No Plan is subject to Title IV or Section 302 of ERISA or Section
412 or 4971 of the Code; and (ii) without limiting the generality of the
foregoing, no Plan is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or more
contributing sponsors at least two of whom are not under common control, within
the meaning of Section 4063 of ERISA and which is subject to Title IV of ERISA
(a "Multiple Employer Plan"), nor has the Company or any of its subsidiaries, or
any of their respective ERISA Affiliates (as defined herein), in the preceding
five years contributed to or been obligated to contribute to any Multiemployer
Plan or Multiple Employer Plan. An "ERISA Affiliate" means any entity, trade or
business that is a member of a group described in Section 414(b), (c) or (m) of
the Code or Section 4001(b)(1) of ERISA that includes the Company or any of its
subsidiaries, or that is a member of the same "controlled group" as the Company
or any of its subsidiaries, pursuant to Section 4001(a)(14) of ERISA.
(g) Except as provided in Section 4.13(g) of the Company Disclosure
Schedule, there does not now exist, nor do any circumstances exist, that could
result in, any liability under
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<PAGE> 23
(i) Title IV of ERISA (other than ordinary course premium payments, if any, to
the Pension Benefit Guaranty Corporation which have been or will be made on a
timely basis, if applicable), (ii) Section 302 of ERISA, (iii) Sections 412 and
4971 of the Code, or (iv) the continuation coverage requirements of Section 601
et seq. of ERISA and Section 4980B of the Code that would be a liability of the
Company or any of its subsidiaries following the Effective Time which would
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Without limiting the generality of the foregoing, none
of the Company, its subsidiaries nor any ERISA Affiliate of the Company or any
of its subsidiaries has engaged in any transaction described in Section 4069,
4204 or 4212(c) of ERISA.
(h) Except as provided in Section 4.13(h) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has any liability for
life, health, medical or other welfare benefits to former employees or
beneficiaries or dependents thereof, except for health continuation coverage as
required by Section 4980B of the Code or Part 6 of Title I of ERISA which would
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(i) Except as provided in Section 4.13(i) of the Company Disclosure
Schedule, there are no pending or, to the Knowledge of the Company, threatened
claims (other than claims for benefits in the ordinary course), lawsuits,
arbitrations or other alternate dispute resolution proceedings which have been
asserted or instituted against the Plans, any fiduciaries thereof with respect
to their duties to the Plans or the assets of any of the trusts under any of the
Plans which would reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(j) Except as provided in Section 4.13(j) of the Company Disclosure
Schedule, all Plans covering foreign employees of the Company or any of its
subsidiaries comply in all material respects with applicable local law
(including any qualification or registration requirements) and, to the extent
applicable, the fair market value of the assets and/or the book reserve
established for each such Plan that is a funded or book reserved Plan is
sufficient to provide for the liability for accrued benefits under such Plans
(based upon reasonable actuarial assumptions) except where any failure to
maintain sufficient assets or liabilities would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
SECTION 4.14. Intellectual Property.
(a) Set forth in Section 4.14(a) of the Company Disclosure Schedule is a
list and description of all material patents, patent applications, patent
disclosures, assumed names, trade names, trademarks, trademark registrations and
trademark applications, service marks, service mark registrations and service
mark applications, certification marks, certification mark registrations and
certification mark applications, copyrights, copyright registrations and
copyright registration applications, chip registrations and chip registration
applications, both domestic and foreign, which are owned by the Company or any
of its subsidiaries. The assets described in Section 4.14(a) of the Company
Disclosure Schedule and all computer software (and related documentation)
("Software"), trade secrets, know-how, industrial property, technology or other
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<PAGE> 24
proprietary rights which are owned or used by the Company or any of its
subsidiaries are referred to as the "Intellectual Property." Except as otherwise
indicated in Section 4.14(a) of the Company Disclosure Schedule, the Company and
its subsidiaries own all right, title and interest in and to the Intellectual
Property free and clear of all Liens, with the sole and exclusive right to use
the same, subject to those licenses listed on Section 4.14(b) of the Company
Disclosure Schedule except for such liens as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
(b) Set forth in Section 4.14(b) of the Company Disclosure Schedule is a
list and description of (i) all material licenses, assignments and other
transfers of Intellectual Property granted to others by the Company or any of
its subsidiaries, and (ii) all material licenses, assignments and other
transfers of patents, trade names, trademarks, service marks, copyrights, chip
registrations, Software, trade secrets, know-how, technology or other
proprietary rights granted to the Company or any of its subsidiaries by others.
Except as set forth in Section 4.14(b) of the Company Disclosure Schedule, none
of the licenses described above is subject to termination or cancellation or
change in its terms or provisions as a result of this Agreement or the
transactions provided for in this Agreement except where such termination,
cancellation or change in terms would not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.
(c) To the Knowledge of the Company, no Person or entity is infringing, or
has misappropriated, any material Intellectual Property.
(d) Except as disclosed in Section 4.14(d) of the Company Disclosure
Schedule, no material claims with respect to the Intellectual Property or with
respect to the manufacture, sale or use of any product or process or the
furnishing of any services, have been asserted or, to the Knowledge of the
Company, are threatened by any Person (i) to the effect that the manufacture,
sale or use of any product or process or the furnishing of any service as
previously used, now used or offered or proposed for use or sale by the Company
infringes on any copyright, trade secret, patent, tradename or other
intellectual property right of any Person, (ii) against the use by the Company
or any of its subsidiaries of any Intellectual Property, or (iii) challenging
the ownership, validity or effectiveness of any Intellectual Property. To the
Company's Knowledge, all granted and issued patents and all registered
trademarks and service marks listed in Section 4.14(a) of the Company Disclosure
Schedule and all copyrights held by the Company or any of its subsidiaries are
valid, enforceable and subsisting.
(e) No Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting in any manner the
licensing thereof by the Company or any of its subsidiaries. Neither the Company
nor any of its subsidiaries has entered into any agreement to indemnify any
other person against any charge of infringement of any Intellectual Property,
except standard infringement indemnities agreed to in the ordinary course of
business included as part of the Company's license or source agreements. Neither
the Company nor any of its subsidiaries has entered into any agreement granting
any third party the right to bring infringement actions with respect to, or
otherwise to enforce rights with respect to, any Intellectual
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<PAGE> 25
Property. The Company and its subsidiaries have the exclusive right to file,
prosecute and maintain all applications and registrations with respect to
Intellectual Property.
SECTION 4.15. Taxes.
(a) Except as set forth in Section 4.15 of the Company Disclosure
Schedule, the Company and each of its subsidiaries has duly filed all federal,
state, local and foreign income and other Tax Returns (as hereinafter defined)
required to be filed by it, and has duly paid or caused to be paid all Taxes (as
hereinafter defined) shown to be due on such Tax Returns in respect of the
periods covered by such returns and has made adequate provision in the Company's
financial statements for payment of all Taxes anticipated to be payable in
respect of all taxable periods or portions thereof ending on or before the date
hereof, except for such as would not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect. Section 4.15 of the
Company Disclosure Schedule lists the periods through which the Tax Returns
required to be filed by the Company or its subsidiaries have been examined by
the IRS or other appropriate taxing authority, or the period during which any
assessments may be made by the IRS or other appropriate taxing authority has
expired. All deficiencies and assessments asserted as a result of such
examinations or other audits by federal, state, local or foreign taxing
authorities have been paid, fully settled or adequately provided for in the
Company's financial statements, and no material issue or claim has been asserted
in writing for Taxes by any taxing authority for any prior period, except for
such as would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, other than those heretofore paid or
adequately provided for in the Company's financial statements. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any Tax Return of the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries has filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(2) of the Code) owned by the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries is a party to any agreement, contract or
arrangement that could result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of Section 280G of the Code
or that would not be deductible pursuant to the terms of Section 162(a)(l),
162(m) or 162(n) of the Code. Neither the Company nor any of its subsidiaries
(i) has been a member of a group filing consolidated returns for federal income
tax purposes, or (ii) is a party to a tax sharing or tax indemnity agreement or
any other agreement of a similar nature that remains in effect, except that the
Company and its subsidiaries organized under the laws of the United States or
any state file as consolidated entities.
(b) For purposes of this Agreement, the term "Taxes" means all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, excise, property, sales, use, transfer, license,
payroll, withholding, export, import, and customs duties, capital stock and
franchise taxes, imposed by the United States or any state, local or foreign
government or subdivision or agency thereof, including any interest, penalties
or additions thereto. For purposes of this Agreement, the term "Tax Return"
means any report, return or other information or document required to be
supplied to a taxing authority in connection with Taxes.
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SECTION 4.16. Absence of Certain Changes. Except as disclosed in Section
4.16 of the Company Disclosure Schedule, since September 30, 1997 (i) there has
not been any Material Adverse Effect; (ii) the businesses of the Company and
each of its subsidiaries have been conducted only in the ordinary course and in
a manner consistent with past practice; (iii) neither the Company nor any of its
subsidiaries has engaged in any material transaction or entered into any
material agreement or commitments outside the ordinary course of business; (iv)
neither the Company nor any of its subsidiaries has taken any action referred to
in Section 6.1 hereof except as permitted thereby; and (v) there has not been
any revaluation by the Company or any of its subsidiaries of any of its material
assets, including but not limited to writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary course of
business.
SECTION 4.17. Labor Matters. No work stoppage involving the Company or any
of its subsidiaries is pending or threatened and neither the Company nor any of
its subsidiaries is involved in, or to the Company's Knowledge, threatened with
or affected by any material labor dispute, arbitration, lawsuit or
administrative proceeding. None of the employees of the Company or of any of its
subsidiaries are represented by any labor union or any collective bargaining
organization and, to the Knowledge of the Company, no labor union is attempting
to organize employees of the Company or any of its subsidiaries.
SECTION 4.18. Rights Agreement. The Company and the Company Board have
taken all necessary action to amend the Rights Agreement (without redeeming the
Rights) so that none of the execution or delivery of this Agreement and the
Support Agreements, the making of the Offer, the acquisition of Common Shares
pursuant to the Offer or the consummation of the Merger will (i) cause any
Rights issued pursuant to the Rights Agreement to become exercisable or to
separate from the stock certificates to which they are attached, (ii) cause
Parent, the Purchaser or any of their Affiliates or Associates to be an
Acquiring Person (as each such term is defined in the Rights Agreement) or (iii)
trigger other provisions of the Rights Agreement, including giving rise to a
Distribution Date or a Triggering Event (as each such term is defined in the
Rights Agreement).
SECTION 4.19. Condition of Assets. The properties and assets, including
the equipment, supplies and other consumables, owned, leased or used by the
Company and its subsidiaries in the operation of their respective business are
in good operating condition and repair, ordinary wear and tear excepted, are
reasonably suitable for the purposes for which they are used, are reasonably
adequate and sufficient for the Company's and its subsidiaries' current
operations and are directly related to the business of the Company and its
subsidiaries.
SECTION 4.20. Brokers. Except for the engagement of SSB, none of the
Company, any of its subsidiaries, or any of their respective officers, directors
or employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated by this Agreement. The Company has previously delivered to Parent a
copy of the Company's engagement letter with SSB. The aggregate fees and
expenses payable to the Company's legal and financial advisors in connection
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with the Offer, the Merger and the transactions contemplated by this Agreement
will not exceed the amount set forth in Section 4.20 of the Company Disclosure
Schedule.
SECTION 4.21. Opinion of Financial Advisor. The Company Board has received
the opinion, and as of the date hereof will receive the written opinion, of SSB,
the Company's financial advisor, to the effect that, as of the date of this
Agreement, the cash consideration to be received in the Offer and the Merger by
the holders of Common Shares (other than Parent and its affiliates) is fair to
such holders from a financial point of view. The Company will deliver to Parent
a copy of SSB's written opinion promptly upon receipt thereof.
SECTION 4.22. Employees. As of the date hereof, to the Company's
Knowledge, its relationship with its employees is satisfactory.
SECTION 4.23. Customers. Section 4.23(a) of the Company Disclosure
Schedule sets forth (a) the names of all customers of Company that accounted for
more than 5% of the Company's consolidated revenues during the twelve-month
period ended December 31, 1997 and (b) the amount for which each such customer
was invoiced during such period. The Company has not received any notice that
any such customer of the Company (i) has ceased, or will cease, to use the
products, goods or services of the Company and its subsidiaries, (ii) has
substantially reduced or will substantially reduce, the use of products, goods
or services of the Company and its subsidiaries or (iii) has sought, or is
seeking, to substantially reduce the price it will pay for products, goods or
services of the Company and its subsidiaries, including in each case after the
consummation of the transactions contemplated hereby. Section 4.23(b) of the
Company Disclosure Schedule sets forth the term, price, any "change in control"
provisions and geographic dimensions of any currently outstanding bids or
proposals of the Company in excess of $1,000,000.
SECTION 4.24. Material Contracts. Except as set forth in Section 4.24 of
the Company Disclosure Schedule, or filed as exhibits to the SEC Reports,
neither the Company nor any of its subsidiaries is a party to or bound by (i)
any "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC); (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any respect the manner in
which, or the localities in which, the business of the Company and its
subsidiaries (including, for purposes of this Section 4.24 Parent and its
subsidiaries, assuming the Merger has taken place), is or would be conducted;
(iii) any employment or consulting agreement requiring payments in the aggregate
in excess of $100,000; (iv) any joint venture, partnership or other similar
agreement; (v) any agreement that grants a right of first refusal with respect
to any asset or property of the Company or any of its subsidiaries; (vi) any
agreement, entered into other than in the ordinary course, for the purchase or
sale of goods, supplies, equipment, services or other assets that provides for
payments by or to the Company or any of its subsidiaries in the aggregate in
excess of $200,000 or, with respect to contracts for the sale of goods,
supplies, equipment, other assets or services, if entered into in the ordinary
course, in excess of $1,000,000; (vii) any agreement relating to indebtedness
for borrowed money or deferred purchase price of property in excess of $200,000
(in either case, whether incurred, assumed, guaranteed or secured); (viii) any
other contract, agreement or arrangement, entered into other than in the
ordinary course of business,
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requiring future payments in the aggregate in excess of $100,000; or (ix) any
contract or other agreement which would prohibit or materially delay the
consummation of the transactions contemplated by this Agreement (all contracts
of the type described in clauses (i) through (ix) being referred to herein as
"Company Material Contracts"). Each Company Material Contract is valid and
binding on the Company (or, to the extent a subsidiary of the Company is a
party, such subsidiary) and is in full force and effect, and the Company and
each subsidiary of the Company have in all material respects performed all
obligations required to be performed by them to date under each Company Material
Contract, except for such instances which would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. The
Company does not have Knowledge, nor has it or any of its subsidiaries received
written notice of, any violation or default under nor, to the Knowledge of the
Company, does there exist any condition which with the passage of time or the
giving of notice or both would result in such violation or default under any
Company Material Contract, except in such instances which would not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.
SECTION 4.25. Affiliated Transactions. Except as set forth in Section 4.25
of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries nor any of their respective officers, directors, employees or
affiliates (nor any individual related by blood, marriage or adoption to any
such individual), is a party to any agreement, contract, commitment, transaction
or understanding with or binding upon the Company or any of its subsidiaries or
any of their respective assets or has engaged in any transaction with any of the
foregoing within the last twelve months except for customary payments to
employees, officers or directors in the ordinary course of business consistent
with past practice for services rendered in their capacity as employees,
officers or directors.
SECTION 4.26. Omission of Material Facts. No statements of the Company
contained in this Agreement or in the Company Disclosure Schedule or any
certificate or opinion delivered or to be delivered pursuant hereto omits or
will omit to state a material fact necessary in order to make any such
statement, in light of the circumstances under which it was made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as follows:
SECTION 5.1. Organization and Qualification. Each of Parent and the
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware. Each of Parent and the Purchaser has
the requisite corporate power and authority to own, operate or lease its
properties and to carry on its business as it is now being conducted, and is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
necessary, except where the failure to have such
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power or authority, or the failure to be so qualified, licensed or in good
standing, would not have a Material Adverse Effect on Parent. The term "Material
Adverse Effect on Parent," as used in this Agreement, means any change in or
effect on the business, assets, liabilities, financial condition, results of
operation or prospects of Parent or any of its subsidiaries that would be
materially adverse to Parent and its subsidiaries taken as a whole.
SECTION 5.2. Authority. Each of Parent and the Purchaser has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the Purchaser and the consummation by Parent and
the Purchaser of the transactions contemplated hereby have been duly and validly
authorized and approved by the respective Boards of Directors of Parent and the
Purchaser and by Parent as sole stockholder of the Purchaser and no other
corporate proceedings on the part of Parent or the Purchaser are necessary to
authorize or approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of Parent and the Purchaser and, assuming the due and valid authorization,
execution and delivery by the Company, constitutes a valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms.
SECTION 5.3. No Conflict; Required Filings and Consents
(a) Assuming (i) the filings required under the HSR Act are made and the
waiting periods thereunder have terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable state securities, "blue sky"
or takeover law are met and (iii) the filing of the certificate of merger and
other appropriate merger documents, if any, as required by the GCL, is made,
none of the execution and delivery of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the transactions contemplated
hereby or compliance by Parent or the Purchaser with any of the provisions
hereof will (i) conflict with or violate the organizational documents of Parent
or the Purchaser, (ii) conflict with or violate any statute, ordinance, rule,
regulation, order, judgment, decree, permit or license applicable to Parent or
the Purchaser or any of their subsidiaries, or by which any of them or any of
their respective properties or assets may be bound or affected, or (iii) result
in a violation pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or the Purchaser or any of their subsidiaries is a party or by
which Parent or the Purchaser or any of their subsidiaries or any of their
respective properties or assets may be bound or affected.
(b) None of the execution and delivery of this Agreement by Parent and the
Purchaser, the consummation by Parent and the Purchaser of the transactions
contemplated hereby or compliance by Parent and the Purchaser with any of the
provisions hereof will require any Consent of any Governmental Entity, except
for (i) compliance with any applicable requirements of the Exchange Act and any
state securities, "blue sky" or takeover law, (ii) the filing of a certificate
of merger pursuant to the GCL, (iii) compliance with the HSR Act and (iv) such
Consents that become applicable solely as a result of the business, operations
or regulatory status of the Company or any of its subsidiaries.
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SECTION 5.4. Information. None of the information supplied or to be
supplied by Parent and the Purchaser for inclusion in (i) the Schedule 14D-9,
(ii) the Proxy Statement or (iii) the Other Filings will, at the respective
times filed with the SEC or such other Governmental Entity and, in addition, in
the case of the Proxy Statement, at the date it or any amendment or supplement
is mailed to stockholders, at the time of the Special Meeting and at the
Effective Time, 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 light of the circumstances under which they were
made, not misleading.
SECTION 5.5. Financing. Parent and Purchaser collectively have and will
have at the closing of the Offer and the Effective Time and Parent will make
available to Purchaser sufficient funds available to enable Purchaser to
purchase all Common Shares, on a fully diluted basis, and to pay all fees and
expenses related to the transactions contemplated by this Agreement payable by
them.
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of the Company. Except as contemplated by
this Agreement or otherwise with the prior written consent of Parent, during the
period from the date of this Agreement to the Effective Time, the Company will,
and will cause each of its subsidiaries to, conduct its operations only in the
ordinary and usual course of business consistent with past practice and will use
its reasonable best efforts, and will cause each of its subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of its subsidiaries, to keep available the services of its and
their present officers and employees, and to preserve the good will of those
having business relationships with it, including, without limitation,
maintaining satisfactory relationships with licensors, suppliers, customers and
others having business relationships with the Company and its subsidiaries.
Without limiting the generality of the foregoing, and except as otherwise
contemplated by this Agreement, the Company will not, and will not permit any of
its subsidiaries to, prior to the Effective Time, without the prior written
consent of Parent:
(a) adopt any amendment to its certificate of incorporation or by-laws or
comparable organizational documents or the Rights Agreement or adopt a plan of
merger, consolidation, reorganization, dissolution or liquidation;
(b) sell, pledge or encumber any stock owned by it in any of its
subsidiaries;
(c) (i) issue, reissue or sell, or authorize the issuance, reissuance or
sale of (A) additional shares of capital stock of any class, or securities
convertible into capital stock of any class, or any rights, warrants or options
to acquire any convertible securities or capital stock, other than the issuance
of Common Shares (and the related Rights), in accordance with the terms of the
instruments governing such issuance on the date hereof, pursuant to the exercise
or conversion of Options and any Exchangeable Shares outstanding on the date
hereof, or (B) any other
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securities in respect of, in lieu of, or in substitution for, Common Shares or
any other capital stock of any class outstanding on the date hereof or (ii) make
any other changes in its capital structure;
(d) declare, set aside or pay any dividend or other distribution (whether
in cash, securities or property or any combination thereof) in respect of any
class or series of its capital stock other than between any of the Company and
any of its wholly owned subsidiaries;
(e) split, combine, subdivide, reclassify or redeem, purchase or otherwise
acquire, or propose to redeem or purchase or otherwise acquire, any shares of
its capital stock, or any of its other securities (except as disclosed in
Section 6.1(e) of the Company Disclosure Schedule);
(f) increase the compensation or fringe benefits payable or to become
payable to its directors, officers or, except in the ordinary course of business
consistent with past practice, employees (whether from the Company or any of its
subsidiaries), or pay or award any benefit not required by any existing plan or
arrangement to any officer, director or employee (including, without limitation,
the granting of stock options, stock appreciation rights, shares of restricted
stock or performance units pursuant to the Stock Plans or otherwise), or grant
any severance or termination pay to any officer, director or other employee of
the Company or any of its subsidiaries (other than as required by existing
agreements or policies described in Section 6.01 of the Company Disclosure
Schedule), or enter into any employment or severance agreement with, any
director, officer or other employee of the Company or any of its subsidiaries or
establish, adopt, enter into, amend, or waive any performance or vesting
criteria under any Plan for the benefit or welfare of any current or former
directors, officers or employees of the Company or its subsidiaries or their
beneficiaries or dependents (any of the foregoing being an "Employee Benefit
Arrangement"), except, in each case, to the extent required by applicable law or
regulation;
(g) acquire, mortgage, encumber, sell, pledge, lease, license or dispose
of any assets (including Intellectual Property) or securities, except pursuant
to existing contracts or commitments entered into in the ordinary course of
business consistent with past practice, or enter into any contract, arrangement,
commitment or transaction outside the ordinary course of business consistent
with past practice other than transactions between a wholly owned subsidiary of
the Company and the Company or another wholly owned subsidiary of the Company;
(h) (i) incur, assume or prepay any long-term debt or incur or assume any
short-term debt, except that the Company and its subsidiaries may incur or
prepay debt in the ordinary course of business in amounts and for purposes
consistent with past practice under existing lines of credit, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except in the
ordinary course of business consistent with past practice, (iii) pay, discharge
or satisfy any claims, liabilities or obligations (absolute, accrued, contingent
or otherwise), except in the ordinary course of business consistent with past
practice, (iv) make any loans, advances or capital contributions to, or
investments in, any other person or entity, except for loans, advances, capital
contributions or investments between any wholly owned subsidiary of the Company
and the
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Company or another wholly owned subsidiary of the Company, (v) authorize or make
capital expenditures in excess of $50,000, (vi) materially accelerate or delay
collection of notes or accounts receivable in advance of or beyond their regular
due dates or the dates when the same would have been collected in the ordinary
course of business consistent with past practice, (vii) materially delay or
accelerate payment of accounts payable beyond or in advance of its due date or
the date such liability would have been paid in the ordinary course of business
consistent with past practice, or (viii) vary the Company's inventory practices
in any material respect from the Company's past practices;
(i) settle or compromise any suit or claim or threatened suit or claim
where the amount involved is greater than $50,000;
(j) other than in the ordinary course of business consistent with past
practice, (i) modify, amend or terminate any material contract, (ii) waive,
release, relinquish or assign any contract (or any of the rights of the Company
or any of its subsidiaries thereunder), right or claim, or (iii) cancel or
forgive any indebtedness (other than with respect to indebtedness which is de
minimus in the aggregate) owed to the Company or any of its subsidiaries;
provided, however, that neither the Company nor any of its subsidiaries may
under any circumstance waive or release any of its rights under any
confidentiality agreement to which it is a party;
(k) make any tax election not required by law or settle or compromise any
tax liability;
(l) cancel or terminate any insurance policy naming it as a beneficiary or
a loss payable payee, except in the ordinary course of business consistent with
past practice;
(m) acquire (by merger, consolidation, acquisition of stock or assets,
combination or other similar transaction) any material corporation, partnership
or other business organization or division or assets thereof;
(n) except as may be required as a result of a change in law or in GAAP or
the rules of the SEC, make any change in its methods of accounting, including
tax accounting policies and procedures;
(o) enter into any agreement of a nature that would be required to be
filed as an exhibit to Form 10-K under the Exchange Act or make or submit any
bids or proposals in excess of $1,000,000 with respect to any services proposed
to be rendered in any location in Latin America, or in excess of $3,000,000 with
respect to any services proposed to be rendered in any location outside of Latin
America, provided that Parent agrees not to unreasonably withhold or delay its
consent with respect to such bids or proposals and provided further that Parent
agrees that any information provided by the Company relating to such bids or
proposals shall (i) be treated confidentially, (ii) shall not be disclosed to
any employees of Parent or its subsidiaries who are involved in preparing or
substantively analyzing a bid or proposal on behalf of Parent or any of its
subsidiaries relating to such services at the applicable location and (iii)
shall not be used to the detriment of the Company in connection with such bid or
proposal;
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(p) take, or agree to commit to take, any action that would or is
reasonably likely to result in any of the conditions to the Offer set forth in
Annex I or any of the conditions to the Merger set forth in Article VII not
being satisfied, or would make any representation or warranty of the Company
contained herein, when read without any exception or qualification as to
materiality or Material Adverse Effect, inaccurate in any respect at, or as of
any time prior to, the Effective Time except for such inaccuracies which would
not be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect, or that would impair the ability of the Company to
consummate the Merger in accordance with the terms hereof or delay such
consummation; or
(q) agree in writing or otherwise to take any of the foregoing actions
prohibited under this Section 6.1.
SECTION 6.2. Access to Information. From the date of this Agreement until
the Effective Time, the Company will, and will cause its subsidiaries, and each
of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to, give Parent
and the Purchaser and their respective officers, employees, counsel, advisors
and representatives (collectively, the "Parent Representatives") full access,
upon reasonable notice and during normal business hours, to the offices and
other facilities and to the books and records of the Company and its
subsidiaries and will cause the Company Representatives and the Company's
subsidiaries to furnish Parent, the Purchaser and the Parent Representatives to
the extent available with such financial and operating data and such other
information with respect to the business and operations of the Company and its
subsidiaries as Parent and the Purchaser may from time to time request subject,
in each case, to the continuing obligations of the parties under the
Confidentiality Agreement between Parent and the Company dated December 19,
1997, which agreement shall survive until termination pursuant to the terms
thereof. The Company shall furnish promptly to Parent and the Purchaser a copy
of each report, schedule, registration statement and other document filed by it
or its subsidiaries during such period pursuant to the requirements of federal
or state or foreign securities laws.
SECTION 6.3. Efforts.
(a) Subject to the terms and conditions provided herein, each of the
Company, Parent and the Purchaser shall, and the Company shall cause each of its
subsidiaries to, cooperate and use their respective reasonable commercial
efforts to take, or cause to be made, all filings reasonably necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including but not
limited to cooperation in the preparation and filing of the Offer Documents, the
Schedule 14D-9, the Proxy Statement, any required filings under the HSR Act, or
other foreign filings and any amendments to any thereof.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or the Purchaser or any of
their respective subsidiaries should be discovered by the Company or Parent, as
the case may be, which should be set forth in
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an amendment to the Offer Documents or Schedule 14D-9, the discovering party
will promptly inform the other party of such event or circumstance.
(b) Each of the parties will use its reasonable commercial efforts to
obtain as promptly as practicable all Consents of any Governmental Entity or any
other person required in connection with, and waivers of any Violations that may
be caused by, the consummation of the transactions contemplated by the Offer and
this Agreement.
SECTION 6.4. Public Announcements. The Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree to consult promptly with each
other prior to issuing any press release or otherwise making any public
statement with respect to the Offer, the Merger and the other transactions
contemplated hereby, agree to provide to the other party for review a copy of
any such press release or statement, and shall not issue any such press release
or make any such public statement prior to such consultation and review, unless
required by applicable law or any listing agreement with a securities exchange.
SECTION 6.5. Employee Benefit Arrangements.
(a) The Company shall, and Parent agrees to cause the Company to, honor
and, from and after the Effective Time, the Surviving Corporation to honor, all
obligations under the employment and severance agreements to which the Company
or any of its subsidiaries is presently a party which are listed in Section 6.05
of the Company Disclosure Schedule. Notwithstanding the foregoing, from and
after the Effective Time, the Surviving Corporation shall have the right to
amend, modify, alter or terminate any Plan, provided that any such action shall
not affect any rights for which the agreement or consent of the other party or a
beneficiary is required. Employees of the Surviving Corporation immediately
following the Effective Time who immediately prior to the Effective Time were
employees of the Company or any Company subsidiary shall be given credit for
purposes of eligibility and vesting under each employee benefit plan, program,
policy or arrangement of the Parent or the Surviving Corporation in which such
employees participate subsequent to the Effective Time for all service with the
Company and any Company subsidiary prior to the Effective Time (to the extent
such credit was given by the Company or any Company subsidiary) for purposes of
eligibility and vesting.
(b) The Company will not take any action which could prevent or impede the
termination of the 1995 Long-Term Incentive Compensation Plan, as amended, the
1997 Long-Term Incentive Compensation Plan Stock Incentive Plan and all other
Stock Plans and any other plans, programs or arrangements providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any subsidiary of the Company in each case effective prior to the
Effective Time. The Company will take all necessary action to (i) ensure that
none of Parent, the Company or any of their respective subsidiaries is or will
be bound by any Options, other options, warrants, rights or agreements which
would entitle any Person, other than Parent or its affiliates, to own any
capital stock of the Surviving Corporation or any of its subsidiaries or to
receive any payment in respect thereof as of the Effective Time and (ii) obtain
all necessary consents so that after the Effective Time, holders of Options will
have no rights other
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than the rights of the holders of Options to receive the Cash Payment, if any,
in cancellation and settlement thereof.
SECTION 6.6. Indemnification.
(a) Parent agrees that all rights to indemnification now existing in favor
of any director or officer of the Company and its subsidiaries (the "Indemnified
Parties") as provided in their respective charters or by-laws shall survive the
Merger and shall continue in full force and effect for a period of not less than
six years from the Effective Time. After the Effective Time, Parent agrees to
cause the Surviving Corporation to honor all rights to indemnification referred
to in the preceding sentence.
(b) Parent agrees to cause the Company, and from and after the Effective
Time, the Surviving Corporation to maintain in effect for not less than four
years (except as provided in the last sentence of this Section 6.6(b)) from the
Effective Time the current policies of the directors' and officers' liability
insurance maintained by the Company; provided that the Surviving Corporation may
substitute therefor other policies not less advantageous (other than to a de
minimus extent) to the beneficiaries of the current policies and provided that
such substitution shall not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time; and provided, further,
that the Surviving Corporation shall not be required to pay an annual premium in
excess of 175% of the last annual premium paid by the Company prior to the date
hereof (which the Company represents to be $100,000 for the 12-month period
ending December 31, 1998) and if the Surviving Corporation is unable to obtain
the insurance required by this Section 6.6(b) it shall obtain as much comparable
insurance as possible for an annual premium equal to such maximum amount.
Notwithstanding the foregoing, at any time on or after the first anniversary of
the Effective Time, Parent may, at its election, provide funds to the Surviving
Corporation to the extent necessary so that the Surviving Corporation may
self-insure with respect to the level of insurance coverage required under this
Section 6.6(b) in lieu of causing to remain in effect any directors' and
officers' liability insurance policy.
(c) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 6.6, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Parent thereof (but any such
failure or delay shall not relieve Parent of liability except to the extent
Parent is actually prejudiced as a result of such failure or delay). In the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Parent or the Surviving
Corporation shall have the right, from and after the purchase of Common Shares
pursuant to the Offer, to assume the defense thereof and Parent shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, (ii) the Indemnified Parties will cooperate
in the defense of any such matter and (iii) Parent shall not be liable for any
settlement effected without its prior written consent, provided that Parent
shall not have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final, that such person is not entitled to
indemnification under applicable law. Any Indemnified Party may retain its own
separate counsel reasonably satisfactory to Parent if there is a
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conflict of interest requiring separate representation under applicable
principles of professional responsibility and may participate in (but not,
except with respect to matters relating to such conflict, control) the defense
of such claim, action, suit, proceeding or investigation and the Indemnifying
Party shall be responsible for any reasonable legal expenses or any other
reasonable expenses subsequently incurred by such Indemnified Party in
connection with such participation or defense to the extent such Indemnified
Party is entitled to be indemnified therefrom pursuant to this Section 6.6.
Parent shall not settle any claim, action, suit, proceeding or investigation
unless the Indemnified Party shall be fully released and discharged.
SECTION 6.7. Notification of Certain Matters. Parent and the Company shall
promptly notify each other of (i) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (A) to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (B) to cause
any covenant, condition or agreement under this Agreement not to be complied
with or satisfied in any material respect and (ii) any failure of the Company or
Parent, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder in any material
respect; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of the Company, Parent and the Purchaser shall give
prompt notice to the other parties hereof of any notice or other communication
from any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement.
SECTION 6.8. Rights Agreement. The Company covenants and agrees that it
will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take
any action which would allow any Person (as defined in the Rights Agreement)
other than Parent or the Purchaser to acquire beneficial ownership of 15% or
more of the Common Shares without causing a Distribution Date or a Triggering
Event to occur.
SECTION 6.9. State Takeover Laws. The Company shall, upon the request of
the Purchaser, take all reasonable steps to assist in any challenge by the
Purchaser to the validity or applicability to the transactions contemplated by
this Agreement, including the Offer and the Merger, of any state takeover law.
SECTION 6.10. No Solicitation.
(a) The Company, its affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any acquisition or exchange of all or any material portion of the
assets of, or any equity interest in, the Company or any of its subsidiaries or
any business combination with the Company or any of its subsidiaries. The
Company agrees that, prior to the Effective Time, it shall not, and shall not
authorize or permit any of its subsidiaries or any of its or its subsidiaries'
directors, officers, employees, agents or representatives, directly or
indirectly, to solicit, initiate, encourage or facilitate, or furnish or
disclose non-public information in furtherance of, any inquiries or the making
of any proposal with respect to
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any merger, liquidation, recapitalization, consolidation or other business
combination involving the Company or its subsidiaries or acquisition of any
capital stock or any material portion of the assets of the Company or its
subsidiaries, or any combination of the foregoing (an "Acquisition
Transaction"), or negotiate, explore or otherwise engage in discussions with any
person (other than the Purchaser, Parent or their respective directors,
officers, employees, agents and representatives) with respect to any Acquisition
Transaction or enter into any agreement, arrangement or understanding requiring
it to abandon, terminate or fail to consummate the Merger or any other
transactions contemplated by this Agreement; provided that the Company may
furnish information to, and negotiate or otherwise engage in discussions with,
any party who delivers a bona fide written proposal for an Acquisition
Transaction if the Company Board determines in good faith and on a reasonable
basis by a majority vote, after consultation with its outside legal counsel and
SSB, that (i) such Acquisition Transaction is reasonably likely to be more
favorable to the stockholders of the Company from a financial point of view than
the transactions contemplated by this Agreement and (ii) that failing to take
such action would thus constitute a breach of the fiduciary duties of the
Company Board.
(b) From and after the execution of this Agreement, the Company shall, as
soon as practicable, advise the Purchaser in writing of the receipt, directly or
indirectly, of any discussions, negotiations, proposals or substantive inquiries
relating to an Acquisition Transaction, identify the offeror and furnish to the
Purchaser a copy of any such proposal or substantive inquiry, if it is in
writing, or a written summary of any oral proposal or substantive inquiry
relating to an Acquisition Transaction. The Company shall as soon as practicable
advise Parent in writing of any substantive development relating to such
proposal, including the results of any substantive discussions or negotiations
with respect thereto.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. The stockholders of the Company shall have duly
approved the transactions contemplated by this Agreement, if required by
applicable law.
(b) Purchase of Common Shares. The Purchaser shall have accepted for
payment and paid for Common Shares pursuant to the Offer in accordance with the
terms hereof.
(c) Injunctions; Illegality. The consummation of the Merger shall not be
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction or any Governmental Entity and there
shall not have been any statute, rule or regulation enacted, promulgated or
deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger or has the effect of making the purchase of Common
Shares illegal.
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(d) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the Merger shall have expired or terminated.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of the Company (with any
termination by Parent also being an effective termination by the Purchaser):
(a) by the mutual written consent of the Company, by action of its Board
of Directors and Parent;
(b) by the Company if (i) the Purchaser fails to commence the Offer as
provided in Section 1.1 hereof, (ii) the Purchaser shall not have accepted for
payment and paid for Common Shares pursuant to the Offer in accordance with the
terms thereof on or before June 30, 1998, provided that if any applicable
waiting period under the HSR Act shall not have expired or been terminated prior
to June 30, 1998, then the Company may not terminate this Agreement pursuant to
this Section 8.1(c)(ii) until August 31, 1998 or (iii) the Purchaser fails to
purchase validly tendered Common Shares in violation of the terms of this
Agreement;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any Common Shares being purchased thereunder;
provided, however, that neither Parent nor the Company may terminate this
Agreement pursuant to this Section 8.1(c) if such party shall have materially
breached this Agreement or, in the case of Parent, if it or the Purchaser is in
material violation of the terms of the Offer;
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued an order, decree, judgment or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, Common Shares pursuant to the Offer or the Merger
and such order, decree or ruling or other action shall have become final and
nonappealable;
(e) by the Company if, prior to the purchase of Common Shares pursuant to
the Offer in accordance with the terms of this Agreement, the Company Board
approves an Acquisition Transaction, on terms which a majority of the members of
the Company Board have determined in good faith and on a reasonable basis, after
consultation with its outside counsel and SSB, that (i) such Acquisition
Transaction is more favorable to the Company and its stockholders from a
financial point of view than the transactions contemplated by this Agreement and
(ii) failure to approve such proposal and terminate this Agreement would thus
constitute a breach of fiduciary duties of the Company Board under applicable
law; provided that the termination described in this Section 8.1(e) shall not be
effective unless and until the Company shall have paid to Parent the Termination
Fee (as defined in Section 8.3(b));
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<PAGE> 39
(f) by Parent if the Company breaches its covenant in Section 6.8;
(g) by Parent prior to the purchase of Common Shares pursuant to the
Offer, if the Company Board shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Purchaser its
approval or recommendation of the Offer, this Agreement or the Merger, shall
have approved or recommended another offer or transaction, or shall have
resolved to effect any of the foregoing;
(h) by Parent if any Management Stockholder shall have failed to perform
or to comply with any of his obligations, covenants or agreements in any
material respect under a Support Agreement;
(i) by Parent prior to the purchase of Common Shares pursuant to the Offer
if the Minimum Condition (as defined in Annex I) shall not have been satisfied
by the expiration date of the Offer and on or prior to such date (A) a third
party shall have made a proposal or public announcement or communication to the
Company with respect to (i) the acquisition of the Company by merger, tender
offer or otherwise; (ii) the acquisition of 50% or more of the assets of the
Company and its subsidiaries, taken as a whole; (iii) the acquisition of 15% or
more of the outstanding Common Shares; (iv) the adoption by the Company of a
plan of liquidation or the declaration or payment of an extraordinary dividend;
or (v) the repurchase by the Company or any of its subsidiaries of 15% or more
of the outstanding Common Shares at a price in excess of the Offer Price or (B)
any person (including the Company or any of its affiliates or subsidiaries),
other than Parent or any of its affiliates, shall have become the beneficial
owner of more than 15% of the Common Shares; or
(j) by Parent if Purchaser shall not have accepted for payment and paid
for Common Shares pursuant to the Offer in accordance with the terms thereof on
or before June 30, 1998.
SECTION 8.2. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers, employees or stockholders, other than the provisions of
this Section 8.2 and Section 8.3, which shall survive any such termination.
Nothing contained in this Section 8.2 or elsewhere in this Agreement shall
relieve any party from liability for any breach of this Agreement.
SECTION 8.3. Fees and Expenses.
(a) Whether or not the Merger is consummated, except as otherwise
specifically provided herein, all costs and expenses incurred in connection with
the Offer, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such expenses.
(b) In the event that this Agreement is terminated pursuant to Section
8.1(e), (f), (g), or (h) or pursuant to Section 8.1(c) as a result of the
failure to satisfy any of the conditions set forth in paragraph (d) of Annex I,
then the Company shall within one business day after such
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<PAGE> 40
termination pay Parent (except in the case of termination pursuant to Section
8.1(e) in which case payment shall be made upon or prior to such termination) a
termination fee of $5,500,000 (the "Termination Fee") in immediately available
funds by wire transfer to an account designated by Parent. In the event that
this Agreement is terminated pursuant to Section 8.1(i) and within six months of
such termination the Company shall have entered into a definitive agreement or a
written agreement in principle providing for an Acquisition Transaction, the
Company shall pay Parent the Termination Fee at or prior to execution of such
agreement or agreement in principle in immediately available funds by wire
transfer to an account designated by Parent. In the event this Agreement is
terminated pursuant to Section 8.1(c) as a result of the failure to satisfy the
conditions set forth in paragraphs (f) or (g)(1) of Annex I, then the Company
shall promptly (and in any event within one business day after such termination
and receipt of notice by Parent specifying, in reasonable detail, such fees and
expenses) reimburse Parent for the fees and expenses of Parent and the Purchaser
(including reasonable printing fees, filing fees and reasonable fees and
expenses of its legal and financial advisors) related to the Offer, this
Agreement, the transactions contemplated hereby and any related financing up to
a maximum of $1,500,000 (collectively "Expenses") in immediately available funds
by wire transfer to an account designated by Parent.
(c) The prevailing party in any legal action undertaken to enforce this
Agreement or any provision hereof shall be entitled to recover from the other
party the costs and expenses (including attorneys' and expert witness fees)
incurred in connection with such action.
SECTION 8.4. Amendment. This Agreement may be amended by the Company,
Parent and the Purchaser at any time before or after any approval of this
Agreement by the stockholders of the Company but, after any such approval, no
amendment shall be made which decreases the Merger Price, changes the
consideration to be received or which otherwise adversely affects the rights of
the Company's stockholders hereunder without the approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties. Any amendment to this Agreement following the
election or appointment of Parent's designees pursuant to Section 1.3 shall be
made only in accordance with Section 1.3(c).
SECTION 8.5. Extension; Waiver. Subject to Section 1.3(c), at any time
prior to the Effective Time, the parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other party or in any document, certificate or writing delivered
pursuant hereto by any other party or (iii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Article III and Sections 6.5(a) and 6.6 shall survive the Effective Time
indefinitely (except to the extent a shorter period of time is explicitly
specified therein).
SECTION 9.2. Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments referred
to herein) constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder will be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of each other party (except
that Parent may assign its rights and the Purchaser may assign its rights,
interest and obligations to any affiliate or direct or indirect subsidiary of
Parent without the consent of the Company provided that no such assignment shall
relieve Parent of any liability for any breach by such assignee). Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 9.3. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
SECTION 9.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Parent or the Purchaser:
Western Atlas Inc.
10205 Westheimer Road
Houston, Texas 77042-3115
Attention: James E. Brasher, Esq.
Fax: (713) 266-1717
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<PAGE> 42
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
Fax: (212) 403-2000
If to the Company:
3-D Geophysical, Inc.
599 Lexington Avenue
Suite 4102
New York, New York 10022
Attention: Joel Friedman
Fax: (212) 317-9230
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Peter S. Kolevzon, Esq.
Fax: (212) 715-8000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
SECTION 9.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 9.8. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and, except with respect to
Sections 6.5(a) and 6.6, nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
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<PAGE> 43
SECTION 9.9. Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any Person, shall mean any other
person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "subsidiary" or "subsidiaries" means, with respect to Parent,
the Company or any other person, any corporation, partnership, joint venture or
other legal entity of which Parent, the Company or such other person, as the
case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, stock or other equity interests the holders of
which are generally entitled to 50% or more of the vote for the election of the
board of directors or other governing body of such corporation or other legal
entity.
SECTION 9.10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity, without posting any bond
or proving that damages would be inadequate.
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<PAGE> 44
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
WESTERN ATLAS INC.
By: /s/ Richard White
---------------------------------
Name: Richard White
Title:
WAI ACQUISITION CORP.
By: /s/ Richard White
---------------------------------
Name: Richard White
Title:
3-D GEOPHYSICAL, INC.
By: /s/ Joel Friedman
---------------------------------
Name: Joel Friedman
Title:
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<PAGE> 45
Annex I
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement and Plan of Merger to which this Annex is attached,
except that the term "Merger Agreement" shall be deemed to refer to such
Agreement and Plan of Merger.
Conditions to the Offer. Notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or pay for any
tendered Common Shares and may terminate or, subject to the terms of the Merger
Agreement, amend the Offer, if (i) there shall not be validly tendered and not
properly withdrawn prior to the expiration date for the Offer (the "Expiration
Date") that number of Common Shares which represents at least a majority of the
total number of outstanding Common Shares on a fully diluted basis on the date
of purchase (not taking into account the Rights) (the "Minimum Condition"), (ii)
any applicable waiting period under the HSR Act shall not have expired or been
terminated, or (iii) at any time on or after March 8, 1998 and prior to the time
of payment for any Common Shares, any of the following exist:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, ruling, judgment, order or
injunction enacted, enforced, promulgated, amended, issued or deemed
applicable to the Offer, by any legislative body, court, government or
governmental, administrative or regulatory authority or agency, domestic
or foreign, that would reasonably be expected to, directly or indirectly:
(1) make illegal or otherwise prohibit or materially delay consummation of
the Offer or the Merger or seek to obtain material damages or make
materially more costly the making of the Offer, (2) prohibit or materially
limit the ownership or operation by Parent or the Purchaser of all or any
portion of the business or assets of the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or compel Parent or the Purchaser to dispose of or hold
separately all or any portion of the business or assets of Parent or the
Purchaser or the Company or any of its subsidiaries that is material to
the Company and its subsidiaries, taken as a whole, or impose any material
limitation on the ability of Parent or the Purchaser to conduct its
business or own such assets, (3) impose material limitations on the
ability of Parent or the Purchaser effectively to acquire, hold or
exercise full rights of ownership of the Common Shares, including, without
limitation, the right to vote any Common Shares acquired or owned by the
Purchaser or Parent on all matters properly presented to the Company's
stockholders, (4) require divestiture by Parent or the Purchaser of any
Common Shares, or (5) result in a Material Adverse Effect; or
(b) there shall be instituted or pending any action or proceeding by
any Governmental Entity seeking, or by any third party that would
reasonably be expected to result in, any of the consequences referred to
in clauses (1) through (5) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving prospective
change) in the business, assets, liabilities, financial condition, results
of operations or prospects of the Company or any of its subsidiaries that
has, or would reasonably be expected to have, a Material Adverse Effect;
or
<PAGE> 46
(d) (1) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph (d) as set forth in Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of the outstanding Common Shares
has been acquired by any person (including the Company or any of its
subsidiaries or affiliates) or group (as defined in Section 13(d)(3) under
the Exchange Act), (2) the Company Board or any committee thereof shall
have withdrawn, or shall have modified or amended in a manner adverse to
Parent or the Purchaser, the approval, adoption or recommendation, as the
case may be, of the Offer or the Merger Agreement, or approved or
recommended any other takeover proposal or other acquisition of Common
Shares other than the Offer and the Merger, (3) a third party shall have
entered into a definitive agreement or a written agreement in principle
with the Company with respect to the acquisition of a majority of the
Company's assets, a tender offer or exchange offer to be made to holders
of Common Shares or a merger, consolidation or other business combination
with or involving the Company or any of its subsidiaries, or (4) the
Company Board or any committee thereof shall have resolved to do any of
the foregoing; or
(e) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(f) any of the representations and warranties of the Company set
forth in the Merger Agreement, when read without any exception or
qualification as to materiality or Material Adverse Effect, shall not be
true and correct, as if such representations and warranties were made at
the time of such determination (except as to any such representation or
warranty which speaks as of a specific date, which must be untrue or
incorrect as of such specific date), except where the failure or failures
to be so true and correct would not, individually or in the aggregate,
reasonably be expected to (i) have a Material Adverse Effect, (ii) prevent
or materially delay the consummation of the Offer, or (iii) materially
increase the cost of the Offer to the Purchaser; or
(g) (1) the Company shall have failed to perform or to comply with
any of its obligations, covenants or agreements under the Merger Agreement
in any material respect or (2) any Management Stockholder shall have
failed to perform or to comply in any material respect with any of his
obligations, covenants or agreements under a Support Agreement; or
(h) any Consent set forth in Section 4.05 of the Company Disclosure
and identified thereon as a "required Consent" shall not have been filed
or obtained or shall not have occurred, as the case may be; or
(i) there shall have occurred, and continued to exist, (1) any
general suspension of, or limitation on prices for, trading in securities
on the New York Stock Exchange or in the NASDAQ National Market System,
(2) any decline of at least 25% in either the Dow Jones Average of
Industrial Stocks or the Standard & Poor's 500 Index from the
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<PAGE> 47
close of business on the last trading day immediately preceding the date
of the Merger Agreement, (3) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (4) a
commencement of a war, armed hostilities or other national or
international crisis directly or indirectly involving the United States,
with the exception of any military action directed against the nation of
Iraq, or a material limitation (whether or not mandatory) by any
Governmental Entity on the extension of credit by banks or other lending
institutions, or (5) in the case of any of the foregoing clauses (1)
through (4) existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof.
The foregoing conditions (including those set forth in clauses (i) and
(ii) of the initial paragraph) are for the benefit of Parent and the Purchaser
and may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or the Purchaser,
in whole or in part, at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
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<PAGE> 1
Exhibit (c)(2)
SUPPORT AGREEMENT (this "Agreement"), dated as of March 8, 1998, by and
between Western Atlas Inc., a Delaware corporation ("Parent"), and
________________________ ("Seller").
WHEREAS, concurrently herewith, Parent, WAI Acquisition Corp. (the
"Purchaser"), a Delaware corporation and a subsidiary of Parent, and 3-D
Geophysical, Inc. (the "Company"), a Delaware corporation, are entering into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement",
which term shall not include any amendment to such Agreement which decreases the
Offer Price or changes the form of consideration payable in the Offer, unless
Seller consents to the inclusion of such amendment in such term). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Merger Agreement, pursuant to which the Purchaser agrees to make a tender offer
(the "Offer") for all outstanding shares of common stock, par value $.01 per
share (the "Shares"), of the Company, at $9.65 per share (the "Offer Price") net
to the seller in cash, to be followed by a merger (the "Merger") of the
Purchaser with and into the Company;
WHEREAS, as of the date hereof, Seller beneficially owns directly
______________ Shares (the "Owned Shares");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement and make the Offer, Parent and the Purchaser have required that Seller
agree, and Seller hereby agrees, (i) to tender pursuant to the Offer the Owned
Shares, together with any Shares acquired after the date hereof and prior to the
termination of the Offer, whether upon the exercise of options, conversion of
convertible securities or otherwise (collectively, the "Tender Shares") on the
terms and subject to the conditions provided for in this Agreement and (ii) to
enter into the other agreements set forth herein; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Tender and Vote.
1.1 Tender. Seller hereby agrees to validly tender (or cause the record
owner of such shares to validly tender), pursuant to and in accordance with the
terms of the Offer, as soon as practicable after commencement of the Offer but
in no event later than five business days after the date of commencement of the
Offer, the Tender Shares by physical delivery of the certificates therefor and
to not withdraw such Tender Shares, except following termination of this
Agreement pursuant to Section 2 hereof. Seller hereby acknowledges and agrees
that Parent's and the Purchaser's obligation to accept for payment and pay for
the Tender Shares is subject to the terms and conditions of the Offer. Seller
hereby permits Parent and the Purchaser to publish and disclose in the Offer
Documents and, if approval of the Company's stockholders is required under
applicable law, the Proxy Statement (including all documents and schedules filed
with the Securities and Exchange Commission) his identity and ownership of the
Tender Shares and the nature of his commitments, arrangements and understandings
under this Agreement.
<PAGE> 2
1.2 Voting. Seller hereby agrees that, during the time this Agreement is
in effect, at any meeting of the shareholders of the Company, however called,
Seller shall (a) vote the Tender Shares in favor of the Merger; (b) vote the
Tender Shares against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement; and (c) vote the Tender Shares against
any action or agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Merger or the Offer, including, but not limited to:
(i) any extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or any of its subsidiaries;
(ii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries or a reorganization, recapitalization or liquidation of the
Company and its subsidiaries; (iii) any change in the management or board of
directors of the Company, except as otherwise agreed to in writing by the
Purchaser; (iv) any material change in the present capitalization or dividend
policy of the Company; or (v) any other material change in the Company's
corporate structure or business. Seller hereby revokes any proxy previously
granted by him with respect to the Tender Shares.
1.3 Grant of Irrevocable Proxy; Appointment of Proxy.
(i) Seller hereby irrevocably grants to, and appoints, William H. Flores
and James E. Brasher, or either of them, in their respective capacities as
officers or directors of Parent, and any individual who shall hereafter succeed
to any such office or directorship of Parent, and each of them individually,
Seller's proxy and attorney-in-fact (with full power of substitution), for and
in the name, place and stead of Seller, to vote the Tender Shares in favor of
the Merger and other transactions contemplated by the Merger Agreement, against
any Acquisition Transaction and otherwise as contemplated by Section 1.2.
(ii) Seller represents that any proxies heretofore given in respect of the
Tender Shares are not irrevocable, and that any such proxies are hereby revoked.
(iii) Seller understands and acknowledges that Parent is entering into the
Merger Agreement in reliance upon Seller's execution and delivery of this
Agreement. Seller hereby affirms that the irrevocable proxy set forth in this
Section 1.3 is given in connection with the execution of the Merger Agreement,
and that such irrevocable proxy is given to secure the performance of the duties
of Seller under this Agreement. Seller hereby further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Seller hereby ratifies and confirms all that such irrevocable proxy may
lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is
executed and intended to be irrevocable in accordance with the provisions of
Section 212(e) of the Delaware General Corporation Law.
1.4 No Inconsistent Arrangements. Seller hereby covenants and agrees that,
except as contemplated by this Agreement and the Merger Agreement, it shall not
(i) transfer (which term shall include, without limitation, any sale, gift,
pledge or other disposition), or consent to any transfer of, any or all of the
Tender Shares or any interest therein, (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all
-2-
<PAGE> 3
of the Tender Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to the Tender
Shares, (iv) deposit the Tender Shares into a voting trust or enter into a
voting agreement or arrangement with respect to the Tender Shares or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of his obligations hereunder or the transactions contemplated hereby
or by the Merger Agreement or which would make any representation or warranty of
Seller hereunder untrue or incorrect.
1.5 No Solicitation. Seller hereby agrees that Seller shall not, and shall
not permit or authorize any of his affiliates, representatives or agents to,
directly or indirectly, encourage, solicit, explore, participate in or initiate
discussions or negotiations with, or provide or disclose any information to, any
corporation, partnership, person or other entity or group (other than Parent,
the Purchaser or any of their affiliates or representatives) concerning any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring the Company to abandon, terminate or fail to consummate
the Merger or any other transactions contemplated by the Merger Agreement.
Seller will immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Transaction. From and after the execution of this Agreement, Seller
shall immediately advise Parent in writing of the receipt, directly or
indirectly, of any inquiries, discussions, negotiations or proposals relating to
an Acquisition Transaction, identify the offeror and furnish to Parent a copy of
any such proposal or inquiry, if it is in writing, or a written summary of any
oral proposal or inquiry relating to an Acquisition Transaction. Seller shall
promptly advise Parent in writing of any development relating to such proposal,
including the results of any discussions or negotiations with respect thereto.
Any action taken by the Company or any member of the Board of Directors of the
Company including, if applicable, Seller acting in such capacity, in accordance
with the proviso to the second sentence of Section 6.10(a) of the Merger
Agreement shall be deemed not to violate this Section 1.5.
1.6 Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to use all reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and the Merger Agreement. Seller shall promptly consult with Parent and provide
any necessary information and material with respect to all filings made by
Seller with any Governmental Entity in connection with this Agreement and the
Merger Agreement and the transactions contemplated hereby and thereby.
1.7 Waiver of Appraisal Rights. Seller hereby waives any rights of
appraisal or rights to dissent from the Merger that he may have.
2. Expiration. This Agreement and Seller's obligation to tender provided
hereto shall terminate on the earlier of the payment for the Shares pursuant to
the Offer and the termination of the Merger Agreement in accordance with its
terms.
-3-
<PAGE> 4
3. Representation and Warranties. Seller hereby represents and warrants to
Parent as follows:
(a) Title. Seller has good and valid title to the Tender Shares,
free and clear of any lien, pledge, charge, encumbrance or claim of
whatever nature and, upon the purchase of the Tender Shares by the
Purchaser, Seller will deliver good and valid title to the Tender Shares,
free and clear of any lien, charge, encumbrance or claim of whatever
nature.
(b) Ownership of Shares. On the date hereof, the Owned Shares are
owned of record or beneficially by Seller and, on the date hereof, the
Owned Shares constitute all of the Shares owned of record or beneficially
by Seller. Seller has sole voting power and sole power of disposition with
respect to all of the Owned Shares, with no restrictions, subject to
applicable federal securities laws, on Seller's rights of disposition
pertaining thereto.
(c) Power; Binding Agreement. Seller has the legal capacity, power
and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by
Seller will not violate any other agreement to which Seller is a party
including, without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and validly
executed and delivered by Seller and constitutes a valid and binding
agreement of Seller, enforceable against Seller in accordance with its
terms.
(d) No Conflicts. Other than in connection with or in compliance
with the provisions of the Exchange Act and the HSR Act, no authorization,
consent or approval of, or filing with, any court or any public body or
authority is necessary for the consummation by Seller of the transactions
contemplated by this Agreement. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby will not constitute a breach, violation or default (or any event
which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, encumbrance, pledge, charge or claim
upon any of the properties or assets of Seller under, any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument to which Seller is a party or by which his properties or assets
are bound.
(e) No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of Seller.
-4-
<PAGE> 5
4. Additional Shares. Seller hereby agrees, while this Agreement is in
effect, to promptly notify Parent of the number of any new Shares acquired by
Seller, if any, after the date hereof.
5. Further Assurances. From time to time, at the Parent's request and
without further consideration, Seller shall execute and deliver such additional
documents and take all such further action as may be reasonably necessary or
desirable to consummate and make effective the transactions contemplated by
Section 1 of this Agreement.
6. Miscellaneous.
6.1 Non-Survival. The representations and warranties made herein shall
terminate upon Seller's sale of the Tender Shares to the Purchaser in the Offer,
other than Seller's representation and warranty in Section 3.2(a), which shall
survive the sale of the Tender Shares and the termination of this Agreement
following such sale.
6.2 Entire Agreement; Assignment. This Agreement (i) constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise, provided that Parent may
assign its rights and obligations hereunder to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Parent of its
obligations hereunder if such assignee does not perform such obligations.
6.3 Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
6.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand
delivery, telegram, telex or telecopy or by any courier service, such as Federal
Express, providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Seller:
copy to Seller's Counsel:
-5-
<PAGE> 6
If to Parent:
Western Atlas Inc.
10205 Westheimer Road
Houston, Texas 77042-3115
Attention: James E. Brasher, Esq.
Fax: (713) 266-1717
copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
Fax: (212) 403-2000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
6.6 Specific Performance. Seller recognizes and acknowledges that a breach
by him of any covenants or agreements contained in this Agreement will cause
Parent to sustain damages for which it would not have an adequate remedy at law
for money damages, and therefore Seller agrees that in the event of any such
breach Parent shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief in addition
to any other remedy to which it may be entitled, at law or in equity.
6.7 Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed to be an original, but both of which shall constitute
one and the same Agreement.
6.8 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
6.9 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
-6-
<PAGE> 7
IN WITNESS WHEREOF, Parent and Seller have caused this Agreement to be
duly executed as of the day and year first above written.
WESTERN ATLAS INC.
By:
---------------------------------
Name:
Title:
SELLER
----------------------------
Name:
-7-
<PAGE> 1
Exhibit (c)(3)
SUPPORT AGREEMENT (this "Agreement"), dated as of March 8,
1998, by and between Western Atlas Inc., a Delaware corporation ("Parent"), and
Wayne P. Widynowski ("Seller").
WHEREAS, concurrently herewith, Parent, WAI Acquisition Corp.
(the "Purchaser"), a Delaware corporation and a subsidiary of Parent, and 3-D
Geophysical, Inc. (the "Company"), a Delaware corporation, are entering into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement",
which term shall not include any amendment to such Agreement which decreases the
Offer Price or changes the form of consideration payable in the Offer, unless
Seller consents to the inclusion of such amendment in such term). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Merger Agreement, pursuant to which the Purchaser agrees to make a tender offer
(the "Offer") for all outstanding shares of common stock, par value $.01 per
share (the "Shares"), of the Company, at $9.65 per share (the "Offer Price") net
to the seller in cash, to be followed by a merger (the "Merger") of the
Purchaser with and into the Company;
WHEREAS, as of the date hereof, Seller beneficially owns
directly ______________ Shares (the "Owned Shares", and together with any Shares
acquired after the date hereof and prior to the termination of the Offer,
whether upon the exercise of options, conversion of convertible securities or
otherwise, the "Tender Shares");
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement and make the Offer, Parent and the Purchaser have required that
Seller agree, and Seller hereby agrees, to enter into this Agreement; and
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration given to each party hereto, the receipt of which
is hereby acknowledged, the parties agree as follows:
1. Agreement to Vote.
1.1 Voting. Seller hereby agrees that, during the time this
Agreement is in effect, at any meeting of the shareholders of the Company,
however called, Seller shall (a) vote the Tender Shares in favor of the Merger;
(b) vote the Tender Shares against any action or agreement that would result in
a breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (c) vote the Tender
Shares against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, including, but not
limited to: (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries or a reorganization, recapitalization or
liquidation of the Company and its subsidiaries; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed to
in writing by the Purchaser; (iv) any material change in the present
capitalization or dividend policy of the Company; or (v) any other material
change in the Company's corporate structure or business. Seller hereby revokes
any proxy previously granted
<PAGE> 2
by him with respect to the Tender Shares. Seller hereby permits Parent and the
Purchaser to publish and disclose in the Offer Documents and, if approval of the
Company's stockholders is required under applicable law, the Proxy Statement
(including all documents and schedules filed with the Securities and Exchange
Commission) his identity and ownership of the Tender Shares and the nature of
his commitments, arrangements and understandings under this Agreement.
1.2 Grant of Irrevocable Proxy; Appointment of Proxy.
(i) Seller hereby irrevocably grants to, and appoints,
William H. Flores and James E. Brasher, or either of them, in their respective
capacities as officers or directors of Parent, and any individual who shall
hereafter succeed to any such office or directorship of Parent, and each of them
individually, Seller's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of Seller, to vote the
Tender Shares in favor of the Merger and other transactions contemplated by the
Merger Agreement, against any Acquisition Transaction and otherwise as
contemplated by Section 1.2.
(ii) Seller represents that any proxies heretofore given in
respect of the Tender Shares are not irrevocable, and that any such proxies are
hereby revoked.
(iii) Seller understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon Seller's execution and
delivery of this Agreement. Seller hereby affirms that the irrevocable proxy set
forth in this Section 1.2 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of Seller under this Agreement. Seller hereby further
affirms that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Seller hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
the provisions of Section 212(e) of the Delaware General Corporation Law.
1.3 No Inconsistent Arrangements. Seller hereby covenants and
agrees that, except as contemplated by this Agreement and the Merger Agreement,
it shall not (i) except to the Company, transfer (which term shall include,
without limitation, any sale, gift, pledge or other disposition), or consent to
any transfer of, any or all of the Tender Shares or any interest therein, (ii)
except with the Company, enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of the Tender Shares or
any interest therein, (iii) grant any proxy, power-of-attorney or other
authorization in or with respect to the Tender Shares, (iv) deposit the Tender
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to the Tender Shares or (v) take any other action that would in any way
restrict, limit or interfere with the performance of his obligations hereunder
or the transactions contemplated hereby or by the Merger Agreement or which
would make any representation or warranty of Seller hereunder untrue or
incorrect.
1.4 No Solicitation. Seller hereby agrees that Seller shall
not, and shall not permit or authorize any of his affiliates, representatives or
agents to, directly or indirectly, encourage, solicit, explore, participate in
or initiate discussions or negotiations with, or provide or disclose any
information to, any corporation, partnership, person or other entity or group
-2-
<PAGE> 3
(other than Parent, the Purchaser or any of their affiliates or representatives)
concerning any Acquisition Transaction or enter into any agreement, arrangement
or understanding requiring the Company to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement. Seller will immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Transaction. From and after the execution of this Agreement, Seller
shall immediately advise Parent in writing of the receipt, directly or
indirectly, of any inquiries, discussions, negotiations or proposals relating to
an Acquisition Transaction, identify the offeror and furnish to Parent a copy of
any such proposal or inquiry, if it is in writing, or a written summary of any
oral proposal or inquiry relating to an Acquisition Transaction. Seller shall
promptly advise Parent in writing of any development relating to such proposal,
including the results of any discussions or negotiations with respect thereto.
Any action taken by the Company or any member of the Board of Directors of the
Company including, if applicable, Seller acting in such capacity, in accordance
with the proviso to the second sentence of Section 6.10(a) of the Merger
Agreement shall be deemed not to violate this Section 1.5.
1.5 Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, Seller hereby agrees to use all reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement. Seller shall promptly consult with
Parent and provide any necessary information and material with respect to all
filings made by Seller with any Governmental Entity in connection with this
Agreement and the Merger Agreement and the transactions contemplated hereby and
thereby.
1.6 Waiver of Appraisal Rights. Seller hereby waives any
rights of appraisal or rights to dissent from the Merger that he may have.
2. Expiration. This Agreement and Seller's obligation to
tender provided hereto shall terminate on the earlier of the payment for the
Shares pursuant to the Offer and the termination of the Merger Agreement in
accordance with its terms.
3. Representation and Warranties. Seller hereby represents
and warrants to Parent as follows:
(a) Title. Seller has good and valid title to the
Tender Shares, free and clear of any lien, pledge, charge,
encumbrance or claim of whatever nature and, upon the purchase
of the Tender Shares by the Purchaser, Seller will deliver
good and valid title to the Tender Shares, free and clear of
any lien, charge, encumbrance or claim of whatever nature.
(b) Ownership of Shares. On the date hereof, the
Owned Shares are owned of record or beneficially by Seller
and, on the date hereof, the Owned Shares constitute all of
the Shares owned of record or beneficially by Seller. Seller
has sole voting power and sole power of disposition with
respect to all of
-3-
<PAGE> 4
the Owned Shares, with no restrictions, subject to applicable
federal securities laws, on Seller's rights of disposition
pertaining thereto.
(c) Power; Binding Agreement. Seller has the legal
capacity, power and authority to enter into and perform all of
his obligations under this Agreement. The execution, delivery
and performance of this Agreement by Seller will not violate
any other agreement to which Seller is a party including,
without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and
validly executed and delivered by Seller and constitutes a
valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms.
(d) No Conflicts. Other than in connection with or in
compliance with the provisions of the Exchange Act and the HSR
Act, no authorization, consent or approval of, or filing with,
any court or any public body or authority is necessary for the
consummation by Seller of the transactions contemplated by
this Agreement. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or
result in the creation of any lien, encumbrance, pledge,
charge or claim upon any of the properties or assets of Seller
under, any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument to which Seller
is a party or by which his properties or assets are bound.
(e) No Finder's Fees. No broker, investment banker,
financial advisor or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Seller.
4. Additional Shares. Seller hereby agrees, while this
Agreement is in effect, to promptly notify Parent of the number of any new
Shares acquired by Seller, if any, after the date hereof.
5. Further Assurances. From time to time, at the Parent's
request and without further consideration, Seller shall execute and deliver such
additional documents and take all such further action as may be reasonably
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Agreement.
6. Miscellaneous.
6.1 Non-Survival. The representations and warranties made
herein shall terminate upon Seller's sale of the Tender Shares to the Purchaser
in the Offer, other than Seller's representation and warranty in Section 3.2(a),
which shall survive the sale of the Tender Shares and the termination of this
Agreement following such sale.
-4-
<PAGE> 5
6.2 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
Parent may assign its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of Parent, but no such assignment shall relieve Parent
of its obligations hereunder if such assignee does not perform such obligations.
6.3 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
6.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand
delivery, telegram, telex or telecopy or by any courier service, such as Federal
Express, providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Seller:
copy to Seller's Counsel:
If to Parent:
Western Atlas Inc.
10205 Westheimer Road
Houston, Texas 77042-3115
Attention: James E. Brasher, Esq.
Fax: (713) 266-1717
copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
Fax: (212) 403-2000
-5-
<PAGE> 6
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
6.6 Specific Performance. Seller recognizes and acknowledges
that a breach by him of any covenants or agreements contained in this Agreement
will cause Parent to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore Seller agrees that in the event
of any such breach Parent shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
6.7 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
6.8 Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
6.9 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
-6-
<PAGE> 7
IN WITNESS WHEREOF, Parent and Seller have caused this
Agreement to be duly executed as of the day and year first above written.
WESTERN ATLAS INC.
By:
-----------------------------------
Name:
Title:
SELLER
-----------------------------------
Name:
-7-
<PAGE> 1
Exhibit (c)(4)
SUPPORT AGREEMENT (this "Agreement"), dated as of March 8,
1998, by and between Western Atlas Inc., a Delaware corporation ("Parent"), and
Ronald L. Koons ("Seller").
WHEREAS, concurrently herewith, Parent, WAI Acquisition Corp.
(the "Purchaser"), a Delaware corporation and a subsidiary of Parent, and 3-D
Geophysical, Inc. (the "Company"), a Delaware corporation, are entering into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement",
which term shall not include any amendment to such Agreement which decreases the
Offer Price or changes the form of consideration payable in the Offer, unless
Seller consents to the inclusion of such amendment in such term). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Merger Agreement, pursuant to which the Purchaser agrees to make a tender offer
(the "Offer") for all outstanding shares of common stock, par value $.01 per
share (the "Shares"), of the Company, at $9.65 per share (the "Offer Price") net
to the seller in cash, to be followed by a merger (the "Merger") of the
Purchaser with and into the Company;
WHEREAS, as of the date hereof, Seller beneficially owns
directly ______________ Shares (the "Owned Shares");
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement and make the Offer, Parent and the Purchaser have required that
Seller agree, and Seller hereby agrees, (i) to tender pursuant to the Offer the
Owned Shares, together with any Shares acquired after the date hereof and prior
to the termination of the Offer, whether upon the exercise of options,
conversion of convertible securities or otherwise (collectively, the "Tender
Shares") on the terms and subject to the conditions provided for in this
Agreement and (ii) to enter into the other agreements set forth herein; and
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration given to each party hereto, the receipt of which
is hereby acknowledged, the parties agree as follows:
1. Agreement to Tender and Vote.
1.1 Tender. Seller hereby agrees to validly tender (or cause
the record owner of such shares to validly tender), pursuant to and in
accordance with the terms of the Offer, as soon as practicable after
commencement of the Offer but in no event later than five business days after
the date of commencement of the Offer, the Tender Shares by physical delivery of
the certificates therefor and to not withdraw such Tender Shares, except
following termination of this Agreement pursuant to Section 2 hereof. Seller
hereby acknowledges and agrees that Parent's and the Purchaser's obligation to
accept for payment and pay for the Tender Shares is subject to the terms and
conditions of the Offer. Seller hereby permits Parent and the Purchaser to
publish and disclose in the Offer Documents and, if approval of the Company's
stockholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the Securities and Exchange Commission)
his identity and ownership of the Tender Shares and the nature of his
commitments, arrangements and understandings under this Agreement.
<PAGE> 2
1.2 Voting. Seller hereby agrees that, during the time this
Agreement is in effect, at any meeting of the shareholders of the Company,
however called, Seller shall (a) vote the Tender Shares in favor of the Merger;
(b) vote the Tender Shares against any action or agreement that would result in
a breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (c) vote the Tender
Shares against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, including, but not
limited to: (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries or a reorganization, recapitalization or
liquidation of the Company and its subsidiaries; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed to
in writing by the Purchaser; (iv) any material change in the present
capitalization or dividend policy of the Company; or (v) any other material
change in the Company's corporate structure or business. Seller hereby revokes
any proxy previously granted by him with respect to the Tender Shares.
1.3 Grant of Irrevocable Proxy; Appointment of Proxy.
(i) Seller hereby irrevocably grants to, and appoints,
William H. Flores and James E. Brasher, or either of them, in their respective
capacities as officers or directors of Parent, and any individual who shall
hereafter succeed to any such office or directorship of Parent, and each of them
individually, Seller's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of Seller, to vote the
Tender Shares in favor of the Merger and other transactions contemplated by the
Merger Agreement, against any Acquisition Transaction and otherwise as
contemplated by Section 1.2.
(ii) Seller represents that any proxies heretofore given in
respect of the Tender Shares are not irrevocable, and that any such proxies are
hereby revoked.
(iii) Seller understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon Seller's execution and
delivery of this Agreement. Seller hereby affirms that the irrevocable proxy set
forth in this Section 1.3 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of Seller under this Agreement. Seller hereby further
affirms that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Seller hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
the provisions of Section 212(e) of the Delaware General Corporation Law.
1.4 No Inconsistent Arrangements. Seller hereby covenants and
agrees that, except as contemplated by this Agreement and the Merger Agreement,
it shall not (i) transfer (which term shall include, without limitation, any
sale, gift, pledge or other disposition), or consent to any transfer of, any or
all of the Tender Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all
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<PAGE> 3
of the Tender Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to the Tender
Shares, (iv) deposit the Tender Shares into a voting trust or enter into a
voting agreement or arrangement with respect to the Tender Shares or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of his obligations hereunder or the transactions contemplated hereby
or by the Merger Agreement or which would make any representation or warranty of
Seller hereunder untrue or incorrect.
1.5 No Solicitation. Seller hereby agrees that Seller shall
not, and shall not permit or authorize any of his affiliates, representatives or
agents to, directly or indirectly, encourage, solicit, explore, participate in
or initiate discussions or negotiations with, or provide or disclose any
information to, any corporation, partnership, person or other entity or group
(other than Parent, the Purchaser or any of their affiliates or representatives)
concerning any Acquisition Transaction or enter into any agreement, arrangement
or understanding requiring the Company to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement. Seller will immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Transaction. From and after the execution of this Agreement, Seller
shall immediately advise Parent in writing of the receipt, directly or
indirectly, of any inquiries, discussions, negotiations or proposals relating to
an Acquisition Transaction, identify the offeror and furnish to Parent a copy of
any such proposal or inquiry, if it is in writing, or a written summary of any
oral proposal or inquiry relating to an Acquisition Transaction. Seller shall
promptly advise Parent in writing of any development relating to such proposal,
including the results of any discussions or negotiations with respect thereto.
1.6 Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, Seller hereby agrees to use all reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement. Seller shall promptly consult with
Parent and provide any necessary information and material with respect to all
filings made by Seller with any Governmental Entity in connection with this
Agreement and the Merger Agreement and the transactions contemplated hereby and
thereby.
1.7 Waiver of Appraisal Rights. Seller hereby waives any
rights of appraisal or rights to dissent from the Merger that he may have.
2. Expiration. This Agreement and Seller's obligation to
tender provided hereto shall terminate on the earlier of the payment for the
Shares pursuant to the Offer and the termination of the Merger Agreement in
accordance with its terms.
3. Representation and Warranties. Seller hereby represents
and warrants to Parent as follows:
(a) Title. Seller has good and valid title to the Tender Shares,
free and clear of any lien, pledge, charge, encumbrance or
claim of whatever nature and, upon the purchase of the Tender
Shares by the Purchaser, Seller will deliver
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<PAGE> 4
good and valid title to the Tender Shares, free and clear of
any lien, charge, encumbrance or claim of whatever nature.
(b) Ownership of Shares. On the date hereof, the
Owned Shares are owned of record or beneficially by Seller
and, on the date hereof, the Owned Shares constitute all of
the Shares owned of record or beneficially by Seller. Seller
has sole voting power and sole power of disposition with
respect to all of the Owned Shares, with no restrictions,
subject to applicable federal securities laws, on Seller's
rights of disposition pertaining thereto.
(c) Power; Binding Agreement. Seller has the legal
capacity, power and authority to enter into and perform all of
his obligations under this Agreement. The execution, delivery
and performance of this Agreement by Seller will not violate
any other agreement to which Seller is a party including,
without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and
validly executed and delivered by Seller and constitutes a
valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms.
(d) No Conflicts. Other than in connection with or in
compliance with the provisions of the Exchange Act and the HSR
Act, no authorization, consent or approval of, or filing with,
any court or any public body or authority is necessary for the
consummation by Seller of the transactions contemplated by
this Agreement. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or
result in the creation of any lien, encumbrance, pledge,
charge or claim upon any of the properties or assets of Seller
under, any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument to which Seller
is a party or by which his properties or assets are bound.
(e) No Finder's Fees. No broker, investment banker,
financial advisor or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Seller.
4. Additional Shares. Seller hereby agrees, while this
Agreement is in effect, to promptly notify Parent of the number of any new
Shares acquired by Seller, if any, after the date hereof.
5. Further Assurances. From time to time, at the Parent's
request and without further consideration, Seller shall execute and deliver such
additional documents and take all such further action as may be reasonably
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Agreement.
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<PAGE> 5
6. Miscellaneous.
6.1 Non-Survival. The representations and warranties made
herein shall terminate upon Seller's sale of the Tender Shares to the Purchaser
in the Offer, other than Seller's representation and warranty in Section 3.2(a),
which shall survive the sale of the Tender Shares and the termination of this
Agreement following such sale.
6.2 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
Parent may assign its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of Parent, but no such assignment shall relieve Parent
of its obligations hereunder if such assignee does not perform such obligations.
6.3 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
6.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand
delivery, telegram, telex or telecopy or by any courier service, such as Federal
Express, providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Seller:
copy to Seller's Counsel:
If to Parent:
Western Atlas Inc.
10205 Westheimer Road
Houston, Texas 77042-3115
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<PAGE> 6
Attention: James E. Brasher, Esq.
Fax: (713) 266-1717
copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
Fax: (212) 403-2000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
6.6 Specific Performance. Seller recognizes and acknowledges
that a breach by him of any covenants or agreements contained in this Agreement
will cause Parent to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore Seller agrees that in the event
of any such breach Parent shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
6.7 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
6.8 Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
6.9 Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
IN WITNESS WHEREOF, Parent and Seller have caused this
Agreement to be duly executed as of the day and year first above written.
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<PAGE> 7
WESTERN ATLAS INC.
By:
------------------------------------------
Name:
Title:
SELLER
------------------------------------------
Name:
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<PAGE> 1
Exhibit (c)(5)
CONSULTING AND NON-COMPETE AGREEMENT
AGREEMENT, dated as of March 8, 1998, by and between Western
Atlas Inc., a Delaware corporation (the "Parent"), Friedman Enterprises Inc., a
New York corporation ("FEI") and Joel Friedman (the "Consultant").
WHEREAS, the Consultant is the Chairman of the Board of
Directors of 3-D Geophysical, Inc., a Delaware corporation, (collectively with
its subsidiaries, the "Company");
WHEREAS, the Parent has entered into an Agreement and Plan of
Merger with the Company and WAI Acquisition Corp., dated as of March 8, 1998
(the "Merger Agreement");
WHEREAS, the Consultant will terminate employment with the
Company effective as of the "Effective Time" (as defined in the Merger
Agreement) of the merger contemplated by the Merger Agreement (the "Merger");
and
WHEREAS, the Consultant is the President and sole shareholder
of FEI; and
WHEREAS, the Parent desires to provide for the Consultant to
perform services for the Parent and the Company following the Merger and FEI
desires to make Consultant available to perform such services.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the Parent and the
Consultant hereby agree as follows:
1. Consulting Services. Subject to the effectiveness of the
Merger, the Consultant hereby agrees to provide such consulting services to the
Parent and to the Company as the President of the Western Geophysical Division
of Western Atlas International, Inc. or his designee shall reasonably request
for not more than 20 hours per month. Such consulting services may be rendered
in New York, New York, or at any other mutually agreeable place. FEI hereby
agrees to make Consultant available to provide such service.
2. Term. The period of consultancy under this Agreement shall
be for a period commencing on the Effective Time and ending on the fourth
anniversary of the Effective Time (the "Term").
3. Consulting Fee. The Parent shall pay to FEI, in
consideration of the consulting services, a consulting fee (the "Consulting
Fee") at an annual rate of $250,000 payable in substantially equal monthly
installments during the Term.
4. Expenses. The Parent will reimburse FEI for all authorized
reasonable and necessary out-of-pocket expenses incurred by the Consultant in
the performance of his duties hereunder upon the presentation of appropriate
documentation. Such expenses shall be submitted to Parent, at P.O. Box 1407,
Houston, TX 77251-1407, Attn.: J. Perez, on Parent's standard
<PAGE> 2
expense report forms in accordance with Parent's expense reimbursement policy in
effect from time to time during the Term.
5. Termination of Consultancy. The Consultant's consultancy
hereunder shall terminate prior to the scheduled end of the Term upon the first
to occur of:
(a) the death of the Consultant; or
(b) the Consultant's illness, disability or incapacity
("Disability") that prevents the Consultant from performing his duties hereunder
for sixty (60) consecutive days, or for any sixty (60) days within any one
hundred and eighty (180) day period, and the provision of written notice of such
termination to the Consultant; or
(c) written notice by the Parent to the Consultant of
termination of the Consultant's consultancy by the Parent for "Cause," which
shall include, without limitation, (i) the failure of the Consultant to perform
his duties hereunder after at least 30 days' written notice thereof specifying
such failure and the Consultant's failure to remedy same within such 30-day
period; (ii) any act of illegality, dishonesty, moral turpitude, or fraud in
connection with the Consultant's consultancy; (iii) any course of action by the
Consultant which is materially detrimental to the business of the Parent or any
of its affiliates (including without limitation any violation of Sections 7, 8
or 9 of this Agreement); or (iv) the commission by the Consultant of any felony;
or
(d) written notice by the Parent to the Consultant of
termination of the Consultant's consultancy without Cause; or
(e) written notice by the Consultant to the Parent of
termination of his consultancy.
The date of termination of the Consultant's consultancy shall be the date
written notice is given or such later date (within thirty (30) days following
such notice) specified in the written notice.
6. Termination Payments. In the event of the termination of
the Consultant's consultancy pursuant to Section 5, the Parent shall make the
payments to FEI set forth below and have no further obligation to the Consultant
or FEI hereunder.
(a) In the event of the termination of the Consultant's
consultancy by the Parent for Cause pursuant to Section 5(c) of this Agreement
or the termination of the Consultant's consultancy by the Consultant pursuant to
Section 5(e) of this Agreement, the Parent shall pay to FEI the Consulting Fee
previously earned but not paid as of the date of termination.
(b) In the event of the termination of the Consultant's
consultancy by the Parent without Cause (and not for death or Disability)
pursuant to Section 5(d) of this Agreement, the Parent shall continue to pay FEI
the full Consulting Fee contemplated by Section 3 of this Agreement in monthly
installments through the scheduled end of the Term, subject to the Consultant's
and FEI's compliance with Sections 7, 8 and 9 of this Agreement.
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<PAGE> 3
(c) In the event of the Consultant's death or termination for
Disability pursuant to Section 5(b) of this Agreement during the Term, the
Parent shall continue to pay to FEI the Consulting Fee contemplated by Section 3
in monthly installments for the lesser of (i) six months following such date of
termination or (ii) the number of months remaining in the Term, subject to the
Consultant's and FEI's compliance with Section 7, 8 and 9 of this Agreement.
7. Covenant Not to Compete. During the Term and until the
later of (a) 12 months after the Consultant's termination of consultancy with
the Parent for any reason or (b) the end of the scheduled Term (the
"Noncompetition Period"), the Consultant will not, directly or indirectly
(whether as sole proprietor, partner or venturer, stockholder, director,
officer, employee or consultant or in any other capacity as principal or agent
or through any person, subsidiary or employee acting as nominee or agent):
(a) Conduct or engage in or have an interest in or be
associated with any person, firm, association, partnership, corporation or other
entity which conducts or engages in the business of seismic data acquisition or
data processing (the "Business"), which are the primary businesses of the
Company;
(b) Take any action, directly or indirectly, to finance,
guarantee or provide any other material assistance to any person, firm,
association, partnership, corporation or other entity which conducts or engages
in the Business;
(c) Influence or attempt to influence any person, firm,
association, partnership, corporation or other entity which is a contracting
party with the Parent at any time during the Noncompetition Period to terminate
any agreement with the Parent except to the extent the Consultant is acting on
behalf, and at the direction, of the Parent in good faith;
(d) Hire or attempt to hire for employment any person who is
employed by the Parent or attempt to influence any such person to terminate
employment with the Parent, except to the extent the Consultant is acting on
behalf, and at the direction, of the Parent in good faith; or
(e) Call on, solicit or take away as a client or customer or
attempt to call on, solicit or take away as a client or customer any person,
firm, association, partnership, corporation or other entity that is or was a
client or customer of the Parent, including actively sought prospective
customers, during the Term or the Consultant's prior employment with the
Company.
The restrictive provisions of this Agreement shall not
prohibit the Consultant from having an equity interest in the securities of any
corporation engaged in the Business, which securities are listed on a recognized
securities exchange or traded in the over-the-counter market to the extent that
such interest does not exceed 3% of the value or voting power of such
corporation and does not constitute control of such corporation. For purposes of
this Section 7 and Sections 8 and 9 of this Agreement, the term "Parent" shall
include the Parent and the Company, and each of their affiliates, and the term
"Consultant" shall include the Consultant and FEI.
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<PAGE> 4
8. Confidential Information; Ownership Rights. (a) The
Consultant acknowledges and agrees that all nonpublic information concerning the
Parent's business including, without limitation, information relating to its
products, customer lists, pricing, trade secrets, patents, business methods,
financial and cost data, business plans and strategies (collectively, the
"Confidential Information") is and shall remain the property of the Parent. The
Consultant recognizes and agrees that all of the Confidential Information,
whether developed by the Consultant or made available to the Consultant, other
than information that is generally known to the public, is a unique asset of the
business of the Parent, the disclosure of which would be damaging to the Parent.
Accordingly, the Consultant agrees to hold such Confidential Information in a
fiduciary capacity for the benefit of the Parent. The Consultant agrees that he
will not at any time during or after the Consultant's consultancy with the
Parent for any reason, directly or indirectly, disclose to any person any
Confidential Information of the Parent, other than information that is already
known to the public, except as may be required in the ordinary course of
business of the Parent or as may be required by law. Promptly upon the
termination of this Agreement for any reason, the Consultant agrees to return to
the Parent any and all documents, memoranda, drawings, notes and other papers
and items (including all copies thereof, whether electronic or otherwise)
embodying any Confidential Information of the Parent which are in the possession
or control of the Consultant. Information concerning the Parent's business that
becomes public as a result of the Consultant's breach of this Section 8 shall be
treated as Confidential Information under this Section 8.
(b) The Consultant hereby assigns to the Parent all right,
title and interest in and to any ideas, inventions, original works or
authorship, developments, improvements or trade secrets with respect to the
Business which the Consultant solely or jointly has conceived or reduced to
practice, or will conceive or reduce to practice, or cause to be conceived or
reduced to practice, during the Term or his prior employment with the Company.
All original works or authorship which are made by Consultant (solely or jointly
with others) within the scope of Consultant's services hereunder or for the
Company and which are protectable by copyright are "works made for hire," as
that term is defined in the United States Copyright Act.
9. Disparagement. During the Term and thereafter, the
Consultant agrees not to (a) criticize, denigrate or speak adversely of, or (b)
disclose negative information about, the operations, management or performance
of the Parent or about any director, officer, employee or agent of the Parent,
except as may be required by law.
10. Breach of Certain Provisions. The Consultant acknowledges
that a violation on the Consultant's part of any of the covenants contained in
Sections 7, 8 or 9 of this Agreement would cause immeasurable and irreparable
damage to the Parent and the Company. Accordingly, the Consultant agrees that
the Parent shall be entitled to injunctive relief in any court of competent
jurisdiction for any actual or threatened violation of any such covenant in
addition to any other remedies it may have. The Consultant agrees that in the
event that any court of competent jurisdiction shall finally hold that any
provision of Section 7, 8 or 9 hereof is void or constitutes an unreasonable
restriction against the Consultant, the provisions of such Section shall not be
rendered void but shall apply to such extent as such court may determine
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<PAGE> 5
constitutes a reasonable restriction under the circumstances. Sections 7, 8 and
9 shall survive the termination of this Agreement.
11. Independent Contractor. Nothing herein shall be construed
to create an employer-employee, agency, master and servant or joint venture
relationship or other association between the Parent or the Company and FEI or
the Consultant, and the Consultant shall not be deemed to be an employee of the
Parent or the Company for any purpose, including without limitation for the
purpose of participating in any employee benefit plan of the Parent or the
Company. The Consultant agrees that he is an independent contractor and will not
hold himself out to be an employee of the Parent or the Company. FEI and the
Consultant shall perform all services under this Agreement as, and shall remain,
independent contractors. All persons performing or assisting FEI or the
Consultant with any part of the services under this Agreement for the Company or
the Parent shall be employees or agents of FEI. FEI's employees and personnel
are not employees, agents or representatives of the Company or the Parent, or
their shareholders, affiliates or co-venturers, notwithstanding that any such
employees or personnel may be construed to be borrowed servants of the Company
or the Parent at any time or from time to time. FEI shall not hold its employees
or personnel out as employees, representatives or agents of the Company or the
Parent or make any representations to create such impression. The Consultant,
FEI, and its employees and personnel shall have no authority, express or
implied, to make any contract or agreement for, or on behalf of, or otherwise
commit the Company or the Parent, or their shareholders, affiliates or
coventurers to any contract, commitment, obligation, or liability binding on the
Company or the Parent, and the Parent and the Company do not assume any
responsibility for proposals, guarantees, or contracts entered into by FEI or
the Consultant with others.
12. Risk of Loss. The Consultant assumes all risk of personal
injury or death to himself and all risk of damage to or loss of personal
property furnished by the Consultant in connection with the services to be
performed by the Consultant under this Agreement. The Consultant will abide by
the safety and security regulations of the Parent and the Company while on the
respective properties of the Parent and the Company.
13. Warranty. The Consultant and FEI warrant that entering
into this Agreement and performance of services hereunder will not conflict with
any obligation of the Consultant arising under any other contract or by
operation of law. The Consultant warrants that he has the right to disclose all
information transmitted to the Parent or the Company pursuant to this Agreement,
and that the services to be performed by the Consultant under this Agreement do
not violate or in any way infringe upon the rights of third parties, including
property, contractual, employment, trade secrets, proprietary information, and
nondisclosure rights, or any trademark, copyright or patent rights, and that
Consultant will not enter into any agreements or arrangements with third persons
that would result in the performance of such services violating or infringing
the rights of such persons.
14. Assignment. This agreement is a contract for the personal
services of the Consultant, and neither FEI nor the Consultant may assign this
Agreement or subcontract any services without first obtaining the written
consent of the Parent. The Parent may assign this
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<PAGE> 6
Agreement to any subsidiary or affiliated company or to any third party together
with the business to which it pertains.
15. Governing Law. This Agreement is governed by, and is to be
construed and enforced in accordance with, the laws of the State of Delaware.
If, under such law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation or ordinance, such
portion shall be deemed to be modified or altered to conform thereto or, if that
is not possible, to be omitted from this Agreement; and the invalidity of any
such portion shall not affect the force, effect and validity of the remaining
portion hereof. The parties agree that all actions or proceedings initiated by
any party hereto and arising directly or indirectly out of this Agreement which
are brought pursuant to judicial proceedings shall be litigated in the State
courts of Delaware.
16. Notices. All notices hereunder shall be in writing and
shall be given (and shall be deemed to have been duly received if so given) by
hand delivery, telegram, telex or telecopy, or by mail (registered or certified
mail, postage prepaid, return receipt requested) or by any courier service, such
as Federal Express, providing proof of delivery. All communications hereunder
shall be delivered to the respective parties at the following addresses:
If to the Parent, to:
Western Atlas Inc.
10205 Westheimer Road
Houston, Texas 77042-3115
Attention: General Counsel
Fax: 713-266-1717
If to the Consultant, to:
Joel Friedman
11 Reimer Road
Scarsdale, NY 10583
If to FEI, to:
11 Reimer Road
Scarsdale, NY 10583
Attention: Joel Friedman
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
17. Miscellaneous. The Consultant shall terminate from
employment with the Company as of the Effective Time. This Agreement constitutes
the entire understanding between the Parent and the Consultant and FEI relating
to the consulting services to be rendered by the Consultant to the Parent and
the Company and cancels all prior written and oral agreements and
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<PAGE> 7
understandings with respect to the subject matter of this Agreement between the
Company and the Consultant, and the Consultant hereby waives any further
payments, under the Employment Agreement, dated February 1, 1996, between the
Company and the Consultant, and any severance payments under any plan or
agreement. This Agreement may be amended only by a subsequent written agreement
of the parties hereto. This Agreement shall be binding upon and shall inure to
the benefit of FEI, its successors and permitted assigns, and the Consultant,
his heirs, executors, administrators, beneficiaries and permitted assigns and
shall be binding upon and shall inure to the benefit of the Parent and its
successors and permitted assigns.
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the year and day first above written.
WESTERN ATLAS INC.
By: /s/ Richard White
---------------------------------------
Richard White
/s/ Joel Friedman
---------------------------------------
Joel Friedman
FRIEDMAN ENTERPRISES INC.
By: /s/ Joel Friedman
---------------------------------------
Joel Friedman, President
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<PAGE> 1
Exhibit (c)(6)
CONSULTING AND NON-COMPETE AGREEMENT
AGREEMENT, dated as of March 8, 1998, by and between Western
Atlas Inc., a Delaware corporation (the "Parent"), and Luis H. Ferran Arroyo
(the "Consultant").
WHEREAS, the Consultant is the Executive Vice President for
Latin American Operations of 3-D Geophysical, Inc., a Delaware corporation,
(collectively with its subsidiaries, the "Company");
WHEREAS, the Parent has entered into an Agreement and Plan of
Merger with the Company and WAI Acquisition Corp., dated as of March 8, 1998
(the "Merger Agreement");
WHEREAS, the Consultant will terminate employment with the
Company effective as of the "Effective Time" (as defined in the Merger
Agreement) of the merger contemplated by the Merger Agreement (the "Merger");
and
WHEREAS, the Parent desires to provide for the Consultant to
perform services for the Parent and the Company following the Merger.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the Parent and the
Consultant hereby agree as follows:
1. Consulting Services. Subject to the effectiveness of the
Merger, the Consultant hereby agrees to provide such consulting services to the
Parent and to the Company as the President of the Western Geophysical Division
of Western Atlas International, Inc. or his designee shall reasonably request,
including without limitation consulting services with respect to Petroleos
Mexicanos, for not more than 32 hours per month. Such consulting services may be
rendered in person at the corporate offices of the Parent or the Company or one
of their affiliates, or at any other mutually agreeable place.
2. Term. The period of consultancy under this Agreement shall
be for a period commencing on the Effective Time and ending on the fourth
anniversary of the Effective Time (the "Term").
3. Consulting Fee. The Parent shall pay to the Consultant, in
consideration of his consulting services, a consulting fee (the "Consulting
Fee") at an annual rate of $125,000 payable in substantially equal monthly
installments during the Term.
4. Expenses. The Parent will reimburse the Consultant for all
authorized reasonable and necessary out-of-pocket expenses incurred by him in
the performance of his duties hereunder upon the presentation of appropriate
documentation. Such expenses shall be submitted to Parent, at P.O. Box 1407,
Houston, TX 77251-1407, Att: J. Perez, on Parent's standard expense report forms
in accordance with Parent's expense reimbursement policy in effect from time to
time during the Term.
<PAGE> 2
5. Termination of Consultancy. The Consultant's consultancy
hereunder shall terminate prior to the scheduled end of the Term upon the first
to occur of:
(a) the death of the Consultant; or
(b) the Consultant's illness, disability or incapacity
("Disability") that prevents the Consultant from performing his duties hereunder
for sixty (60) consecutive days, or for any sixty (60) days within any one
hundred and eighty (180) day period, and the provision of written notice of such
termination to the Consultant; or
(c) written notice by the Parent to the Consultant of
termination of the Consultant's consultancy by the Parent for "Cause," which
shall include, without limitation, (i) the failure of the Consultant to perform
his duties hereunder after at least 30 days' written notice thereof specifying
such failure and the Consultant's failure to remedy same within such 30-day
period; (ii) any act of illegality, dishonesty, moral turpitude, or fraud in
connection with the Consultant's consultancy; (iii) any course of action by the
Consultant which is materially detrimental to the business of the Parent or any
of its affiliates (including without limitation any violation of Sections 7, 8
or 9 of this Agreement); or (iv) the commission by the Consultant of any felony;
or
(d) written notice by the Parent to the Consultant of
termination of the Consultant's consultancy without Cause; or
(e) written notice by the Consultant to the Parent of
termination of his consultancy.
The date of termination of the Consultant's consultancy shall be the date
written notice is given or such later date (within thirty (30) days following
such notice) specified in the written notice.
6. Termination Payments. In the event of the termination of
the Consultant's consultancy pursuant to Section 5, the Parent shall make the
payments to the Consultant set forth below and have no further obligation to the
Consultant hereunder.
(a) In the event of the termination of the Consultant's
consultancy by the Parent for Cause pursuant to Section 5(c) of this Agreement
or the termination of the Consultant's consultancy by the Consultant pursuant to
Section 5(e) of this Agreement, the Parent shall pay the Consultant the
Consulting Fee previously earned but not paid as of the date of termination.
(b) In the event of the termination of the Consultant's
consultancy by the Parent without Cause (and not for Disability) pursuant to
Section 5(d) of this Agreement, the Parent shall continue to pay the Consultant
the full Consulting Fee contemplated by Section 3 of this Agreement in monthly
installments through the scheduled end of the Term, subject to the Consultant's
compliance with Sections 7, 8 and 9 of this Agreement.
(c) In the event of the Consultant's death or termination for
Disability pursuant to Section 5(b) of this Agreement during the Term, the
Parent shall continue to pay to Consultant (or to his estate or beneficiary in
the event of his death) the Consulting Fee contemplated by
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<PAGE> 3
Section 3 in monthly installments for the lesser of (i) six months following
such date of termination or (ii) the number of months remaining in the Term,
subject to, in the event of termination for Disability, the Consultant's
compliance with Sections 7, 8 and 9 of this Agreement.
7. Covenant Not to Compete. During the Term and until the
later of (a) 12 months after the Consultant's termination of consultancy with
the Parent for any reason or (b) the end of the scheduled Term (the
"Noncompetition Period"), the Consultant will not, directly or indirectly
(whether as sole proprietor, partner or venturer, stockholder, director,
officer, employee or consultant or in any other capacity as principal or agent
or through any person, subsidiary or employee acting as nominee or agent):
(a) Conduct or engage in or have an interest in or be
associated with any person, firm, association, partnership, corporation or other
entity which conducts or engages in the business of seismic data acquisition or
data processing (the "Business"), which are the primary businesses of the
Company;
(b) Take any action, directly or indirectly, to finance,
guarantee or provide any other material assistance to any person, firm,
association, partnership, corporation or other entity which conducts or engages
in the Business;
(c) Influence or attempt to influence any person, firm,
association, partnership, corporation or other entity which is a contracting
party with the Parent at any time during the Noncompetition Period to terminate
any agreement with the Parent except to the extent the Consultant is acting on
behalf, and at the direction, of the Parent in good faith;
(d) Hire or attempt to hire for employment any person who is
employed by the Parent or attempt to influence any such person to terminate
employment with the Parent, except to the extent the Consultant is acting on
behalf, and at the direction, of the Parent in good faith; or
(e) Call on, solicit or take away as a client or customer or
attempt to call on, solicit or take away as a client or customer any person,
firm, association, partnership, corporation or other entity that is or was a
client or customer of the Parent, including actively sought prospective
customers, during the Term or the Consultant's prior employment with the
Company.
The restrictive provisions of this Agreement shall not
prohibit the Consultant from having an equity interest in the securities of any
corporation engaged in the Business, which securities are listed on a recognized
securities exchange or traded in the over-the-counter market to the extent that
such interest does not exceed 1% of the value or voting power of such
corporation and does not constitute control of such corporation. For purposes of
this Section 7 and Sections 8 and 9 of this Agreement, the term "Parent" shall
include the Parent and the Company, and each of their affiliates.
8. Confidential Information; Ownership Rights. (a) The
Consultant acknowledges and agrees that all nonpublic information concerning the
Parent's business including,
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<PAGE> 4
without limitation, information relating to its products, customer lists,
pricing, trade secrets, patents, business methods, financial and cost data,
business plans and strategies (collectively, the "Confidential Information") is
and shall remain the property of the Parent. The Consultant recognizes and
agrees that all of the Confidential Information, whether developed by the
Consultant or made available to the Consultant, other than information that is
generally known to the public, is a unique asset of the business of the Parent,
the disclosure of which would be damaging to the Parent. Accordingly, the
Consultant agrees to hold such Confidential Information in a fiduciary capacity
for the benefit of the Parent. The Consultant agrees that he will not at any
time during or after the Consultant's consultancy with the Parent for any
reason, directly or indirectly, disclose to any person any Confidential
Information of the Parent, other than information that is already known to the
public, except as may be required in the ordinary course of business of the
Parent or as may be required by law. Promptly upon the termination of this
Agreement for any reason, the Consultant agrees to return to the Parent any and
all documents, memoranda, drawings, notes and other papers and items (including
all copies thereof, whether electronic or otherwise) embodying any Confidential
Information of the Parent which are in the possession or control of the
Consultant. Information concerning the Parent's business that becomes public as
a result of the Consultant's breach of this Section 8 shall be treated as
Confidential Information under this Section 8.
(b) The Consultant hereby assigns to the Parent all right,
title and interest in and to any ideas, inventions, original works or
authorship, developments, improvements or trade secrets with respect to the
Business which the Consultant solely or jointly has conceived or reduced to
practice, or will conceive or reduce to practice, or cause to be conceived or
reduced to practice, during the Term or his prior employment with the Company.
All original works or authorship which are made by Consultant (solely or jointly
with others) within the scope of Consultant's services hereunder or for the
Company and which are protectable by copyright are "works made for hire," as
that term is defined in the United States Copyright Act.
9. Disparagement. During the Term and thereafter, the
Consultant agrees not to (a) criticize, denigrate or speak adversely of, or (b)
disclose negative information about, the operations, management or performance
of the Parent or about any director, officer, employee or agent of the Parent,
except as may be required by law.
10. Breach of Certain Provisions. The Consultant acknowledges
that a violation on the Consultant's part of any of the covenants contained in
Sections 7, 8 or 9 of this Agreement would cause immeasurable and irreparable
damage to the Parent and the Company. Accordingly, the Consultant agrees that
the Parent shall be entitled to injunctive relief in any court of competent
jurisdiction for any actual or threatened violation of any such covenant in
addition to any other remedies it may have. The Consultant agrees that in the
event that any court of competent jurisdiction shall finally hold that any
provision of Section 7, 8 or 9 hereof is void or constitutes an unreasonable
restriction against the Consultant, the provisions of such Section shall not be
rendered void but shall apply to such extent as such court may determine
constitutes a reasonable restriction under the circumstances. Sections 7, 8 and
9 shall survive the termination of this Agreement.
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<PAGE> 5
11. Independent Contractor. Nothing herein shall be construed
to create an employer-employee, agency, master and servant or joint venture
relationship or other association between the Parent or the Company and the
Consultant, and the Consultant shall not be deemed to be an employee of the
Parent or the Company for any purpose, including without limitation for the
purpose of participating in any employee benefit plan of the Parent or the
Company. The Consultant agrees that he will not hold himself out to be an
employee of the Parent or the Company. The Consultant shall perform all services
under this Agreement as, and shall remain, an independent contractor. The
Consultant shall have no authority, express or implied, to make any contract or
agreement for, or on behalf of, or otherwise commit the Company or the Parent,
or their shareholders, affiliates or coventurers to any contract, commitment,
obligation, or liability binding on the Company or the Parent, and the Parent
and the Company do not assume any responsibility for proposals, guarantees, or
contracts entered into by the Consultant with others.
12. Risk of Loss. The Consultant assumes all risk of personal
injury or death to himself and all risk of damage to or loss of personal
property furnished by the Consultant in connection with the services to be
performed by the Consultant under this Agreement. The Consultant will abide by
the safety and security regulations of the Parent and the Company while on the
respective properties of the Parent and the Company.
13. Warranty. The Consultant warrants that entering into this
Agreement and performance of service hereunder will not conflict with any
obligation of the Consultant arising under any other contract or by operation of
law. The Consultant warrants that he has the right to disclose all information
transmitted to the Parent or the Company under this Agreement, and that the
services to be performed by the Consultant under this Agreement do not violate
or in any way infringe upon the rights of third parties, including property,
contractual, employment, trade secrets, proprietary information, and
nondisclosure rights, or any trademark, copyright or patent rights, and that
Consultant will not enter into any agreements or arrangements with third persons
that would result in the performance of such services violating or infringing
the rights of such persons.
14. Assignment. This agreement is a contract for the personal
services of the Consultant, and the Consultant may not assign this Agreement or
subcontract any services without first obtaining the written consent of the
Parent. The Parent may assign this Agreement to any subsidiary or affiliated
company or to any third party together with the business to which it pertains.
15. Governing Law. This Agreement is governed by, and is to be
construed and enforced in accordance with, the laws of the State of Delaware.
If, under such law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation or ordinance, such
portion shall be deemed to be modified or altered to conform thereto or, if that
is not possible, to be omitted from this Agreement; and the invalidity of any
such portion shall not affect the force, effect and validity of the remaining
portion hereof. The parties agree that all actions or proceedings initiated by
any party hereto and arising directly or indirectly out of this Agreement which
are brought pursuant to judicial proceedings shall be litigated in the State
courts of Delaware.
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<PAGE> 6
16. Notices. All notices hereunder shall be in writing and
shall be given (and shall be deemed to have been duly received if so given) by
hand delivery, telegram, telex or telecopy, or by mail (registered or certified
mail, postage prepaid, return receipt requested) or by any courier service, such
as Federal Express, providing proof of delivery. All communications hereunder
shall be delivered to the respective parties at the following addresses:
If to the Parent, to:
Western Atlas Inc.
10205 Westheimer Road
P.O. Box 1407
Houston, Texas 77251
Attention: General Counsel
Houston, Texas 77042-3115
Attention: General Counsel
Fax: 713-266-1717
If to the Consultant, to:
Luis H. Ferran Arroyo
Avenida La Malinche No. 320
Colonia Colinas del Basques
Deleg, Tialplan, Mexico, D.F
Fax: (525) 532-5700
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
17. Miscellaneous. The Consultant shall terminate from
employment with the Company as of the Effective Time. This Agreement constitutes
the entire understanding between the Parent and the Consultant relating to the
consulting services to be rendered by the Consultant to the Parent and the
Company and cancels all prior written and oral agreements and understandings
with respect to the subject matter of this Agreement between the Company and the
Consultant, and the Consultant hereby waives any further payments under the
Employment Agreement, dated February 1, 1996, between the Company and the
Consultant, and any severance payments under any plan or agreement. This
Agreement may be amended only by a subsequent written agreement of the
Consultant and the Parent. This Agreement shall be binding upon and shall inure
to the benefit of the Consultant, his heirs, executors, administrators,
beneficiaries and permitted assigns and shall be binding upon and shall inure to
the benefit of the Parent and its successors and permitted assigns.
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<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the year and day first above written.
WESTERN ATLAS INC.
By: /s/ Richard White
----------------------------------------
Richard White
/s/ Luis H. Ferran Arroyo
----------------------------------------
Luis H. Ferran Arroyo
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<PAGE> 1
Exhibit (c)(7)
[WESTERN ATLAS INC. LETTERHEAD]
January 20, 1998
3-D Geophysical, Inc.
8226 Park Meadows Drive
Littleton, Colorado 80124
Gentlemen:
To induce Western Atlas Inc. ("WAI") to commence its due diligence
investigation of 3-D Geophysical, Inc. (the "Company") and to pursue its
interest in a possible business combination or other transaction with the
Company, WAI and the Company have agreed as follows:
(1) The Company agrees to negotiate exclusively with WAI through March
9, 1998, or such later date as the parties may agree in writing (such period
being referred to herein as the "Exclusivity Period") with respect to a possible
business combination between the Company and WAI.
(2) During the Exclusivity Period, the Company agrees that it shall
not, and it shall not permit its subsidiaries, or any officers, directors,
employees, financial advisors, and other agents or representatives of the
Company or its subsidiaries, directly or indirectly, to solicit or initiate
(including by way of furnishing any non-public information concerning the
Company or its assets) inquiries or proposals, or participate in any discussions
or negotiations with any person, corporation, partnership, or other entity
(other than WAI), concerning a merger or other business combination or an
acquisition of all or any substantial portion of the Company or its assets (a
"Transaction").
Please confirm your agreement with the foregoing by signing the
enclosed copy of this letter and returning it to us, whereupon it will become a
binding obligation of WAI and the Company. The agreements set forth in this
letter may be modified or waived only by a separate writing by the Company and
WAI expressly so modifying or waiving such agreements. The Company and WAI
hereby acknowledge that the Confidentiality Agreement dated December 19, 1997,
remains in full force and effect.
Very truly yours, ACCEPTED AND AGREED:
WESTERN ATLAS INC. 3-D GEOPHYSICAL, INC.
By: /s/ J. William G. Honeybourne By: /s/ Joel Friedman
----------------------------- -----------------
J. William G. Honeybourne Its: Chairman
Vice President Date: January 20, 1998
<PAGE> 1
Exhibit (c)(8)
[WESTERN ATLAS INC. LETTERHEAD]
July 18, 1997
3-D Geophysical, Inc.
599 Lexington Avenue, Suite 3102
New York, New York 10022
Attention: Mr. Joel Friedman
Chairman
RE: Confidentiality and Non-Disclosure Agreement
Dear Mr. Friedman:
In connection with the evaluation of a potential transaction (a "Transaction")
involving 3-D Geophysical, Inc. ("3-D") and Western Geophysical, a division of
Western Atlas International, Inc. ("Western"), 3-D and Western propose to
disclose to each other certain Confidential Information (as hereinafter defined)
from time to time (each such party as disclosing party hereunder, a "Disclosing
Party" and as recipient of Confidential Information hereunder, a "Recipient").
For good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto hereby undertake and agree as follows:
1. Confidential Information
(a) As used in this Agreement, the term "Confidential Information"
means any and all information relating to a Disclosing Party, its
financial condition, cash flow or results of operations, customers,
assets or operations or any other aspect of its financial affairs or
business, including, without limitation, those portions of any
analyses, compilations, forecasts, studies or other documents relating
thereto, except such thereof as (i) shall have become generally
available to the public through no act or omission of Recipient in
breach of this Agreement, (ii) which Recipient can establish was, prior
to its disclosure by or on behalf of Disclosing Party to Recipient,
already in Recipient's lawful possession, or (iii) which Recipient can
establish was independently disclosed to Recipient by a third party who
or which Recipient reasonably believes did not acquire such information
under any obligation of confidentiality in favor of Disclosing Party
(including, without limitation, as a direct or indirect result of the
breach of any other party of any obligation of confidentiality to
Disclosing Party).
(b) Except as provided in this Agreement or with the prior written
consent of Disclosing Party, at all times during the course of and for
a period for two years following termination of the discussions
relating to a potential Transaction, Recipient
<PAGE> 2
3-D Geophysical, Inc.
Western Geophysical
July 18, 1997
Page 2
shall keep and shall cause its Representatives (as hereinafter defined)
to keep, confidential and shall not directly or indirectly disclose or
cause to be disclosed to anyone any Confidential Information which may
be communicated to Recipient or to which Recipient may have access.
Recipient shall not use any such Confidential Information for any
purpose whatsoever other than to evaluate a Transaction; provided,
however, that Recipient may communicate Confidential Information to
such of Recipient's Representatives as Recipient in good faith
determines have a need to know such Confidential Information for the
purpose of evaluating a Transaction, and then only on the condition
that each such person shall, prior to any such disclosure, (i) be
informed that such Confidential Information is subject to this
Agreement, and (ii) be directed by Recipient for the benefit of
Disclosing Party not to disclose any Confidential Information to others
or to use any Confidential Information except as permitted by this
Agreement. Recipient agrees that any breach of this Agreement by any
such person shall be deemed for all purposes to be a breach of this
Agreement by Recipient. Representatives means all directors, officers,
employees, affiliates, agents, representatives and controlling persons,
within the meaning of Section 20 of the Securities Exchange Act of
1934, as amended, of any party to this Agreement, and, in the case of
Western, such individual of Western Atlas Inc., the corporate parent of
Western (collectively "Representatives").
(c) Notwithstanding the provisions of Paragraph 1(b) above, or
Paragraph 2 below, Recipient shall be entitled to disclose the
Confidential Information or the fact that Recipient and Disclosing
Party are considering a Transaction or that discussions or negotiations
have taken or are taking place concerning a Transaction or any term,
condition or other fact relating to a Transaction to the extent
required by applicable law or requirement of any stock exchange or
market upon which the equity securities of Recipient are listed or
traded.
(d) As between the parties hereto, all Confidential Information shall
be and remain the sole and exclusive property of the Disclosing Party.
Recipient shall keep and hold all physical embodiments of any
Confidential Information, including, without limitation, those portions
of any notes, computer programs and files, drawings, pictures,
blueprints, plans, schematics, recordings, audio and video tapes,
movies, prototypes, samples, photographs, tables, records, documents,
notebooks and the like which constitute, contain, reflect or relate to
Confidential Information, whether prepared by Disclosing Party,
Recipient or on Recipient's behalf, and all excerpts, abstracts and
other summaries of any thereof (collectively, "Confidential
Documents"), which may from time to time be in Recipient's possession
or otherwise under Recipient's control, in a secure place, and shall
not make or cause to be made any copy or reproduction of any thereof
without Disclosing Party's prior express written authorization. At
Disclosing Party's request (made at any time or from time to time,
whether during the course of or following termination of the
discussions referred to above), Recipient shall promptly deliver to
Disclosing Party or its nominee all Confidential Documents then in
Recipient's
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<PAGE> 3
3-D Geophysical, Inc.
Western Geophysical
July 18, 1997
Page 3
possession, or under Recipient's control, whether or not Recipient
shall have been previously authorized to retain the same, provided that
Recipient may destroy Confidential Documents prepared by or on behalf
of Recipient so long as such destruction is confirmed to Disclosing
Party by the certification of an officer of the Recipient.
Notwithstanding the foregoing, the attorneys of Recipient may retain
one set of the Confidential Documents for use solely in connection with
defending itself or its Representatives against a claim regarding its
obligations hereunder.
(e) Recipient understands that the Disclosing Party will endeavor to
include in the Confidential Information those materials which
Disclosing Party believes to be reliable and relevant for the purpose
of Recipients evaluation of a Transaction; however, no Disclosing Party
makes any express or implied representation or warranty as to the
accuracy or completeness of any information provided hereunder.
Recipient agrees that the Disclosing Party will not have any liability
relating to the Confidential Information or for any errors therein or
omissions therefrom and Recipient shall not be entitled to rely on such
Confidential Information except as to the extent representations and
warranties are provided in any definitive documentation relating to a
Transaction, subject to the restrictions and limitations set forth in
such documentation.
(f) Each party hereby acknowledges that it is aware (and that is
Representatives who are apprised of this matter have been, or upon
becoming so apprised will be, advised) of the restrictions imposed by
the United States securities laws on a person possessing material
non-public information about a company whose equity securities are
publicly traded.
2. No Disclosure Regarding Transaction
For the term of this Agreement, neither party shall disclose to any
person, other than to its Representatives, that Recipient and
Disclosing Party are considering a Transaction or that discussions or
negotiations have taken or are taking place concerning a Transaction or
any term, condition or other fact relating to a Transaction or such
discussions or negotiations, including, without limitation, the status
thereof.
3. Due Authorization
Each of the parties represents and warrants to the other that it has
full power, authority and legal right to enter into this Agreement and
to incur and perform its obligations hereunder.
4. Entire Agreement and Amendments
(a) This Agreement shall expire two years after the date
hereof.
-3-
<PAGE> 4
3-D Geophysical, Inc.
Western Geophysical
July 18, 1997
Page 4
(b) This Agreement embodies the entire understanding between the
parties with respect to the subject matter hereof and merges all prior
discussions and writings between them as to their respective rights and
obligations respecting such subject matter.
(c) This Agreement may not be amended, nor may any provisions hereof be
modified or waived, except by an instrument duly executed by or on
behalf of the party to be charged therewith. No failure or delay by any
party in exercising any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right
hereunder preclude any further exercise thereof or the exercise of any
other right hereunder.
5. Notices
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given upon (a) personal delivery, (b) deposit in the
mails, registered or certified mail, postage prepaid, return receipt
requested, in either case addressed to the address for such party
specified herein or to such other address as such party may designate
by notice to the other party given in accordance with this Paragraph 5,
or (c) sending via facsimile the same to the fax number set forth
below:
If to 3-D, (212) 317-9230 (attention: Joel Friedman, Chairman); if to
Western, (713) 266-1717 (attention: James E. Brasher, General Counsel).
6. Governing Law Jurisdiction
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without reference to
principles of conflict of laws.
If the foregoing correctly sets forth the terms of our understanding, please
evidence Western's agreement therewith by signing the enclosed copy of this
letter in the space provided below and returning it to my attention, whereupon
it will become a binding agreement between us in accordance with its terms.
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<PAGE> 5
3-D Geophysical, Inc.
Western Geophysical
July 18, 1997
Page 5
Very truly yours,
WESTERN GEOPHYSICAL, A DIVISION OF
WESTERN ATLAS INTERNATIONAL, INC.
By: /s/ Jesse Perez
----------------------------------
Jesse Perez
Title: Sr. Vice President, Finance
and Administration
ACKNOWLEDGED AND AGREED as of the date first written above:
3-D GEOPHYSICAL, INC.
By: /s/ Joel Friedman
----------------------------------
Joel Friedman
Title: Chairman
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<PAGE> 1
Exhibit (c)(9)
[WESTERN ATLAS INC. LETTERHEAD]
December 19, 1997
3-D Geophysical, Inc
599 Lexington Avenue, Suite 3l02
New York, New York 10022
Attention: Mr. Joel Friedman
Chairman
RE: Confidentiality and Non-Disclosure Agreement
Dear Mr. Friedman:
In connection with the evaluation of a potential transaction (a "Transaction")
involving 3-D Geophysical, Inc. ("3-D") and Western Geophysical, a division of
Western Atlas International, Inc. ("Western"), 3-D proposes to disclose to
Western certain Confidential Information (as hereinafter defined) from time to
time. For good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the parties hereto hereby undertake and agree as follows:
1. Confidential Information
(a) As used in this Agreement, the term "Confidential Information"
means any and all information relating to 3-D, its financial condition,
cash flow or results of operations, customers, assets or operations or
any other aspect of its financial affairs or business, including,
without limitation, those portions of any analyses, compilations,
forecasts, studies or other documents relating thereto, except such
thereof as (i) shall have become generally available to the public
through no act or omission of Western in breach of this Agreement, (ii)
which Western can establish was, prior to its disclosure by or on
behalf of 3-D to Western, already in Western's lawful possession, or
(iii) which Western can establish was independently disclosed to
Western by a third party who or which Western reasonably believes did
not acquire such information under any obligation of confidentiality in
favor of 3-D (including, without limitation, as a direct or indirect
result of the breach of any other party of any obligation of
confidentiality to 3-D).
(b) Except as provided in this Agreement or with the prior written
consent of 3-D, at all times during the course of and for a period for
two years following termination of the discussions relating to a
potential Transaction, Western shall keep and shall cause its
Representatives (as hereinafter defined) to keep, confidential and
shall not directly or indirectly disclose or cause to be disclosed to
anyone any Confidential Information which may be
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3-D Geophysical, Inc.
December 19, 1997
Page 2
communicated to Western or to which Western may have access. Western
shall not use any such Confidential Information for any purpose
whatsoever other than to evaluate a Transaction; provided, however,
that Western may communicate Confidential Information to such of
Western's Representatives as Western in good faith determines have a
need to know such Confidential Information for the purpose of
evaluating a Transaction, and then only on the condition that each such
person shall, prior to any such disclosure, (i) be informed that such
Confidential Information is subject to this Agreement, and (ii) be
directed by Western for the benefit of 3-D not to disclose any
Confidential Information to others or to use any Confidential
Information except as permitted by this Agreement. Western agrees that
any breach of this Agreement by any such person shall be deemed for all
purposes to be a breach of this Agreement by Western. Representatives
means all directors, officers, employees, affiliates, agents,
representatives and controlling persons, within the meaning of Section
20 of the Securities Exchange Act of 1934, as amended, of any party to
this Agreement, and, in the case of Western, such individual of Western
Atlas Inc., the corporate parent of Western (collectively
"Representatives").
(c) Notwithstanding the provisions of Paragraph 1(b) above, or
Paragraph 2 below, Western shall be entitled to disclose the
Confidential Information or the fact that Western and 3-D are
considering a Transaction or that discussions or negotiations have
taken or are taking place concerning a Transaction or any term,
condition or other fact relating to a Transaction to the extent
required by applicable law or requirement of any stock exchange or
market upon which the equity securities of Western are listed or
traded.
(d) As between the parties hereto, all Confidential Information shall
be and remain the sole and exclusive property of 3-D. Western shall
keep and hold all physical embodiments of any Confidential Information,
including, without limitation, those portions of any notes, computer
programs and files, drawings, pictures, blueprints, plans, schematics,
recordings, audio and video tapes, movies, prototypes, samples,
photographs, tables, records, documents, notebooks and the like which
constitute, contain, reflect or relate to Confidential Information,
whether prepared by 3-D, Western or on Western's behalf, and all
excerpts, abstracts and other summaries of any thereof (collectively,
"Confidential Documents"), which may from time to time be in Western's
possession or otherwise under Western's control, in a secure place, and
except as contemplated by paragraph 1(b) above shall not make or cause
to be made any copy or reproduction of any thereof without 3-D's prior
express written authorization. At 3-D's request (made at any time or
from time to time, whether during the course of or following
termination of the discussions referred to above) Western shall
promptly deliver to 3-D or its nominee all Confidential Documents then
in Western's possession, or under Western's control, whether or not
Western shall have been previously authorized to retain the same,
provided that Western may destroy Confidential Documents prepared by or
on behalf of Western so long as such
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3-D Geophysical, Inc.
December 19, 1997
Page 3
destruction is confirmed to 3-D by the certification of an officer of
the Western. Notwithstanding the foregoing, the attorneys of Western
may retain one set of the confidential Documents for use solely in
connection with defending itself or its Representatives against a claim
regarding its obligations hereunder.
(e) Western understands that 3-D will endeavor to include in the
Confidential Information those materials which 3-D believes to be
reliable and relevant for the purpose of Western's evaluation of a
Transaction; however, 3-D makes no express or implied representation or
warranty as to the accuracy or completeness of any information provided
hereunder. Western agrees that 3-D will not have any liability relating
to the Confidential Information or for any errors therein or omissions
therefrom and Western shall not be entitled to rely on such
Confidential Information except as to the extent representations and
warranties are provided in any definitive documentation relating to a
Transaction, subject to the restrictions and limitations set forth in
such documentation.
(f) Each party hereby acknowledges that it is aware (and that its
Representatives who are apprised of this matter have been, or upon
becoming so apprised will be, advised) of the restrictions imposed by
the United States securities laws on a person possessing material
non-public information about a company whose equity securities are
publicly traded.
2. No Disclosure Regarding Transaction
For the term of this Agreement, neither party shall disclose to any
person, other than to its Representatives, that Western and 3-D are
considering a Transaction or that discussions or negotiations have
taken or are taking place concerning a Transaction or any term,
condition or other fact relating to a Transaction or such discussions
or negotiations, including, without limitation, the status thereof.
3. Due Authorization
Each of the parties represents and warrants to the other that it has
full power, authority and legal right to enter into this Agreement and
to incur and perform its obligations hereunder.
4. Entire Agreement and Amendments
(a) This Agreement shall expire two years after the date hereof.
(b) This Agreement embodies the entire understanding between the
parties with respect to the subject matter hereof and merges all prior
discussions and writings between them as to their respective rights and
obligations respecting such subject matter.
<PAGE> 4
3-D Geophysical, Inc.
December 19, 1997
Page 4
(c) This Agreement may not be amended, nor may any provisions hereof be
modified or waived, except by an instrument duly executed by or on
behalf of the party to be charged therewith. No failure or delay by any
party in exercising any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right
hereunder preclude any further exercise thereof or the exercise of any
other right hereunder.
5. Notices
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given upon (a) personal delivery, (b) deposit in the
mails, registered or certified mail, postage prepaid, return receipt
requested, in either case addressed to the address for such party
specified herein or to such other address as such party may designate
by notice to the other party given in accordance with this Paragraph 5,
or (c) sending via facsimile the same to the fax number set forth
below:
If to 3-D, (212) 317-9230 (attention: Joel Friedman, Chairman); if to
Western, (713) 266-1717 (attention: James E. Brasher, General Counsel).
6. Governing Law Jurisdiction
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, without reference to
principles of conflict of laws
If the foregoing correctly sets forth the terms of our understanding, please
evidence Western's agreement therewith by signing the enclosed copy of this
letter in the space provided below and returning it to my attention, whereupon
it will become a binding agreement between us in accordance with its terms.
Very truly yours,
WESTERN ATLAS INTERNATIONAL, INC.
By: /s/ Will Honeybourne
----------------------
Will Honeybourne
Title: Senior Vice President
<PAGE> 5
3-D Geophysical, Inc.
December 19, 1997
Page 5
ACKNOWLEDGED AND AGREED as of the date first written above:
3-D GEOPHYSICAL, INC.
By: /s/ Joel Friedman
----------------------------
Joel Friedman
Title: Chairman
