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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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NEW WEST EYEWORKS, INC.
(Name of Subject Company)
NEW WEST EYEWORKS, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
649156 10 6
(CUSIP Number of Class of Securities)
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BARRY J. FELD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NEW WEST EYEWORKS, INC.
2104 WEST SOUTHERN AVENUE
TEMPE, ARIZONA 85282
(602) 438-1330
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
MARC C. KRANTZ, ESQ.
KOHRMAN JACKSON & KRANTZ P.L.L.
ONE CLEVELAND CENTER, 20TH FLOOR
CLEVELAND, OHIO 44114
(216) 736-7204
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is New West Eyeworks, Inc., a Delaware
corporation ("New West"). The address of the principal executive offices of New
West is 2104 West Southern Avenue, Tempe, Arizona 85282. The title of the class
of equity securities to which this Schedule 14D-9 Solicitation/Recommendation
Statement (this "Statement") relates is the Common Stock, par value $0.01 per
share, of New West (collectively, the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to a tender offer by NW Acquisition Corp., a
Delaware corporation ("Purchaser") and a wholly-owned subsidiary of National
Vision Associates, Ltd., a Georgia corporation ("National Vision"), disclosed in
a Tender Offer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission (the "Commission") on July 20, 1998 (the "Schedule 14D-1"),
to purchase all issued and outstanding Shares at a price of $13.00 per Share
(the "Offer Price"), net to sellers in cash, without interest and upon the terms
and subject to the conditions set forth in Purchaser's Offer to Purchase, dated
July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together constitute the "Offer").
The Offer is being made in accordance with an Agreement and Plan of Merger,
dated as of July 13, 1998 (the "Merger Agreement"), among National Vision,
Purchaser and New West, which is incorporated by reference. A copy of the Merger
Agreement has been filed with the Commission as an exhibit to the Schedule
14D-1. As soon as practicable after consummation of the Offer and satisfaction
of the other conditions specified in the Merger Agreement, Purchaser will be
merged with and into New West (the "Merger"). Following the Merger, New West
will continue as the surviving corporation (the "Surviving Corporation") and
will be a wholly-owned subsidiary of National Vision.
All information contained in this Statement or incorporated by reference
concerning Purchaser, National Vision or their affiliates, or actions or events
with respect to any of them, was provided by Purchaser or National Vision. New
West takes no responsibility for the accuracy or completeness of such
information or for any failure by such entities to disclose events or
circumstances that may have occurred and may affect the significance,
completeness or accuracy of any such information.
The principal executive offices of National Vision and Purchaser are
located at 296 Grayson Highway, Lawrenceville, Georgia 30045-5750.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of New West, which is the person filing
this Statement, are set forth in Item 1 above and are incorporated by reference.
(b) Except as set forth in this Statement, to the knowledge of New West, as
of the date of this Statement, there are no material contracts, agreements,
arrangements or understandings, or any actual or potential conflicts of
interest, between New West or its affiliates and (i) New West, its executive
officers, directors or affiliates, or (ii) National Vision, Purchaser or its
executive officers, directors or affiliates.
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement.
This summary is not a complete description of the terms and conditions of the
Merger Agreement and is qualified in its entirety by reference to the full text
of the agreement, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1.
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable but in no event later than five business days
following public announcement of the Merger Agreement. The obligation of
Purchaser to accept for payment any Shares tendered shall be subject to the
satisfaction of the conditions described below under Conditions of the Offer.
Subject to the terms of the Merger Agreement and the
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applicable rules and regulations of the Commission, the Purchaser expressly
reserves the right, in its sole discretion, to (a) extend the period of time
during which the Offer is open, and thereby delay acceptance for payment of and
the payment for any Shares, by giving oral or written notice of such extension
to the Depositary and (b) amend the Offer in any other respect by giving oral or
written notice of such amendment to the Depositary. THE PURCHASER SHALL NOT HAVE
ANY OBLIGATION TO PAY INTEREST ON THE PURCHASE PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. 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., Eastern Time, on the next business day after the previously scheduled
Expiration Date (as defined below) in accordance with the public announcement
requirements of Rule 14d-4(c) 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. The term "Expiration
Date" means 12:00 Midnight, Eastern Time, on Monday, August 17, 1998, unless and
until the Purchaser shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Purchaser, shall expire.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in the Offer.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-1 under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer. In addition, as discussed
below, the Merger Agreement contains provisions that limit the Purchaser's
ability to extend the Offer or delay payment for Shares accepted for payment.
In the Merger Agreement, the Purchaser has agreed that it will not, without
the consent of New West, extend the Offer, except that, without the consent of
New West, the Purchaser may extend the Offer (a) for a period of not more than
20 business days beyond the date on which the Offer would otherwise expire if on
the date of such extension any of the conditions to Purchaser's obligation to
purchase Shares shall not be satisfied, until such time as such conditions are
satisfied or waived (other than an extension in order to obtain financing as
contemplated by the Financing Condition (as defined below) for which an
extension may be made only pursuant to clause (c) of this sentence), (b) for any
period required by any rule, regulation, interpretation or position of the
Commission or the staff thereof applicable to the Offer, (c) through and
including October 14, 1998 solely in order to obtain financing pursuant to the
Financing Condition, and (d) for any reason for a period of not more than 10
business days beyond the latest expiration date that would otherwise be
permitted under clause (a) or (b) of this sentence. National Vision has informed
New West that it expects that it will be necessary to extend the Offer beyond
the August 17, 1998 date set as the initial Expiration Date (as defined below)
in order to permit adequate time for National Vision to obtain the financing
required in order to provide funds for the Purchaser to consummate the Offer and
the Merger. As used in this Offer to Purchase, "business day" has the meaning
set forth in Rule 14d-1 under the Exchange Act.
In addition, the Purchaser has agreed in the Merger Agreement that it will
not, without the consent of New West, (a) increase the percentage of outstanding
Shares required to be tendered pursuant to the Minimum Tender Condition (as
defined below), (b) reduce the number of Shares subject to the Offer, (c) reduce
the Offer Price, (d) modify or add to the conditions set forth in the Merger
Agreement or (e) change the form of consideration payable in the Offer. New
West, National Vision and the Purchaser each have the right to terminate the
Merger
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Agreement if the Purchaser has not purchased Shares pursuant to the Offer by
October 15, 1998. In addition, the Merger Agreement is subject to termination as
more fully described below under Termination of the Merger Agreement.
The Purchaser's obligation to accept and pay for Shares tendered pursuant
to the Offer is expressly conditioned upon National Vision's receipt of funds
from a contemplated financing in an amount sufficient to consummate the
transactions contemplated by the Merger Agreement (the "Financing Condition"),
which required amount is approximately $77 million. National Vision has
initiated a transaction for the private placement of its high yield debt
securities in an amount that would provide sufficient funds to satisfy the
Financing Condition and permit the Purchaser to accept and pay for Shares
pursuant to the Offer, if that private placement is consummated as expected. If
the Purchaser terminates (and does not consummate) the Offer in reliance upon
the Financing Condition on or before September 30, 1998, then National Vision
must pay a termination fee to New West equal to $2.5 million (plus expenses of
New West incurred in connection with the transaction), or $3.5 million (plus
expenses of New West incurred in connection with the transaction) if such
termination occurs after September 30, 1998 and on or before October 14, 1998.
Certain other conditions to the Purchaser's obligation, which are not related to
the Financing Condition, are contained in the Merger Agreement and are more
fully described below under Conditions of the Offer.
If by 12:00 Midnight, Eastern Time, on the Expiration Date, any or all
conditions to the Offer have not been satisfied or waived, the Purchaser
reserves the right (but shall not be obligated), subject to the terms and
conditions contained in the Merger Agreement and to the applicable rules and
regulations of the Commission, to (a) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering stockholders, (b)
waive all the unsatisfied conditions and, subject to complying with the terms of
the Merger Agreement and the applicable rules and regulations of the Commission,
accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn, (c) extend the Offer and, subject
to the right of stockholders to withdraw Shares until the Expiration Date,
retain the Shares that have been tendered during the period or periods for which
the Offer is extended or (d) amend the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of ten business days is generally required to allow for
adequate dissemination to stockholders and investor response.
Conditions of the Offer. The Merger Agreement provides that the Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the Commission, including Rule 14e-l(c) under the Exchange
Act (relating to the Purchaser's obligation to pay for or return tendered Shares
after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (a) there are validly tendered and not
withdrawn prior to the Expiration Date that number of Shares that would
represent at least 51% of the outstanding Shares as determined immediately prior
to the consummation of the Offer (the "Minimum Tender Condition"), (b) the
Financing Condition shall have been satisfied, and (c) any waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder (the "HSR Act"), applicable to the purchase of Shares
pursuant to the Offer and/or Merger shall have expired or been terminated. The
Merger Agreement also provides that the Purchaser shall not be required to
continue the Offer or accept for payment or to pay for any Shares not
theretofore accepted for payment or paid for, and may terminate or amend the
Offer, if, any of the following conditions exists:
(1) there shall have been entered in any action or proceeding before any
governmental entity of competent jurisdiction, an injunction or order,
(a) prohibiting or limiting the acquisition by National Vision or the
Purchaser of any Shares, (b) restraining or prohibiting or otherwise
rendering unenforceable the consummation of the Merger or any of the
other transactions contemplated by or provisions of the
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Merger Agreement, (c) prohibiting or limiting the ownership or
operation by New West of any of its subsidiaries or of any material
portion of the business or assets of New West or any of its
subsidiaries, or compelling New West or any of its subsidiaries to
dispose of or hold separate any material portion of the business or
assets of New West, or any of its subsidiaries, as a result of the
Merger or any of the other transactions contemplated by the Merger
Agreement, (d) imposing limitations on the ability of National Vision
or the Purchaser to acquire or hold, or exercise full rights of
ownership of, any Shares, including, without limitation, the right to
vote Shares purchased by the Purchaser on all matters properly
presented to the stockholders of New West, or (e) requiring New West,
National Vision or the Purchaser to pay damages that reasonably can be
foreseen, or are reasonably likely, to result in a material adverse
effect on the business, assets, liabilities, results of operations or
financial condition of New West and its subsidiaries taken as a whole
(a "Company Material Adverse Effect");
(2) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction that is or could
reasonably be likely to result, directly or indirectly, in any of the
consequences referred to in clauses (a) through (e) of paragraph (1)
above;
(3) there shall have occurred any material adverse change, or any
development that, insofar as reasonably can be foreseen, is reasonably
likely to result in a Company Material Adverse Effect;
(4) there shall have occurred (a) any general suspension of trading in, or
limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States
(excluding any coordinated trading halt triggered solely as a result of
a specified decrease in a market index), (b) any material adverse
change in the financial markets, commodities markets or major stock
exchange indices in the United States, (c) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States, or (d) a commencement of a war or armed hostilities or
other national or international calamity directly or indirectly
involving the United States;
(5) (a) the Board of Directors of New West or any committee thereof shall
have withdrawn or modified in a manner adverse to National Vision or
the Purchaser its approval or recommendation of the Offer, the Merger
or the Merger Agreement, or approved or recommended any Acquisition
Proposal (as defined below), (b) New West shall have entered into any
agreement (other than a confidentiality agreement or engagement letter
with an investment bank) with respect to any Acquisition Proposal or
(c) the Board of Directors of New West or any committee thereof shall
have resolved to do any of the foregoing;
(6) any of the representations and warranties of New West set forth in the
Merger Agreement that are qualified as to materiality shall not be true
and correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in
each case as if such representations and warranties were made as of
such time;
(7) New West shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of New West to be performed or complied with by it under the
Merger Agreement;
(8) the Merger Agreement shall have been terminated in accordance with its
terms; or
(9) the Purchaser, National Vision and New West (with the approval of a
majority of its Independent Directors (as defined below)) shall have
mutually agreed that the Purchaser shall terminate the Offer or
postpone the acceptance for payment of or payment for Shares
thereunder; which, in the sole judgment of the Purchaser or National
Vision, in any such case, and regardless of the circumstances giving
rise to any such condition (including any action or inaction by
National Vision or any of its affiliates), makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
National Vision and may be asserted or waived by them, in whole, or in part, at
any time and from time to time, in their sole discretion. The failure by
National Vision or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right.
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Vote Required to Approve Merger. The Delaware General Corporation Law (the
"Delaware Law") provides that the adoption of any plan of merger or
consolidation by New West requires the approval of the Board of Directors and
the affirmative vote of a majority of the outstanding shares entitled to vote
thereon (including the votes of any Shares owned by the Purchaser as a result of
the Offer or otherwise). The Board of Directors of New West has authorized and
approved the Offer and the Merger. New West's Restated Certificate of
Incorporation (the "New West Certificate") does not contain additional voting
requirements for the adoption of a plan of merger or consolidation.
Conditions to Each Party's Obligation to Effect the Merger. The Merger
Agreement provides that the respective obligations of each party to effect the
Merger are subject to the satisfaction or waiver on or prior to the Merger
becoming effective (the "Effective Time") of the following conditions: (a) if
required by applicable law, the Merger Agreement shall have been approved and
adopted by the affirmative vote of New West's stockholders by the requisite
percentage in accordance with applicable law and New West Certificate, and the
Certificate of Merger shall have been executed and delivered by the Surviving
Corporation and filed in the Department of State of the State of Delaware, (b)
no temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties has agreed to use its best efforts
to prevent the entry of any such injunction or other order and to appeal as
promptly as possible any injunction or other order that may be entered, (c) all
regulatory approvals (in addition to any approval contemplated by the HSR Act)
shall have been obtained on terms mutually satisfactory to National Vision and
New West, except for any the failure of which to obtain would not have a
material adverse effect on either National Vision or the Surviving Corporation
and (d) the Purchaser or its permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; provided, however,
that this condition shall not be applicable to the obligations of National
Vision or the Purchaser if, in breach of the Merger Agreement or the terms of
the Offer, the Purchaser fails to purchase any Shares validly tendered and not
withdrawn pursuant to the Offer.
Termination of the Merger Agreement. The Merger Agreement may be terminated
and the Merger contemplated thereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of New
West, (a) by mutual written consent of New West and National Vision, except if
Shares have been purchased pursuant to the Offer, (b) by any of New West,
National Vision or the Purchaser if (i) upon a vote at a duly held stockholders
meeting or any adjournment thereof, any required approval of the stockholders of
New West shall not have been obtained; (ii) (A) the Purchaser shall not have
commenced the Offer within five business days after the date of the Merger
Agreement, (B) as the result of the failure of any of the conditions described
above under Conditions of the Offer relating to the Purchaser's obligations to
consummate the Offer, the Offer shall have been terminated by National Vision or
expired in accordance with its terms without the Purchaser having purchased
Shares pursuant to the Offer or (C) the Purchaser shall not have purchased
Shares pursuant to the Offer by October 15, 1998; provided, however, that the
passage of the period referred to in clause (C) shall be tolled for any part
thereof during which any party shall be subject to a nonfinal order, decree,
ruling or action restraining, enjoining or otherwise prohibiting the purchase of
Shares pursuant to the Offer or the consummation of the Merger; and provided,
further, that the right to terminate the Merger Agreement pursuant to clause
(b)(ii) of this paragraph shall not be available to any party whose failure to
fulfill any of its obligations under the Merger Agreement results in the failure
of any such condition; (iii) the Merger shall not have been consummated on or
before the date six months following the date of the Merger Agreement, unless
the failure to consummate the Merger is the result of a willful and material
breach of the Merger Agreement by the party seeking to terminate the Merger
Agreement; provided, however, that the passage of such period shall be tolled
for any part thereof during which any party shall be subject to a nonfinal
order, decree, ruling or action restraining, enjoining or otherwise prohibiting
the consummation of the Merger or the calling or holding of a stockholders
meeting to consider and vote on the Merger; provided further, that no party
shall be entitled to terminate the Merger Agreement pursuant to this clause
(b)(iii) of this paragraph if Shares have been purchased pursuant to the Offer;
or (iv) any governmental entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the purchase of Shares pursuant to the Offer or the Merger and such
order, decree, ruling or other action shall have become final and nonappealable;
or (c) by either National Vision or New West under the circumstances described
below under Acquisition Proposals.
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If the Merger Agreement is terminated by any of New West, National Vision
or the Purchaser as described in the foregoing paragraph, the Merger Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of New West, the Purchaser or National Vision, except
with respect to certain specified provisions (including the provisions described
below under Fees and Expenses) and, in the case of National Vision and the
Purchaser, except to the extent that such termination results from the material
breach by National Vision or the Purchaser of any of its representations,
warranties, covenants or agreements set forth in the Merger Agreement.
Acquisition Proposals. The Merger Agreement provides that New West and its
subsidiaries will not, and will cause their respective directors, officers,
employees, or other agents not to, directly or indirectly, (a) take any action
to solicit, initiate or encourage any Acquisition Proposal (as defined below),
provided that no public announcement, or a press release substantially in the
Form of Exhibit B to the Merger Agreement, made by New West prior to the date of
the Merger Agreement regarding the transactions contemplated thereby will be
deemed a violation of this clause (a), or (b) engage in discussions or
negotiations with, or disclose any nonpublic information relating to New West or
any of its subsidiaries or afford access to their respective property, books or
records to any person in connection with an Acquisition Proposal.
Notwithstanding the foregoing, New West and its Board of Directors (or any
committee thereof) will not be prohibited from taking and disclosing a position
with respect to a tender offer by a third party pursuant to Rules 14d-9 and
14e-2(a) promulgated by the Commission under the Exchange Act, or considering,
negotiating, discussing, approving or recommending to the stockholders of New
West a bona fide Acquisition Proposal not solicited, initiated or encouraged in
violation of the Merger Agreement, if and only to the extent that: (i) the Board
of Directors determines in good faith upon the advice of counsel that such
action is required for the Board of Directors to comply with its fiduciary
duties to stockholders imposed by law, and (ii) prior to furnishing such
information to, or entering into discussions or negotiations with, such person
or entity, New West provides written notice to National Vision to the effect
that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity. National Vision or (provided New West
and its Board of Directors have complied with the requirements described in this
paragraph) New West may terminate the Merger Agreement if New West or its Board
of Directors approves or recommends to New West's stockholders an Acquisition
Proposal or the Board of Directors of New West withdraws its recommendation that
the stockholders accept and approve the transactions contemplated by the Merger
Agreement; provided that New West or its Board of Directors may take such
actions only if New West or its Board of Directors has received a written
opinion from New West's investment advisor that such advisor reasonably believes
the party making the Acquisition Proposal has the financial ability to
consummate such Acquisition Proposal on the proposed terms and that such
Acquisition Proposal may reasonably be expected to provide a per share value
greater than the Offer.
The Merger Agreement defines "Acquisition Proposal" as any proposal or
offer from any person (other than National Vision or the Purchaser) relating to
(a) any direct or indirect acquisition or purchase of any equity interest in, or
a substantial amount of assets of, New West or its subsidiaries, (b) any tender
offer or exchange offer (including a self-tender offer) involving the equity
securities of New West, (c) any merger, consolidation, recapitalization,
liquidation, business combination or similar transaction involving New West
other than the transactions contemplated by the Merger Agreement or (d) any
other extraordinary transaction the consummation of which would or could
reasonably be expected to impede, interfere with, prevent or materially delay
the transactions contemplated by the Merger Agreement.
Fees and Expenses. The Merger Agreement provides that, except as provided
below, all costs and expenses in connection with the Merger Agreement and the
transactions contemplated by the Merger Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
National Vision shall be entitled to receive from New West a termination
fee in the amount of $2.5 million if the Merger Agreement is terminated or the
Purchaser does not purchase Shares pursuant to the Offer because (a) New West or
its Board of Directors approves or recommends to New West's stockholders an
Acquisition Proposal or (b) in connection with an Acquisition Proposal, the
Board of Directors of New West withdraws its recommendation that the
stockholders of New West accept and approve the transactions contemplated by the
Merger Agreement. New West shall be entitled to receive a termination fee in the
amounts and under the conditions described above in The Offer.
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National Vision has also agreed that if it has received the full amount of
any payment to it under the foregoing paragraph, neither National Vision nor the
Purchaser nor any of their respective directors, officers, representatives, or
agents shall assert or pursue, directly or indirectly, whether arising under
tort, contract, or otherwise, any claim or cause of action against any of New
West or any person making an Acquisition Proposal or any of their respective
directors, officers, representatives, or agents based in whole or part upon its
or their receipt, consideration, recommendation or approval of an Acquisition
Proposal, including New West's exercise of its right of termination pursuant to
the provisions of the Merger Agreement. If New West has received the full amount
of any payment to it described above under The Offer, neither New West nor any
of its respective directors, officers, representatives, or agents shall assert
or pursue, directly or indirectly, whether arising under tort, contract, or
otherwise, any claim or cause of action against any of National Vision or the
Purchaser or any of their respective directors, officers, representatives or
agents based in whole or in part upon the failure of National Vision or the
Purchaser to obtain financing pursuant to the Financing Condition and the
termination of the Merger Agreement as a result of such failure.
Conduct of Business by New West. The Merger Agreement provides that, unless
National Vision shall otherwise agree in writing, or except as otherwise set
forth in the Merger Agreement or described in a schedule to the Merger
Agreement, New West and each of its subsidiaries will conduct their business in
the ordinary course and consistent with past practice and use their reasonable
best efforts to preserve intact their respective business organizations and
relationships and goodwill with third parties and to keep available the services
of their present officers and key employees. The Merger Agreement further
provides that, without limiting the generality of the foregoing, except as
otherwise provided in the Merger Agreement, during the period from the date of
the Merger Agreement to the Effective Time of the Merger, without the prior
written consent of National Vision, which consent shall not be unreasonably
withheld: (a) New West will not adopt or propose any change in New West
Certificate or By-Laws; (b) other than declaration and payment of regular
quarterly dividends on the Series A and B Convertible 6% Cumulative Preferred
Stock, par value $1,000 per share (collectively, the "Convertible Preferred
Stock"), New West will not, and will not permit any of its subsidiaries to,
declare, set aside or pay any dividend or other distribution with respect to any
shares of capital stock of New West, or contract for or effect any repurchase,
redemption or other acquisition or investment by New West or any of its
subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, New West or any of its subsidiaries or declare
or effect any stock split, reclassification or other change in capital
structure; (c) New West will not, and will not permit any of its subsidiaries
to, enter into or consummate any joint venture, partnership, or similar
arrangement or form any other new arrangement for the conduct of its business or
acquire or enter into any agreement or letter of intent to merge or consolidate
with any other person; (d) New West will not and will not permit any of its
subsidiaries to, purchase a material amount of assets or securities of any other
person, except for asset purchases in the ordinary course of business consistent
with past practice or as described in a disclosure letter provided by New West
to National Vision; (e) New West will not, and will not permit any of its
subsidiaries to, sell, lease, license or otherwise surrender, relinquish or
dispose of any assets or property which are material to New West and its
subsidiaries, taken as a whole, except (i) pursuant to existing contracts or
commitments (the terms of which have been disclosed to National Vision prior to
the date of the Merger Agreement), or (ii) in the ordinary course of business
consistent with past practice; (f) New West will not settle any material tax
audit, make or change any material tax election or file amended tax returns; (g)
New West will not issue or grant any securities or option or warrant to acquire
any securities (except pursuant to existing obligations), enter into any
amendment of any material term of any outstanding security of New West or of any
of its subsidiaries, incur any indebtedness, including notes payable or capital
lease obligations, or guarantee obligations of others except pursuant to
existing credit facilities or arrangements, fail to make any required
contribution to any of New West's employee benefit plans, increase compensation,
bonus or other benefits payable to any employee or former employee, consultant
or agent, adopt any other plan, program, arrangement or practice providing
benefits for or compensation to or on behalf of its employees or former
employees (except, as required by applicable law), or enter into any settlement
or consent with respect to any pending litigation, except in the ordinary course
of business consistent with past practice or as otherwise permitted by the
Merger Agreement; (h) New West will not change any method of accounting or
accounting practice, or any practice relating to the maintenance of records, by
New West or any of its subsidiaries, except for any such required change in
generally accepted accounting
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principles; and (i) New West will not, and will not permit any of its
subsidiaries to, agree or commit to do any of the foregoing.
The Merger Agreement also provides that, except to the extent necessary to
comply with the requirements of applicable laws and regulations, New West will
not, and will not permit any of its subsidiaries to, (a) take, or agree or
commit to take, any action that would make any representation and warranty of
New West in the Merger Agreement inaccurate in any respect at, or as of any time
prior to, the Effective Time or (b) omit, or agree or commit to omit, to take
any action necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time, provided, however that New West
shall be permitted to take or omit to take such action which can (without any
uncertainty) be cured at or prior to the Effective Time.
Board of Directors. The Merger Agreement provides that, subject to
compliance with Section 14(f) of the Exchange Act, at the Effective Time of the
Merger, certain persons who have been identified on a Schedule to the Merger
Agreement shall become the directors and officers of the Surviving Corporation
until their successors are duly elected and qualified. The Merger Agreement also
provides that, promptly upon the acceptance for payment of and payment by the
Purchaser for, any Shares pursuant to the Offer, the Purchaser will be entitled
to designate such number of directors on the Board of Directors of New West as
will give the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on such Board of Directors equal to at least that
number of directors which is the product of (a) the total number of directors on
such Board of Directors who are elected by the holders of Shares pursuant to New
West Certificate (giving effect to the directors elected pursuant to this
sentence) multiplied by (b) the percentage that (i) such number of Shares so
accepted for payment and paid for by the Purchaser, plus the number of Shares
otherwise owned by the Purchaser or any other subsidiary of National Vision,
bears to (ii) the total number of Shares outstanding, and New West shall, at
such time, cause the Purchaser's designees to be appointed or elected; provided,
however, that, in the event the Purchaser's designees are to be appointed or
elected to New West's Board of Directors, until the Effective Time of the
Merger, the Board of Directors of New West will have at least three directors
who were directors of New West on the date of the Merger Agreement and who are
not officers of New West (the "Independent Directors"); and provided further
that, in such event, if the number of Independent Directors shall be reduced
below three for any reason whatsoever, any remaining Independent Directors (or
Independent Director, if there shall be only one remaining) shall be entitled to
designate persons to fill such vacancies, who shall be deemed to be Independent
Directors for purposes of the Merger Agreement, or, if no Independent Directors
then remain, the other directors shall designate three persons to fill such
vacancies who shall not be officers, stockholders or affiliates of New West,
National Vision or the Purchaser, and such persons shall be deemed to be
Independent Directors for purposes of the Merger Agreement. Subject to
applicable law, New West has agreed to take all action requested by National
Vision necessary to effect any such appointment or election, including mailing
to its stockholders an information statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder (the
"Information Statement"). National Vision has waived the requirement that New
West make such mailing with the mailing of the Schedule 14D-9, except National
Vision reserved the right to request New West to make such mailing at a later
date if National Vision deems it necessary or appropriate to do so. In
connection with the foregoing, the Merger Agreement provides that New West will
promptly, at the option of the Purchaser (which the Purchaser intends to
exercise), either increase the size of New West's Board of Directors or obtain
the resignation of such number of its current directors as is necessary to
enable the Purchaser's designees to be elected or appointed to New West's Board
of Directors as provided above.
Stock Plans. The Merger Agreement provides that as soon as practicable
following the date of the Merger Agreement, the Board of Directors of New West
(or, if appropriate, any committee administering any Stock Plans (as defined
below)) shall adopt such resolutions or take such other actions as are required
to adjust the terms of all outstanding stock options to purchase Shares ("Stock
Options") granted prior to the date of the Merger Agreement under any stock
option program or arrangement of New West (collectively, the "Stock Plans") to
provide that each Stock Option outstanding immediately prior to the acceptance
for payment of Shares pursuant to the Offer, whether or not vested, shall be
canceled in exchange for a cash payment to the holder by the Purchaser, within
five business days of the day Shares are purchased pursuant to the Offer, of an
amount equal to (a) the excess, if any, of (i) the price per Share to be paid
pursuant to the Offer over (ii) the exercise price per
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Share subject to such Stock Option, multiplied by (b) the number of Shares for
which such Stock Option may then be exercised.
All amounts payable pursuant to the terms described in the preceding
paragraph shall be subject to any required withholding of taxes and shall be
paid without interest. New West agrees in the Merger Agreement to use its best
efforts to obtain all consents of the holders of the Stock Options as shall be
necessary to effectuate the foregoing. Notwithstanding anything to the contrary
contained in the Merger Agreement, payment shall, at National Vision's request,
be withheld in respect of any Stock Option with respect to any holder until all
necessary consents with respect to such holder are obtained.
The Merger Agreement provides further that all Stock Plans shall terminate
as of the Effective Time of the Merger, and the provisions in any other benefit,
stock or other plan providing for the issuance, transfer or grant of any capital
stock of New West, any interest in respect of any capital stock of New West, or
any amounts derived from the value of any capital stock of New West shall be
deleted at the time of the Merger, and New West shall ensure that following the
Merger no holder of a Stock Option or any participant in any Stock Plan will
have any right thereunder to acquire any capital stock of New West or the
Surviving Corporation.
Indemnification, Exculpation and Insurance. The Merger Agreement provides
that the Certificate of Incorporation of the Surviving Corporation shall contain
provisions with respect to matters occurring prior to the Effective Time that
are no less favorable with respect to indemnification than are set forth in
Article VIII of the New West Certificate, which provisions shall not be amended,
repealed or otherwise modified in any manner that would have an adverse effect
on the rights thereunder of individuals who as of the date of the Merger
Agreement or at the Effective Time are directors, officers, employees,
fiduciaries or agents of New West, unless such modification shall be required by
law.
The Merger Agreement also provides that New West shall, to the fullest
extent permitted under applicable law and regardless of whether the Merger
becomes effective, indemnify and hold harmless, and, after the Effective Time,
the Surviving Corporation shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and former director,
officer, employee, fiduciary and agent of New West and each of its subsidiaries
and each fiduciary and agent of each such director and officer (collectively,
the "Indemnified Parties") against all costs and expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and settlement
amounts ("Losses") paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, criminal, administrative or investigative, arising out of or pertaining
to any action or omission in their capacity as an officer, director, employee,
fiduciary or agent of New West or any of its subsidiaries, occurring before the
Effective Time, until the expiration of the statute of limitations relating
thereto (and shall pay any expenses in advance of the final disposition of such
action or proceeding to each Indemnified Party to the fullest extent permitted
under the Delaware Law, upon receipt from the Indemnified Party to whom expenses
are advanced of any undertaking to repay such advances required under the
Delaware Law). National Vision has agreed to guarantee the obligations of the
Surviving Corporation and, following consummation of the Offer, of New West, as
described in this paragraph.
The Merger Agreement provides that National Vision shall cause the
Surviving Corporation to, and the Surviving Corporation shall maintain in effect
for six years from the Effective Time, if available, the current directors' and
officers' liability insurance policies maintained by New West (provided that the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend pursuant to this paragraph more than an amount per year equal to 200%
of current annual premiums paid by New West for such insurance. If, but for the
proviso to the immediately preceding sentence, the Surviving Corporation would
be required to expend more than 200% of current annual premiums, the Surviving
Corporation shall obtain the maximum amount of such insurance obtainable by
payment of annual premiums equal to 200% of current annual premiums.
If New West or the Surviving Corporation or any of their respective
successors or assigns (a) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (b) transfers all or substantially all of its
properties and assets to any person, then, and
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in each such case, proper provision shall be made so that the successors and
assigns of New West or the Surviving Corporation, as the case may be, or at
National Vision's option, National Vision, shall assume the indemnification
obligations described in this section.
Best Efforts. The Merger Agreement provides that, subject to the terms and
conditions of the Merger Agreement, each of the parties will use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Offer and the Merger and the other
transactions contemplated by the Merger Agreement.
Representations and Warranties. The Merger Agreement contains customary
representations and warranties, in light of the circumstances, from New West,
National Vision and the Purchaser.
Procedure for Termination, Amendment, Extension or Waiver. The Merger
Agreement provides that action by a majority of the members of the Board of
Directors of New West who were members thereof on the date of the Merger
Agreement and remain as such thereafter (or the duly authorized designee of such
members), and approval of such action by a majority of Independent Directors, is
required for New West to amend or terminate the Merger Agreement, exercise or
waive any of its rights or remedies under the Merger Agreement, or extend the
time for performance of the Purchaser's and National Vision's respective
obligations under the Merger Agreement. In the case of National Vision or the
Purchaser, action by its respective Board of Directors is required to take the
actions described in the previous sentence.
EMPLOYMENT/CHANGE OF OWNERSHIP AGREEMENTS
Without limitation, National Vision and the Purchaser agree to abide by all
the terms of the employment agreements and change of ownership agreements
entered into by New West with certain of its employees.
THE STOCK TENDER AND RELATED AGREEMENTS
Stock Tender Agreement. In connection with the execution of the Merger
Agreement, on July 13, 1998 National Vision and certain holders of Shares
(collectively, the "Committed Stockholders") entered into a Stock Tender
Agreement (the "Tender Agreement"), pursuant to which each Committed Stockholder
has agreed to tender in the Offer, no later than 15 business days after
commencement of the Offer, and not withdraw, all Shares owned or controlled by
such Committed Stockholder, subject to certain provisions of the Tender
Agreement described below. As of July 13, 1998, the Shares subject to the Tender
Agreement represented an aggregate of 1,675,410 Shares, or approximately 34% of
the outstanding Shares. The Committed Stockholders are Mesirow Capital Partners
II, Mesirow Capital Partners III, Mesirow Capital Partners IV, Mesirow Capital
Partners V, Mesirow Capital Partners VI, Ronald E. Weinberg and Barry J. Feld.
In addition, the Committed Stockholders have agreed in the Tender Agreement
to vote (or execute a consent in respect of) all Shares owned or controlled by
them (a) in favor of the Merger, the Merger Agreement (as amended from time to
time) and any of the transactions contemplated by the Merger Agreement, (b)
against any action or agreement that would reasonably be expected to result in a
breach, in any material respect, of any covenant, representation or warranty or
any other obligation of New West under the Merger Agreement and (c) against any
action or agreement that would reasonably be expected to impede, interfere with,
delay, or attempt to discourage the Offer or Merger.
Each of the Committed Stockholders has agreed that, without the prior
written consent of National Vision, it will not (a) offer for sale, sell,
transfer, assign, tender, pledge, encumber, assign or otherwise dispose of any
or all of its Shares (other than 5,000 Shares which Mr. Weinberg may gift to
charities); (b) enter into any contract, option or understanding with respect to
any transfer of any or all of the Shares or any interest therein; (c) except as
otherwise provided in the Tender Agreement, grant any proxy, power-of-attorney
or other authorization or consent with respect to the Shares; (d) deposit the
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to the Shares; or (e) take any other action that would in any way
restrict, limit or interfere with the performance of such Committed
Stockholder's obligations under the Tender Agreement or the transactions
contemplated thereby.
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Each Committed Stockholder has agreed that such Committed Stockholder will
not, and will cause its officers, directors, partners, employees or other agents
not to, directly or indirectly, (a) take any action to solicit, initiate or
encourage any Acquisition Proposal, provided, however, that certain public
announcements made pursuant to the Merger Agreement shall not be deemed a
violation of this provision; or (b) engage in discussions or negotiations with,
or disclose any nonpublic information relating to New West or its subsidiaries,
or afford access to their respective properties, books or records to, any person
in connection with an Acquisition Proposal. Each Committed Stockholder shall
immediately cease and cause to be terminated any existing discussions or
negotiations with any person (other than each other, National Vision, the
Purchaser and New West) conducted by such Committed Stockholder before the
effective date of the Tender Agreement with respect to any of the foregoing
transactions referenced in this paragraph. Nothing in the Tender Agreement shall
prohibit, limit or affect any Committed Stockholder or any of its officers,
directors, partners, employees or agents, acting solely in their capacities as a
director or officer of New West, from taking any action as a director or officer
including, without limitation, any actions permitted or not prohibited by the
Merger Agreement with respect to any Acquisition Proposal and nothing in the
Tender Agreement shall prohibit New West from taking any action permitted under
the Merger Agreement.
The Tender Agreement, and all rights and obligations of the parties
thereunder, will terminate immediately upon the earlier of (a) the acquisition
by National Vision, through the Purchaser or otherwise, of all the Shares, (b)
the termination of the Merger Agreement in accordance with its terms (c) the
Effective Time, (d) by any Committed Stockholder, if National Vision or the
Purchaser breaches certain covenants relating to the Offer and the purchase of
Shares, or (e) by National Vision if any Committed Stockholder breaches any
representation or warranty in any material respect or any covenant, but only
with respect to such breaching Committed Stockholder.
Preferred Stock Conversion and Warrant Exercise Agreements. Concurrently
with the execution of the Merger Agreement with respect to the Committed
Stockholders or as soon as practicable after such execution with respect to all
other holders of Shares, New West and the holders of the Convertible Preferred
Stock will execute agreements (the "Preferred Conversion Agreements"), and New
West and the holders of warrants exercisable for the purchase of Shares ("New
West Warrants"), will execute agreements (the "Warrant Exercise Agreements"), to
provide that the outstanding New West Warrants and Convertible Preferred Stock,
as the case may be, shall be exercised or converted simultaneously with the
closing of the Offer and the purchase of Shares in the Offer and the Shares
issuable upon such exercise or conversion shall be tendered in the Offer. On the
same day that Shares are purchased pursuant to the Offer, the Purchaser shall
pay to the holders of the Convertible Preferred Stock or New West Warrants, an
amount equal to (a) in the case of the Convertible Preferred Stock only, the
price per Share to be paid pursuant to the Offer multiplied by the number of
Shares into which such Convertible Preferred Stock may then be converted, and
(b) in the case of New West Warrants only, (i) the excess, if any, of (x) the
price per Share to be paid pursuant to the Offer over (y) the exercise price per
Share of New West Warrants, multiplied by (ii) the number of Shares for which
such New West Warrants may then be exercised. Notwithstanding anything to the
contrary contained in the Merger Agreement, payment shall, at National Vision's
request, be withheld in respect of any Convertible Preferred Stock or New West
Warrants with respect to any holder until all necessary consents with respect to
such holder are obtained. As of July 13, 1998, the Shares issuable upon
conversion of Convertible Preferred Stock and exercise of New West Warrants held
by the Committed Stockholders represented in the aggregate 621,429 Shares, which
together with all Shares owned or controlled by such Committed Stockholders,
would equal approximately 40.3% of the outstanding Shares immediately following
such conversions and exercises on a fully diluted basis, exclusive of Stock
Options.
CONFIDENTIALITY AGREEMENTS
New West and National Vision signed Confidentiality Agreements dated March
11, 1998 and April 1, 1998, providing for each of them to keep confidential
their discussions and negotiations regarding the Offer and the Merger and all
information exchanged by them concerning New West or National Vision.
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OTHER MATTERS
Section 203 of the Delaware Law. Section 203 of the Delaware Law limits the
ability of a Delaware corporation to engage in business combinations with
"interested stockholders" (defined as any beneficial owner of 15% or more of the
outstanding voting stock of the corporation) unless, among other things, the
corporation has opted out of the provisions of Section 203 by including a
provision to that effect in its certificate of incorporation or bylaws or the
corporation's board of directors has given its prior approval to either the
business combination or the transaction which resulted in the stockholder's
becoming an "interested stockholder." On July 9, 1998, the Board of Directors
approved the Offer and the Merger. Therefore, Section 203 is inapplicable to the
Offer, the Merger and related transactions.
Appraisal Rights. No appraisal rights are available to holders of Shares in
connection with the Offer. However, if the Merger is consummated, holders of
Shares will have certain rights under Section 262 of the Delaware Law to dissent
and demand appraisal of, and payment in cash for the fair value of their Shares.
Such rights, if the statutory procedures are complied with, could lead to a
judicial determination of the fair value (excluding any element of value arising
from accomplishment or expectation of the Merger) required to be paid in cash to
such dissenting holders for their Shares. Any such judicial determination of the
fair value of Shares could be based upon considerations in addition to the Offer
price and the market value of the Shares, including asset values and the
investment value of the Shares. The value so determined could be more or less
than the Offer Price or the Merger Consideration.
If any holder of Shares who demands appraisal under Section 262 of the
Delaware Law fails to perfect, or effectively withdraws or loses his right to
appraisal, as provided in the Delaware Law, the Shares of such holder will be
converted into the Merger Consideration in accordance with the Merger Agreement.
A stockholder may withdraw his demand for appraisal by delivery to National
Vision of a written withdrawal of his demand for appraisal and acceptance of the
Merger.
Failure to follow the steps required by Section 262 of the Delaware Law for
perfecting appraisal rights may result in the loss of such rights.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
("Rule 13e-3"), which is applicable to certain "going private" transactions.
Rule 13e-3 requires, among other things, that certain financial information
concerning New West and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
New West believes that Rule 13e-3 will not be applicable to the Merger
because of the exemption afforded by Rule 13e-3(g)(1), among other things.
However, under certain circumstances, Rule 13e-3 could be applicable to the
Merger or other business combination in which National Vision seeks to acquire
the remaining Shares it does not beneficially own following the purchase of
Shares pursuant to the Offer. For example, if the Merger as consummated is not
substantially similar to the Merger as described in this Offer to Purchase and
the Merger Agreement, then Rule 13e-3 could apply. However, the terms and
conditions of the Merger are governed by the Merger Agreement, and any amendment
to the Merger Agreement must be approved by each party to the Merger Agreement.
If National Vision has exercised its right to appoint directors to the Board of
Directors following its purchase of Shares pursuant to the Offer, any such
amendment must be approved on behalf of New West by a majority of the directors
of New West then in office who have not been designated by National Vision.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares under the Offer may be consummated following the expiration
of a 15-calendar day waiting period following the filing by National Vision of a
Notification and Report Form with respect to the Offer, unless National Vision
receives a request for additional information or documentary material from the
Antitrust Division of the Department of Justice (the "Antitrust Division") or
the Federal Trade Commission (the "FTC") or unless early termination of the
waiting period is granted. National Vision has informed New West that it plans
promptly to file the Notification and Report Form. If, within the initial 15-day
waiting period, either the Antitrust Division or the FTC requests additional
information or material from National Vision concerning the Offer, the waiting
period will be
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extended and would expire at 11:59 P.M., New York City time, on the tenth
calendar day after the date of substantial compliance by National Vision with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of National
Vision. In practice, complying with a request for additional information or
material can take a significant amount of time. In addition, if the Antitrust
Division or the FTC raises substantive issues in connection with a proposed
transaction, the parties frequently engage in negotiations with the relevant
governmental agency concerning possible means of addressing those issues and may
agree to delay consummation of the transaction while such negotiations continue.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of New West. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of National
Vision or its subsidiaries, or the New West or its subsidiaries. Private parties
may also bring legal action under the antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if a challenge is made, of the result of
the challenge.
It is a condition to the obligation of the Purchaser to purchase Shares
tendered in the Offer that any waiting period under the HSR Act shall have
expired or been terminated. It is also a condition to the obligation of the
Purchaser to purchase Shares tendered in the Offer that there not be entered in
any action or proceeding before any Governmental Entity, any injunction or order
having the effect described above in Conditions of the Offer and that there not
be any statute, rule, regulation, legislation, interpretation, judgment, order
or injunction that has or could have the effect described above in Conditions of
the Offer.
There can be no assurance that the Merger will take place, even though each
party has agreed in the Merger Agreement to use its best efforts to cause the
Merger to occur, because the Merger is subject to certain conditions, some of
which are beyond the control of the Purchaser, National Vision or New West.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
BACKGROUND
In late 1997, in response to its recognition that New West required
additional capital to realize its growth potential and intrinsic value, the
Board of Directors determined that it should take action to consider New West's
available strategic alternatives. Accordingly, a review of the business and
financial condition of New West was initiated, and New West retained F.M.
Roberts & Company, Inc. ("FMRC"), an investment banking firm, to assist in the
process. FMRC advised and assisted New West in developing and refining a
comprehensive strategic plan, evaluated potential strategic acquisitions,
attended and participated in various New West board meetings and strategic
planning sessions and provided other general financial consulting services to
New West.
In conducting its review for the purpose of making recommendations to the
New West Board, FMRC held discussions with New West's management, reviewed New
West's financial statements, analyzed the results of New West's operations in
comparison with its competitors, and evaluated potential acquisition targets of
New West, as well as New West's ability to effect such acquisitions. Strategic
alternatives reviewed and analyzed by FMRC included continuing the business as
an independent company, issuing additional equity securities of New West,
selling New West or forming a joint venture between New West and another party.
This summary of the FMRC analysis does not purport to be a complete description
of the work undertaken by FMRC on behalf of New West.
As a result of this review, the Board of Directors concluded, consistent
with FMRC's recommendation, that New West's interests would be best served by
pursuing the sale of New West. To pursue this option, New West
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entered into an engagement letter with FMRC in January 1998 to retain FMRC
specifically to investigate, evaluate and advise New West about the possible
sale of New West.
Upon the advice and assistance of FMRC, New West pursued contacts with a
number of parties, including National Vision, regarding a potential strategic
transaction. No formal offers were received from parties other than National
Vision, and attempts to negotiate an acquisition with parties other than
National Vision ceased as of July 9, 1998 when the Board of Directors approved
exclusive negotiations with National Vision. The background to New West's
discussions with National Vision follows. To the extent any of the following
information describes events to which neither New West nor its advisors were a
party, it is based on information provided by National Vision.
Prior to March 1998, neither the Purchaser nor National Vision or any
officer or other affiliate of National Vision had any arrangement, relationship
or contact with New West, other than in the ordinary course of business as
participants in the same industry.
On March 8, 1998, Barry J. Feld, President and Chief Executive Officer of
New West, and Fredric M. Roberts, President of FMRC, met with James W. Krause,
Chairman and Chief Executive Officer of National Vision, in Los Angeles to
discuss their respective businesses, the growth of their companies, the
existence of a strategic fit between the companies and the possibility of a
transaction. At the meeting, the participants concluded that New West and
National Vision had similar strategic objectives and that further discussions
would be appropriate.
On March 11, 1998, New West and National Vision entered into a
Confidentiality Agreement pursuant to which National Vision agreed to treat as
confidential any discussions and negotiations and certain information provided
to it by New West. As a result, New West provided National Vision with copies of
publicly-available information and certain other financial and corporate
information concerning New West.
On March 18, 1998, Mr. Roberts participated in a conference call with
representatives of an investment banking firm acting on behalf of National
Vision, to continue discussions concerning a possible transaction involving New
West and National Vision. Although positive, no firm proposals resulted from
this conversation.
On March 31, 1998, Mr. Krause and Mr. Roberts had follow-up telephone
discussions, and Mr. Krause arranged to visit certain Vista Optical stores owned
by New West in Montana.
On April 1, 1998, National Vision and New West entered into a
Confidentiality Agreement pursuant to which New West agreed to treat as
confidential any discussions and negotiations and certain information provided
to it by National Vision. As a result, National Vision provided New West with
copies of its publicly-available information and certain other financial and
corporate information concerning National Vision.
Throughout April and early May, Messrs. Feld, Krause and Roberts spoke by
telephone on several occasions regarding a possible transaction and potential
synergies between the two companies.
On May 6 and 7, 1998, discussions continued in San Francisco among Mr.
Feld, Mr. Krause, Jed Sherwindt, a representative of Schroder & Co. Inc.,
National Vision's financial advisor, and Mr. Roberts with respect to the
possible acquisition of New West by National Vision. At this meeting, potential
synergies created by a combination of the companies were discussed in detail, as
well as a possible price range for the sale of New West. In addition, the
framework of a transaction involving the acquisition of New West by National
Vision was outlined. Each party agreed to continue to work toward a transaction.
On June 15, 1998, New West received a letter of intent from National Vision
outlining the acquisition of New West by National Vision (including a $13.00
price per Share). On June 16, 1998, the Board of Directors of New West held a
regular meeting following the annual New West stockholders' meeting. As part of
that meeting, management of New West and Mr. Roberts updated the New West Board
of Directors on the status of negotiations with National Vision and other
potential acquirors. The Board discussed in detail the benefits and challenges
of a merger and the process that would be necessary to complete it. Mr. Feld
responded to various questions concerning National Vision and the other
candidates, and Byron S. Krantz, a director and partner in the law firm of
Kohrman Jackson & Krantz P.L.L., New West's legal counsel, discussed certain
legal aspects concerning a merger. The Board determined not to enter into
exclusive discussions with National Vision at that
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<PAGE> 16
time and to continue its search for a strategic combination as outlined by FMRC.
The Board authorized Ronald E. Weinberg, Chairman of the Board of New West, Mr.
Feld and Mr. Roberts to continue negotiations and discussions with National
Vision and the other candidates.
On June 18, 1998, New West delivered the first draft of the Merger
Agreement to National Vision's counsel. Commencing on June 23, 1998,
representatives of National Vision began a due diligence examination of New West
at New West's corporate headquarters in Tempe, Arizona, during which Messrs.
Feld, Roberts, and Darius J. DiTallo, Vice President -- Finance and
Administration and Chief Financial Officer of New West, met with several members
of National Vision's management and financial advisors. During the course of the
meetings, discussions arose concerning the possibility of National Vision's
raising capital through a high yield debt offering as a condition to a
transaction. Representatives of New West proposed that if the Offer failed
because National Vision was unable to raise sufficient funds to consummate the
transaction, National Vision would pay a termination fee to New West to mitigate
the risk of the financing contingency to New West stockholders.
National Vision provided New West with its initial comments to the Merger
Agreement on June 26, 1998, including a termination fee of $3.5 million, plus
expenses of National Vision, in the event New West's Board of Directors
determined to terminate the Merger Agreement and accept a superior proposal. The
June 26 comments did not provide for the payment of a termination fee to New
West by National Vision in the event of an unsuccessful high yield debt
offering. Negotiations, due diligence and document preparation continued into
early July, including negotiations regarding each party's termination fees. As a
result of these negotiations, (a) the termination fee that New West would have
to pay in the event its Board terminated the Merger Agreement and accepted a
superior proposal was reduced from National Vision's original proposal to $2.5
million, without expenses; (b) the termination fee that National Vision would
have to pay New West if the Financing Condition was not met on or prior to
September 30, 1998, and the Offer was not extended by National Vision beyond
that date was set at $2.5 million, plus New West's expenses; and (c) the
termination fee that National Vision would have to pay New West if the Offer was
extended beyond September 30, 1998, but was not closed on or prior to October
14, 1998, because the Financing Condition had not been met, was set at $3.5
million, plus New West's expenses.
On July 6, 1998, New West retained EVEREN Securities, Inc. ("EVEREN") to
determine the fairness the consideration to be received by holders of the Shares
pursuant to the proposed Offer and Merger with National Vision from a financial
perspective to such holders.
On July 8, 1998, representatives of National Vision informed
representatives of New West that the Board of Directors of National Vision had
approved the transactions at a price of $13.00 per Share.
On July 9, 1998, the Board held a special meeting to consider the Offer and
proposed Merger. At the meeting, New West's management and legal counsel
apprised the Board of the status of negotiations and discussed the likely timing
of the transaction, the structure of the transaction and the conditions to
consummation of the Offer, including the proposed financing contingency and
related termination fee to be received by New West, the right of the Board to
terminate the Merger Agreement and to accept a superior proposal subject to the
payment of a $2.5 million termination fee without expenses and the other terms
of the Merger Agreement, the Tender Agreement, the Preferred Stock Conversion
Agreements and the Warrant Exercise Agreements (together, the "Transaction
Agreements"). Management and Mr. Roberts stated their belief to the Board that
strategically National Vision is an excellent fit with New West and is the
logical buyer due to the synergies that could be realized upon completion of the
Merger. The Board noted that National Vision has a substantial interest in
effecting the transaction due to the positive effect the acquisition of New West
would have on National Vision and its other recently proposed acquisition of
Frame-n-Lens, and felt that National Vision would proceed diligently to close
the proposed transaction. EVEREN then provided the Board with a draft of its
financial presentation concerning the Offer and stated it was prepared to issue
an opinion (the "Fairness Opinion") that, based upon and subject to certain
considerations and assumptions, the consideration to be received by the holders
of Shares pursuant to the Offer and the Merger is fair from a financial point of
view to such holders. The Board then reviewed proposed resolutions authorizing
the Transaction Agreements, Offer, Merger and related matters but took no action
on the resolutions at the July 9 meeting. The Board determined that it would
reconvene by telephone on July 13, 1998 to consider all changes to the Merger
Agreement and final approval of the transaction,
15
<PAGE> 17
provided that National Vision delivered to New West a copy of a letter to
National Vision from Schroder & Co. Inc. stating that it is "highly confident"
that National Vision can obtain the funding necessary to consummate the Offer
and Merger, subject to certain conditions (the "Highly Confident Letter").
On July 13, 1998 at 6:30 P.M. Eastern Time, the Board of Directors of New
West met by telephone with their legal counsel and financial advisors to reach a
decision concerning the Offer and the Merger. During the meeting, EVEREN
formally presented its Fairness Opinion. A copy of the Fairness Opinion issued
on July 13, 1998 containing the assumptions made, procedures followed, matters
considered and limits of its review is attached to this Statement and is
incorporated by reference. THE FULL TEXT OF THE FAIRNESS OPINION SHOULD BE READ
IN CONJUNCTION WITH THIS STATEMENT. Also during this meeting, National Vision
provided New West's legal counsel with a copy of the Highly Confident Letter.
The Board reviewed the Highly Confident Letter and the changes to the Merger
Agreement that had been made since the July 9 meeting. The Board then
unanimously (a) approved the Offer and the Merger; (b) approved and adopted the
Transaction Agreements and the transactions contemplated by the Merger
Agreement; (c) delegated authority to Messrs. Weinberg and Feld to conduct final
negotiations with respect to changes in the Merger Agreement occasioned by the
terms of the Highly Confident Letter; and (d) determined that the terms of the
Offer and the Merger were fair to and in the best interest of the stockholders
of New West and recommended that the stockholders of New West accept the Offer
and tender their Shares to Purchaser pursuant to the Offer.
Negotiations continued into the evening of the 13th, culminating in
National Vision, Purchaser and New West agreeing upon the final form of the
Merger Agreement. The final agreements, which reflect the instructions given by
the full Board earlier that day, were approved by Messrs. Weinberg and Feld
pursuant to the authority conferred upon them by the Board. Executed copies of
Transaction Agreements were delivered late in the evening on July 13, 1998.
Prior to the opening of stock trading on July 14, 1998, New West and National
Vision issued a joint press release, publicly announcing the transactions.
RECOMMENDATION OF BOARD
At its meeting held on July 13, 1998, as discussed above, the Board
unanimously approved and adopted the Transaction Agreements, approved the Offer,
the Merger, and the transactions contemplated by the Merger Agreement, and
determined that the terms of the Offer and the Merger were fair to and in the
best interest of the stockholders of New West and recommended that the
stockholders of New West accept the Offer and tender their Shares to Purchaser
pursuant to the Offer. In making its recommendations to the stockholders of New
West with respect to the Offer and the Merger, the Board considered a number of
factors, including the following:
Financial Condition, Results of Operations, Business and Prospects of New
West. The Board considered the financial condition, results of operations,
business and prospects of New West, including its prospects if it were to remain
independent. The Board discussed New West's current plan for expansion,
including the costs of the plan and the risks involved in its implementation.
The Board also discussed the competitive environment in which New West operates
and the importance of size to enable New West to achieve economies of scale.
Other Potential Transactions. The Board also considered information
provided by FMRC, EVEREN and New West's management regarding alternative
transactions and other potential acquirors of New West. The Board noted that
National Vision could realize very substantial operating synergies from an
acquisition of New West, which heightened National Vision's desire to complete
the Merger promptly. The Board also noted that the Merger Agreement would permit
New West to terminate the Merger to accept a superior proposal from a third
party (subject to payment of the $2.5 million termination fee) and that the
Committed Stockholders, who also are on the Board of Directors of New West are,
under the terms of the Tender Agreement, permitted as directors to consider
superior proposals.
Historical Stock Price Performance. The Board reviewed the historical stock
price performance of New West and noted that the consideration to be received by
New West's stockholders pursuant to the Offer and the Merger would as of the
Board's meeting on Monday, July 13, 1998, represent a premium of approximately
24% over the closing price of the Shares on the Nasdaq SmallCap Stock Market(SM)
on the day before the first announcement of the Offer and 30% premium over the
30-day average closing price for the Shares. The Board also noted that New
West's stock does not have a significant public float, and therefor even if the
price of the
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<PAGE> 18
Shares increased significantly, the lack of public float would negatively affect
the ability of stockholders to fully realize a price increase.
Financial Advisors' Presentations. The Board took into account the
presentations and advice of FMRC and EVEREN with respect to the financial and
other terms of the Offer and the Merger and EVEREN's opinion that the
consideration to be received by the holders of Shares pursuant to the Offer and
the Merger is fair from a financial point of view to the stockholders. The Board
considered the presentations of EVEREN in connection with the Fairness Opinion
as to various financial and other considerations deemed relevant to the Board's
evaluation of the Offer and the Merger. In connection with the preparation of
its opinion, EVEREN informed the Board that it had (a) reviewed the Merger
Agreement; (b) reviewed certain publicly-available financial statements and
other information of New West; (c) reviewed certain non-public financial
statements, financial projections and other financial and operating data
concerning New West prepared by the management of New West; (d) discussed New
West's operations, financial statements, and future prospects with management of
New West; (e) reviewed publicly-available financial data and stock market
performance data of other eyewear retailers EVEREN considered comparable to New
West; (f) reviewed the terms of selected recent acquisition transactions
considered generally comparable by EVEREN; (g) reviewed the historical stock
prices and reported trading volumes of the Shares; and (h) conducted other
studies, analyses, inquiries and investigations considered appropriate by
EVEREN.
A copy of the Fairness Opinion is attached to this Statement and is
incorporated by reference. Holders of Shares should read the Fairness Opinion in
its entirety for a description of procedures followed, assumptions and
qualifications made, matters considered and limitations on the review undertaken
by EVEREN. In considering the opinion, the Board was aware that upon its
delivery, EVEREN became entitled to certain fees described in Item 5 below in
connection with its engagement by New West and that, in addition, EVEREN
expressed no opinion or recommendation as to whether the stockholders of New
West should accept the Offer and the Merger.
Terms and Conditions of the Offer and the Merger. The Board also considered
the terms and conditions of the Offer and the Merger Agreement including (a)
that the Offer is subject to the Financing Condition and the Minimum Tender
Condition; and (b) that the Merger Agreement provides for the payment to
National Vision, under certain circumstances and subject to certain limits, of
certain fees. The Board also considered, among other matters, (a) the financial
ability of National Vision to consummate the Offer and the Merger in light of
the Highly Confident Letter; (b) the risk of the Offer's non-consummation; (c)
that the Merger Agreement requires National Vision to pay to New West $2.5
million plus New West's expenses if National Vision does not obtain financing to
consummate the Offer and the Merger on or prior to September 30, 1998 unless
National Vision extends the Offer; and (d) that the Merger Agreement requires
National Vision to pay to New West $3.5 million plus New West's expenses if
National Vision extends the Offer beyond September 30, 1998 and does not obtain
financing to consummate the Offer and the Merger on or prior to October 14,
1998. In assessing the termination fees applicable to New West, the Board
considered the likelihood of any third party making a proposal for a third party
transaction and that the effect of the termination fee would be to increase by
$2.5 million the costs to a third party of acquiring New West. The Board noted
that the transaction was being structured as a cash tender offer for all Shares,
and it would permit all holders of Shares to participate on the same basis. The
Board also considered the terms of the Transaction Agreements, including the
fact that these agreements would terminate if the Merger Agreement terminated,
enabling the Board to pursue a superior proposal from a third party.
Other Considerations. The Board also considered the possible impact of the
Offer and the Merger and of alternative strategies on New West's business and
prospects and that following the consummation of the Offer and the Merger, the
current stockholders of New West will no longer be able to participate in any
increases or decreases in the value of New West's business and profits.
The foregoing discussion of the information and factors considered and
given weight by the Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Offer and
the Merger, the Board did not find it practicable to, and did not, quantify or
otherwise assign relative weights to the specific factors considered in reaching
its determination. In addition, individual members of the Board may have given
different weights to different factors.
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<PAGE> 19
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
New West engaged FMRC to assist the Board in evaluating potential
transactions. For such services, New West agreed to pay FMRC a retainer fee of
$100,000, and if the transaction contemplated by the Merger Agreement is
consummated, a total fee of approximately $2.0 million, against which the
retainer fee previously paid will be credited. In addition, New West has agreed
to reimburse FMRC for its reasonable expenses and to indemnify FMRC against
certain liabilities arising out of or in connection with its engagement,
including liabilities under federal securities laws. In addition, since 1993 Mr.
Roberts has held a New West Warrant which is exercisable for the purchase of
12,500 Shares for $8.00 per Share.
New West has also engaged EVEREN to render its Fairness Opinion in
connection with the Offer and the Merger. New West agreed to pay EVEREN a
retainer fee of $100,000 and an additional $100,000 upon the earlier of the
closing of the Offer or October 4, 1998. In addition, New West also agreed to
reimburse EVEREN for its reasonable expenses not to exceed $10,000 and to
indemnify EVEREN against certain liabilities arising out of or in connection
with its engagement, including liabilities under federal securities laws.
Neither New West nor any person acting on its behalf currently intends to
employ, retain or compensate any other person to make solicitations or
recommendations to the stockholders of New West on its behalf concerning the
Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) During the past sixty days, no transaction in Shares have been effected
by New West or, to New West's knowledge, by any executive officer, director or
affiliate of New West other than the transfer by Mr. Feld of 5,000 shares in the
aggregate to two trusts for his children.
(b) To New West's knowledge, to the extent permitted by applicable
securities laws, rules or regulations, each of New West's executive officers and
directors currently intends to tender all Shares over which he has sole
dispositive power pursuant to the Offer, except that Mr. Weinberg may, and is
permitted under the Tender Agreement, to give 5,000 Shares to charity.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) As described under Item 4 above, New West has agreed in the Merger
Agreement not to engage in certain activities in connection with any proposal to
engage in a business combination with, or acquire an interest in or assets of,
New West.
Except in accordance with the terms of the Merger Agreement, in connection
with the exercise of fiduciary duties as advised by counsel as described under
Item 4 and except as otherwise described in this Statement, New West does not
presently intend to undertake any negotiations in response to the Offer which
relate to or would result in (a) an extraordinary transaction, such as a merger
or reorganization, involving New West or any of its subsidiaries, (b) a
purchase, sale or transfer of a material amount of assets by New West or any of
its subsidiaries, (c) a tender offer for or other acquisition of securities by
or of New West or (d) any material change in the present capitalization or
dividend policy of New West.
(b) Except as described in this Statement, there are no transactions, board
resolutions, agreements in principle or signed contracts in response to the
Offer which relate to or would result in one or more of the events referred to
in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
None.
18
<PAGE> 20
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed with this Statement:
Exhibit 1: Agreement and Plan of Merger, dated as of July 13, 1998, among
National Vision Associates, Ltd., NW Acquisition Corp. and New West
Eyeworks, Inc. (incorporated by reference to Exhibit (c)(1) of the
Schedule 14D-1 (the "Schedule 14D-1") of National Vision
Associates, Ltd. and NW Acquisition Corp. filed with the Securities
and Exchange Commission on July 20, 1998).
Exhibit 2: Stock Tender Agreement, dated as of July 13, 1998, by and among NW
Acquisition Corp. and certain holders of Common Stock of New West
Eyeworks, Inc. (incorporated by reference to Exhibit (c)(2) of the
Schedule 14D-1).
Exhibit 3: Form of Preferred Stock Conversion Letter Agreement, dated as of
July 13, 1998, by and among New West Eyeworks, Inc., holders of
Convertible Preferred Stock of New West Eyeworks, Inc., National
Vision Associates, Ltd. and NW Acquisition Corp. (incorporated by
reference to Exhibit (c)(4) of the Schedule 14D-1).
Exhibit 4: Form of Warrant Exercise Letter Agreement, dated as of July 13,
1998, by and among New West Eyeworks, Inc., holders of certain
Warrants to purchase Common Stock of New West Eyeworks, Inc.,
National Vision Associates, Ltd. and NW Acquisition Corp.
(incorporated by reference to Exhibit (c)(3) of the Schedule
14D-1).
Exhibit 5: Form of letter, dated July 20, 1998, to be sent to the stockholders
of New West Eyeworks, Inc.*
Exhibit 6: Confidentiality Agreement, dated March 11, 1998, between New West
Eyeworks, Inc. and National Vision Associates, Ltd.**
Exhibit 7: Confidentiality Agreement, dated April 1, 1998, between National
Vision Associates, Ltd. and New West Eyeworks, Inc.**
Exhibit 8: Offer to Purchase dated June 20, 1998 (incorporated by reference to
Exhibit (a)(1) of the Schedule 14D-1).*
Exhibit 9: Letter of Transmittal (incorporated by reference to Exhibit (a)(2)
of the Schedule 14D-1).*
Exhibit 10: Text of Press Release dated July 14, 1998 issued by National Vision
Associates, Ltd. and New West Eyeworks, Inc. (incorporated by
reference to Exhibit (a)(8) of the 14D-1).
Exhibit 11: Form of Summary Advertisement dated July 20, 1998 (incorporated by
reference to Exhibit (a)(7) of the Schedule 14D-1).
Exhibit 12: Opinion dated July 13, 1998 of EVEREN Securities, Inc.*
Exhibit 13: "Highly Confident" Letter to National Vision Associates, Ltd. from
Schroder & Co. Inc. with respect to contemplated financing by
National Vision Associates, Ltd. (incorporated by reference to
Exhibit (c)(5) of the 14D-1).
- ---------------
* Included in documents sent to stockholders of New West.
** Filed with the Commission as an exhibit to this Statement.
19
<PAGE> 21
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Schedule 14D-9 is true, complete
and correct.
Dated July 20, 1998
NEW WEST EYEWORKS, INC.
/S/ BARRY J. FELD
--------------------------------------
By Barry J. Feld,
President and Chief Executive
Officer
20
<PAGE> 1
[NEW WEST EYEWORKS LOGO]
July 20, 1998
Dear Stockholder:
I am pleased to inform you that on July 13, 1998, New West Eyeworks, Inc., a
Delaware corporation ("New West"), entered into an Agreement and Plan of Merger
(the "Merger Agreement") with National Vision Associates, Ltd., a Georgia
corporation ("National Vision"), and NW Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of National Vision ("Purchaser"). In the
Merger Agreement, Purchaser has agreed to offer to purchase all of the issued
and outstanding shares of New West's Common Stock at a price of $13.00 net per
share payable in cash through a tender offer to the stockholders of New West.
The Merger Agreement provides for a subsequent merger at which time Purchaser
will pay the same price per share paid pursuant to the tender offer for any
remaining issued and outstanding shares of New West's Common Stock.
Based in part on the opinion of EVEREN Securities, Inc., New West's financial
advisor, that the consideration to be paid to stockholders of New West in the
Merger Agreement is fair to the stockholders from a financial point of view,
your Board of Directors has unanimously approved the tender offer and the Merger
Agreement and determined that the terms of the tender offer and merger are fair
to and in the best interest of the stockholders of New West. ACCORDINGLY, THE
BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS TENDER THEIR SHARES PURSUANT TO
THE TENDER OFFER.
In arriving at its decision to recommend the tender offer, the Board of
Directors gave careful consideration to a number of factors that are described
in New West's attached Schedule 14D-9. Also enclosed is Purchaser's Offer to
Purchase and related materials, including a letter of transmittal to be used in
tendering your shares. These documents describe in detail the terms and
conditions of the tender offer and the merger and provide instructions on how to
tender your shares and who to contact if you have questions. I urge you to read
these materials carefully.
New West is not soliciting a vote of the stockholders with respect to the merger
at this time. If a stockholder vote is required to approve the merger, a Proxy
Statement will be mailed to stockholders of New West in connection with a
special meeting of stockholders to be called to vote upon the merger.
On behalf of New West's Board of Directors, I thank you for the support you have
given New West over the years.
Sincerely,
/s/ Ronald E. Weinberg
RONALD E. WEINBERG
Chairman of the Board
2104 West Southern Avenue, Tempe, Arizona 85282
602.438.1330 - Fax 602.431.1060
<PAGE> 1
EXHIBIT 6
[NEW WEST EYEWORKS LOGO]
March 11, 1998
Mr. James W. Krause
Chairman, President and CEO
National Vision Associates, Ltd.
296 Grayson Highway, Suite A
Lawrenceville, GA 30045-5750
Re: Confidentiality Agreement
Dear Mr. Krause:
We have advised you that F.M. Roberts & Company, Inc. ("F.M. Roberts &
Company") is acting on behalf of New West Eyeworks, Inc. (the "Company") and
that the Company has requested F.M. Roberts & Company to furnish you with
certain information that the Company has prepared to assist you in making an
evaluation of the business and prospects of the Company in connection with a
possible transaction or series of transactions involving the Company. As a
condition to the Company's furnishing such information or causing such
information to be furnished to you, you agree to treat confidentially such
information and any other information the Company or its agents furnish to you,
including but not limited to any information obtained by meeting with Company
personnel, whether furnished before or after the date of this letter (the
"Information"), together with all analyses, compilations, studies or other
documents or records prepared by you, your directors, officers, employees,
agents, advisors, subsidiaries, affiliates or representatives (collectively,
"Representatives"), that contain or otherwise reflect or are generated from such
Information (the "Studies" and, together with the Information, the "Material").
You agree that the Material will not be used other than in connection
with the purpose described above, and that the Material will be kept
confidential by you and your Representatives; provided, however, that (i) any
Material may be disclosed to your Representatives who need to know such Material
for the purpose described above (it being understood that such Representatives
shall be informed by you of the confidential nature of such Material and shall
agree to be bound by the terms of this letter agreement as if they were parties
hereto) and (ii) any disclosure of such Material may be made if required by law
or legal process (written notice of which shall be given to the Company as
promptly as practicable prior to the disclosure thereof) or if an executive
officer of the Company consents in writing to such disclosure.
<PAGE> 2
NEW WEST EYEWORKS, INC.
- --------------------------------------------------------------------------------
Mr. James W. Krause
March 11, 1998
Page 2
You and your Representatives shall refrain from using the Material in
any way detrimental to the Company, and from disclosing or making available any
Material to any other person for any purpose, other than as specifically
provided herein. You agree to be responsible for enforcing the terms of this
letter agreement as to your Representatives and the confidentiality of the
Material and to take such action, legal or otherwise, to the extent necessary or
appropriate to cause them to comply with the terms and conditions of this letter
agreement and thereby prevent any disclosure of the Material by any of your
Representatives (including but not limited to all actions that you would take to
protect your own trade secrets and confidential information).
Without the prior consent of the Company, you will not, and will direct
your Representatives not to, disclose to any person the fact that the Material
has been made available to you or that you have inspected any portion of the
Material or the fact that discussions between the Company and you are taking
place or any facts with respect to these discussions, including the status
thereof. Notwithstanding the foregoing, you may make any such disclosure which,
based on the written determination of independent outside counsel, is required
or advisable under applicable laws or any securities listing agreement to which
you are a party. In no event will you make any such disclosure without notifying
the Company, in writing, prior to your anticipated disclosure, allowing the
Company reasonable time under the circumstances to make its own disclosure and
to co-ordinate the release of its disclosure, if any, with yours. The term
"person" as used in this letter shall be broadly interpreted to include, without
limitation, any individual, group or entity.
The term "Information" does not include information that (i) becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives, (ii) was available to you on a non-confidential basis
prior to its disclosure to you by the Company or its representatives or (iii)
becomes available to you on a non-confidential basis from a source other than
the Company or its representatives, provided that such source is not bound by a
confidentiality agreement with the Company or its representatives or otherwise
prohibited from transmitting the Information to you by a contractual, legal or
fiduciary obligation. The fact that Information included in the Material is or
becomes otherwise available to you and your Representatives pursuant to clauses
(i), (ii) or (iii) of this paragraph shall not relieve you and your
Representatives of the prohibitions of the preceding paragraphs or, with respect
to the balance of the Material, the confidentiality provisions of this letter
agreement.
If you or any of your Representatives are requested or required as a
result of a judicial or regulatory proceeding (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose or make any disclosure
contrary to the terms of this letter agreement, you agree to provide the Company
with prompt notice thereof so that the Company may seek an appropriate
protective order. If a protective order has not been
<PAGE> 3
NEW WEST EYEWORKS, INC.
- --------------------------------------------------------------------------------
Mr. James W. Krause
March 11, 1998
Page 3
obtained after the Company has had sufficient time to secure the same in light
of the circumstances under which such order is sought, and you or any of your
Representatives are compelled to disclose any Material to any tribunal,
regulatory authority or agency or third party claimant or else stand liable for
contempt or suffer any similar censure, sanction or penalty, then you and such
Representatives may disclose such information to the extent required to such
tribunal, regulatory authority or agency or third party claimant without
liability hereunder.
All Material and all copies, extracts and other reproductions thereof,
including copies in the possession or control of any of your Representatives, is
and shall remain the property of the Company. If you do not consummate a
transaction or series of transactions with the Company or if the Company so
requests, you shall deliver to the Company, or destroy at the Company's option,
all such Material as promptly as practicable. You agree to provide the Company
with a written certification of the delivery to the Company, or the destruction,
of all such Material upon receipt of a written request therefor from the
Company.
Although the Company will endeavor to provide you with Information that
is known to it and that it believes to be accurate and relevant for the purposes
of your investigation of a possible transaction or series of transactions with
the Company, you understand that neither the Company nor F.M. Roberts & Company
makes any representation, warranty or covenant, express or implied, as to the
accuracy or completeness of any of the Material. Only those particular
representations, warranties and covenants that the Company may make to you in
any definitive agreement relating to such transaction or transactions (a
"Definitive Agreement"), when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, shall have any legal
effect. You therefore agree to rely solely on your own investigation in
evaluating such transaction or transactions and that neither the Company nor
F.M. Roberts & Company nor any of their respective directors, officers,
employees, agents, stockholders, advisors, subsidiaries, affiliates or
representatives shall have any liability to you or any of your Representatives
resulting from the use of the Material by you or your Representatives. In
addition, the Company and F.M. Roberts & Company expressly reserve the right,
without giving reasons therefor, to terminate discussions with you and any and
all other persons, to reject any and all proposals, and to negotiate with any
person, with respect to a possible transaction or series of transactions
involving the Company.
For a period of one year from the date of this letter agreement, and
other than pursuant to the terms of a Definitive Agreement between you and the
undersigned, you and your Representatives shall not, directly or indirectly, and
you shall cause any person controlled by you not to:
(i) acquire, or offer to agree to acquire, directly or
indirectly, by purchase or otherwise, any securities of the Company
(including but not limited to direct or indirect rights or options to
acquire any securities of the Company), except by way of stock
dividends or other distributions made on a pro rata basis with respect
to securities of the Company acquired by you prior to the date of this
letter agreement;
<PAGE> 4
NEW WEST EYEWORKS, INC.
- --------------------------------------------------------------------------------
Mr. James W. Krause
March 11, 1998
Page 4
(ii) solicit proxies or consents or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the
Securities Exchange Act of 1934, as amended) of proxies or consents
with respect to securities of the Company with regard to any matter;
(iii) seek to control or influence the management, Board of
Directors or policies of the Company, or seek to advise, encourage or
influence any person with respect to the voting of any securities of
the Company, or induce, attempt to induce or in any manner assist any
other person in initiating any stockholder proposal or a tender or
exchange offer for securities of the Company or any change of control
of the Company, or for the purpose of convening a stockholders' meeting
of the Company;
(iv) acquire or agree to acquire, by purchase or otherwise,
more than 1% of any class of equity securities of any entity which,
prior to the time you acquire more than 1% of such class, is publicly
disclosed (by filing with the Securities and Exchange Commission or
otherwise), or is otherwise known to you, to be the beneficial owner of
more than 5% of the outstanding common stock of the Company;
(v) make any public announcement (except in accordance with
the terms of this letter agreement) or make any written or oral
proposal or invitation to discuss any possibility, intention, plan or
arrangement relating to a tender or exchange offer for securities of
the Company or a business combination (or other similar transaction
which would result in a change of control), sale of securities or
assets, liquidation or other extraordinary corporate transaction
between you or any of your Representatives and the Company or take any
action that might require the Company to make a public announcement
regarding any of the foregoing;
(vi) deposit any securities of the Company in a voting trust
or subject any securities of the Company to any arrangement or
agreement with respect to the voting of securities of the Company; or
(vii) form, join or in any way participate in a partnership,
limited partnership, syndicate or other group (or otherwise act in
concert with any other person) for the purpose of acquiring, holding,
voting or disposing of securities of the Company or taking any other
actions restricted or prohibited under clauses (i) through (vi) above,
or announce an intention to do, or enter into any arrangement or
understanding with others to do, any of the actions restricted or
prohibited under clauses (i) through (vi) above.
In addition, you hereby acknowledge that you are aware, and that you
will advise your Representatives who are informed as to the matters which are
the subject of this letter agreement, that the United States securities laws
prohibit any person who has material, non-public information concerning the
matters that are the subject of this letter agreement from purchasing or selling
securities of the Company or any other entity that may become a party to a
transaction of a type
<PAGE> 5
NEW WEST EYEWORKS, INC.
- --------------------------------------------------------------------------------
Mr. James W. Krause
March 11, 1998
Page 5
contemplated by this letter agreement or from communicating such information to
any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
It is agreed that you shall not, for a period of two years from the
date of this letter agreement, directly or indirectly hire, solicit or encourage
any executive employee of the Company or any subsidiary or affiliate of the
Company to either leave the employment or cease working for the Company and/or
the subsidiary and/or affiliate. For the purposes hereof, executive employees
means all officers and directors of the Company. Except with the written
permission of the chairman of the Company, you agree that neither you nor your
Representatives shall contact any officers, employees or affiliates of the
Company, directly or indirectly, with respect to any of the Material or with
respect to the possible transaction or series of transactions involving the
Company.
It is further understood and agreed that no failure or delay in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this letter agreement by you and that the
Company shall be entitled to specific performance and injunctive relief as
remedies for any such breach. Such remedies shall not be deemed to be the
exclusive remedy for your breach of this letter agreement but shall be in
addition to all other remedies available to the Company at law or in equity. In
the event either party is required to engage in legal proceedings to protect its
rights under this letter agreement, and either party or any of their
Representatives is found to be in violation of the terms of this letter
agreement, the losing party shall be entitled to reasonable legal fees and
disbursements incurred by it in such proceedings.
This letter agreement may be waived, amended or modified only by an
instrument in writing signed by the party against which such waiver, amendment
or modification is sought to be enforced. If any provision of this letter
agreement shall for any reason be adjudged to be void, invalid or unenforceable,
the remainder of this letter agreement shall continue and remain in full force
and effect. You shall not be entitled to assign this letter agreement without
the prior written consent of the Company. This letter agreement constitutes the
entire agreement between the parties regarding the treatment of the Material and
shall inure to and be binding upon the parties and their respective successors
and permitted assigns. This letter agreement shall be construed and enforced in
accordance with the domestic substantive laws of the State of Delaware without
giving effect to any choice or conflict of laws provision or rule that would
cause the application of the domestic substantive laws of any other state, shall
remain in full force and effect for a period of two (2) years following the
consummation or termination of your evaluation of the business and prospects of
the Company or of any proposed transaction or series of transactions between you
and the Company.
<PAGE> 6
NEW WEST EYEWORKS, INC.
- --------------------------------------------------------------------------------
Mr. James W. Krause
March 11, 1998
Page 6
This letter agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument. The execution of counterparts shall not be deemed to constitute
delivery of this letter agreement by any party until all of the parties have
executed and delivered their respective counterparts.
Very truly yours,
NEW WEST EYEWORKS, INC.
By: /s/ Byron S. Krantz
------------------------------------
Byron S. Krantz, its Secretary
AGREED TO AND ACCEPTED BY:
NATIONAL VISION ASSOCIATES, LTD.
By: /s/ Mitchell Goodman
---------------------------------
Name: Mitchell Goodman
--------------------------------
Title: Vice President General Counsel
-------------------------------
<PAGE> 1
EXHIBIT 7
NATIONAL VISION ASSOCIATES, LTD.
296 Grayson Highway, Suite A
Lawrenceville, GA 30045-5750
- --------------------------------------------------------------------------------
April 1, 1998
Mr. Barry J. Feld
New West Eyeworks, Inc.
2104 West Southern Avenue
Tempe, Arizona 85282
Re: Confidentiality Agreement
Dear Mr. Feld:
On March 11, 1998, National Vision Associates, Ltd. (the "Company") and
you agreed to keep confidential certain information provided by you to the
Company. You have now requested that the Company furnish you with certain
information that the Company has prepared to assist you in making an evaluation
of the business and prospects of the Company in connection with a possible
transaction or series of transactions involving the Company. As a condition to
the Company's furnishing such information or causing such information to be
furnished to you, you agree to treat confidentially such information and any
other information the Company or its agents furnish to you, including but not
limited to any information obtained by meeting with Company personnel, whether
furnished before or after the date of this letter (the "Information"), together
with all analyses, compilations, studies or other documents or records prepared
by you, your directors, officers, employees, agents, advisors, subsidiaries,
affiliates or representatives (collectively, "Representatives"), that contain or
otherwise reflect or are generated from such Information (the "Studies" and,
together with the Information, the "Material").
You agree that the Material will not be used other than in connection
with the purpose described above, and that the Material will be kept
confidential by you and your Representatives; provided, however, that (i) any
Material may be disclosed to your Representatives who need to know such Material
for the purpose described above (it being understood that such Representatives
shall be informed by you of the confidential nature of such Material and shall
agree to be bound by the terms of this letter agreement as if they were parties
hereto) and (ii) any disclosure of such Material may be made if required by law
or legal process (written notice of which shall be given to the Company as
promptly as practicable prior to the disclosure thereof) or if an executive
officer of the Company consents in writing to such disclosure.
<PAGE> 2
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
Mr. Barry J. Feld
April 1, 1998
Page 2
You and your Representatives shall refrain from using the Material in
any way detrimental to the Company, and from disclosing or making available any
Material to any other person for any purpose, other than as specifically
provided herein. You agree to be responsible for enforcing the terms of this
letter agreement as to your Representatives and the confidentiality of the
Material and to take such action, legal or otherwise, to the extent necessary or
appropriate to cause them to comply with the terms and conditions of this letter
agreement and thereby prevent any disclosure of the Material by any of your
Representatives (including but not limited to all actions that you would take to
protect your own trade secrets and confidential information).
Without the prior consent of the Company, you will not, and will direct
your Representatives not to, disclose to any person the fact that the Material
has been made available to you or that you have inspected any portion of the
Material or the fact that discussions between the Company and you are taking
place or any facts with respect to these discussions, including the status
thereof. Notwithstanding the foregoing, you may make any such disclosure which,
based on the written determination of independent outside counsel, is required
or advisable under applicable laws or any securities listing agreement to which
you are a party. In no event will you make any such disclosure without notifying
the Company, in writing, prior to your anticipated disclosure, allowing the
Company reasonable time under the circumstances to make its own disclosure and
to co-ordinate the release of its disclosure, if any, with yours. The term
"person" as used in this letter shall be broadly interpreted to include, without
limitation, any individual, group or entity.
The term "Information" does not include information that (i) becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives, (ii) was available to you on a non-confidential basis
prior to its disclosure to you by the Company or its representatives or (iii)
becomes available to you on a non-confidential basis from a source other than
the Company or its representatives, provided that such source is not bound by a
confidentiality agreement with the Company or its representatives or otherwise
prohibited from transmitting the Information to you by a contractual, legal or
fiduciary obligation. The fact that Information included in the Material is or
becomes otherwise available to you and your Representatives pursuant to clauses
(i), (ii) or (iii) of this paragraph shall not relieve you and your
Representatives of the prohibitions of the preceding paragraphs or, with respect
to the balance of the Material, the confidentiality provisions of this letter
agreement.
If you or any of your Representatives are requested or required as a
result of a judicial or regulatory proceeding (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose or make any disclosure
contrary to the terms of this letter agreement, you agree to provide the Company
with prompt notice thereof so that the Company may seek an appropriate
protective order. If a protective order has not been
<PAGE> 3
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
Mr. Barry J. Feld
April 1, 1998
Page 3
obtained after the Company has had sufficient time to secure the same in light
of the circumstances under which such order is sought, and you or any of your
Representatives are compelled to disclose any Material to any tribunal,
regulatory authority or agency or third party claimant or else stand liable for
contempt or suffer any similar censure, sanction or penalty, then you and such
Representatives may disclose such information to the extent required to such
tribunal, regulatory authority or agency or third party claimant without
liability hereunder.
All Material and all copies, extracts and other reproductions thereof,
including copies in the possession or control of any of your Representatives, is
and shall remain the property of the Company. If you do not consummate a
transaction or series of transactions with the Company or if the Company so
requests, you shall deliver to the Company, or destroy at the Company's option,
all such Material as promptly as practicable. You agree to provide the Company
with a written certification of the delivery to the Company, or the destruction,
of all such Material upon receipt of a written request therefor from the
Company.
Although the Company will endeavor to provide you with Information that
is known to it and that it believes to be accurate and relevant for the purposes
of your investigation of a possible transaction or series of transactions with
the Company, you understand that the Company does not make any representation,
warranty or covenant, express or implied, as to the accuracy or completeness of
any of the Material. Only those particular representations, warranties and
covenants that the Company may make to you in any definitive agreement relating
to such transaction or transactions (a "Definitive Agreement"), when, as and if
executed, and subject to such limitations and restrictions as may be specified
therein, shall have any legal effect. You therefore agree to rely solely on your
own investigation in evaluating such transaction or transactions and that
neither the Company nor any of its respective directors, officers, employees,
agents, stockholders, advisors, subsidiaries, affiliates or representatives
shall have any liability to you or any of your Representatives resulting from
the use of the Material by you or your Representatives. In addition, the Company
expressly reserves the right, without giving reasons therefor, to terminate
discussions with you and any and all other persons, to reject any and all
proposals, and to negotiate with any person, with respect to a possible
transaction or series of transactions involving the Company.
For a period of one year from the date of this letter agreement, and
other than pursuant to the terms of a Definitive Agreement between you and the
undersigned, you and your Representatives shall not, directly or indirectly, and
you shall cause any person controlled by you not to:
(i) acquire, or offer to agree to acquire, directly or
indirectly, by purchase or otherwise, any securities of the Company
(including but not limited to direct or indirect rights or options to
acquire any securities of the Company), except by way of stock
dividends or other distributions made on a pro rata basis with respect
to securities of the Company acquired by you prior to the date of this
letter agreement;
<PAGE> 4
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
Mr. Barry J. Feld
April 1, 1998
Page 4
(ii) solicit proxies or consents or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the
Securities Exchange Act of 1934, as amended) of proxies or consents
with respect to securities of the Company with regard to any matter;
(iii) seek to control or influence the management, Board of
Directors or policies of the Company, or seek to advise, encourage or
influence any person with respect to the voting of any securities of
the Company, or induce, attempt to induce or in any manner assist any
other person in initiating any stockholder proposal or a tender or
exchange offer for securities of the Company or any change of control
of the Company, or for the purpose of convening a stockholders' meeting
of the Company;
(iv) acquire or agree to acquire, by purchase or otherwise,
more than 1% of any class of equity securities of any entity which,
prior to the time you acquire more than 1% of such class, is publicly
disclosed (by filing with the Securities and Exchange Commission or
otherwise), or is otherwise known to you, to be the beneficial owner of
more than 5% of the outstanding common stock of the Company;
(v) make any public announcement (except in accordance with
the terms of this letter agreement) or make any written or oral
proposal or invitation to discuss any possibility, intention, plan or
arrangement relating to a tender or exchange offer for securities of
the Company or a business combination (or other similar transaction
which would result in a change of control), sale of securities or
assets, liquidation or other extraordinary corporate transaction
between you or any of your Representatives and the Company or take any
action that might require the Company to make a public announcement
regarding any of the foregoing;
(vi) deposit any securities of the Company in a voting trust
or subject any securities of the Company to any arrangement or
agreement with respect to the voting of securities of the Company; or
(vii) form, join or in any way participate in a partnership,
limited partnership, syndicate or other group (or otherwise act in
concert with any other person) for the purpose of acquiring, holding,
voting or disposing of securities of the Company or taking any other
actions restricted or prohibited under clauses (i) through (vi) above,
or announce an intention to do, or enter into any arrangement or
understanding with others to do, any of the actions restricted or
prohibited under clauses (i) through (vi) above.
In addition, you hereby acknowledge that you are aware, and that you
will advise your Representatives who are informed as to the matters which are
the subject of this letter agreement, that the United States securities laws
prohibit any person who has material, non-public information concerning the
matters that are the subject of this letter agreement from purchasing or selling
securities of the Company or any other entity that may become a party to a
transaction of a type
<PAGE> 5
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
Mr. Barry J. Feld
April 1, 1998
Page 5
contemplated by this letter agreement or from communicating such information to
any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
It is agreed that you shall not, for a period of two years from the
date of this letter agreement, directly or indirectly hire, solicit or encourage
any executive employee of the Company or any subsidiary or affiliate of the
Company to either leave the employment or cease working for the Company and/or
the subsidiary and/or affiliate. For the purposes hereof, executive employees
means all officers and directors of the Company. Except with the written
permission of the chairman of the Company, you agree that neither you nor your
Representatives shall contact any officers, employees or affiliates of the
Company, directly or indirectly, with respect to any of the Material or with
respect to the possible transaction or series of transactions involving the
Company.
It is further understood and agreed that no failure or delay in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this letter agreement by you and that the
Company shall be entitled to specific performance and injunctive relief as
remedies for any such breach. Such remedies shall not be deemed to be the
exclusive remedy for your breach of this letter agreement but shall be in
addition to all other remedies available to the Company at law or in equity. In
the event either party is required to engage in legal proceedings to protect its
rights under this letter agreement, and either party or any of their
Representatives is found to be in violation of the terms of this letter
agreement, the losing party shall be entitled to reasonable legal fees and
disbursements incurred by it in such proceedings.
This letter agreement may be waived, amended or modified only by an
instrument in writing signed by the party against which such waiver, amendment
or modification is sought to be enforced. If any provision of this letter
agreement shall for any reason be adjudged to be void, invalid or unenforceable,
the remainder of this letter agreement shall continue and remain in full force
and effect. You shall not be entitled to assign this letter agreement without
the prior written consent of the Company. This letter agreement constitutes the
entire agreement between the parties regarding the treatment of the Material and
shall inure to and be binding upon the parties and their respective successors
and permitted assigns. This letter agreement shall be construed and enforced in
accordance with the domestic substantive laws of the State of Delaware without
giving effect to any choice or conflict of laws provision or rule that would
cause the application of the domestic substantive laws of any other state, shall
remain in full force and effect for a period of two (2) years following the
consummation or termination of your evaluation of the business and prospects of
the Company or of any proposed transaction or series of transactions between you
and the Company.
<PAGE> 6
NATIONAL VISION ASSOCIATES, LTD.
- --------------------------------------------------------------------------------
Mr. Barry J. Feld
April 1, 1998
Page 6
This letter agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument. The execution of counterparts shall not be deemed to constitute
delivery of this letter agreement by any party until all of the parties have
executed and delivered their respective counterparts.
Very truly yours,
NATIONAL VISION ASSOCIATES, LTD.
By: /s/ Mitchell Goodman
---------------------------------
Name: Mitchell Goodman
--------------------------------
Title: Senior Vice President
-------------------------------
AGREED TO AND ACCEPTED BY:
NEW WEST EYEWORKS, INC.
By: /s/ Byron S. Krantz
---------------------------------
Name: Byron S. Krantz
--------------------------------
Title: Secretary
-------------------------------
<PAGE> 1
EVEREN SECURITIES LOGO
July 13, 1998
Board of Directors
New West Eyeworks, Inc.
2104 West Southern Avenue
Tempe, AZ 85282
Gentlemen:
We understand that New West Eyeworks, Inc. ("NEWI") has agreed to sell all
of its issued and outstanding shares of Common Stock, par value $0.01 per share
(the "Common Stock"), to National Vision Associates, Ltd., ("NVAL"). Pursuant to
the Agreement and Plan of Merger dated July 13, 1998 (the "Merger Agreement")
among NEWI, NVAL, and NVAL's wholly owned subsidiary, NW Acquisition Corp.
("Merger Sub"), NVAL proposes to cause Merger Sub to commence a tender offer
(the "Tender") to acquire all of NEWI's issued and outstanding shares of Common
Stock for $13.00 per share in cash (the "Consideration"). Certain stockholders
of the Company agreed to tender their shares pursuant to lock-up agreements.
We also understand that following the Tender, Merger Sub will merge with
and into NEWI (the "Merger"), and any remaining stockholders, subject to the
rights of Dissenting Stockholders (as such term is defined in the Merger
Agreement), will receive the Consideration in cash in connection with the
Merger. The Tender and subsequent Merger are defined herein as the Transaction.
You have requested our opinion as to whether the Consideration to be
received by the stockholders of NEWI in the Transaction is fair, from a
financial point of view, to the stockholders of NEWI as of the date hereof.
For the purposes of the opinion set forth herein, we have, among other
things,
<TABLE>
<S> <C>
(i) reviewed the Merger Agreement;
(ii) reviewed NEWI's annual report on Form 10-K for the year
ended December 31, 1997, and NEWI's Form 10-Q for the three
month period ended March 31, 1998;
(iii) reviewed certain non-public operating and financial
information, including financial projections, relating to
NEWI's business prepared by management of NEWI;
(iv) interviewed certain members of NEWI's management to discuss
its operations, financial statements, and future prospects;
(v) reviewed publicly available financial data and stock market
performance data of other eyewear retailers which we deemed
comparable to NEWI;
(vi) reviewed the terms of selected recent acquisitions of
companies which we deemed generally comparable to NEWI;
(vii) reviewed the historical stock prices and reported traded
volumes of NEWI's Common Stock; and
(viii) conducted such other studies, analyses, inquiries and
investigations as we deemed appropriate.
</TABLE>
In arriving at our opinion, we have considered such factors as we have
deemed relevant including, but not limited to: (i) the market value of publicly
held companies we deemed comparable to NEWI relative to sales, earnings before
interest, taxes, depreciation and amortization ("EBITDA"), earnings before
interest and taxes ("EBIT") and net income, (ii) the transaction values on
business combinations which we believe comparable to NEWI relative to sales,
EBITDA, EBIT and net income, (iii) premiums in recent merger transactions of
EVEREN SECURITIES, INC.
77 West Wacker Drive Chicago, IL 60601-1694 Tel (312) 574-6000
Member New York Stock Exchange and other principal exchanges
<PAGE> 2
EVEREN SECURITIES LOGO
New West Eyeworks, Inc.
July 13, 1998
Page 2
comparable size, (iv) the historical market prices and trading volume of the
Common Stock of NEWI, and (v) other items we deemed to be relevant.
During our review, we have, with your consent, relied upon and assumed,
without independent verification, the accuracy and completeness of the financial
and other information provided, and have further relied upon the assurances of
management that they are unaware of any facts that would make the information
provided to us to be incomplete or misleading for the purposes of this opinion.
Although our opinion does not encompass forward looking valuation techniques
such as discounted cash flow analysis, we have assumed that the financial
projections which we reviewed to have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the future
financial performance of each company. Our opinion is necessarily based on the
economic, market, and other conditions as in effect on, and the information made
available to us as of, the date hereof. In arriving at our opinion, we have not
performed any independent appraisal of the assets of NEWI. We disclaim any
undertaking or obligation to advise any person of any change in any fact or
matter affecting our opinion which may come or be brought to our attention after
the date of this opinion.
We have acted as financial advisor to the Board of Directors of NEWI in
connection with this opinion and will receive a fee for our services.
It is understood that this opinion will be included in its entirety in a
proxy statement or other document distributed to the stockholders of NEWI in
connection with the Transaction and this constitutes our express written
approval for that purpose. It is understood that this opinion shall be used by
you solely in connection with your consideration of the fairness of the
Transaction to the stockholders of NEWI and for no other purpose, and NEWI will
not furnish this opinion or any other material prepared by us to any other
person or use or refer to this opinion for any other purpose without our prior
written approval. However, no summary of, or excerpt from, this opinion may be
used, and no published public reference (other than as provided in the preceding
sentence) to this opinion may be made except with our prior express approval.
This opinion does not constitute a recommendation to any stockholder of
NEWI as to whether such stockholder should tender his shares, or as to any other
actions which such stockholder should take in conjunction with the Transaction.
This opinion relates solely to the question of fairness to the NEWI
stockholders, from a financial point of view, of the Transaction as currently
proposed. Further, we express no opinion herein as to the structure, terms or
effect of any other aspect of the Transaction, including, without limitation,
any effects resulting from the application of any bankruptcy, fraudulent
conveyance or other federal or state insolvency law or of any pending or
threatened litigation affecting NEWI.
Based on the foregoing, we are of the opinion that the Consideration to be
received by the stockholders of NEWI in the Transaction is fair, from a
financial point of view, to the stockholders of NEWI as of the date hereof.
Very truly yours,
EVEREN Securities, Inc.
By: /s/MAURY J. BELL
Maury J. Bell
Senior Managing Director
