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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
CAMERON ASHLEY BUILDING PRODUCTS, INC.
(Name of Subject Company (Issuer))
CAB MERGER CORP.
GUARDIAN FIBERGLASS, INC.
(Names of Filing Persons (Offerors))
---------------------
COMMON STOCK, NO PAR VALUE (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE
RIGHTS)
(Title of Class of Securities)
133290106
(CUSIP Number of Class of Securities)
---------------------
DAVID A. CLARK
TREASURER
GUARDIAN FIBERGLASS, INC.
2300 HARMON ROAD
AUBURN HILLS, MICHIGAN 48326
(248) 340-1800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Filing Persons)
COPY TO:
PAUL R. RENTENBACH
DYKEMA GOSSETT PLLC
400 RENAISSANCE CENTER
DETROIT, MICHIGAN 48243-1668
(313) 568-6973
CALCULATION OF FILING FEE
TRANSACTION VALUATION* $188,895,432.15 AMOUNT OF FILING FEE $37,779.09
* Estimated solely for purposes of calculating the amount of filing fee. This
calculation assumes the purchase of (i) all 8,817,405 outstanding shares of
common stock, no par value, of the Subject Company (the "Common Stock")
including associated Series A Preferred Stock purchase rights (the "Rights" and,
together with the Common Stock, the "Shares"), at a price per Share of $18.35 in
cash, and (ii) options to purchase Common Stock that will be vested and
exercisable immediately prior to the effective time of the merger. The amount of
the filing fee, calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, as amended, equals 1/50(th) of one percent of the value of
the transaction.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: Not applicable
FORM OR REGISTRATION NO.: Not applicable
FILING PARTY: Not applicable
DATE FILED: Not applicable
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4
[ ] going-private transaction subject to Rule 13e-3
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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This Tender Offer Statement on Schedule TO relates to the third-party
tender offer by CAB Merger Corp., a Georgia corporation (the "Purchaser") and a
wholly-owned subsidiary of Guardian Fiberglass, Inc., a Delaware corporation
("Parent"), to purchase all of the issued and outstanding shares of common
stock, no par value (the "Common Stock"), of Cameron Ashley Building Products,
Inc., a Georgia corporation (the "Company"), and the associated Series A
Preferred Stock purchase rights (the "Rights" and, together with the Common
Stock, the "Shares"), at a purchase price of $18.35 per Share, net to the Seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated May 12, 2000 (the "Offer to Purchase")
and in the related Letter of Transmittal (the "Letter of Transmittal"), copies
of which are attached hereto as Exhibits (a)(1)(A) and (a)(1)(B), respectively
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer").
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the "Summary of the Offer" in the Offer to
Purchase is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY.
(a) The name of the subject company is Cameron Ashley Building Products,
Inc., a Georgia corporation. The Company's executive offices are located at
11651 Plano Road, Dallas, Texas, 75243, telephone, 214-860-5100.
(b) The class of securities to which this statement relates is the Common
Stock, no par value, including the associated Rights, of the Company of which
8,817,405 Shares were issued and outstanding as of April 28, 2000. The
information set forth on the cover page and in the Introduction of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) This Tender Offer Statement is filed by Parent and the Purchaser. The
information set forth in Section 9 ("Certain Information Concerning Guardian
Industries, Parent and the Purchaser") of the Offer to Purchase and on Schedule
I thereto is incorporated herein by reference.
(b) The information set forth in Section 9 ("Certain Information Concerning
Guardian Industries, Parent and the Purchaser") of the Offer to Purchase and on
Schedule I thereto is incorporated herein by reference.
(c) The information set forth in Section 9 ("Certain Information Concerning
Guardian Industries, Parent and the Purchaser") of the Offer to Purchase and on
Schedule I thereto is incorporated herein by reference. During the last five
years, to the best knowledge of Guardian Industries, the Purchaser or Parent,
none of the persons listed on Schedule I to the Offer to Purchase (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to any judicial or administrative proceeding
(except for matters that were dismissed without sanction or settlement) that
resulted in a judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of such laws. All of the persons listed on
Schedule I to the Offer to Purchase are citizens of the United States.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in the Offer to Purchase is incorporated herein
by reference.
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ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) None.
(b) The information set forth in the Introduction, Section 11 ("Background
of the Offer and the Merger; Past Contacts or Negotiations with the Company")
and Section 12 ("Purpose of the Offer and the Merger; Plans for the Company; the
Merger Agreement; Tender and Option Agreement; Other Agreements; Other Matters")
of the Offer to Purchase is incorporated herein by reference. Except as set
forth in the Introduction, Section 11 and Section 12 of the Offer to Purchase,
there have been no material contacts, negotiations or transactions during the
past two years that would be required to be disclosed under this Item 5(b)
between any of the Purchaser or Parent or any of their respective subsidiaries
or, to the best knowledge of the Purchaser and Parent, any of those persons
listed on Schedule I to the Offer to Purchase and the Company or its affiliates
concerning a merger, consolidation or acquisition, a tender offer for or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
ITEM 6. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS.
(a), (c)(1)-(7) The information set forth in the Introduction, Section 7,
("Effect of the Offer on the Market for the Shares; New York Stock Exchange
Quotation; Exchange Act Registration and Margin Securities"), Section 11
("Background of the Offer and the Merger; Past Contacts or Negotiations with the
Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company; the Merger Agreement; Tender and Option Agreement; Other Agreements;
Other Matters") and Section 13 ("Dividends and Distributions; Changes in Stock")
of the Offer to Purchase is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Section 10 ("Source and Amount of Funds") and
Section 14 ("Certain Conditions of the Offer") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in the Introduction and Section 9 ("Certain
Information Concerning Guardian Industries, Parent and the Purchaser") of the
Offer to Purchase is incorporated herein by reference.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; New York Stock Exchange Quotation; Exchange Act
Registration and Margin Securities"), Section 12 ("Purpose of the Offer and the
Merger; Plans for the Company; the Merger Agreement; Tender and Option
Agreement; Other Agreements; Other Matters") and Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
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ITEM 12. EXHIBITS.
<TABLE>
<S> <C>
(a)(1)(A) Offer to Purchase.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(1)(E) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
(a)(1)(F) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(1)(G) Form of Summary Advertisement dated May 12, 2000.
(a)(1)(H) Press Release, dated May 1, 2000, issued by Parent
(previously filed with the Schedule TO filed by the
Purchaser and Parent on May 2, 2000 and incorporated herein
by reference).
(b) None.
(d)(1) Agreement and Plan of Merger, dated as of April 28, 2000, by
and among the Company, Parent and the Purchaser.
(d)(2) Tender and Option Agreement, dated as of April 28, 2000,
among the Purchaser and each of the Company shareholders a
signatory thereto.
(d)(3) Confidentiality Agreement, dated February 10, 2000, between
the Company and Guardian Industries Corp.
(g) None.
(h) None.
</TABLE>
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
CAB MERGER CORP.
By: /s/ DAVID A. CLARK
------------------------------------
David A. Clark
Chairman and Treasurer
GUARDIAN FIBERGLASS, INC.
By: /s/ DAVID A. CLARK
------------------------------------
David A. Clark
Treasurer
Dated: May 12, 2000
5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
(a)(1)(A) Offer to Purchase.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(1)(E) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
(a)(1)(F) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(1)(G) Form of Summary Advertisement dated May 12, 2000.
(d)(1) Agreement and Plan of Merger, dated as of April 28, 2000, by
and among the Company, Parent and the Purchaser.
(d)(2) Tender and Option Agreement, dated as of April 28, 2000,
among the Purchaser and the Company shareholders a signatory
thereto.
(d)(3) Confidentiality Agreement, dated February 10, 2000, between
the Company and Guardian Industries Corp.
</TABLE>
6
<PAGE> 1
EXHIBIT 99.(a)(1)(A)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
AT
$18.35 NET PER SHARE
BY
CAB MERGER CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GUARDIAN INDUSTRIES CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
The Board of Directors of Cameron Ashley Building Products, Inc. (the
"Company") has unanimously approved the Offer and the Merger referred to herein
and determined that the terms of the Offer and the Merger are fair to, and in
the best interests of, the shareholders of the Company, and recommends that the
shareholders of the Company accept the Offer and tender all of their Shares
pursuant thereto.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date that number of shares of
common stock of the Company (and the associated preferred stock purchase rights)
(together, the "Shares") which, together with the Shares then owned by Guardian
Fiberglass, Inc. ("Parent") or CAB Merger Corp. (the "Purchaser"), or their
affiliates, represents at least a majority of the Shares outstanding on a
fully-diluted basis (the "Minimum Condition"), and (ii) the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, having expired or been terminated. The Offer is also subject to other
terms and conditions. See Sections 12 and 14.
The Offer is not conditioned upon Parent or the Purchaser obtaining
financing.
The Purchaser has entered into a Tender and Option Agreement with certain
shareholders of the Company pursuant to which, among other things, such
shareholders have granted the Purchaser an option to acquire at $18.35 per
share, and in the event such option is not theretofore exercised, to tender and
sell in the Offer 382,574 Shares beneficially owned by such shareholders
(together with the options subject to the Tender and Option Agreement,
approximately 12.5% of the outstanding Shares on a fully-diluted basis). See
Section 12.
A SUMMARY OF THE PRINCIPAL TERMS OF THE OFFER APPEARS ON PAGES (I) THROUGH
(IV). YOU SHOULD READ THIS ENTIRE DOCUMENT CAREFULLY BEFORE DECIDING WHETHER TO
TENDER YOUR SHARES.
----------------------
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
May 12, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
SUMMARY OF THE OFFER................................................ (i)
INTRODUCTION........................................................ 1
THE TENDER OFFER.................................................... 3
1. TERMS OF THE OFFER.......................................... 3
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES............... 4
3. PROCEDURE FOR TENDERING SHARES.............................. 6
4. WITHDRAWAL RIGHTS........................................... 8
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 9
6. PRICE RANGE OF THE SHARES; DIVIDENDS........................ 9
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NEW YORK
STOCK EXCHANGE QUOTATION; EXCHANGE ACT REGISTRATION AND
MARGIN SECURITIES........................................... 10
8. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 11
9. CERTAIN INFORMATION CONCERNING GUARDIAN INDUSTRIES, PARENT
AND THE PURCHASER........................................... 13
10. SOURCE AND AMOUNT OF FUNDS.................................. 14
11. BACKGROUND OF THE OFFER AND THE MERGER; PAST CONTACTS OR
NEGOTIATIONS WITH THE COMPANY............................... 14
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY;
THE MERGER AGREEMENT; TENDER AND OPTION AGREEMENT; OTHER
AGREEMENTS; OTHER MATTERS................................... 17
13. DIVIDENDS AND DISTRIBUTIONS; CHANGES IN STOCK............... 32
14. CERTAIN CONDITIONS OF THE OFFER............................. 32
15. CERTAIN LEGAL MATTERS....................................... 33
16. FEES AND EXPENSES........................................... 36
17. MISCELLANEOUS............................................... 36
Schedule I -- Information Concerning Directors and Executive
Officers of Guardian Industries, Parent and the Purchaser........... I-1
</TABLE>
<PAGE> 3
SUMMARY OF THE OFFER
Guardian Fiberglass, Inc., through its wholly-owned subsidiary, CAB Merger
Corp., is offering to purchase all of the outstanding shares of common stock of
Cameron Ashley Building Products, Inc. and the Series A Preferred Stock purchase
rights associated with the shares for $18.35 per share in cash. The following
are some of the questions that you, as a shareholder of Cameron Ashley Building
Products, Inc., may have and the answers to those questions. We urge you to
carefully read the remainder of this Offer to Purchase and the Letter of
Transmittal because the information in this Summary is not complete. Additional
important information is contained in the remainder of this Offer to Purchase
and the Letter of Transmittal.
WHO IS OFFERING TO BUY YOUR SECURITIES?
Our name is CAB Merger Corp. We are a Georgia corporation and have carried
on no business other than in connection with the offer and the related merger
agreement. We are a wholly-owned subsidiary of Guardian Fiberglass, Inc., a
Delaware corporation. Guardian Fiberglass, Inc., is a wholly-owned subsidiary of
Guardian Industries Corp., a Delaware corporation that is principally owned by
William Davidson. See "Introduction" and Section 9.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are offering to purchase all of the outstanding common stock of Cameron
Ashley Building Products, Inc. and the preferred stock purchase rights
associated with such shares. See "Introduction" and Section 1.
HOW MUCH ARE WE OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL YOU HAVE
TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $18.35 per share, net to you, in cash, without
interest. If you are the record owner of your shares and you tender your shares
to us in the offer, you will not have to pay brokerage fees or similar expenses.
If you own your shares through a broker or other nominee, and your broker
tenders your shares on your behalf, your broker or nominee may charge you a fee
for doing so. You should consult your broker or nominee to determine whether any
charges will apply. See "Introduction."
DO WE HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Guardian Fiberglass, Inc., our parent company, will provide us with
sufficient funds from its own resources to purchase all shares validly tendered
and not withdrawn in the offer and to provide funding for the merger which is
expected to follow the successful completion of the offer. We anticipate that
all of these funds will be obtained from the existing resources, available
credit facilities and internally generated funds of Guardian Fiberglass, Inc.
and/or its parent company, Guardian Industries Corp., including short-term
borrowings in the ordinary course of their businesses. The offer is not
conditioned upon any financing condition. See Section 10.
IS OUR FINANCIAL CONDITION RELEVANT TO YOUR DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because the form of payment consists solely of
cash and we have already arranged for all of our funding to come from the
existing resources and internally generated funds of Guardian Fiberglass, Inc.
and its parent company, Guardian Industries Corp., including utilization of
existing credit facilities. Additionally, our offer is not subject to any
financing condition. See Section 10.
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HOW LONG DO YOU HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, Eastern time, on Friday, June
9, 2000, to tender your shares in the offer. Further, if you cannot deliver
everything that is required in order to make a valid tender by that time, you
may be able to use a guaranteed delivery procedure, which is described later in
this offer to purchase. See Sections 1, 2, and 3.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we may extend the offer one or more
times, up to July 31, 2000, without Cameron Ashley Building Products, Inc.'s
consent, in the following circumstances:
- If at the then scheduled expiration date of the offer any of the
conditions to our obligation to accept for payment and pay for shares of
Cameron Ashley Building Products, Inc. common stock are not satisfied or
waived;
- If all conditions to the offer have been satisfied or waived but less
than 90% of the outstanding shares of Cameron Ashley Building Products,
Inc. common stock have been validly tendered and not properly withdrawn;
or
- We may extend the offer for any period required by any rule, regulation,
or interpretation of the Securities and Exchange Commission or its staff.
HOW WILL YOU BE NOTIFIED IF THE OFFER IS EXTENDED
If we extend the offer, we will inform SunTrust Bank, Atlanta (which is the
depositary for the offer) of that fact and we will make a public announcement of
the extension, not later than 9:00 a.m., Eastern time, on the next business day
after the day on which the offer was scheduled to expire. See Section 1.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The most significant conditions to the offer are:
- We are not obligated to purchase any shares that are validly tendered
unless the number of shares validly tendered and not properly withdrawn
before the expiration date of the offer, together with the shares then
owned by us and our affiliates, represents at least a majority of the
outstanding shares of Cameron Ashley Building Products, Inc. common
stock, on a fully diluted basis.
- We are not obligated to purchase shares that are validly tendered if the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, has not expired or been terminated
before we accept the shares that have been validly tendered.
HOW DO YOU TENDER YOUR SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to SunTrust Bank,
Atlanta, the depositary for the offer, not later than the time the tender offer
expires. If your shares are held in street name, the shares can be tendered by
your nominee through The Depository Trust Company. If you cannot get any
document or instrument that is required to be delivered to the depositary by the
expiration of the tender offer, you may get a little extra time to do so by
having a broker, a bank or other fiduciary that is a member of the Securities
Transfer Agents Medallion Signature Guarantee Program or other eligible
institution guarantee that the missing items will be received by the depositary
within three New York Stock Exchange trading days. For the tender to be valid,
however, the depositary must receive the missing items within that three trading
day period. See Sections 2 and 3.
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UNTIL WHAT TIME CAN YOU WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not agreed by July 11, 2000 (or such later date as may apply if the offer
is extended) to accept your shares for payment, you can withdraw them at any
time after such time until we accept shares for payment. This right to withdraw
will not apply to any subsequent offering period discussed in Section 1. See
Sections 3 and 4.
HOW DO YOU WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4.
WHAT DOES CAMERON ASHLEY BUILDING PRODUCTS, INC.'S BOARD OF DIRECTORS THINK OF
THE OFFER?
We are making the offer pursuant to a merger agreement, that has been
unanimously approved by the board of directors of Cameron Ashley Building
Products, Inc. The board of directors of Cameron Ashley Building Products, Inc.,
based upon the unanimous recommendation of the special committee of that board
of directors, unanimously (i) determined that the consideration to be paid for
each share in the offer and the merger is fair to, and in the best interests of,
its shareholders (other than Guardian Fiberglass, Inc. and its affiliates), (ii)
approved the merger, the offer, the merger, the merger agreement and the other
transactions contemplated by the merger agreement and (iii) recommends that its
shareholders accept the offer and tender their shares pursuant thereto and
approve and adopt the merger agreement and approve the merger. See
"Introduction."
HAVE ANY SHAREHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Certain shareholders of Cameron Ashley Building Products, Inc., who
own shares representing approximately 4.3% of the outstanding common stock of
Cameron Ashley Building Products, Inc. (together with options subject to an
agreement with such shareholders, approximately 12.5% after taking into
consideration unexercised options and warrants and other securities convertible
into common stock), have agreed to tender their shares in the offer. See Section
12.
IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL CAMERON
ASHLEY BUILDING PRODUCTS, INC. CONTINUE AS A PUBLIC COMPANY?
No. Following the purchase of the shares in the offer we expect to
consummate the merger, and following the merger, Cameron Ashley Building
Products, Inc. no longer will be publicly owned. Even if for some reason the
merger does not take place, if we purchase all the tendered shares, there may be
so few remaining shareholders and publicly held shares that Cameron Ashley
Building Products, Inc. common stock will no longer be eligible to be traded on
the New York Stock Exchange or on any other securities exchange, there may not
be a public trading market for Cameron Ashley Building Products, Inc. common
stock, and Cameron Ashley Building Products, Inc. may cease making filings with
the Securities and Exchange Commission or otherwise cease being required to
comply with the Securities and Exchange Commission's rules relating to publicly
held companies. See Sections 7 and 13.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES OF CAMERON
ASHLEY BUILDING PRODUCTS, INC. ARE NOT TENDERED IN THE OFFER?
Yes. If we accept for payment and pay for at least a majority of the
outstanding shares of Cameron Ashley Building Products, Inc. common stock, we
will be merged with and into Cameron Ashley Building Products, Inc. If that
merger takes place, Guardian Fiberglass, Inc. will own all of the shares of
Cameron Ashley Building Products, Inc. common stock and all remaining
shareholders of Cameron Ashley Building Products, Inc. (other than us and
shareholders properly exercising dissenters' rights) will receive $18.35 per
share in cash. See "Introduction" and Section 12.
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<PAGE> 6
IF YOU DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT YOUR SHARES?
If the merger described above takes place, shareholders not tendering in
the offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer, subject to any dissenters'
properly exercised under the Georgia Business Corporation Code. Therefore, if
the merger takes place, the only difference to you between tendering your shares
and not tendering your shares is that you will be paid earlier and will not have
dissenters' rights if you tender your shares. However, if for some reason the
merger does not take place, the number of shareholders of Cameron Ashley
Building Products, Inc. and the number of shares of Cameron Ashley Building
Products, Inc. common stock that are still in the hands of the public may be so
small that there no longer will be an active public trading market (or,
possibly, there may not be any public trading market) for Cameron Ashley
Building Products, Inc. common stock. Also, as described above, Cameron Ashley
Building Products, Inc. may cease making filings with the Securities and
Exchange Commission or otherwise being required to comply with the rules of the
Securities and Exchange Commission relating to publicly held companies. See the
"Introduction" and Section 13.
WHAT IS THE MARKET VALUE OF YOUR SHARES AS OF A RECENT DATE?
On Friday, April 28, 2000, the last trading day before we announced the
signing of the Merger Agreement, the closing price of Cameron Ashley Building
Products, Inc. common stock reported on the New York Stock Exchange was $17.50
per share. On May 11, 2000, the last trading day before we commenced the tender
offer, the closing price of Cameron Ashley Building Products, Inc. common stock
reported on the New York Stock Exchange was $18.0625 per share. We advise you to
obtain a recent quotation for shares of Cameron Ashley Building Products, Inc.
common stock in deciding whether to tender your shares. See Section 6.
WHO CAN YOU TALK TO IF YOU HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call MacKenzie Partners, Inc. at (212) 929-5550 (collect) or (800)
322-2885 (toll free). MacKenzie Partners, Inc. is acting as our information
agent for the offer. See the back cover of this offer to purchase.
iv
<PAGE> 7
TO THE HOLDERS OF COMMON STOCK OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.:
INTRODUCTION
CAB Merger Corp., a Georgia corporation (the "Purchaser"), formed by
Guardian Fiberglass, Inc., a Delaware corporation ("Parent"), hereby offers to
purchase all outstanding shares of common stock, no par value (the "Common
Stock"), of Cameron Ashley Building Products, Inc., a Georgia corporation (the
"Company"), and the associated Series A Preferred Stock purchase rights (the
"Rights" and, together with the Common Stock, the "Shares") issued pursuant to
the Rights Agreement, dated as of August 19, 1997, as amended, between the
Company and SunTrust Bank, Atlanta, as Rights Agent (the "Rights Agreement"), at
a purchase price of $18.35 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the "Offer"). Until a Distribution Date (as
defined in the Rights Agreement), the Rights will be evidenced by and traded
with the certificates evidencing the Common Stock. See Section 12 for a brief
description of the Rights Agreement and its application to the Offer and the
Merger (as defined herein).
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of SunTrust Bank, Atlanta, which is
acting as the Depositary (the "Depositary"), and MacKenzie Partners, Inc., which
is acting as the Information Agent (the "Information Agent"), incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY OTHER
THAN PARENT AND ITS AFFILIATES AND RECOMMENDS THAT THE SHAREHOLDERS OF THE
COMPANY ACCEPT THE OFFER AND TENDER ALL OF THEIR SHARES.
The Company has advised the Purchaser that Credit Suisse First Boston
Corporation ("Credit Suisse First Boston"), the financial advisor to the Special
Committee of the Board of Directors of the Company (the "Special Committee"),
has delivered to the Special Committee and the Board of Directors of the Company
its written opinion, dated April 28, 2000, to the effect that, as of such date,
and based upon and subject to certain matters stated in such opinion, the $18.35
per Share cash consideration to be received by the holders of the Shares (other
than Parent and its affiliates) in the Offer and the Merger is fair, from a
financial point of view, to such holders. Such opinion is set forth in full as
an exhibit to the Company's Solicitation/ Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9") that is being mailed to shareholders of the Company
concurrently herewith. Shareholders are urged to read the full text of such
opinion carefully.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER DEFINED)
THAT NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY THE
PURCHASER AND ITS AFFILIATES, REPRESENTS AT LEAST A MAJORITY OF THE SHARES
OUTSTANDING ON A FULLY-DILUTED BASIS (THE "MINIMUM CONDITION"), AND (II) THE
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"), HAVING
EXPIRED OR BEEN TERMINATED.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
April 28, 2000 (the "Merger Agreement"), among Parent, the Purchaser and the
Company pursuant to which, as promptly as practicable after the purchase of the
Shares pursuant to the Offer and the satisfaction or waiver of certain
conditions, the Purchaser will be merged with and into the Company (the
"Merger"). In the Merger, the separate corporate existence of the Purchaser will
cease, the Company will be the surviving corporation and will continue to be
governed by the laws of the State of Georgia and the corporate existence of the
Company with all of its rights, privileges, immunities, powers and franchises
will continue unaffected by the Merger.
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<PAGE> 8
The Purchaser has entered into a Tender and Option Agreement (the "Tender
and Option Agreement") with certain shareholders (the "Tendering Shareholders")
of the Company beneficially owning, in the aggregate, 382,574 shares, or
approximately 4.3% of the outstanding shares (together with options subject to
the Tender and Option Agreement, approximately 12.5% of the outstanding Shares
on a fully-diluted basis, as defined in the Merger Agreement). Pursuant to the
Tender and Option Agreement, the Tendering Shareholders have agreed, among other
things, to (i) grant the Purchaser an irrevocable option (the "Option") to buy
all Shares owned of record or beneficially by them from and after the date of
the Tender and Option Agreement at $18.35 per share, (ii) in the event such
Option is not exercised, validly tender and sell all Shares that are owned of
record or beneficially by them prior to the Expiration Date and are subject to
the Tender and Option Agreement in the Offer and (iii) vote all of their Shares
in favor of the Merger, in each case upon the terms and subject to the
conditions set forth in the Tender and Option Agreement. In the event of
termination of the Option, or termination of the Merger Agreement under certain
circumstances, the Purchaser's Option shall continue for a period of 90 days
thereafter so long as (x) all applicable waiting periods under the HSR Act
required for the purchase of the Option Shares upon such exercise shall have
expired or been terminated and (y) there shall not be in effect any preliminary
or final injunction or other order issued by any court or governmental,
administrative or regulatory agency or authority or legislative body or
commission prohibiting the exercise of the Option pursuant to this Agreement.
The Option will terminate, however, in the event the Merger Agreement is
terminated under certain circumstances as described under "Tender and Option
Agreement." See Section 12.
Based on the representations and warranties of the Company contained in the
Merger Agreement, there are 10,294,029 shares presently outstanding on a
"fully-diluted basis"; accordingly, the Minimum Condition will be satisfied if
5,147,015 Shares are validly tendered and not withdrawn prior to the Expiration
Date. As noted, because shareholders beneficially owning a total of 1,283,868
Shares (including options subject to the Tender and Option Agreement) are
required to tender (and not withdraw) such Shares pursuant to the Offer, the
Minimum Condition will be satisfied by the tender of at least 3,863,147 Shares
held by persons other than the Tendering Shareholders. For purposes of the
Merger Agreement, "on a fully-diluted basis" means, as of any date, the number
of Shares outstanding plus all Shares the Company is then required to issue
under employee stock option or other benefit plans, outstanding warrants,
outstanding options of any kind, convertible securities, or otherwise (to the
extent such options, warrants, convertible securities or other rights are vested
or exercisable).
Consummation of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required, the approval of the Merger and the
Merger Agreement by the requisite vote of the shareholders of the Company. Under
the Georgia Business Corporation Code ("GBCC"), the shareholder vote necessary
to approve the Merger will be the affirmative vote of at least a majority of the
outstanding Shares, including Shares held by the Purchaser and its affiliates.
Accordingly, if the Purchaser acquires a majority of the outstanding Shares, the
Purchaser will have the voting power required to approve the Merger without any
additional affirmative votes by any other shareholders of the Company.
Furthermore, if the Purchaser acquires at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, the Purchaser will be able to effect the
Merger pursuant to the "short-form" merger provisions of the GBCC, without prior
notice to, or any action by, any other shareholder of the Company. In such
event, the Purchaser intends to effect the Merger as promptly as practicable
following the purchase of the Shares in the Offer. See Section 12.
In connection with the Offer and the Merger, the Board of Directors of the
Company has approved an amendment to the Company's Rights Agreement to assure
that the Rights are not exercisable as a result of the Offer or the Merger.
The information contained herein concerning or attributed to the Company
has been supplied by the Company, and all other information contained herein has
been supplied by Parent and the Purchaser. Although neither the Company nor
Parent or the Purchaser have any knowledge that would indicate that any
statements contained herein based on the information provided by the other are
untrue, neither the Company nor Parent or the Purchaser take any responsibility
for the accuracy or completeness of any information
2
<PAGE> 9
provided by the other or for any failure by the other to disclose events that
may have occurred and may affect the significance or accuracy of such
information but which are unknown to the Company or Parent and the Purchaser,
respectively.
The Merger Agreement and the Tender and Option Agreement are more fully
described in Section 12.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not withdrawn in accordance with
Section 4. The term "Expiration Date" means 12:00 Midnight, Eastern time, on
Friday, June 9, 2000, unless and until the Purchaser (subject to the terms of
the Merger Agreement) 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.
Subject to the terms of the Merger Agreement, the Tender and Option
Agreement and the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Purchaser expressly reserves the
right, in its sole discretion, at any time and from time to time, and regardless
of whether or not any of the events set forth in Section 14 hereof shall have
occurred or shall have been determined by the Purchaser to have occurred, (i) to
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 (ii) to amend the Offer
in any other respect by giving oral or written notice of such amendment to the
Depositary.
If by 12:00 midnight, Eastern time, on Friday, June 9, 2000 (or any other
date or time then set as 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, the Tender and Option Agreement and the applicable rules and
regulations of the Commission, to (i) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering shareholders,
(ii) waive all the unsatisfied conditions and, subject to complying with the
terms of the Merger Agreement, the Tender and Option 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, (iii) extend the Offer and, subject to the right of shareholders 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 (iv)
amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, waiver, amendment or termination will be
followed as promptly as practicable by a press release or 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 press release or
announcement be issued no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date in accordance with
the public announcement requirements of Rule 14d-4(d) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the
Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to inform
shareholders of such change), without limiting the obligation of the Purchaser
under such rules or 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
issuing a release to the Dow Jones News Service.
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<PAGE> 10
In the Merger Agreement, the Purchaser has agreed that subject to any
rights the Company may have under the Merger Agreement, except as otherwise
required by law, it may extend the Offer one or more times, up to July 31, 2000,
without the consent of the Company, (i) if at the then scheduled Expiration
Date, any of the conditions to the Offer are not satisfied or waived, (ii) if
all conditions to the Offer have been satisfied or waived but less than 90% of
the outstanding Shares have been validly tendered and not withdrawn, and (iii)
for any period required by any rule, regulation, or interpretation of the
Commission or its staff applicable to the Offer.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of the 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
shareholders are entitled to withdrawal rights as described in Section 4.
However, the ability of the Purchaser to delay the payment for the Shares that
the Purchaser has accepted for payment is limited by Rule 14e-1(c) 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.
Pursuant to Rule 14d-11 under the Exchange Act, the Purchaser may, subject
to certain conditions, provide a subsequent offering period following the
expiration of the Offer on the Expiration Date (a "Subsequent Offering Period").
A Subsequent Offering Period is an additional period of time from three (3)
business days to twenty (20) business days in length, beginning after the
Purchaser purchases the Shares tendered in the Offer, during which shareholders
may tender, but not withdraw, their Shares and receive the Offer Price.
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(d), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer 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 (10) business days is generally required to allow for
adequate dissemination to shareholders. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition, the expiration or termination of all waiting periods imposed by the
HSR Act, and the other conditions set forth in Section 14. Subject to the terms
and conditions contained in the Merger Agreement and the Tender and Option
Agreement, the Purchaser reserves the right (but shall not be obligated) to
waive any or all such conditions.
The Company has provided the Purchaser with its list of shareholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal and
other relevant materials will be mailed by the Purchaser to record holders of
the Shares and will be furnished by the Purchaser to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the shareholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of the Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all of the
Shares validly tendered prior to the Expiration Date, and not properly withdrawn
in accordance with Section 4, promptly after the later to occur of (i) the
Expiration Date or (ii) the satisfaction or waiver of the conditions set forth
in Section 14. The Purchaser expressly reserves the right, in its sole
4
<PAGE> 11
discretion, to delay acceptance for payment of, or payment for, the Shares in
order to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. Any such delays will be effected in compliance with
Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after the termination or withdrawal
of the Offer).
Parent currently anticipates filing a Notification and Report Form with
respect to the Offer under the HSR Act on or about May 17, 2000. Accordingly,
the waiting period under the HSR Act with respect to the Offer will expire at
11:59 p.m., Eastern time, on the 15th day after the date such form is filed
(anticipated to be on or about June 1, 2000, unless early termination of the
waiting period is granted). In addition, the Antitrust Division of the
Department of Justice (the "Antitrust Division") or the Federal Trade Commission
(the "FTC") may extend the waiting period by requesting additional information
or documentary material from Parent. If such a request is made, such waiting
period will expire at 11:59 p.m., Eastern time, on the 10th day after
substantial compliance by Parent with such request. See Section 15 hereof for
additional information concerning the HSR Act and the applicability of other
antitrust laws to the Offer.
In all cases, payment for the Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (the "Share Certificates") or timely confirmation
(the "Book-Entry Confirmation") of the book-entry transfer of such Shares into
the Depositary's account at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3, (ii) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined below) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, the Shares properly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such
Shares pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Purchaser and transmitting payment to tendering shareholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act,
which requires that a tender offeror pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares; any such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or otherwise, certificates for any such Shares will be
returned, without expense to the tendering shareholders (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable after the expiration
or termination of the Offer.
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<PAGE> 12
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share pursuant to the Offer, the Purchaser will pay such
increased consideration for all such Shares purchased pursuant to the Offer,
whether or not such Shares were tendered prior to such increase in
consideration.
Shareholders of the Company will be required to tender one Right for each
Share tendered in order to effect a valid tender of such Share. If Right
Certificates have been distributed to holders of Shares prior to the
consummation of the Offer, Right Certificates representing a number of Rights
equal to the number of Shares being tendered must be delivered to the Depositary
in order for such Shares to be validly tendered. If Right Certificates have not
been distributed prior to the time Shares are accepted for payment by the
Purchaser, a tender of Shares will also constitute a tender of the associated
Rights.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's Message
in connection with a book-entry delivery of Shares, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase prior to
the Expiration Date. In addition, either (i) certificates for tendered Shares
must be received by the Depositary along with the Letter of Transmittal at one
of such addresses or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below (and a Book-Entry Confirmation received by
the Depositary), in each case prior to the Expiration Date, or (ii) the
tendering shareholder must comply with the guaranteed delivery procedure set
forth below.
THE METHOD OF DELIVERY OF THE SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account at the Book-Entry
Transfer Facility in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering shareholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered holder
of Shares (which term, for purposes of this Section, includes any participant in
the Book-Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) tendered therewith and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (ii) such Shares are tendered for the account of a bank,
broker, dealer, credit union, savings association or other entity that is a
member in good standing of a recognized Medallion Signature Guarantee
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<PAGE> 13
Program approved by The Securities Transfer Association, Inc. (an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for the Shares not tendered or not accepted for
payment are to be issued to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as described
above. See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for the Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(1) such tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(3) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees and any
other documents required by the Letter of Transmittal, are received by the
Depositary within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a signature guarantee by an Eligible Institution in
the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for the Shares accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for the Shares or a Book-Entry
Confirmation with respect to such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message in connection with a book-entry
transfer, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations are actually
received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of the Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must provide the Depositary with such shareholder's correct
taxpayer identification number ("TIN") on a Substitute Form W-9 and certify
under penalties of perjury that such TIN is correct and that such shareholder is
not subject to backup withholding. Certain shareholders (including, among
others, all corporations and certain foreign individuals and entities) are not
subject to backup withholding. If a shareholder does not provide its correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service may impose a penalty on such shareholder and payment of cash to such
shareholder pursuant to the Offer may be subject to backup withholding of 31%.
All shareholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Noncorporate foreign
shareholders should complete
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<PAGE> 14
and sign the main signature form and a Form W-8, Certificate of Foreign Status,
a copy of which may be obtained from the Depositary, in order to avoid backup
withholding. See Instruction 10 to the Letter of Transmittal.
Appointment as Proxy. By executing the Letter of Transmittal, the tendering
shareholder will irrevocably appoint designees of the Purchaser as the
shareholder's attorney-in-fact and proxies in the manner set forth in the Letter
of Transmittal, each with full power of substitution, to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder and
accepted for payment by the Purchaser and with respect to any and all other
Shares or other securities or rights issued or issuable in respect of such
Shares on or after April 28, 2000. All such proxies shall be considered coupled
with an interest in the tendered Shares. Such appointment will be effective
when, and only to the extent that, the Purchaser accepts for payment Shares
tendered by such shareholder as provided herein. Upon such acceptance for
payment, all prior powers of attorney and proxies given by such shareholder with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney and proxies may be given
(and, if given, will not be deemed effective). The designees of the Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Shares or other securities or rights in respect of any annual, special
or adjourned meeting of the Company's shareholders, or otherwise, as they in
their sole discretion deem proper. The Purchaser reserves the right to require
that, in order for the Shares to be deemed validly tendered, immediately upon
the Purchaser's acceptance for payment of such Shares, the Purchaser must be
able to exercise full voting and other rights with respect to such Shares and
other securities or rights, including voting at any meeting of shareholders then
scheduled.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of the Shares will be determined by the Purchaser, in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders determined by it not to be in proper form or
the acceptance for payment of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the terms and conditions of the Merger
Agreement and the Tender and Option Agreement, to waive any of the conditions of
the Offer or any defect or irregularity in any tender with respect to any
particular Shares, whether or not similar defects or irregularities are waived
in the case of other Shares. No tender of Shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of the Purchaser, the Depositary, the Information Agent,
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any such
notification. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares are
irrevocable. The Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after July 11, 2000 (or such
later date as may apply if the Offer is extended).
If the Purchaser extends the Offer, is delayed in its acceptance for
payment of the Shares or is unable to accept the Shares for payment pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser,
retain tendered Shares, and such Shares may not be withdrawn except to the
extent that tendering shareholders are entitled to withdrawal rights as
described in this Section 4. Any such delay will be by an extension of the Offer
to the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from
8
<PAGE> 15
the name of the person who tendered the Shares. If certificates for the Shares
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If the Shares have
been tendered pursuant to the procedures for book-entry transfer set forth in
Section 3, the notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares. Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for any
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 3 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, the Depositary, the Information Agent, nor any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash for the Shares pursuant to the Offer will be a taxable
transaction for United States federal income tax purposes under the Internal
Revenue Code of 1986, as amended, and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Generally, for
federal income tax purposes a tendering shareholder will recognize gain or loss
in an amount equal to the difference between the cash received and the
shareholder's adjusted tax basis in the Shares tendered by the shareholder and
purchased pursuant to the Offer or the Merger, as the case may be. Gain or loss
will be calculated for each Share tendered and purchased pursuant to the Offer
(or canceled pursuant to the Merger). For federal income tax purposes, such gain
or loss will be a capital gain or loss if the Shares are a capital asset in the
hands of the shareholder, and a long-term capital gain or loss if the
shareholder's holding period is more than one year as of the date of the sale of
the Shares or the effective date of the Merger, as the case may be.
THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR
GENERAL INFORMATION ONLY AND IS BASED ON THE LAW AS CURRENTLY IN EFFECT. THE TAX
TREATMENT OF EACH SHAREHOLDER WILL DEPEND IN PART UPON SUCH SHAREHOLDER'S
PARTICULAR SITUATION. SPECIAL TAX CONSEQUENCES NOT DESCRIBED HEREIN MAY BE
APPLICABLE TO PARTICULAR CLASSES OF TAXPAYERS, SUCH AS FINANCIAL INSTITUTIONS,
BROKER-DEALERS, PERSONS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES
AND SHAREHOLDERS WHO ACQUIRED THEIR SHARES THROUGH THE EXERCISE OF ANY EMPLOYEE
STOCK OPTION OR OTHERWISE AS COMPENSATION. ALL SHAREHOLDERS SHOULD CONSULT WITH
THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND
THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS.
6. PRICE RANGE OF THE SHARES; DIVIDENDS
According to the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1999 (the "Company Form 10-K"), the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended January 31, 2000 (the "Company Form
10-Q") and information supplied to the Purchaser by the Company, since June 17,
1998, the Shares have been traded on the New York Stock Exchange ("NYSE") under
the trading symbol "CAB." Prior to June 17, 1998, the Shares were traded on the
Nasdaq National Market System ("Nasdaq") under the trading symbol "CABP." The
following table sets forth, for the periods
9
<PAGE> 16
indicated, the high and low closing bid prices per Share on the NYSE and Nasdaq,
as applicable, for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal year ended October 31, 1998:
November 1, 1997 through January 31, 1998.............. $19.0000 $13.7500
February 1, 1998 through April 30, 1998................ 20.5000 14.7500
May 1, 1998 through July 31, 1998...................... 22.3750 14.8750
August 1, 1998 through October 31, 1998................ 16.3750 9.5630
Fiscal year ended October 31, 1999:
November 1, 1998 through January 31, 1999.............. $13.3750 $10.8750
February 1, 1999 through April 30, 1999................ 13.3750 8.7500
May 1, 1999 through July 31, 1999...................... 12.7500 10.0000
August 1, 1999 through October 31, 1999................ 12.2500 8.1250
Fiscal year ending October 31, 2000:
November 1, 1999 through January 31, 2000.............. $13.8125 $ 7.7500
February 1, 2000 through April 30, 2000................ 17.8125 13.8125
May 1, 2000 through May 11, 2000....................... 18.0625 18.0000
</TABLE>
On April 28, 2000, the last full trading day before the public announcement
of the execution of the Merger Agreement and the Purchaser's intention to
acquire the Shares pursuant to the Offer, the reported closing sales price of
the Shares on the NYSE was $17.50. On May 11, 2000, the last full trading day
prior to the date of this Offer to Purchase, the reported closing sales price of
the Shares on the NYSE was $18.0625 per Share. SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has never paid or declared cash dividends on the Shares.
Certain agreements pertaining to the Company's long-term indebtedness contain
covenants that restrict the Company's ability to pay dividends.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NEW YORK STOCK EXCHANGE
QUOTATION, EXCHANGE ACT REGISTRATION AND MARGIN SECURITIES
Effect on the Market for the Shares. The purchase of the Shares pursuant to
the Offer will reduce the number of holders of the Shares and the number of
Shares that might otherwise trade publicly. Consequently, depending upon the
number of Shares purchased and the number of remaining holders of the Shares,
the purchase of the Shares pursuant to the Offer may adversely affect the
liquidity and market value of the remaining Shares held by the public. The
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether it would cause
future market prices to be greater or less than the Offer Price.
Stock Quotations. The Shares are currently listed and traded on the NYSE,
which constitutes the principal trading market for the Shares. Depending upon
the aggregate market value and the number of Shares not purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
the NYSE. According to its published guidelines, the NYSE would give
consideration to delisting the Shares if, among other things, the number of
publicly held Shares falls below 600,000, the total number of holders of Shares
falls below 400 (or below 1,200 if the average monthly trading volume is below
100,000 Shares for the last twelve months). The Shares held by officers or
directors of the Company or their immediate families, or by any beneficial owner
of more than 10% or more of the Shares, ordinarily will not be considered as
being publicly held for this purpose.
If, as a result of the purchase of the Shares pursuant to the Offer, the
Shares no longer meet the requirements for continued listing on the NYSE, the
market for the Shares could be adversely affected. In the event the Shares are
no longer eligible for listing on the NYSE, quotations might still be available
from other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares at such time, the interest in maintaining a market in
such
10
<PAGE> 17
Shares on the part of securities firms, the possible termination of registration
of such Shares under the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Commission if such Shares are not listed on a national securities
exchange and there are fewer than 300 holders of record of the Shares. The
termination of the registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
its shareholders and to the Commission, and would make certain of the provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b) and the requirement of furnishing a proxy statement in connection
with shareholder meetings and the related requirement of an annual report to
shareholders, and the requirements of Rule 13e-3 with respect to going-private
transactions, no longer applicable with respect to the Shares or to the Company.
Furthermore, if registration of the Shares under the Exchange Act were
terminated, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended, may be
impaired or, with respect to certain persons, eliminated. If the Shares were no
longer registered under the Exchange Act, the Shares would no longer be eligible
for NYSE listing. Parent and the Purchaser intend to cause the Company to make
an application for termination of registration of the Shares as soon as possible
after consummation of the Offer if the Shares are then eligible for such
termination.
Margin Securities. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on such Shares as collateral. Depending on factors
similar to those described above regarding listing and market quotations, it is
possible the Shares would no longer constitute "margin securities" for purposes
of the Federal Reserve Board's margin regulations and therefore could no longer
be used as collateral for loans made by brokers. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The historical information concerning the Company contained in this Offer
to Purchase, including financial information, has been taken from or based upon
publicly available documents and records on file with the Commission and other
public sources. Neither the Purchaser nor the Information Agent assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser.
The Company is a Georgia corporation with its principal executive offices
located at 11651 Plano Road, Dallas, Texas 75243, where its telephone number is
(214) 860-5100. The Company is a leading North American distributor of a broad
line of building products that are used principally in home improvement,
remodeling and repair work and in new residential and commercial construction.
The Company's product lines include roofing, millwork, pool and patio enclosure
materials, insulation, vinyl siding, industrial metals and a variety of other
building materials. The Company distributes its products through its extensive
167-branch network to independent building materials dealers, professional
builders, large contractors and mass merchandisers and national co-ops in all 50
U.S. states and throughout Canada.
Set forth below is certain selected historical consolidated financial
information with respect to the Company and its subsidiaries excerpted or
derived from the information contained in the Company Form 10-K and Company Form
10-Q, which are incorporated by reference herein. More comprehensive financial
information is included in such reports and other documents filed by the Company
with the Commission. The financial information that follows is qualified in its
entirety by reference to such reports and other documents, including the
financial statements and related notes contained therein. Such reports and
11
<PAGE> 18
other documents may be examined and copies may be obtained from the offices of
the Commission in the manner set forth below.
CAMERON ASHLEY BUILDING PRODUCTS, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JANUARY 31, FISCAL YEAR ENDED OCTOBER 31,
-------------------- ----------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue...................... $255,789 $223,417 $1,138,377 $899,217 $761,590 $604,710 $503,691
Cost of sales................ 205,912 178,677 911,588 721,300 611,753 485,595 408,528
-------- -------- ---------- -------- -------- -------- --------
Gross profit................. 49,877 44,740 226,789 177,917 149,837 119,115 95,163
Operating expense............ 48,080 41,828 184,950 143,835 125,684 95,689 75,927
Re-engineering and system
conversion................. 567 339 2,578 1,545 -- -- --
-------- -------- ---------- -------- -------- -------- --------
Income from operations....... 1,230 2,573 39,261 32,537 24,153 23,426 19,236
Interest expense............. 3,225 2,582 11,664 8,019 5,750 3,910 3,376
Minority interest............ (415) 0 (159) -- -- -- --
-------- -------- ---------- -------- -------- -------- --------
Income (loss) before income
taxes...................... (1,580) (9) 27,756 24,518 18,403 19,516 15,860
Provision for income taxes... (376) 34 10,690 9,224 7,084 7,447 5,985
-------- -------- ---------- -------- -------- -------- --------
Income (loss) before
extraordinary charge....... (1,204) (43) 17,066 15,294 11,319 12,069 9,875
-------- -------- ---------- -------- -------- -------- --------
Extraordinary charge -- early
extinguishment of debt, net
of income tax.............. -- -- -- -- -- 245 --
-------- -------- ---------- -------- -------- -------- --------
Net income (loss)............ $(1,204) $(43) $17,066 $15,294 $11,319 $11,824 $9,875
======== ======== ========== ======== ======== ======== ========
Net income (loss) per share
before extraordinary
charge:
Basic...................... $(0.14) $0.00 $1.97 $1.65 $1.23 $1.36 $1.22
Diluted.................... $(0.14) $0.00 $1.94 $1.61 $1.30 $1.30 $1.15
Net income (loss) per share:
Basic...................... $(0.14) $0.00 $1.97 $1.65 $1.23 $1.33 $1.22
Diluted.................... $(0.14) $0.00 $1.94 $1.61 $1.20 $1.28 $1.15
Weighted average shares
outstanding (in thousands):
Basic...................... 8,695 8,646 8,661 9,250 9,195 8,879 8,068
Diluted.................... 8,695 8,646 8,816 9,501 9,447 9,249 8,621
</TABLE>
<TABLE>
<CAPTION>
AS OF JANUARY 31, AS OF OCTOBER 31,
-------------------- --------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Accounts receivable, net..... $143,009 $183,453 $183,453 $148,392 $115,687 $ 92,932 $ 75,502
Inventories.................. 128,903 112,896 112,896 99,810 82,298 64,644 51,780
Total assets................. 412,356 435,596 435,596 361,733 293,251 219,670 175,067
Accounts payable and accrued
expenses................... 96,576 125,522 125,522 105,002 88,420 69,795 51,679
Long-term debt, less current
maturities................. 161,785 155,224 155,224 135,051 79,480 52,078 38,264
Shareholders' equity......... 132,353 133,022 133,022 114,965 108,927 95,609 82,986
</TABLE>
Available Information. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its
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<PAGE> 19
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration,
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
shareholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's public reference rooms in New York, New York and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Copies may also be obtained by mail,
upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
The reports, proxy statements and other information filed by the Company with
the Commission are also available from commercial document retrieval services
and may be accessed electronically at the Commission's Internet world wide web
site, the address of which is http://www.sec.gov.
9. CERTAIN INFORMATION CONCERNING GUARDIAN INDUSTRIES, PARENT AND THE PURCHASER
Guardian Industries Corp. ("Guardian Industries") is a Delaware corporation
with its principal offices located at 2300 Harmon Road, Auburn Hills, Michigan
48326, and its telephone number is (248) 340-1800. Guardian Industries, along
with its subsidiaries and affiliates ("Guardian"), is a multinational
manufacturing group of companies with operations in three principal business
groups: flat glass manufacturing and fabrication for the construction industry,
automotive products focused on automotive glass and exterior trim, and building
products (principally fiberglass insulation manufacturing and building products
distribution). Guardian operates facilities in 17 countries and employs
approximately 15,000 people, and is one of the largest global manufacturers of
flat glass and fabricated glass products for the commercial and residential
construction industries. Guardian is also a supplier of vehicle glass and
exterior trim systems to the global automotive industry. In addition, Guardian
is the fourth largest manufacturer of fiberglass in the world and occupies a
growing position in the building materials distribution business. Guardian
Industries is a privately-owned company and William Davidson is its controlling
shareholder. No shareholder other than William Davidson owns greater than five
percent of the voting shares of Guardian Industries.
Parent is a Delaware corporation with its principal offices also located at
2300 Harmon Road, Auburn Hills, Michigan 48326, and its telephone number is also
(248) 340-1800. It is a wholly-owned subsidiary of Guardian Industries. Parent's
primary business is the manufacture and distribution of private label fiberglass
insulation for the United States and Canadian residential construction and
remodeling markets. Parent manufactures a broad line of fiberglass insulation
products at plants in Michigan, West Virginia, Mississippi and Ontario, Canada
(through an affiliate), and intends to begin operations at a fifth plant in
Kingman, Arizona in the second quarter of 2000. In addition, Parent owns a
substantial interest in, and has significant management control of, Builder
Marts of America, Inc. ("BMA"), a leading nationwide distributor of building
materials to over 2,700 customers. BMA is a buying group for forest products,
building materials, millwork and hardlines. Headquartered in Greeneville, South
Carolina, BMA operates regional sales offices in Oregon, New York, Georgia,
Illinois, California and Arizona.
The Purchaser is a Georgia corporation and is a wholly-owned subsidiary of
Parent. The principal offices of the Purchaser are also located at 2300 Harmon
Road, Auburn Hills, Michigan 48326, and its telephone number is also (248)
340-1800. The Purchaser has not carried on any activities other than in
connection with the Merger Agreement.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Guardian Industries, Parent and the Purchaser are set forth in
Schedule I to this Offer to Purchase.
Except as provided in the Merger Agreement, the Tender and Option Agreement
or as otherwise described in this Offer to Purchase, (i) none of Guardian
Industries, Parent, the Purchaser nor, to the best knowledge of Guardian
Industries, Parent and the Purchaser, any of the persons listed in Schedule I to
this
13
<PAGE> 20
Offer to Purchase or any associate or majority-owned subsidiary of Guardian
Industries, Parent or the Purchaser or any of the persons so listed,
beneficially owns or has any right to acquire, directly or indirectly, any
Shares and (ii) none of Guardian Industries, Parent, the Purchaser nor, to the
best knowledge of Guardian Industries, Parent, and the Purchaser, any of the
persons or entities referred to above nor any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in the Shares
during the past 60 days.
Except as provided in the Merger Agreement, the Tender and Option Agreement
or as otherwise described in this Offer to Purchase, none of Guardian
Industries, Parent, the Purchaser nor, to the best knowledge of Guardian
Industries, Parent and the Purchaser, any of the persons listed in Schedule I to
this Offer to Purchase, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or voting of such securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies.
None of the persons listed in Schedule I have, during the past five years,
(i) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
None of Guardian Industries, Parent or the Purchaser is subject to the
informational filing requirements of the Exchange Act and none of Guardian
Industries, Parent or the Purchaser is obligated to file reports or other
information with the Commission.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase the Shares
pursuant to the Offer and the Merger is estimated to be approximately $160.0
million. The Purchaser will obtain such funds from Parent who will obtain such
funds from internally generated funds, including short-term borrowings in the
ordinary course of its business and/or from Guardian Industries. The Offer is
not conditioned on any financing arrangements.
11. BACKGROUND OF THE OFFER AND THE MERGER; PAST CONTACTS OR NEGOTIATIONS WITH
THE COMPANY
Before January 2000, executives of Parent and Guardian Industries were
familiar with the business and operations of the Company because both Parent and
the Company are active in the building products industry, BMA was a customer of
the Company and Parent and BMA sold products to some of the same customers as
the Company. Prior to January 2000, executives of Parent and Guardian Industries
had been studying the possibility of a business combination with the Company and
preparing to make an offer to purchase the Company. In connection with this
study and preparation, BMA purchased 5,500 Shares at $8 7/8 per Share on
December 14, 1999, which Shares BMA continues to beneficially own. In January
2000, BMA, Parent and Guardian Industries continued their study of the Company.
On January 18, 2000, the Company publicly announced it had entered into a
definitive agreement with an investment group comprised of CGW Southeast
Partners IV, L.P., an investment fund affiliated with several directors of the
Company, Citicorp Venture Capital, Ltd., a subsidiary of Citigroup Inc., and
certain members of the Company's senior management (collectively, the
"Investment Group"), pursuant to which the Investment Group would acquire all of
the outstanding Shares at $15.10 per Share (the "CBP Merger Agreement"). The
Company entered into the CBP Merger Agreement following the unanimous
recommendation by a special committee of outside directors (the "Special
Committee"). Credit Suisse First Boston advised the Special Committee in the
transaction. Immediately after this announcement, executives of Parent and
Guardian Industries assembled a team of employees and advisors to accelerate and
complete the research
14
<PAGE> 21
that had already been in progress regarding the Company and to prepare an offer
for the purchase of the Company at a price higher than that offered by the
Investment Group.
On January 21, 2000, representatives of Guardian Industries notified the
Special Committee's financial advisor that Guardian Industries was interested in
making a competing bid for the Company. On February 1, 2000, Guardian Industries
sent the Special Committee a letter in which Guardian Industries offered to
acquire all of the outstanding Shares for $17.00 per Share and requested an
opportunity to meet. On February 7, 2000, the Company and Guardian Industries
executed a confidentiality agreement and meetings were held in Atlanta and
Dallas between representatives of the Company, the Special Committee, Credit
Suisse First Boston and Guardian Industries. On February 10, 2000, Guardian
Industries and the Company executed a revised confidentiality agreement, and
Guardian Industries' representatives and advisors began a due diligence
examination of the Company.
On February 10, 2000, Bradco Supply Corporation and Barry Segal
(collectively, the "Bradco Group") jointly filed a Schedule 13D with the
Commission to report that they had together purchased approximately 444,900
Shares (approximately 5.13% of the outstanding Shares). The Bradco Group stated
that it believed the Investment Group's proposed acquisition price of $15.10 per
Share to be inadequate and that it was seeking to purchase approximately 60% of
the outstanding Shares at $16.25 per Share in the open market or in privately
negotiated transactions. It further indicated its intent to merge Bradco Supply
Corporation's operations into the Company and work with the Company's management
to grow the combined companies.
On February 11, 2000, the Company announced that it had received an
unsolicited proposal from Guardian Industries to acquire all of the outstanding
Shares at $17.00 per Share, which proposal was subject to due diligence,
negotiation of a definitive agreement and regulatory approval. Guardian
Industries made a separate announcement of its offer the same day. Subsequently,
the Special Committee notified the Bradco Group that it was considering Guardian
Industries' proposal and, in light of the superior terms of that offer, did not
believe that further consideration of the Bradco Group's proposal was warranted
at that time.
On February 16, 2000, the Bradco Group filed an amended Schedule 13D to
report an increase in its ownership of Shares, and on February 18, 2000, the
Bradco Group further amended its Schedule 13D filing to report that it intended
to hold its Shares for investment purposes.
Between January 24, 2000 and January 31, 2000, a total of five separate
shareholder lawsuits were filed against the Company and its individual
directors, each alleging, among other things, breach of fiduciary duties and
unfair dealing in connection with the announced merger transaction by the
Company and the Investment Group. Each suit was purportedly filed on behalf of
the Company's shareholders and contained allegations challenging the adequacy
and fairness of the CBP Merger Agreement. On February 24, 2000, a temporary
restraining order was issued by the Dallas County Court that temporarily
restrained the Company and its directors from abiding by the nonsolicitation
provision clause and the termination fee payment provisions of the CBP Merger
Agreement and from triggering the Rights Agreement with respect to any potential
bidders who offer $15.10 per Share or more for all of the outstanding Shares.
Prior to the completion of Guardian Industries' due diligence examination,
the Investment Group advised the Special Committee that it was increasing its
offer to acquire all of the Shares to $18.25 per Share and that it had obtained
a financing commitment for up to $30 million in additional funds from Owens
Corning, a significant supplier to the Company, to support the increased price.
On March 20, 2000, Guardian Industries was advised of this development. On March
26, 2000, the Special Committee met and reviewed the situation, and concluded
that it was advisable to recommend that the Company accept the revised proposal
from the Investment Group. On March 27, 2000, the Board of Directors approved
the revised proposal and executed an amendment to the CBP Merger Agreement which
increased the merger price to $18.25 per Share.
Thereafter, Guardian Industries advised representatives of the Special
Committee that Guardian Industries remained interested in acquiring the Company
and additional discussions were had between representatives of Guardian
Industries and the Special Committee and their advisors. On April 3, 2000,
Guardian Industries delivered to the Special Committee a letter offering to
acquire all of the outstanding Shares for $18.50 per Share through a cash tender
offer followed by a merger and without any financing condition. The Special
Committee met on April 7, 2000 to consider Guardian Industries' offer which by
its
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terms expired at 5:00 p.m. on that date. On the same date prior to the Special
Committee meeting, the Investment Group delivered a letter to the Special
Committee indicating that it intended to increase its offer to $19.00 per Share
and that it was obtaining revised financing commitment letters in order to
permit it to so increase its offer. Prior to the Special Committee meeting,
representatives of the Special Committee informed representatives of Guardian
Industries of this development and gave Guardian Industries the opportunity to
increase its offer or extend its expiration date, which it declined to do. At
its meeting later that day, the Special Committee reviewed and discussed the
status of the competing bids. Shortly after the meeting, representatives of the
Special Committee contacted representatives of Guardian Industries and indicated
that, if Guardian Industries was willing to offer $19.50 per Share and sign an
agreement promptly, the Special Committee was prepared to recommend acceptance
to the Company's Board of Directors. On April 10, 2000, Guardian Industries
representatives responded to the Special Committee's proposal by indicating that
Guardian Industries was not prepared to offer $19.50 per Share and that Guardian
Industries would wait for further developments. The Special Committee then asked
both Guardian Industries and the Investment Group to submit their best and final
offers on or before April 13, 2000. On April 13, 2000, Guardian tendered a
letter to counsel for the Special Committee while the Investment Group notified
the committee that it needed an additional day before submitting its best and
final offer. The Special Committee extended the deadline one day to April 14,
2000. On April 14, 2000, the Investment Group delivered a letter to the Special
Committee offering to purchase all of the outstanding Shares for $19.50 per
Share and Guardian Industries delivered a letter to the Special Committee
offering to purchase all the outstanding Shares for $18.50 per Share. The offer
from the Investment Group was subject to a financing condition while Guardian's
offer was not.
On April 17, 2000, the Special Committee met to consider the respective
offers. Shortly before the meeting Guardian Industries delivered a letter to the
Special Committee withdrawing its $18.50 per Share offer and, during the Special
Committee meeting, counsel to the Investment Group contacted the Special
Committee and requested that no action on the Investment Group's offer be taken
before contacting representatives of the Investment Group. As a result, the
Special Committee adjourned its meeting. Later that day, representatives of the
Special Committee contacted representatives of the Investment Group, who
informed them that the Investment Group's $19.50 per Share offer was being
withdrawn, but that the amended CBP Merger Agreement to pay $18.25 per Share
remained in effect. After these developments, representatives of the Special
Committee contacted representatives of Guardian Industries to explain what had
happened and requested that Guardian Industries reconsider the withdrawal of its
$18.50 per Share offer. During the following week, various conversations were
held between representatives of the Special Committee and the Investment Group
and between representatives of Guardian Industries and the Special Committee.
On April 27, 2000, Guardian Industries delivered a letter to the Special
Committee proposing to acquire all of the outstanding Shares for $18.35 per
Share and additionally proposing to increase the expense reimbursement and
break-up fee provision in the proposed Guardian Industries agreement from $5
million to $8 million. After receiving Guardian Industries' proposal, the
Special Committee met later that night to review and consider the situation and,
after discussion and receipt of an oral fairness opinion (which was later
confirmed in writing) from Credit Suisse First Boston, concluded to approve the
Guardian Industries proposal and recommend its acceptance by the full board of
the Company. On April 28, 2000, the full board of the Company met to receive the
recommendation of the Special Committee, and after review and discussion,
unanimously approved Guardian Industries' current proposal. Later that day, the
Merger Agreement was signed by the Company, Parent and the Purchaser and on May
1, 2000, the transaction was publicly announced.
Except as set forth in this Offer to Purchase, none of Guardian Industries,
Parent, the Purchaser nor, to the best knowledge of Guardian Industries, Parent
and the Purchaser, any of the persons listed on Schedule I to this Offer to
Purchase, has had any business relationship or transaction with the Company or
any of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between Guardian Industries or any of its
subsidiaries or, to the best knowledge of Guardian Industries, any of the
persons listed in Schedule I to this Offer to Purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
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12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT; TENDER AND OPTION AGREEMENT; OTHER AGREEMENTS; OTHER MATTERS
PURPOSE OF THE OFFER AND THE MERGER
The purpose of the Offer and the Merger is to enable Parent, through the
Purchaser, to acquire the entire equity interest in the Company. The Offer is
intended to increase the likelihood that the Merger will be completed promptly.
Parent regards the acquisition of the Company as an attractive opportunity to
further develop its distribution strategy and to create additional growth
opportunities.
PLANS FOR THE COMPANY
If and to the extent that the Purchaser acquires control of the Company,
Parent and the Purchaser intend to conduct a detailed review of the Company and
its assets, corporate structure, capitalization, operations, properties,
policies, management and personnel and consider and determine what, if any,
changes would be desirable in light of the circumstances which then exist. Such
strategies could include, among other things and subject to the terms of the
Merger Agreement, changes in the Company's business, corporate structure,
articles of incorporation, bylaws, capitalization and/or management.
Except as noted in this Offer to Purchase, the Purchaser and Parent have no
present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, reorganization, liquidation or sale or transfer
of a material amount of assets involving the Company or any subsidiary of the
Company or any other material changes in the Company's capitalization, corporate
structure, business or composition of its management or Board of Directors.
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 thereof
and is qualified in its entirety by reference to the full text thereof, which is
incorporated herein by reference, and a copy of which has been filed with the
Commission as an exhibit to the Schedule TO. The Merger Agreement may be
examined, and copies thereof may be obtained at the place and in the manner, as
set forth in Section 8 above.
The Offer. The Merger Agreement provides that Parent will cause the
Purchaser to commence the Offer as promptly as practicable, but in no event
later than ten (10) business days after the date of the public announcement of
the execution of the Merger Agreement, and that upon the terms and subject to
the prior satisfaction or waiver of the conditions of the Offer, including,
without limitation, the Minimum Condition, the Purchaser will accept for payment
and pay for the Shares tendered as soon as practicable after it is legally
permitted to do so under applicable law. The Merger Agreement further provides
that, without the written consent of the Company, the Purchaser shall not
decrease the Offer Price, decrease the number of Shares sought, change the form
of consideration to be paid in the Offer, increase the Minimum Condition, extend
the Offer or amend or add to the Offer any other offer conditions or amend, add
or waive any other condition of the Offer in any manner adverse to the Company
or the holders of the Shares, except that the Purchaser may, without the consent
of the Company, extend the Offer one or more times, up to July 31, 2000, (i) if
at the then scheduled expiration date of the Offer any of the conditions to the
Purchaser's obligation to accept for payment and pay for shares of Common Stock
shall not be satisfied or waived, (ii) if all conditions to the Purchaser's
obligations to accept payment for the Shares have been satisfied or waived but
less than ninety percent (90%) of the outstanding shares of Common Stock have
been validly tendered and not withdrawn; and (iii) for any period required by
any rule, regulation or interpretation of the Commission or its staff applicable
to the Offer.
For purposes of the Merger Agreement, "Minimum Condition" means that there
shall have been validly tendered and not withdrawn prior to the expiration of
the Offer that number of Shares which, together with any Shares beneficially
owned by Parent or the Purchaser, represents at least a majority of the Shares
outstanding, on a fully-diluted basis on the date of purchase, and "on a
fully-diluted basis" means, as of any
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date, the number of Shares outstanding plus all the Shares which the Company is
then required to issue pursuant to obligations outstanding at that date under
employee stock option or other benefit plans, outstanding warrants, outstanding
options of any kind, convertible securities, or otherwise (to the extent such
options, warrants, convertible securities or other rights are vested or
exercisable).
The Merger. The Merger Agreement provides that subject to the terms and
conditions thereof, at the effective time of the Merger (the "Effective Time")
the Purchaser will be merged with and into the Company and the separate
corporate existence of the Purchaser will thereupon cease. The Company will be
the successor or the surviving corporation in the Merger (the "Surviving
Corporation") and will continue to be governed by the laws of the State of
Georgia. The separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger.
The respective obligations of the parties to effect the Merger are subject
to the satisfaction or waiver, on or prior to the Closing Date, of the following
conditions: (a) if required by applicable law, the Merger and the Merger
Agreement shall have been approved and adopted by the affirmative vote of the
shareholders of the Company by the requisite vote; (b) no statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or enforced by any court or governmental entity of
competent jurisdiction which prohibits, restrains, enjoins or restricts the
consummation of the Merger; and there shall be no order or injunction of a court
of competent jurisdiction in effect precluding the consummation of the Merger;
(c) all consents of, filings and registrations with, and notifications to, all
governmental entities required for the consummation of the Merger shall have
been obtained or made and shall be in full force and effect and all waiting
periods required by law for consummation of the Merger shall have expired; (d)
each party to the Merger Agreement shall have obtained any and all consents
required for consummation of the Merger or for the preventing of any default
under any contract or permit of such party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a material adverse
effect on the Company or the Purchaser, as applicable; and (e) the Purchaser
shall have purchased Shares sufficient to meet the Minimum Condition pursuant to
the Offer.
Company Board of Directors. The Merger Agreement provides that promptly
upon the purchase of and acceptance for payment for any Shares (including,
without limitation, all Shares subject to the Tender and Option Agreement) by
the Purchaser or any affiliate of the Purchaser pursuant to the Offer or the
Tender and Option Agreement which represents the Minimum Condition, the
Purchaser shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as is equal to
the product of the total number of directors then serving on such Board (after
giving effect to the directors designated by the Purchaser) multiplied by the
ratio of the aggregate number of Shares beneficially owned by the Purchaser and
any of its affiliates to the total number of Shares then outstanding. The
Company is required, upon request of the Purchaser, to take all action necessary
to cause the Purchaser's designees to be elected or appointed to the Company's
Board of Directors, including, without limitation, increasing the size of the
Company's Board of Directors or, at the Company's election, securing the
resignations of such number of its incumbent directors as is necessary to enable
the Purchaser's designees to be so elected or appointed to the Company's Board
of Directors, and shall cause the Purchaser's designees to be so elected or
appointed. At such time, the Company also is required to cause persons
designated by the Purchaser to constitute the same percentage (rounded up to the
next whole number) as is on the Company's Board of (i) each committee of the
Company's Board of Directors, (ii) each board of directors (or similar body) of
each subsidiary of the Company and (iii) each committee (or similar body) of
each such board. In the event that the Purchaser's designees are elected to the
Board of Directors of the Company, until the Effective Time, the Company's Board
of Directors shall have at least two directors who were directors of the Company
on April 28, 2000 (the "Company Directors"). In the event that the Purchaser's
designees are elected to the Board, after the acceptance for payment of shares
of Common Stock pursuant to the Offer and prior to the Effective Time, the
affirmative vote of the Company Directors shall be required to (a) amend or
terminate the Merger Agreement by the Company, (b) exercise or waive any of the
Company's rights, benefits or remedies under the Merger Agreement, (c) extend
the time for performance of the Purchaser's obligations under the Merger
Agreement or (d) take any other action by the Company's Board of Directors in
connection with the Merger Agreement. The Merger Agreement further provides that
the Company shall promptly take all actions required pursuant
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to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder,
including mailing to the shareholders as part of the Schedule 14D-9 the
information required by such Section 14(f) and Rule 14f-1, as is necessary to
enable the Purchaser's designees to be elected to the Company's Board of
Directors.
At the Effective Time, the then directors of the Purchaser will be the
initial directors of the Company, as the Surviving Corporation, each to hold
office in accordance with the Restated Articles and the Bylaws of the Company,
as the Surviving Corporation, until each such director's successor is duly
elected or appointed and qualified.
Company Stock Options and Warrants. At or immediately prior to the
Effective Time, each outstanding stock option to purchase Shares granted under
any stock option plan, compensation plan or arrangement of the Company or
outstanding warrant to purchase Shares shall be canceled and the holder of each
such option or warrant (whether or not then vested or exercisable) shall be paid
by the Company promptly after the Effective Time for each such option or warrant
an amount equal to the product of (a) the excess, if any, of the merger
consideration ($18.35 per Share) over the applicable exercise price per Share
and (b) the number of Shares each holder could have purchased (assuming full
vesting and exercisability of such option or warrant) had such holder exercised
such option or warrant in full immediately prior to the Effective Time.
Shareholders' Meeting. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, (i) as soon as
reasonably practicable following the acceptance for payment and purchase of
Shares sufficient to meet the Minimum Condition by the Purchaser pursuant to the
Offer, duly call, give notice of, convene and hold a special meeting of its
shareholders (the "Special Meeting"), for the purpose of considering and taking
action upon the approval of the Merger and the approval and adoption of the
Merger Agreement; (ii) prepare and file with the Commission a preliminary proxy
or information statement relating to the Merger and the Merger Agreement and use
its best efforts to obtain and furnish the information required to be included
by the Company in the Company Proxy Statement (as defined below) and, after
consultation with the Purchaser, to respond promptly to any comments made by the
Commission with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement (the "Company Proxy
Statement") to be mailed to its shareholders at the earliest practicable time;
(iii) use its reasonable efforts to obtain the necessary approvals of the Merger
and the Merger Agreement by its shareholders; (iv) incorporate into the Company
Proxy Statement written information provided by Parent concerning Parent and the
Purchaser required to be included in the Company Proxy Statement; and (v)
include in the Company Proxy Statement the recommendation of the Company's Board
of Directors that the shareholders of the Company vote in favor of the approval
of the Merger and the approval and adoption of the Merger Agreement. The
Purchaser agreed that it shall, and shall cause any permitted assignee to, vote
all Shares then owned by it which are entitled to vote in favor of the approval
of the Merger and the approval and adoption of the Merger Agreement.
The Merger Agreement provides that in the event that the Purchaser or any
permitted assignee of the Purchaser acquires at least 90% of the outstanding
Shares, the parties will, subject to the conditions of the Merger Agreement,
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without approval of the
Company's shareholders in accordance with the GBCC.
Interim Operations. In the Merger Agreement, the Company agreed that,
except as otherwise expressly provided, the Company will not, and will not
permit its subsidiaries to, without the prior written consent of Parent:
(i) amend or propose to amend the charter, bylaws or other
governing instruments of the Company or any of its subsidiaries;
(ii) authorize for issuance, issue, sell, deliver, or agree or
commit to issue, sell or deliver, dispose of, encumber or pledge (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or
any securities, except as disclosed in the disclosure schedules to the
Merger Agreement or as required by agreements with the Company's employees
under the Company's benefit plans as in effect as of the date of the Merger
Agreement, or
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amend any of the terms of any such securities or agreements outstanding as
of the date of the Merger Agreement, except as specifically contemplated by
the Merger Agreement;
(iii) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, or redeem or otherwise acquire any of its securities, except
intercompany cash dividends in the ordinary course of business;
(iv) (a) incur or assume any long-term or short-term debt or issue
any debt securities, except for borrowings under existing lines of credit
in the ordinary course of business and in amounts not in excess of an
aggregate of $1,000,000 (on a consolidated basis); (b) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except
in the ordinary course of business consistent with past practice and in
amounts not material to the Company and its subsidiaries, taken as a whole,
and except for obligations of wholly-owned subsidiaries of the Company to
the Company or to other wholly-owned subsidiaries of the Company; (c) make
any loans, advances or capital contributions to, or investments in, any
other person (other than to wholly-owned subsidiaries of the Company or
customary advances to employees in the ordinary course of business
consistent with past practice for reasonable business expenses not to
exceed an aggregate amount of $5,000 outstanding to any employee at any
time) or make any change in its existing borrowing or lending arrangements
for or on behalf of any such person, whether pursuant to a benefit plan of
the Company or otherwise; (d) pledge or otherwise encumber shares of
capital stock of the Company or any of its subsidiaries; or (e) mortgage or
pledge any of its material assets, tangible or intangible, or create or
suffer to exist any material lien thereupon;
(v) adopt a plan of complete or partial liquidation or adopt
resolutions providing for the complete or partial liquidation, dissolution,
consolidation, merger, restructuring or recapitalization of the Company or
any of its subsidiaries;
(vi) (a) make any change in the compensation payable or to become
payable to any of its officers, directors, employees, agents or consultants
(other than general increases in wages to employees in the ordinary course
consistent with past practice or other increases in each such instance as
disclosed in the disclosure schedules to the Merger Agreement) or to
persons providing management services; (b) pay any severance or termination
cost or any bonus other than pursuant to written contracts in effect on the
date of the Merger Agreement or disclosed in the disclosure schedules to
the Merger Agreement) or enter into or amend any severance agreements with
officers of the Company or any subsidiary; (c) make any loans to any of its
officers, directors, employees, affiliates, agents or consultants (other
than customary advances to employees in the ordinary course of business
consistent with past practice for reasonable business expenses not to
exceed an aggregate amount of $5,000 outstanding to any employee at any
time); (d) adopt, amend or terminate any new or existing benefit plan
(other than as required by applicable law); (e) permit a new option period
to commence under the Company's employee stock purchase plan after the
Special Meeting; or (f) make any expenditures for business entertainment
purposes for any single event or occasion in excess of $1,000;
(vii) acquire, sell, transfer, lease, encumber or dispose of any
assets outside the ordinary course of business or any assets which in the
aggregate are material to the Company and its subsidiaries, taken as a
whole, or enter into any commitment or transaction outside the ordinary
course of business consistent with past practice which would be material to
the Company and its subsidiaries, taken as a whole;
(viii) except as may be required as a result of a change in law or in
United States generally accepted accounting principles, change any of the
tax or accounting principles or practices used by it or make any material
tax election or amend any tax return previously filed or settle any
material audit;
(ix) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing off
notes or accounts receivable other than in the ordinary course of business;
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(x) (a) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (b) enter into any
contract or agreement other than in the ordinary course of business
consistent with past practice which would be material to the Company and
its subsidiaries, taken as a whole; (c) authorize any new capital
expenditure or expenditures which, individually, is in excess of $25,000
or, in the aggregate, are in excess of $50,000; (d) make any capital
expenditure or expenditures which, individually, is in excess of $25,000
or, in the aggregate, are in excess of $50,000, provided, however, that no
capital expenditures shall be made (I) to implement any information
technology projects, (II) for transportation equipment, or (III) in respect
of Field Marketing & Management, Inc.; (e) take any action whatsoever to
implement or install the JD Edwards Software Program at any location at
which the JD Edwards Software Program is not currently installed; or (f)
enter into or amend any contract, agreement, commitment or arrangement
providing for the taking of any action that would be prohibited under the
Merger Agreement;
(xi) discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business of liabilities fully reflected or reserved against in, or
contemplated by, the consolidated October 31, 1999 audited financial
statements (or the notes thereto) of the Company and its subsidiaries or
incurred in the ordinary course of business consistent with past practice;
(xii) permit any insurance policy naming the Company as a beneficiary
or a loss payable payee to be canceled or terminated without notice to
Parent, unless the Company shall have obtained a comparable replacement
policy;
(xiii) enter into or amend any employment contract between the Company
or any subsidiary and any person having a base salary thereunder in excess
of $100,000 per year (unless such amendment is required by law) that the
Company or any subsidiary does not have the unconditional right to
terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time;
(xiv) commence or settle any litigation other than in accordance
with past practice and, with respect to any settlement, for an amount
greater than $100,000;
(xv) enter into, modify, amend or terminate any material contract
(including any standstill agreement, loan contract with an unpaid balance
exceeding $100,000 or any of the agreements referred to in Section 5.10 of
the Merger Agreement) or waive, release, compromise or assign any material
rights or claims, except for modifications, in the ordinary course of
business and consistent with past practice, to quantities specified in
purchase orders;
(xvi) take any action that would adversely affect the ability of any
party to the Merger Agreement to perform its covenants and agreements under
the Merger Agreement;
(xvii) take any action that would cause an event of default under any
material contract;
(xviii) cause (or permit to exist) any circumstances that would result
in a material adverse effect to the Company; or
(xix) take, or agree in writing or otherwise to take, any of the
actions described above or any action which would make any of the
representations or warranties of the Company contained in the Merger
Agreement untrue or incorrect as of the date when made.
No Solicitation. In the Merger Agreement, the Company has agreed that the
Company and its subsidiaries will not, directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or knowingly encourage
the submission of any proposal or offer from any person relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) a substantial portion of the assets of, or a substantial equity
interest in, the Company or any of its subsidiaries or any recapitalization,
business combination or similar transaction with the Company or any of its
subsidiaries (any such proposal or offer being an "Acquisition Proposal") or
participate in any negotiations regarding, or furnish to any other person
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any non-public information with respect to, or take any other action to
knowingly facilitate the making of an Acquisition Proposal. Notwithstanding the
foregoing, (a) the Company may engage in discussions or negotiations with a
third party who seeks to initiate such discussions or negotiations and may
furnish such third party information concerning the Company and its
subsidiaries, in each case only in response to a request for such information or
access which was not solicited, initiated or knowingly encouraged by the Company
or any of its affiliates, (b) the Company's Board of Directors or the Special
Committee may take and disclose to the Company's shareholders a position
contemplated by Rule 14e-2 promulgated under the Exchange Act and (c) following
receipt of an Acquisition Proposal from a third party, the Company's Board of
Directors or the Special Committee may withdraw or modify its recommendation
with respect to the Merger, but in each case referred to in the foregoing
clauses only to the extent that the Company's Board of Directors or the Special
Committee shall conclude in good faith after consultation with legal counsel
that the failure to take such action could reasonably be determined to be a
breach of the Company's Board of Directors' or the Special Committee's fiduciary
obligations to the Company's shareholders under applicable law.
In connection with any party's Acquisition Proposal, the Company is
required to enter into an appropriate confidentiality agreement with such party.
The Company is required to immediately cease all existing activities,
discussions and negotiations with any parties conducted prior to the date of the
Merger Agreement with respect to any Acquisition Proposal. From and after the
execution of the Merger Agreement, the Company is required to promptly notify
the Purchaser of the receipt of any Acquisition Proposal, and, in any such
notice to the Purchaser, shall indicate in reasonable detail the material terms
thereof and the identity of the other party or parties involved.
Directors' and Officers' Indemnification. For a period of six and one-half
(6 1/2) years after the Effective Time, Parent agreed that all rights to
indemnification or exculpation now existing in favor of the present and former
directors, officers, employees, and agents of the Company and its subsidiaries
with respect to matters occurring prior to the Effective Time shall survive the
Merger and shall continue in full force and effect and shall not be amended,
repealed, or otherwise modified in any manner that will adversely affect the
rights of such individuals. After the Effective Time, Parent and the Surviving
Corporation agreed, to the fullest extent that a Georgia corporation may now or
thereafter legally indemnify its own officers and directors, to indemnify and
hold harmless, each present director or officer of the Company and each
subsidiary (collectively, the "Indemnified Parties") against all costs and
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation (whether asserted or commencing 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 or director occurring before or at the Effective Time
(including, without limitation, the Merger and all actions taken in
contemplation of, or to effect the Merger), for a period of six and one-half
(6 1/2) years after the date of the Merger Agreement.
The Surviving Corporation is required to maintain the Company's existing
officers' and directors' liability and fiduciary insurance policies for a period
of five years after the Effective Time; provided, that the Surviving Corporation
may substitute therefor policies of substantially similar coverage and amounts
containing terms not materially less favorable to such former directors or
officers; provided, further, that if the Company's existing directors' liability
insurance expires, is terminated or canceled during such period, the Surviving
Corporation will use its reasonable efforts to obtain substantially similar
insurance; provided, however, that in no event shall the Surviving Corporation
be required to pay aggregate annual premiums for insurance in excess of 200% of
the current annual premiums paid by the Company (the "Premium Amount"). In the
event that, but for the last proviso of the immediately preceding sentence, the
Surviving Corporation would be required to expend more than the Premium Amount,
the Surviving Corporation would nonetheless be required to purchase the maximum
amount of such insurance obtainable by payment of the Premium Amount.
In the event that the Surviving Corporation or Parent or any of their
respective successors or assigns after the Effective Time (i) consolidates with
or merges with any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, the parties agreed
that then, and in each case, proper provision will be made so that the
successors and assigns of the Surviving Corporation or Parent, as the case may
be, will assume the
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obligations with respect to indemnification set forth in Section 5.6 of the
Merger Agreement. The Company is required to request prior to the Effective Time
general releases from all directors and former directors (who were directors at
any time after October 31, 1997) and officers of the Company and its
subsidiaries, releasing Parent, the Company and its subsidiaries and their
officers, directors, employees and agents of any claim that they or any of them
may have against Parent, the Company or its subsidiaries (and their officers,
directors, employee and agents), exclusive of employment compensation
obligations or obligations arising under Section 5.6 of the Merger Agreement.
Rights Agreement. In the Merger Agreement, the Company agreed to take all
necessary action (including, if required, redeeming all of the outstanding
Rights or amending or terminating the Rights Agreement) so that (i) entering
into the Merger Agreement and consummation of the Merger do not and will not
result in any person becoming able to exercise any Rights under the Rights
Agreement or enabling or requiring the Rights to be separated from the shares of
Common Stock to which they are attached or to be triggered or to become
exercisable and (ii) no Rights are outstanding at the Effective Time.
Change of Control Agreements. The Company has change of control agreements
with certain employees of the Company that provide certain benefits upon (i)
consummation of the Merger and/or (ii) a termination of employment of such
employee following the Effective Time. In the Merger Agreement, Parent agreed to
take all appropriate steps necessary to give reasonable advance notice prior to
the acceptance for payment and payment for the Shares tendered in the Offer of
its then present intention to continue employment, or not to continue
employment, to each such employee; provided, however, that such expression of
present intention by Parent will not create any rights in favor of any such
employee and will not constitute a binding commitment of Parent.
Termination; Fees. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding any
approval and adoption of the Merger Agreement and the Merger by the shareholders
of the Company, by mutual written consent of the Boards of Directors of Parent,
the Purchaser and the Company, and also in the following circumstances:
(a) by Parent or the Company if (i) any court or governmental entity
of competent jurisdiction shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by the Merger Agreement (including the denial of
any consent of a governmental entity required for consummation of the
Merger) and such order, decree, ruling or other action is or shall have
become final and nonappealable or (ii) if Shares shall not have been
purchased pursuant to the Offer on or prior to October 31, 2000; provided,
however, that the right to terminate the Merger Agreement under such
provision shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted
in, the failure of the Purchaser to purchase the Shares pursuant to the
Offer on or before such date; or
(b) by Parent if neither Parent nor the Purchaser is in material
breach of the Merger Agreement and either (i) prior to the purchase of the
Shares pursuant to the Offer, the Company's Board of Directors shall have
withdrawn, modified, failed to reaffirm or changed (including by amendment
of the Company's Schedule 14D-9) its recommendation or approval in respect
of the Offer, the Merger Agreement or the Merger, or shall have adopted any
resolution to effect the foregoing, or shall have affirmed, recommended or
authorized entering into any other Acquisition Proposal; or (ii) prior to
the purchase of the Shares pursuant to the Offer, it shall have been
publicly disclosed, or Parent shall have learned, that any person, entity
or "group" (as that term is defined in Section 13(d)(3) of the Exchange
Act), other than the Purchaser or its affiliates or any group of which any
of them is a member, shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of more than
14.9% of any class or series of capital stock of the Company (including the
Shares), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted an option, right, or warrant,
conditional or otherwise, to acquire beneficial ownership of more than
14.9% of any class or series of capital stock of the Company (including the
Shares); or
(c) by Parent if, prior to the purchase of the Shares pursuant to the
Offer, there shall have been a breach of the Company's representation set
forth in Section 3.2(a) of the Merger Agreement (relating to
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the capitalization of the Company) or covenant set forth in Section 5.1(c)
of the Merger Agreement (relating to capital stock) or a material breach of
any of the Company's other representations, warranties or covenants which
breach cannot be or has not been cured within ten (10) days following
receipt of written notice of such breach; or
(d) by the Company if, prior to the purchase of Shares sufficient to
meet the Minimum Condition pursuant to the Offer, there shall have been a
material breach of any of the Purchaser's representations, warranties or
covenants which breach cannot be or has not been cured within ten (10) days
of the receipt of written notice thereof; or
(e) by Parent if, due to an event that if occurring after the
commencement of the Offer, would result in a failure to satisfy any of the
conditions set forth in Annex B of the Merger Agreement, the Purchaser
shall have failed to commence the Offer on or prior to the tenth (10th)
business day after the public announcement of the Merger Agreement (the
"Offer Deadline"); provided that Parent may not terminate the Merger
Agreement pursuant to such provision if Parent or the Purchaser (x) is in
material breach of the Merger Agreement or (y) has not exercised such right
by the close of business on or before the tenth (10th) business day
following the Offer Deadline; or
(f) by the Company if, prior to the purchase of Shares sufficient to
meet the Minimum Condition by the Purchaser pursuant to the Offer, a person
or group (other than Parent or any of its affiliates) shall have made a
bona fide Acquisition Proposal that the Company's Board of Directors or the
Special Committee determines in good faith that failing to accept or
recommend to the Company's shareholders such Acquisition Proposal could
reasonably be determined to constitute a breach of the fiduciary duties of
the Company's Board of Directors or the Special Committee to the Company's
shareholders under applicable law after consultation with (i) a nationally
recognized investment banking firm regarding the financial superiority of
the Acquisition Proposal and (ii) legal counsel; provided that termination
under such provision shall not be effective until payment of the fee
required by Section 7.3 of the Merger Agreement; or
(g) by Parent if the Purchaser shall have terminated the Offer, or the
Offer shall have expired without the Purchaser purchasing any Shares
thereunder; provided that Parent may not terminate the Merger Agreement
pursuant to such provision if (x) the Purchaser has failed to purchase
Shares in the Offer in violation of the material terms thereof or (y) the
Purchaser has not exercised such right by the close of business on or
before the fifth (5th) business day following the termination or expiration
of the Offer in accordance with its terms; or
(h) by the Company if the Purchaser or any of its affiliates shall
have failed to commence the Offer on or prior to the Offer Deadline other
than due to an event that if occurring after the commencement of the Offer,
would result in a failure to satisfy any of the conditions set forth in
Annex B of the Merger Agreement; provided, that the Company may not
terminate the Merger Agreement pursuant to this provision if the Company is
in material breach of the Merger Agreement.
If the Merger Agreement is terminated by Parent pursuant to Section 7.1(d)
of the Merger Agreement, if the Merger is not consummated as a result of the
failure of the Company to satisfy any of the conditions set forth in Section
6.1(c) of the Merger Agreement, or if the Merger Agreement is terminated by
Parent pursuant to Section 7.1(c)(i) of the Merger Agreement or the Company
pursuant to Section 7.1(g) of the Merger Agreement, then the Company is required
to promptly pay Parent the sum of (A) $1 million, plus (B) all the out-of-pocket
costs and expenses of Parent, including costs of counsel, investment bankers,
actuaries and accountants, up to but not exceeding an additional $2 million in
the aggregate.
If no payment is due under the preceding paragraph and the Merger Agreement
is terminated or the Merger is not consummated, then the Company is required to
promptly pay Parent all the out-of-pocket costs and expenses of Parent,
including costs of counsel, investment bankers, actuaries and accountants, up to
but not exceeding $2 million in the aggregate, unless (i) the Agreement is
terminated pursuant to Section 7.1(a) or 7.1(e) of the Merger Agreement, or (ii)
the Merger is not consummated because the conditions set forth in Section 6.1(b)
of the Merger Agreement are not satisfied.
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If, after the date of the Merger Agreement and within twelve (12) months
following (a) any termination of the Merger Agreement (i) by Parent pursuant to
Section 7.1(c) or 7.1(d) of the Merger Agreement, or (ii) by the Company
pursuant to Section 7.1(g) of the Merger Agreement, or (b) the failure to
consummate the Merger by reason of any failure of the Company to satisfy the
conditions enumerated in Section 6.1(c) of the Merger Agreement, any third party
shall acquire, merge with, combine with, purchase a significant amount of assets
of (including a significant amount of assets of, or the stock of, any subsidiary
of the Company), or engage in any other business combination with, or purchase
any equity securities involving an acquisition of 20% or more of the voting
stock of, the Company on terms that are financially superior to those of the
Offer, or enter into any letter of intent or agreement to do any of the
foregoing (collectively, a "Superior Business Combination"), such third party
that is a party to the Superior Business Combination shall pay to Parent, (A)
upon execution of such letter of intent or agreement relating to such Superior
Business Combination, the sum of (i) $1 million, which amount represents the
best estimate by the parties to the Merger Agreement of the value of the
management time, overhead, opportunity costs and other unallocated costs of
Parent incurred by or on behalf of Parent in connection with the Merger
Agreement and the Offer which cannot be calculated with certainty, plus (ii) all
the out-of-pocket costs and expenses of Parent, including costs of counsel,
investment bankers, actuaries and accountants, up to but not exceeding an
additional $2 million in the aggregate and (B) upon the consummation of any
Superior Business Combination that occurs within the later of 24 months from the
date of the Merger Agreement or 12 months from the date of such letter of intent
or agreement, an amount in cash equal to the product of $8 million and the
percentage of the Company assets or equity securities acquired in the Superior
Business Combination, which sum represents additional compensation for Parent's
loss (including expenses) as a result of the Merger Agreement not being
consummated. The amounts owed under the preceding clauses (A) and (B) shall be
reduced by any amounts previously paid to Parent pursuant to the other
provisions of Section 7.3 of the Merger Agreement. In no event will the
aggregate amount paid to Parent pursuant to all provisions of Section 7.3 of the
Merger Agreement exceed $8 million. In the event such third party refuses to pay
such amounts within ten days of demand therefor by Parent, the amounts will be
an obligation of the Company and will be paid by the Company promptly upon
notice to the Company by Parent.
Representations and Warranties. The Company has made customary
representations and warranties to Parent with respect to, among other things,
its organization and qualification, subsidiaries, capitalization, authority,
consents and approvals, violations, the Company's reports filed with the
Commission, financial statements, undisclosed liabilities, certain changes,
taxes, litigation, employee benefit plans, environmental liability, compliance
with applicable laws, material contracts, patents, trademarks, trade names,
copyrights and registrations, labor matters, real property, information
supplied, and the Company's Proxy Statement.
TENDER AND OPTION AGREEMENT
The following is a summary of the material terms of the Tender and Option
Agreement. This summary is qualified in its entirety by reference to the full
text of the Tender and Option Agreement which is incorporated herein by
reference and a copy of which has been filed with the Commission as an exhibit
to the Schedule TO. The Tender and Option Agreement may be examined and copies
may be obtained at the place and in the manner as set forth in Section 8 of this
Offer to Purchase.
Tender of Shares. The Purchaser and certain directors and officers (some of
whom are members of the Investment Group) (the "Tendering Shareholders") have
entered into the Tender and Option Agreement. Upon the terms and subject to the
conditions of such agreement, the Tendering Shareholders have severally agreed
(i) to validly tender or cause the record owner of any Shares to tender all
Shares beneficially owned by each Tendering Shareholder pursuant to the Offer,
not later than the fifth business day after commencement of the Offer or, with
respect to any Shares acquired directly or indirectly, or otherwise beneficially
owned, by any of the Tendering Shareholders in any capacity after April 28,
2000, and prior to the termination of the Tender and Option Agreement, whether
upon the exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of a purchase, dividend,
distribution, gift, bequest, inheritance or as a successor-in-interest in any
capacity (including a fiduciary capacity) or otherwise ("After-Acquired
Shares"), within one business day following the acquisition thereof, (ii) not to
withdraw
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any Shares so tendered without the prior written consent of the Purchaser except
upon receipt of notice from the Purchaser that it is exercising the Option to
acquire the Shares and (iii) to withdraw all Shares tendered in the Offer
immediately upon receipt of notice from the Purchaser that it is exercising the
Option in order that the Purchaser may acquire such Shares. The Tendering
Shareholders have agreed that the Purchaser's obligation to accept for payment
and pay for the Shares in the Offer is subject to the terms and conditions of
the Offer.
Option to Purchase. In order to induce the Purchaser to enter into the
Merger Agreement, the Tendering Shareholders have granted to the Purchaser an
irrevocable option, exercisable in whole but not in part (the "Option") to
purchase all of the Shares beneficially owned by such Tendering Shareholders
(the "Option Shares") at a purchase price per Share equal to $18.35. Pursuant to
the Tender and Option Agreement, the Purchaser's Option will terminate in the
event the Merger Agreement is terminated under any circumstances other than
(i) by Parent, if neither Parent nor the Purchaser is in material
breach of the Agreement and either (a) prior to the purchase of Shares, the
Board of Directors of the Company withdrew, modified, failed to reaffirm or
changed (including by amendment of the Company's Schedule 14D-9) its
approval or recommendation of the Offer, the Merger Agreement or the Merger
or shall have adopted any resolution to effect the foregoing or shall have
affirmed, recommended or authorized entering into any other Acquisition
Proposal; or (b) prior to the purchase of Shares pursuant to the Offer, the
Company publicly disclosed, or Parent learned, that any person, entity or
"group" (as that term is defined in Section 13(d)(3) of the Exchange Act),
other than Parent or its affiliates or any group of which any of them is a
member, will have acquired beneficial ownership (determined pursuant to
Rule 13d-3 promulgated under the Exchange Act) of more than 14.9% of any
class or series of capital stock of the Company (including the Shares),
through the acquisition of stock, the formation of a group or otherwise, or
shall have been granted an option, right, or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 14.9% of any class
or series of capital stock of the Company (including the Shares); or
(ii) by Parent if, prior to the purchase of Shares pursuant to the
Offer, there is (a) a breach of the Company's representation set forth in
Section 3.2(a) of the Merger Agreement (relating to the capitalization of
the Company) or covenant set forth in Section 5.1(c) of the Merger
Agreement (relating to capital stock); or (b) a material breach of any of
the Company's other representations, warranties or covenants which breach
cannot be or has not been cured within ten (10) days following receipt of
notice of such breach; or
(iii) by Parent if, due to an event that if occurring after the
commencement of the Offer would result in a failure to satisfy any of the
conditions to the Offer, the Purchaser failed to commence the Offer on or
prior to the Offer Deadline (as defined in the Merger Agreement), provided
that neither Parent nor the Purchaser is in material breach of the Merger
Agreement and has exercised such right by the close of business on or
before the tenth (10th) business day following the Offer Deadline; or
(iv) by the Company, if, prior to the purchase of Shares sufficient
to meet the Minimum Condition by Parent pursuant to the Offer, a person or
group (other than Parent or any of its affiliates) shall have made a bona
fide Acquisition Proposal that the Board of Directors of the Company or the
Special Committee determines in good faith that failing to accept or
recommend to the Company's shareholders such Acquisition Proposal could
reasonably be determined to constitute a breach of the fiduciary duties of
the Board of Directors of the Company or the Special Committee to the
Company's shareholders under applicable law after consultation with: (a) a
nationally recognized investment banking firm regarding the financial
superiority of the Acquisition Proposal and (b) legal counsel; provided
that such termination shall not be effective until payment of the fee
required by Section 7.3 of the Merger Agreement.
In the event of termination of the Option, or termination of the Merger
Agreement under any circumstances other than those described above, the Option
will continue for a period of 90 days thereafter so long as (i) all applicable
waiting periods under the HSR Act required for the purchase of the Option Shares
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<PAGE> 33
upon such exercise shall have expired or been terminated and (ii) there is not
then in effect any preliminary or final injunction or other order issued by any
court or governmental, administrative or regulatory agency or authority or
legislative body or commission prohibiting the exercise of the Option.
If, within twelve (12) months following the exercise of the Option by the
Purchaser, the Purchaser, directly or indirectly, sells, transfers or otherwise
disposes of any or all of the Shares acquired upon exercise of the Option or the
Offer to a third party (or realizes cash proceeds in respect of such Shares as a
result of a distribution to shareholders of the Company following the sale of
substantially all of the Company's assets) in connection with a transaction
whereby the third party is acquiring the entire equity interest in the Company
pursuant to a merger, tender offer, exchange offer, sale of assets, sale of
shares or a similar business transaction (a "Subsequent Sale") at a per Share
price in excess of $18.35 (the "Subsequent Sale Price"), then the Purchaser will
pay to each Tendering Shareholder, within five (5) days of receipt of payment by
the Purchaser, an amount equal to such Tendering Shareholder's pro rata share of
fifty percent (50%) of the excess of the Subsequent Sale Price over $18.35,
multiplied by the number of Shares sold in the Subsequent Sale.
Assignment of Dividends and Other Distributions. The Tendering Shareholders
have assigned to the Purchaser any and all dividends and other distributions
that may be declared, set aside or paid by the Company with respect to the
Tendering Shareholders' Shares during the term of the Tender and Option
Agreement.
Voting. Each Tendering Shareholder has agreed that (for so long as the
Merger Agreement is in effect), at any meeting of the holders of Shares, however
called, or in connection with any written consent of the holders of Shares, he
will vote (or cause to be voted) his Shares (a) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
of the terms thereof and each of the other actions contemplated by the Merger
Agreement and the Tender and Option Agreement and any actions required in
furtherance thereof; (b) against any action or agreement that would result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or the Tender
and Option Agreement; and (c) except as otherwise agreed to in writing in
advance by the Purchaser, against any of the following actions or agreements
(other than the Merger Agreement or the transactions contemplated thereby): (i)
any action or agreement that is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone or attempt to discourage or adversely
affect the Merger, the Offer and the transactions contemplated by the Tender and
Option Agreement and the Merger Agreement; (ii) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company and its subsidiaries; (iii) a sale, lease or transfer of a
material amount of assets of the Company or its subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its subsidiaries; (iv) any change in the management or the Company's Board of
Directors, except as contemplated by the Merger Agreement; (v) any change in the
present capitalization or dividend policy of the Company; (vi) any amendment of
the Company's articles of incorporation or bylaws; or (vii) any other material
change in the Company's corporate structure or business. Notwithstanding
anything to the contrary contained in the Tender and Option Agreement, each
Tendering Shareholder who is also a member of the Board of Directors of the
Company will be free to act in his or her capacity as a member of the Company's
Board of Directors and to discharge his or her fiduciary duty as such. Each
Tendering Shareholder agreed, at the request of the Purchaser, to execute and
deliver to the Purchaser an irrevocable proxy.
Representations and Warranties and Certain Covenants. In connection with
the Tender and Option Agreement, each Tendering Shareholder has made certain
representations, warranties and covenants, including, without limitation, with
respect to ownership of Shares, the Tendering Shareholder's power and authority
to enter into and perform his obligations under the Tender and Option Agreement,
the receipt of requisite governmental consents and approvals, absence of
conflicts, absence of liens and encumbrances on and in respect of the Tendering
Shareholder's Shares, finder's fees, reliance by the Purchaser, confidentiality,
and the solicitation of acquisition proposals.
Restriction on Transfer, Proxies and Non-Interference; Stop Transfer
Order. In connection with the Tender and Option Agreement, each Tendering
Shareholder agreed, while the Tender and Option Agreement
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<PAGE> 34
is in effect and except as specifically contemplated therein, not to (i) offer
for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any Shares or any interest therein, (ii)
grant any proxies or powers of attorney, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any Shares or (iii) take any
action that would make any representation or warranty of any Tendering
Shareholder untrue or incorrect or have the effect of preventing or disabling
any Tendering Shareholder from performing his or her obligations under the
Tender and Option Agreement. In furtherance of the Tender and Option Agreement,
concurrently with the execution of the Tender and Option Agreement, the
Tendering Shareholders authorized the Company to notify the Company's transfer
agent that there is a stop transfer order with respect to all of the Existing
Shares (as defined in the Tender and Option Agreement) and any additional Shares
of Common Stock acquired by any Tendering Shareholder after the execution date
and that the Tender and Option Agreement places limits on the voting and
transfer of such shares.
Additional Shares. Each Tendering Shareholder further agreed, at the
request of the Purchaser, to exercise, exchange or convert his or her Rights
into shares of Company Common Stock, so as to constitute After-Acquired Shares
under the Tender and Option Agreement. In order to facilitate the exercise at
the request of the Purchaser of any such Right, the Purchaser agreed to loan to
any requesting Tendering Shareholder funds sufficient to allow such Tendering
Shareholder to exercise the Right. Such loan is not to be interest bearing and,
at the Purchaser's option, is to be secured by a pledge of the shares of Company
Common Stock acquired upon exercise of such Right. Each Tendering Shareholder
agreed to promptly notify the Purchaser in writing of the number of
After-Acquired Shares that may be acquired by such Tendering Shareholder, if
any, after the date of the Tender Option Agreement.
OTHER AGREEMENTS
Rights Agreement. The following is a summary of the material terms of the
Rights Agreement. This summary is qualified in its entirety by reference to the
Rights Agreement, a copy of which has been filed with the Commission as an
exhibit to the Company's Current Report on Form 8-K, dated August 19, 1997, the
First Amendment to Rights Agreement, dated as of January 17, 2000, a copy of
which has been filed with the Commission as Exhibit 99.2 to the Company's
Registration Statement on Form 8-A/A, filed with the Commission on February 1,
2000, and the Second Amendment to Rights Agreement, dated as of April 28, 2000,
a copy of which has been filed with the Commission as Exhibit 4.2 to the
Company's Current Report on Form 8-K, filed with the Commission on May 5, 2000.
The Rights Agreement may be examined and copies may be obtained at the place and
in the manner set forth in Section 8 of this Offer to Purchase.
On August 19, 1997, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of the Company's
Common Stock to shareholders of record at the close of business on September 10,
1997. This dividend distribution was made on or about September 24, 1997. Each
Right entitles the registered holder to purchase from the Company one
ten-thousandth (1/10,000) of a share of Series A Preferred Stock, no par value
(the "Preferred Stock"), at a purchase price of $72.00 per one ten-thousandth
(1/10,000) of a share, subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement.
The Rights were attached to all Common Stock certificates representing
shares of the Company then outstanding, and no separate Rights Certificates were
distributed. The Rights are to separate from the Company's Common Stock upon the
earlier of (i) ten (10) business days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person")
(which term does not include an "Exempt Person" as defined in the Rights
Agreement) has acquired, or obtained the right to acquire, beneficial ownership
of fifteen percent (15%) or more of the outstanding shares of the Company's
Common Stock (the "Stock Acquisition Date") or (ii) ten (10) business days (or
such later date as the Board of Directors of the Company shall determine)
following the commencement of a tender or exchange offer that would result in a
person or group beneficially owning fifteen percent (15%) or more of such
outstanding shares of Common Stock. The date the Rights separate is referred to
as the "Distribution Date."
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<PAGE> 35
Until the Distribution Date, (i) the Rights will be evidenced by the
Company's Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates issued after
September 10, 1997 contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for the
Company's Common Stock outstanding also constituted the transfer of the Rights
associated with the Company's Common Stock represented by such certificates.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon any
exercise of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and are to
expire at the close of business on September 10, 2007, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Company's Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates will represent the Rights. Except in connection with shares of the
Company's Common Stock issued or sold pursuant to the exercise of stock options
under any employee plan or arrangements, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, or as otherwise
determined by the Board of Directors, only shares of the Company's Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a merger
or other business combination with an Acquiring Person (or any associate or
affiliate thereof) and its Common Stock remains outstanding and unchanged, (ii)
any person shall acquire beneficial ownership of more than fifteen percent (15%)
of the outstanding shares of the Company's Common Stock (except pursuant to (A)
certain consolidations or mergers involving the Company or sales or transfers of
the combined assets, cash flow or earning power of the Company and its
subsidiaries or (B) an offer for all outstanding shares of the Company's Common
Stock at a price and upon terms and conditions which a majority of the
Disinterested Directors (as defined below) determines to be in the best
interests of the Company and its shareholders), or (iii) there occurs a
reclassification of securities, a recapitalization of the Company or any of
certain business combinations or other transactions (other than certain
consolidations and mergers involving the Company and sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries)
involving the Company or any of its subsidiaries which has the effect of
increasing by more than one percent (1%) the proportionate share of any class of
the outstanding equity securities of the Company or any of its subsidiaries
beneficially owned by an Acquiring Person (or any associate or affiliate
thereof), each holder of a Right (other than the Acquiring Person and certain
related parties) will thereafter have the right to receive, upon exercise, the
Company's Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the purchase price
of the Right. However, Rights are not exercisable following the occurrence of
any of the events described above until such time as the Rights are no longer
redeemable by the Company as described below. Notwithstanding any of the
foregoing, following the occurrence of any of the events described in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company shall enter into a merger or other business combination transaction
in which the Company is not the surviving corporation, (ii) the Company is the
surviving corporation in a consolidation, merger or similar transaction pursuant
to which all or part of the outstanding shares of the Company's Common Stock are
changed into or exchanged for stock or other securities of any other person or
cash or any other property or (iii) more than 50% of the combined assets, cash
flow or earning power of the Company and its subsidiaries is sold or transferred
(in each case other than certain consolidations with, mergers with and into, or
sales of assets, cash flow or earning power by or to subsidiaries of the Company
as specified in the Rights Agreement), each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
value equal to two times the purchase price of the Right. The events described
in this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
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The purchase price payable, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights, options or warrants
to subscribe for Preferred Stock or securities convertible into Preferred Stock
at less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness,
cash (excluding regular quarterly cash dividends), assets (other than dividends
payable in Preferred Stock) or subscription rights or warrants (other than those
referred to in (ii) immediately above).
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments amount to at least one percent (1%) of the
purchase price. No fractional shares of Preferred Stock are required to be
issued (other than fractions which are integral multiples of one ten-thousandth
(1/10,000th) of a share of Preferred Stock) and, in lieu thereof, the Company
may make an adjustment in cash based on the market price of the Preferred Stock
on the trading date immediately prior to the date of exercise.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of fifty percent (50%) or more of the
outstanding shares of the Company's Common Stock, the Board of Directors of the
Company may, without payment of the purchase price by the holder, exchange the
Rights (other than Rights owned by such person or group, which will become
void), in whole or in part, for shares of the Company's Common Stock at an
exchange ratio of one-half (1/2) the number of shares of the Company's Common
Stock (or in certain circumstances Preferred Stock) for which a Right is
exercisable immediately prior to the time of the Company's decision to exchange
the Rights (subject to adjustment).
At any time until ten (10) business days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (payable in cash, shares of the Company's Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.001 redemption price.
The term "Disinterested Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Disinterested
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of an acquiring company or in the event that the Rights are
redeemed.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date; provided, that
any amendments after the Stock Acquisition Date must be approved by a majority
of the Disinterested Directors. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity,
inconsistency or defect, to make changes which do not adversely affect the
interest of holders of Rights (excluding the interest of any Acquiring Person)
or to shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable; and, provided, that any
amendments after the Stock Acquisition Date must be approved by a majority of
the Disinterested Directors.
Confidentiality Agreement. The following is a summary of the material terms
of the Confidentiality Agreement. This summary is qualified in its entirety by
reference to the full text of the Confidentiality
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Agreement which is incorporated herein by reference and copies of which have
been filed with the Commission as an exhibit to the Schedule TO. The
Confidentiality Agreement may be examined and copies may be obtained at the
place and in the manner as set forth in Section 8 of this Offer to Purchase.
Guardian Industries and the Company entered into a confidentiality
agreement on February 10, 2000 (the "Confidentiality Agreement"). The
Confidentiality Agreement addressed the "Evaluation Material," which is
comprised of all information provided to Guardian Industries except (i)
information already in the possession of Guardian Industries, provided that the
information is not known to Guardian Industries to be subject to another
confidentiality agreement or similar arrangement; (ii) information that becomes
publicly available other than as a result of disclosure by Guardian Industries
or certain representatives of Guardian Industries and (iii) information that is
available to Guardian Industries on a non-confidential basis from a source other
than the Company or certain affiliates of the Company, provided that the source
is not known by Guardian Industries to be bound by a confidentiality agreement.
Guardian Industries and the Company agreed that the Evaluation Material
would be used solely for the purpose of evaluating a possible transaction with
the Company and that Guardian Industries would keep the Evaluation Material
confidential, disclosing it only to certain representatives of Guardian
Industries. Unless the Company discloses the existence of an offer by Guardian
Industries or indicates an intention to pursue another offer that is not
financially superior to an offer of Guardian Industries, Guardian Industries and
its affiliates agreed not to disclose that any discussions or negotiations were
in progress between Guardian Industries and the Company and agreed not to
disclose the details of any such discussions.
Guardian Industries further agreed with the Company that Guardian
Industries would not, unless requested in writing by the Company or unless the
Company announced its intention to pursue an offer or transaction that is not
financially superior to that of Guardian Industries': (i) propose, or state a
willingness to propose, a transaction with the Company or any holders of the
Company's securities, or (ii) acquire or assist, advise or encourage any person
to acquire, directly or indirectly, control of the Company or a portion of the
Company's securities in excess of 4.9% or any of the Company's businesses or
assets for a period of two years from February 10, 2000. This period would be
reduced to one year from February 10, 2000 if the Company terminates all
discussions with third parties for a change of control transaction and does not
pursue a transaction with any party as contemplated by the Confidentiality
Agreement.
If, after February 10, 2000, the Company enters into another
confidentiality agreement with a third party in connection with a proposed
change of control transaction between the Company and such third party and such
a confidentiality agreement contains restrictions different from the
restrictions of the Confidentiality Agreement, the Company is required to notify
Guardian Industries and Guardian Industries will have the option to amend the
Confidentiality Agreement to include such different terms.
Guardian Industries acknowledged that neither the Company nor its
representatives or advisors made any representations or warranties regarding the
accuracy or completeness of the Evaluation Material and that neither the Company
nor its representatives or advisors will have any liability to Guardian
Industries resulting from the use of the Evaluation Material.
In the event Guardian Industries does not proceed with a transaction with
the Company within a reasonable time, Guardian Industries agreed to promptly
redeliver all written Evaluation Materials and any other written material
containing or reflecting any information in the Evaluation Material to the
Company and agreed that neither Guardian Industries nor its representatives or
advisors would retain any copies, extracts or other reproductions in whole or in
part of such written material relating to the Evaluation Materials.
Guardian Industries agreed to indemnify and hold harmless the Company and
certain of its representatives from any damages or other losses or expenses
resulting from the disclosure or use of the Evaluation Material by Guardian
Industries or its representatives contrary to the terms of the Confidentiality
Agreement.
OTHER MATTERS
Dissenters' Rights. No dissenters' rights are available under the GBCC in
connection with the Offer. However, if the Merger is consummated holders of the
Shares that do not tender their Shares in the Offer will
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have certain rights under Article 13 of the GBCC to dissent from the Merger and
to demand payment in cash of the fair value of their Shares. A person having a
beneficial interest in the Shares that are held of record in the name of another
person, such as a broker or nominee, must act promptly to cause the record
holder to properly follow the steps set forth in Article 13 of the GBCC and in a
timely manner to perfect whatever rights the beneficial owner may have. The
dissenters' rights provided by Article 13 of the GBCC, if the statutory
procedures are complied with in connection with the Merger, could lead to a
judicial determination of the fair value (excluding any appreciation or
depreciation in value arising from the accomplishment of the Merger) being
required to be paid in cash to such dissenting shareholders for their Shares.
Any such judicial determination of the fair value of the Shares could be based
on considerations other than, or in addition to, the price paid in the Offer and
the market value of the Shares, including asset values and the investment value
of the Shares. Shareholders considering seeking appraisal in connection with the
Merger should be aware that the "fair value" of their Shares determined under
Article 13 could be more than, the same as or less than the price being paid in
the Offer, and that the opinion of Credit Suisse First Boston as to fairness,
from a financial point of view, of the cash consideration to be paid for Shares
in the Offer and the Merger pursuant to the Merger Agreement is not an opinion
as to fair value under Article 13 of the GBCC. The cost of any appraisal
proceeding will be determined by the court and may be assessed against the
parties as the court deems equitable in the circumstances. The court may order
that all or a portion of the attorneys' fees incurred by the dissenting
shareholder in connection with any dissenters' rights proceeding be charged pro
rata against the value of all Shares of Common Stock entitled to dissenters'
rights.
Going-Private Transactions. Rule 13e-3 under the Exchange Act is applicable
to certain "going-private" transactions. The Purchaser does not believe that
Rule 13e-3 will be applicable to the Merger unless, among other things, the
Merger is completed more than one year after termination of the Offer. If
applicable, Rule 13e-3 would require, among other things, that certain financial
information regarding the Company and certain information regarding the fairness
of the Merger and the consideration offered to minority shareholders of the
Company be filed with the Commission and disclosed to such minority shareholders
prior to consummation of the Merger.
13. DIVIDENDS AND DISTRIBUTIONS; CHANGES IN STOCK
As described above, the Merger Agreement provides that prior to the time
the directors of the Purchaser have been elected to the Board of Directors of
the Company, the Company will not (i) authorize for issuance, issue, sell,
deliver, or agree or commit to issue, sell or deliver, dispose of, encumber or
pledge (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class of any securities, except as disclosed pursuant to the Merger Agreement or
as required by agreements with the Company's employees under the Company's
benefit plans as in effect as of the date of the Merger Agreement, or amend any
of the terms of any such securities or agreements outstanding as of the date of
the Merger Agreement, except as specifically contemplated by the Merger
Agreement; or (ii) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
or redeem or otherwise acquire any of its securities, except intercompany cash
dividends in the ordinary course of business (or enter into any agreements,
arrangements, plans or understandings with respect to any of the foregoing).
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser will not be required to accept for payment or, subject
to any applicable rules and regulations of the Commission, including Rule
14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate the Offer as to any Shares not then paid for, if (i) the applicable
waiting period under the HSR Act has not expired or terminated, (ii) the Minimum
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Condition has not been satisfied or waived, or (iii) if at any time on or after
April 28, 2000, and before the time for payment for Shares, any of the following
events shall exist:
(a) any domestic or foreign federal, state or local governmental,
regulatory or administrative agency or authority or legislative body or
commission shall have instituted any action, proceeding, application, claim
or suit, or shall have promulgated, entered, enforced, enacted, proposed,
issued or made applicable to the Offer or the Merger any statute, rule,
regulation, judgment, order or injunction which directly or indirectly (i)
challenges, seeks to make illegal, prohibits or makes illegal, or imposes
any material limitations on, Parent's or the Purchaser's ownership or
operation (or that of any of their respective subsidiaries or affiliates)
of all or a material portion of the businesses or assets of Parent or the
Purchaser, taken as a whole, or of the Company or its subsidiaries, taken
as a whole, or compels Parent or the Purchaser or their affiliates to
dispose of or hold separate any material portion of the business or assets
of the Company or its subsidiaries, taken as a whole, (ii) challenges,
seeks to make illegal, prohibits or makes illegal the acceptance for
payment, payment for or purchase of Shares or the consummation of the Offer
or the Merger, (iii) restricts the ability of the Purchaser, or renders the
Purchaser unable, to accept for payment, pay for or purchase some or all of
the Shares, (iv) imposes material limitations on the ability of Parent or
the Purchaser to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by it
on all matters presented to the Company's shareholders, (v) seeks to obtain
or obtains material damages as a result of the transactions contemplated by
the Offer or the Merger or (vi) seeks to require divestiture by Parent or
the Purchaser or any of their subsidiaries or affiliates of any Shares, and
in the case of (v) or (vi) above, is likely to have a material adverse
effect on the Company, provided that the Purchaser shall have used
reasonable efforts to cause any such judgment, order or injunction to be
vacated or lifted;
(b) the Company shall have breached its representations and
warranties, or failed to perform or comply with any of its covenants and
agreements contained in the Merger Agreement, which breach or failure shall
have a material adverse effect;
(c) the Merger Agreement shall have been terminated in accordance with
its terms;
(d) (i) it shall have been publicly disclosed or Parent shall have
otherwise learned that any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or its affiliates or any
group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 14.9% of any class or series of capital stock of the
Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted an option,
right or warrant, conditional or otherwise, to acquire beneficial ownership
of more than 14.9% of any class or series of capital stock of the Company
(including the Shares); or (ii) any person or group shall have entered into
a definitive agreement or agreement in principle with the Company with
respect to an Acquisition Proposal or other business combination with the
Company; or
(e) the Company's Board of Directors shall have withdrawn, modified,
failed to reaffirm or changed (including by amendment of the Schedule
14D-9) its approval or recommendation of the Offer, the Merger Agreement or
the Merger in a manner adverse to Parent or the Purchaser or shall have
adopted any resolution to effect the foregoing, or shall have affirmed,
recommended or authorized entering into any other Acquisition Proposal,
which in the judgment of the Purchaser, in any such case, and regardless of the
circumstances (including any action or inaction by Parent or the Purchaser other
than a material breach of the Merger Agreement by Parent or the Purchaser)
giving rise to such condition, makes it inadvisable to proceed with the Offer or
with such acceptance for payment or payments.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, as well as
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certain representations made to Parent in the Merger Agreement by the Company,
neither Parent nor the Purchaser is aware of any license or regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action
by any governmental entity that would be required for the acquisition or
ownership of Shares by the Purchaser as contemplated herein. Should any such
approval or other action be required, the Purchaser and Parent currently
contemplate that such approval or other action will be sought. While the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of if such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Shares tendered. See Section 14 for certain
conditions to the Offer.
State Takeover Laws. A number of states (including the State of Georgia in
which the Company is incorporated) have adopted takeover laws and regulations
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, shareholders, principal executive offices or principal
places of business therein. Except as set forth below, neither Parent nor the
Purchaser has attempted to comply with any state takeover statutes in connection
with the Offer or the Merger. Each of Parent and the Purchaser has the right to
challenge the validity or applicability of any state law allegedly applicable to
the Offer or the Merger, and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that it is asserted that one or more takeover statutes apply to the Offer or the
Merger, and it is not determined by an appropriate court that such statute or
statutes do not apply or are invalid as applied to the Offer or the Merger, as
applicable, Parent and/or the Purchaser may be required to file certain
documents with, or receive approvals from, the relevant state authorities, and
Parent and/or the Purchaser might be unable to accept for payment or purchase
Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, Parent and/or the Purchaser may not be
obligated to accept for purchase, or pay for, any Shares tendered. See "Certain
Conditions of the Offer" in Section 14 above.
Sections 14-2-1110 through 1132 of the GBCC restrict certain "business
combinations" with an "interested shareholder" (generally, any person who owns
or has the right to acquire 10% or more of the corporation's outstanding voting
stock) of a Georgia corporation that has expressly elected to be governed by
these provisions. The restrictions of Sections 14-2-1110 through 1132 of the
GBCC are inapplicable to the Merger, the Offer and the related transactions
because the Company has not elected to be governed by these provisions.
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 Parent of a
Notification and Report Form with respect to the Offer, unless Parent receives a
request for additional information or documentary material from the Antitrust
Division or the FTC or unless early termination of the waiting period is
granted. Parent currently anticipates making such filing on or about May 17,
2000. If, within the initial 15-day waiting period, either the Antitrust
Division or the FTC requests additional information or material from Parent
concerning the Offer, the waiting period will be extended and would expire at
11:59 p.m., Eastern time, on the tenth calendar day after the date of
substantial compliance by Parent 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 Parent. In practice, complying with a request for
additional information or material can take a significant amount of time.
Although the Company is required to file certain information and documentary
material with the Antitrust Division and the FTC in connection with the Offer,
neither the Company's failure to make such filings nor a request to the Company
from the Antitrust Division or the FTC for additional information or documentary
material will extend the waiting period. In addition, if the Antitrust Division
or the FTC raises substantive issues in connection with a proposed transaction,
the parties frequently
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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 the Company. 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 the
Purchaser, or of the Company 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 such a challenge is made, of the results thereof.
Canadian Competition Act. The merger provisions of the Canadian Competition
Act (the "Competition Act") permit the Commissioner of Competition appointed
thereunder (the "Commissioner") to apply to the Competition Tribunal (the
"Tribunal") to seek relief in respect of a merger which prevents or lessens, or
is likely to prevent or lessen, competition substantially. The relief that may
be ordered by the Tribunal includes, in the case of a completed merger, ordering
a dissolution of the merger or a disposition of assets or shares, and in the
case of a proposed merger, prohibiting completion of the transaction.
The Competition Act also requires parties to certain proposed mergers which
exceed specified size thresholds to provide the Commissioner with prior notice
of and information relating to the transaction and the parties thereto, and to
await the expiration of the prescribed waiting period, prior to completing the
transaction. In lieu of, or in addition to, filing a prescribed notification
form, which can be either short-form or long-form, and awaiting the expiration
of the prescribed waiting period, a party to a proposed merger may apply to the
Commissioner for an advance ruling certificate ("ARC"), which may be issued by
the Commissioner if he is satisfied he would not have sufficient grounds on
which to apply to the Tribunal for an order under the merger provisions in
respect to the transaction. Parent and the Company will be filing a short-form
pre-merger notification with the Commissioner and applying for an ARC.
The proposed acquisition may not be completed until 14 days after a
short-form pre-merger notification has been filed with the Commissioner unless
prior to the expiration of that time the Commissioner either (i) gives notice
that he does not intend to make an application to the Tribunal under section 92
of the Competition Act in respect of the proposed acquisition, or (ii) requires
that a long-form pre-merger notification filing be made. If a long-form
pre-merger notification filing is required, the proposed acquisition may not be
completed until 42 days after the long-form filing is made, unless prior to the
expiration of that time the Commissioner gives notice that he does not intend to
make an application the Tribunal under section 92 of the Competition Act in
respect of the proposed acquisition.
In either case, the issuance of an ARC prior to the expiration of the
applicable waiting period terminates the waiting period. An ARC precludes the
Commissioner from applying to the Tribunal for an order in respect of the
proposed transaction solely on the basis of information that is the same or
substantially the same as that upon which the ARC was issued, provided that the
proposed acquisition is substantially completed within one year after the ARC is
issued. There can be no assurance, however, that an ARC will be granted.
There can be no assurance that a challenge to or in respect of the
consummation of the transaction contemplated by the Offer and the Merger on
competition law grounds will not be made either prior to or following the
consummation thereof or that, if such a challenge were made; Parent and the
Company would prevail or would not be required to accept certain adverse
conditions in order to consummate such transaction or following consummation
thereof.
Investment Canada Act. The Investment Canada Act is Canada's statute of
general application governing the acquisition of control of Canadian businesses
by non-Canadians. An investment governed by the
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Investment Canada Act is either notifiable or reviewable. A notifiable
investment is simply one for which the acquiror must provide notice to the
Investment Review Division of Industry Canada ("Investment Canada") at any time
prior to the closing of the investment or within thirty (30) days thereafter.
A reviewable investment is one for which the acquiror must submit an
application for review with prescribed information to Investment Canada. With
certain limited exceptions relating to the type of business carried on by the
target company, a direct acquisition of a Canadian business by a non-Canadian
that qualifies as a "WTO investor" for purposes of the Act is reviewable only if
the value of the assets acquired is equal to or greater than Cdn $192 million as
set forth in the audited financial statements of the target company for its most
recently completed fiscal period.
Before a reviewable investment may be completed, the Minister of the
federal Cabinet responsible for Investment Canada must determine that the
investment is likely to be of "net benefit to Canada." The Minister has an
initial 45-day period to make his determination from the date of receipt of the
Investment Review Division of a completed application for review. The Minister
may, at his discretion, extend this initial 45-day period for a further thirty
(30) days by giving notice to the prospective acquiror. Any further extensions
require the consent of the acquiror. If at the end of the 75-day period the
Minister is not satisfied that the investment is likely to be of net benefit to
Canada, he must send a notice to that effect to the prospective acquiror, and
the acquiror has thirty (30) days to make representations and submit
undertakings to the Minister in an attempt to change his decision.
The Purchaser does not believe that an application for review will be
necessary and believes that all that will be required is the filing of a notice
thirty (30) days following the closing of the investment.
16. FEES AND EXPENSES
The Purchaser has retained MacKenzie Partners, Inc., to act as the
Information Agent and SunTrust Bank, Atlanta to serve as the Depositary in
connection with the Offer. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their services, be reimbursed
for certain reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
under the federal securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person in connection with the solicitation of tenders
of Shares pursuant to the Offer. Brokers, dealers, banks and trust companies
will be reimbursed by the Purchaser upon request for customary mailing and
handling expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. The Purchaser is not aware of any jurisdiction in which the making
of the Offer or the tender of Shares in connection therewith would not be in
compliance with the laws of such jurisdiction. If the Purchaser becomes aware of
any state law prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto in such state, the Purchaser will make a good faith effort to
comply with any such state statute or seek to have such state statute declared
inapplicable to the Offer. If, after such good faith effort, the Purchaser
cannot comply with any such state statute, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Shares in such
state. In any jurisdiction the securities, blue sky or other laws of which
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of the Purchaser by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE
DELIVERY OF THIS OFFER TO PURCHASE NOR ANY PURCHASE PURSUANT TO THE OFFER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY
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IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PARENT, THE
PURCHASER OR THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED OR
THE DATE OF THIS OFFER TO PURCHASE.
The Purchaser and Parent have filed with the Commission the Schedule TO
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act,
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that they will not be available at the regional offices of the
Commission).
CAB MERGER CORP.
May 12, 2000
37
<PAGE> 44
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF GUARDIAN INDUSTRIES, PARENT AND THE PURCHASER
The following tables set forth the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years, of each of the directors and executive
officers of Guardian Industries Corp. ("Guardian Industries"), Guardian
Fiberglass, Inc. (the "Parent") and CAB Merger Corp. (the "Purchaser"). Each
person is a citizen of the United States of America. Unless otherwise noted,
each such person's business address is 2300 Harmon Road, Auburn Hills, Michigan
48326.
DIRECTORS AND EXECUTIVE OFFICERS OF GUARDIAN INDUSTRIES CORP. (GUARDIAN
INDUSTRIES)
<TABLE>
<CAPTION>
NAME AND ADDRESS PRESENT PRINCIPAL OCCUPATION AND FIVE-YEAR EMPLOYMENT HISTORY
---------------- -------------------------------------------------------------
<S> <C>
William Davidson* Director since April 1968 and President and Chief Executive
Officer for over five years.
Russell J. Ebeid* Director since March 1985 and President/Glass Division for
over five years.
Oscar H. Feldman Director since April 1968 and of counsel to Butzel Long for
over five years.
Ralph J. Gerson* Director since April 1985 and Executive Vice President for
over five years.
Richard Alonzo Vice President/Engineering for over five years.
Joseph G. Bruce Vice President/Purchasing for over five years.
David A. Clark* Chairman of Building Products Group since January 2000.
President/Automotive Products Group since July 1999. Prior to
that time he was Vice President/Corporate Finance &
Acquisitions and Treasurer. Also Chairman of Builder Marts of
America, Inc. since May 1999.
Charles G. Croskey Group Vice President for over five years.
Bruce Cummings Vice President/Human Resources since August 1999. Prior to
that time he was Director of Human Resources since August
1995, and prior to that time he was Director of Human
Resources/Planning.
Robert H. Gorlin Vice President, General Counsel and Assistant Secretary for
over five years.
Anthony Hobart Group Vice President since December 1998. Prior to that time
he was North American Sales Manager.
Jeffrey A. Knight* Group Vice President/Chief Financial Officer for over five
years.
James D. Moore Group Vice President for over five years and Managing
Director of Guardian Europe S.A. for over five years.
Paul M. Rappaport Vice President/Tax Counsel for over five years.
Alan L. Schlang* Secretary and Assistant General Counsel for over five years.
Peter S. Walters Group Vice President for over five years.
</TABLE>
- -------------------------
* Also a director and/or officer of Parent and/or the Purchaser.
I-1
<PAGE> 45
DIRECTORS AND EXECUTIVE OFFICERS OF GUARDIAN FIBERGLASS, INC. (PARENT)
<TABLE>
<CAPTION>
NAME AND ADDRESS PRESENT PRINCIPAL OCCUPATION AND FIVE-YEAR EMPLOYMENT HISTORY
---------------- -------------------------------------------------------------
<S> <C>
William Davidson* Director since June 1984.
Russell J. Ebeid* Director since March 1995.
Ralph J. Gerson* Director since January 1988.
Duane Faulkner* President and General Manager for over five years. Director
1000 East North Street since August 1998. President (since August 1998) and Chief
Albion, MI 49224 Executive Officer (since May 1999) of Builder Marts of
America, Inc.
David A. Clark* Treasurer for over five years.
Billy L. Jacoby Vice President/Production for over five years. Director of
1000 East North Street Builder Marts of America, Inc. since August 1999.
Albion, MI 49224
Jeffrey K. Knight* Vice President/Finance for over five years.
Robert Marshall Vice President/Financial Services for over five years.
1000 East North Street
Albion, MI 49224
Martin Powell* Vice President/Sales & Marketing for over five years.
1000 East North Street Director since August 1999. Senior Vice President since
Albion, MI 49224 August 1998 of Builder Marts of America, Inc.
Gary Romes Vice President/Business Development and Planning for over
4100 Executive Park Drive No. 2 five years.
Cincinnati, OH 45241
Alan L. Schlang* Secretary for over five years.
Jayne C. Van Liere Vice President/Human Resources for over five years.
1000 East North Street
Albion, MI 49224
</TABLE>
- -------------------------
* Also a director and/or officer of Guardian Industries and/or the Purchaser.
I-2
<PAGE> 46
DIRECTORS AND EXECUTIVE OFFICERS OF CAB MERGER CORP. (PURCHASER)
<TABLE>
<CAPTION>
NAME AND ADDRESS PRESENT PRINCIPAL OCCUPATION AND FIVE-YEAR EMPLOYMENT HISTORY
---------------- -------------------------------------------------------------
<S> <C>
David A. Clark* Director, Chairman and Treasurer.
Duane Faulkner* Director and President.
Martin Powell* Director.
David B. Jaffe Secretary and General Counsel of Guardian Europe S.A. since
Zone Industrielle Wolser January 1996; prior to that time, Assistant General Counsel
L-3452 Dudelange of Guardian Industries.
Grand Duchy of Luxembourg
</TABLE>
- -------------------------
* Also a director and/or officer of Guardian Industries and/or Parent.
I-3
<PAGE> 47
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
SUNTRUST BANK, ATLANTA
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand/Overnight Courier:
SunTrust Bank, Atlanta 404-865-5371 SunTrust Bank, Atlanta
Post Office Box 4625 Stock Transfer Department
Atlanta, Georgia 30302 58 Edgewood Avenue
Room 225, Annex
Atlanta, Georgia 30303
</TABLE>
For Information on your Account:
(800) 568-3476 (Toll-Free)
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its telephone number and
location listed below. You may also contact your broker, dealer, bank, trust
company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
(800) 322-2885 (call toll-free)
<PAGE> 1
EXHIBIT 99.(a)(1)(B)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 12, 2000
BY
CAB MERGER CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GUARDIAN INDUSTRIES CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
SUNTRUST BANK, ATLANTA
<TABLE>
<S> <C> <C>
By Facsimile Transmission: By Mail: By Overnight Courier:
404-865-5371 SunTrust Bank, Atlanta SunTrust Bank, Atlanta
(For Eligible Institutions Post Office Box 4625 Stock Transfer Department
Only) Atlanta, Georgia 30302 58 Edgewood Avenue
Room 225, Annex
Confirm by Telephone to: Atlanta, Georgia 30303
800-568-3476
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW AND
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of Shares (as
defined below) of Cameron Ashley Building Products, Inc. if certificates
evidencing Shares ("Certificates") are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is used, if delivery of
Shares is to be made by book-entry transfer to an account maintained by SunTrust
Bank, Atlanta (the "Depositary") at the Depositary Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3 of the Offer to Purchase (as defined below). Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
Shareholders whose Certificates are not immediately available or who cannot
deliver either their Certificates for, or a Book-Entry Confirmation (as defined
in Section 2 of the Offer to Purchase) with respect to, their Shares and all
other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) may tender their Shares according
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. See Instruction 2.
<PAGE> 2
<TABLE>
<S> <C>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE
BOOK-ENTRY TRANSFER FACILITY, AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY
BOOK-ENTRY TRANSFER).
Name of Tendering Institution: -----------------------------------
Account Number: --------------------------------------------------
Transaction Code Number: -----------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY.
Name(s) of Registered Holder(s): ---------------------------------
Window Ticket Number (if any): -----------------------------------
Date of Execution of Notice of Guaranteed Delivery: --------------
Name of Institution which Guaranteed Delivery: -------------------
If delivered by book-entry transfer, check box: [ ]
Account Number: --------------------------------------------------
Transaction Code Number: -----------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
NAMES(S) APPEAR ON SHARE CERTIFICATE(S)) (Attach additional list, if necessary)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER
CERTIFICATE SHARES OF SHARES
NUMBER(S)(1) CERTIFICATES(1) TENDERED(2)
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by holders of Shares delivering Shares by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by Certificates delivered to the Depositary are
being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to CAB Merger Corp., a Georgia corporation
(the "Purchaser") and an indirect wholly-owned subsidiary of Guardian Industries
Corp., a Delaware corporation, the above-described shares of common stock, no
par value (the "Common Stock"), of Cameron Ashley Building Products, Inc., a
Georgia corporation (the "Company"), and the associated Series A Preferred Stock
purchase rights issued pursuant to the Rights Agreement, dated as of August 19,
1997, as amended, between the Company and SunTrust Bank, Atlanta, as Rights
Agent (the "Rights" and, together with the Common Stock, the "Shares"), at a
price of $18.35 per share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated May 12, 2000 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer"). The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering holders of the Shares to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms or
conditions of any such extension or amendment), the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to all of the Shares that are being tendered hereby and all
dividends, distributions (including, without limitation, distributions of
additional Shares) and rights declared, paid or distributed in respect of such
Shares (collectively, "Distributions") and irrevocably constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and any Distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Certificates evidencing such Shares
(and any Distributions), or transfer ownership of such Shares (and any
Distributions) on the account books maintained by the Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of transfer
and authenticity to, or upon the order of, the Purchaser, upon receipt by the
Depositary as the undersigned's agent, of the purchase price with respect to
such Shares, (ii) present such Shares (and any Distributions) for transfer on
the books of the Company and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares (and any Distributions), all
in accordance with the terms and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints David A. Clark and Robert H.
Gorlin, and each of them, acting individually, as the attorneys-in-fact and
proxies of the undersigned, each with full power of substitution, to vote in
such manner as each such attorney and proxy or his substitute shall, in his sole
discretion, deem proper and otherwise act (by written consent or otherwise) with
respect to all Shares tendered hereby which have been accepted for payment by
the Purchaser prior to the time of such vote or other action and all Shares and
other securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of shareholders of the Company
(whether annual or special and whether adjourned or postponed) or consent in
lieu of any such meeting or otherwise. This proxy and power of attorney is
coupled with an interest in the Shares tendered herby, is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by the Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke all other proxies and powers of attorney
granted by the undersigned at any time with respect to such Shares (and all
Shares and other securities issued in Distributions in respect of such Shares),
and no subsequent proxy or power of attorney shall be given or written consent
executed (and if given or executed, shall not be effective) by the undersigned
with respect thereto. The undersigned understands that, in order for Shares to
be deemed validly tendered, immediately upon the Purchaser's acceptance of such
Shares for payment, the Purchaser must be able to exercise full voting and other
rights with respect to such Shares, including, without limitation, voting at any
meeting of the Company's shareholders then scheduled.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustee in bankruptcy, personal and legal representatives
3
<PAGE> 4
of the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable, provided that the Shares tendered pursuant to the Offer
may be withdrawn prior to their acceptance for payment.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distributions) and that, when the same are accepted for
payment and paid for by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances, and that the Shares tendered hereby (and
any Distributions) will not be subject to any adverse claim. The undersigned,
upon request, will execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of Shares tendered hereby (and any Distributions). In
addition, the undersigned shall promptly remit and transfer to the Depositary
for the account of the Purchaser any and all Distributions issued to the
undersigned in respect of the Shares tendered hereby, accompanied by appropriate
documentation of transfer, and, pending such remittance and transfer or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions and may withhold the entire
purchase price or deduct from the purchase price the amount of value thereof, as
determined by the Purchaser in its sole discretion.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser with respect to such Shares upon the terms and subject to the
conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the Shares tendered hereby or may accept for payment fewer than all of
the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered." In the event that both the
"Special Payment Instructions" and the "Special Delivery Instructions" are
completed, please issue the check for the purchase price and/or return any such
Certificates evidencing Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) in the name(s) of, and deliver such
check and/or return such certificates (and accompanying documents, as
appropriate) to, the person(s) so indicated. Unless otherwise indicated herein
under "Special Payment Instructions," in the case of a book-entry delivery of
Shares, please credit the account maintained at the Book-Entry Transfer Facility
with respect to any Shares not accepted for payment. The undersigned recognizes
that the Purchaser has no obligation pursuant to the "Special Payment
Instructions" to transfer any Shares from the name of the registered holder
thereof if the Purchaser does not accept for payment any of the Shares tendered
hereby.
4
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be issued in the name of someone other than the undersigned,
or if Shares delivered by book-entry transfer that are not accepted for payment
are to be returned by credit to an account maintained at the Book-Entry Transfer
Facility, other than to the account indicated above.
Issue (check appropriate box(es)):
[ ] Check to [ ] Certificate(s) to:
Name: -----------------------------------------------
Address: ---------------------------------------------
---------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
[ ] Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below:
Account Number: -----------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Certificates for Shares not tendered or not
accepted for payment and/or the check of the purchase price of Shares accepted
for payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that shown above.
Mail (check appropriate box(es)):
[ ] Check to [ ] Certificate(s) to:
Name: -----------------------------------------------
Address: ---------------------------------------------
---------------------------------------------
(INCLUDE ZIP CODE)
5
<PAGE> 6
- -------------------------------------------------------------------------------
IMPORTANT
SHAREHOLDER:
SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 BELOW
(Signature(s) of Shareholder(s))
Dated: __________, 2000
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Certificates or on a security position listing or by person(s) authorized to
become registered holder(s) by Certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, agents, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s): ----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): --------------------------------------------------------
(SEE INSTRUCTION 5)
Address: ----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Codes and Telephone Nos.: ------------------------------------------------
- -------------------------------------------------------------------------------
(HOME)
- -------------------------------------------------------------------------------
(BUSINESS)
Taxpayer Identification or Social Security No.: -------------------------------
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(If Required; see Instructions 1 and 5)
Authorized
Signature(s): -----------------------------------------------------------------
Name: -------------------------------------------------------------------------
Name of Firm: -----------------------------------------------------------------
Address:
-----------------------------------------------------------------------
------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.: --------------------------------------------------
Dated: ---------------------------------------------------------------- , 2000
- -------------------------------------------------------------------------------
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on this Letter of Transmittal must be guaranteed by a member firm of a
registered national securities exchange (registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), by a member
firm of the National Association of Securities Dealers, Inc., by a commercial
bank or trust company having an office or correspondent in the United States or
by any other "Eligible Guarantor Institution" (bank, broker, dealer, credit
union, savings association or other entity that is a member in good standing of
a recognized Medallion Signature Guarantee Program approved by the Securities
Transfer Association, Inc. (each of the foregoing constituting an "Eligible
Institution")), unless the Shares tendered hereby are tendered (i) by the
registered holder (which term, for purposes of this document, shall include any
participant in the Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Shares) of such Shares who has completed
neither the box entitled "Special Payment Instructions" nor the box entitled
"Special Delivery Instructions" herein or (ii) for the account of an Eligible
Institution. See Instruction 5. If the Certificates are registered in the name
of a person other than the signer of this Letter of Transmittal, or if payment
is to be made or delivered to, or Certificates evidencing unpurchased Shares are
to be issued or returned to, a person other than the registered owner, then the
tendered Certificates must be endorsed or accompanied by duly executed stock
powers, in either case signed exactly as the name or names of the registered
owner or owners appear on the Certificates, with the signatures on the
Certificates or stock powers guaranteed by an Eligible Institution as provided
herein. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
shareholders if Certificates evidencing Shares are to be forwarded herewith or
if delivery of Shares is to be made pursuant to the procedures for book-entry
transfer set forth in Section 3 of the Offer to Purchase. For a shareholder to
validly tender Shares pursuant to the Offer, either (a) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof),
with any required signature guarantees or an Agent's Message (as defined in the
Offer to Purchase) in the case of a book-entry delivery of Shares, and any other
required documents, must be received by the Depositary at one of its addresses
set forth herein on or prior to the Expiration Date and either (i) Certificates
for tendered Shares must be received by the Depositary at one of such addresses
on or prior to the Expiration Date or (ii) Shares must be delivered pursuant to
the procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase and a Book-Entry Confirmation must be received by the Depositary on or
prior to the Expiration Date or (b) the shareholder must comply with the
guaranteed delivery procedures set forth below and in Section 3 of the Offer to
Purchase.
Shareholders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary or
complete the procedures for book-entry transfer on or prior to the Expiration
Date may tender their Shares by properly completing and duly executing a Notice
of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth
in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution, (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser, must be received by the Depositary prior
to the Expiration Date and (iii) the Certificates representing all tendered
Shares in proper form for transfer, or a Book-Entry Confirmation with respect to
all tendered Shares, together with a Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or in the case of a book-entry transfer, an Agent's
Message) and any other documents required by this Letter of Transmittal, must be
received by the Depositary within three New York Stock Exchange trading days
after the date of such Notice of Guaranteed Delivery. If Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) must accompany
each such delivery.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE SHAREHOLDER AND
THE DELIVERY WILL BE DEEMED MADE, AND RISK OF LOSS AND TITLE TO THE CERTIFICATES
SHALL PASS, ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED
7
<PAGE> 8
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All shareholders, by execution of this
Letter of Transmittal (or a facsimile thereof), waive any right to receive any
notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
information required under "Description of Shares Tendered" should be listed on
a separate signed schedule attached hereto.
4. Partial Tenders. If fewer than all of the Shares represented by any
Certificates delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such case, a new Certificate for the remainder
of the Shares that were evidenced by your old certificate(s) will be sent,
without expense, to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal, as soon
as practicable after the Expiration Date. All Shares represented by
Certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal, Instruments of Transfer and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or instruments of
transfer are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of such person's authority to so
act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Certificates or
separate instruments of transfer are required. If payment is to be made, or
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s), signatures on this Letter of
Transmittal and such Certificates or instruments of transfer must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by the Certificate(s) listed and
transmitted hereby, the Certificate(s) must be endorsed or accompanied by
appropriate instruments of transfer, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Certificate(s). Signatures on
this Letter of Transmittal and such Certificate(s) or instruments of transfer
must be guaranteed by an Eligible Institution.
6. Transfer Taxes. Except as set forth in this Instruction 6, the Purchaser
will pay or cause to be paid any transfer taxes with respect to the transfer and
sale of Shares to it or its order pursuant to the Offer. If, however, payment of
the purchase price is to be made to, or (in the circumstances permitted hereby)
if Certificates for Shares not tendered or not purchased are to be registered in
the name of, any person other than the registered holder(s), or if tendered
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any transfer taxes (whether
imposed on the registered holder(s) or such persons) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted. Except as provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the Certificate(s) listed in this
Letter of Transmittal.
8
<PAGE> 9
7. Special Payment and Delivery Instructions. If a check and/or
Certificates for unpurchased Shares are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if a check is to be sent
and/or such Certificates are to be returned to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. If any
tendered Shares are not purchased for any reason and such Shares are delivered
by book-entry transfer, such Shares will be credited to an account maintained at
the Book-Entry Transfer Facility.
8. Requests for Assistance or Additional Copies. Questions and requests for
assistance may be directed to the Information Agent at its address or telephone
numbers set forth below and requests for additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or brokers, dealers, commercial banks and
trust companies and such materials will be furnished at the Purchaser's expense.
9. Waiver of Conditions. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time or from time to time, in the
Purchaser's sole discretion.
10. Backup of Withholding Tax. Each Tendering Shareholder is required to
provide the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below
and to certify that the shareholder is not subject to backup withholding.
Failure to provide the information on the Substitute Form W-9 may subject the
shareholder to 31% federal income tax backup withholding on the payment of the
purchase price for the Shares. The shareholder should indicate in the box in
Part III of the Substitute Form W-9 if the shareholder has not been issued a TIN
and has applied for a TIN or intends to apply for a TIN in the near future. If
the shareholder has indicated in the box in Part III that a TIN has been applied
for and the Depositary is not provided with a TIN by the time of payment, the
Depositary will withhold 31% of all payments of the purchase price, if any, made
thereafter pursuant to the Offer until a TIN is provided to the Depositary.
11. Lost or Destroyed Certificates. If any Certificate(s) representing
Shares have been lost or destroyed, the holders should promptly notify the
Company's transfer agent, SunTrust Bank, Atlanta. The holders will then be
instructed as to the procedure to be followed in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed Certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE
THEREOF (TOGETHER WITH CERTIFICATES OR A BOOK-ENTRY CONFIRMATION FOR SHARES AND
ANY OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY, OR A NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payor) with such
shareholder's correct TIN on Substitute Form W-9 below. If such shareholder is
an individual, the TIN is his social security number. If the shareholder has not
been issued a TIN and has applied for a number or intends to apply for a number
in the near future, such shareholder should so indicate on the Substitute Form
W-9. See Instruction 10. If the Depositary is not provided with the correct TIN,
the shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholders with respect
to Shares purchased pursuant to the Offer may be subject to backup federal
income tax withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that shareholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Forms for such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
9
<PAGE> 10
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, a shareholder
must provide the Depositary with his correct TIN by completing the Substitute
Form W-9 below, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such shareholder is awaiting a TIN) and that (i) such
shareholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of failure to report all interest or
dividends or (ii) the Internal Revenue Service has notified the shareholder that
he is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are registered in more than one name or are not
in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report. If the shareholder has not been
issued a TIN and has applied for a number or intends to apply for a number in
the near future, he or she should write "Applied For" in the space provided for
in the TIN in Part III, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part III and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% of all payments of the purchase price
made thereafter until a TIN is provided to the Depositary.
10
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: SUNTRUST BANK, ATLANTA
- --------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ---------------------------
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
OR-------------------------
Employer Identification
Number
------------------------------------------------------------------------------------------
PART II--For Payees Exempt From Backup Withholding, see PART III--Social Security
the enclosed Guidelines for Certification of Taxpayer Number OR Employer
Identification Number on Substitute Form W-9 and Identification Number
complete as instructed therein. (If awaiting TIN write
"Applied For")
------------------------------------------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify that:
PAYER'S REQUEST FOR TAXPAYER (1) The number shown on this form is my correct Taxpayer Identification Number (or I
IDENTIFICATION NUMBER (TIN) am waiting for a number to be issued to me); and
(2) I am not subject to backup withholding either because I have not been notified
by the Internal Revenue Service (IRS) that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or the IRS has notified
me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding, you received another
notification from the IRS that you were no longer subject to backup withholding, do
not cross out item (2). (Also see instructions in the enclosed Guidelines.)
------------------------------------------------------------------------------------------
NAME -------------------------------------------------------------------------------
(Please Print)
SIGNATURE -------------------------------------- DATE -----------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER TO PURCHASE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty (60) days, 31%
of all payments of the Offer Price made to me thereafter will be withheld until
I provide a number.
SIGNATURE ----------------------------------------- DATE ---------------
11
<PAGE> 12
THE INFORMATION AGENT FOR THE OFFER IS:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
Collect Tel.: (212) 929-5500
or
Toll Free: (800) 322-2885
MAY 12, 2000
<PAGE> 1
EXHIBIT 99.(a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000 UNLESS THE OFFER IS EXTENDED.
May 12, 2000
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
the common stock, no par value (the "Common Stock"), of Cameron Ashley Building
Products, Inc., a Georgia corporation, and the associated Series A Preferred
Stock purchase rights (the "Rights" and, together with the Common Stock, the
"Shares"), are not immediately available or the procedures for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach SunTrust Bank, Atlanta (the "Depositary") prior to
the Expiration Date (as defined in the Offer to Purchase). This Notice of
Guaranteed Delivery may be delivered by hand or transmitted by facsimile
transmission or mail to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
SUNTRUST BANK, ATLANTA
<TABLE>
<S> <C> <C>
By Facsimile Transmission: By Mail: By Overnight Courier:
404-865-5371 SunTrust Bank, Atlanta SunTrust Bank, Atlanta
(For Eligible Institutions Post Office Box 4625 Stock Transfer Department
Only) Atlanta, Georgia 30302 58 Edgewood Avenue
Room 225, Annex
Confirm by Telephone to: Atlanta, Georgia 30303
800-568-3476
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE BELOW MUST BE COMPLETED
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to CAB Merger Corp., a Georgia corporation
(the "Purchaser"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer"), receipt
of each of which is hereby acknowledged, the number of Shares indicated below
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
Number of Shares:
...............................................................................
Certificate Nos. (if available):
...............................................................................
...............................................................................
Check box if Shares will be tendered by book-entry transfer: [ ]
Account Number: ................................................................
Dated: .........................................................................
Name(s) of Record Holder(s):
...............................................................................
(PLEASE PRINT)
Address(es):
...............................................................................
...............................................................................
(Zip Code)
Area Code and Tel. No.: ........................................................
Signature(s):
...............................................................................
...............................................................................
<PAGE> 3
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, as Eligible Institution (as such term is defined in
Section 3 of the Offer to Purchase), hereby (a) represents that the tender of
shares effected hereby complies with Rule 14e-4 under the Securities Exchange
Act of 1934, as amended, and (b) guarantees to deliver to the Depositary the
certificates representing the Shares tendered hereby, in proper form for
transfer, or a Book-Entry Confirmation (as defined in Section 3 of the Offer to
Purchase) with respect to transfer of such Shares into the Depositary's account
at The Depositary Trust Company together with a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery of Shares, and any other
documents required by the Letter of Transmittal, all within three New York Stock
Exchange trading days after the date hereof.
Name of Firm:...................................................................
Address:........................................................................
................................................................................
(Zip Code)
Area Code and Tel. No...........................................................
...............................................................................
(AUTHORIZED SIGNATURE)
Name:...........................................................................
Title:..........................................................................
Date:...........................................................................
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT ONLY TOGETHER WITH YOUR
LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT 99.(a)(1)(D)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
AT
$18.35, NET PER SHARE
BY
CAB MERGER CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GUARDIAN INDUSTRIES CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME, ON
FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
May 12, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by CAB Merger Corp., a Georgia corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of Guardian Industries
Corp., a Delaware corporation, to act as Information Agent in connection with
the Purchaser's offer to purchase for cash all of the outstanding shares of
common stock, no par value (the "Common Stock"), of Cameron Ashley Building
Products, Inc., a Georgia corporation (the "Company") and the associated Series
A Preferred Stock purchase rights (the "Rights" and, together with the Common
Stock, the "Shares"), for $18.35 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together with the Offer to Purchase (and any
amendments or supplements hereto or thereto, collectively) constitute the
"Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase dated May 12, 2000.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal may
be used to tender Shares.
3. A letter to shareholders of the Company from Ronald R. Ross, together
with a Solicitation/ Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to shareholders of
the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if neither of the two procedures for tendering Shares set forth in the
Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Offer.
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
<PAGE> 2
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS
EXTENDED.
Please note the following:
1. The tender price is $18.35 per Share, net to the seller in cash,
without interest.
2. The Offer is subject to there being validly tendered and not
properly withdrawn prior to the expiration of the offer a majority of the
outstanding shares on a fully diluted basis and certain other conditions.
3. The Offer is being made for all of the outstanding Shares.
4. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. However, federal income tax backup
withholding at a rate of 31% may be required, unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 10 of the Letter of Transmittal.
5. The board of directors of the Company has unanimously determined
that each of the Offer and the Merger (as defined in the Offer to Purchase)
is fair to, and is in the best interests of, the Company's shareholders
(other than Guardian Fiberglass, Inc. and its affiliates), has approved the
Merger Agreement (as defined in the Offer to Purchase) and the transactions
contemplated thereby, including the Offer and the Merger, and recommends
that the Company's shareholders accept the Offer and tender all of their
Shares pursuant to the Offer.
6. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Certificates pursuant to
the procedures set forth in Section 3 of the Offer to Purchase or a timely
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect
to such Shares, (b) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares and (c) any
other documents required by the Letter of Transmittal. Accordingly, payment
may not be made to all tendering shareholders at the same time depending
upon when Certificates are actually received by the Depositary.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees or an Agent's Message in connection with a
book-entry transfer and other required documents should be sent to the
Depositary and (ii) Certificates representing the tendered Shares or a timely
Book-Entry Confirmation (as defined in the Offer to Purchase) should be
delivered to the Depositary in accordance with the instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in Section 3
of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The
Purchaser will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Purchaser will pay or cause to be paid any transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
<PAGE> 3
Any inquiries you may have with respect to the Offer or requests for copies
of the enclosed materials should be addressed to MacKenzie Partners, Inc., the
Information Agent for the Offer, at 156 Fifth Avenue, New York, New York 10010,
telephone number (212) 929-5500 or (toll free) (800) 322-2885.
Very truly yours,
MACKENZIE PARTNERS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND
THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
EXHIBIT 99.(a)(1)(E)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
AT
$18.35 NET PER SHARE
BY
CAB MERGER CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
GUARDIAN INDUSTRIES CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000 UNLESS THE OFFER IS EXTENDED.
May 12, 2000
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 12,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by CAB Merger Corp., a
Georgia corporation (the "Purchaser") and an indirect wholly-owned subsidiary of
Guardian Industries Corp., a Delaware corporation, to purchase all the
outstanding shares of common stock, no par value (the "Common Stock"), of
Cameron Ashley Building Products, Inc., a Georgia corporation (the "Company")
and the associated Series A Preferred Stock purchase rights (the "Rights" and,
together with the Common Stock, the "Shares"), at a purchase price of $18.35 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer. Holders of Shares whose certificates
for such Shares (the "Certificates") are not immediately available or who cannot
deliver their Certificates and all other required documents to the depositary
(the "Depositary") or complete the procedures for book-entry transfer prior to
the Expiration Date (as defined in the Offer to Purchase) must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $18.35 per Share, net to the seller in cash,
without interest.
2. The Offer is subject to there being validly tendered and not
properly withdrawn prior to the expiration of the Offer a majority of the
outstanding Shares on a fully diluted basis and certain other conditions.
3. The Offer is being made for all of the outstanding Shares.
4. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. However, federal income tax backup
withholding at a rate of 31% may be required, unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 10 of the Letter of Transmittal.
<PAGE> 2
5. The board of directors of the Company (the "Board") has unanimously
determined that each of the Offer and the Merger (as defined in the Offer
to Purchase) is fair to, and is in the best interests of, the Company's
shareholders (other than Guardian Fiberglass, Inc. and its affiliates), has
approved the Merger Agreement (as defined in the Offer to Purchase) and the
transactions contemplated thereby, including the Offer and the Merger, and
recommends that the Company's shareholders accept the Offer and tender all
of their Shares pursuant to the Offer.
6. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Certificates pursuant to
the procedures set forth in Section 3 of the Offer to Purchase or a timely
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect
to such Shares, (b) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares and (c) any
other documents required by the Letter of Transmittal. Accordingly, payment
may not be made to all tendering shareholders at the same time depending
upon when Certificates are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. An
envelope to return your instructions to us is enclosed. Your instructions should
be forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated May 12, 2000, and the related Letter of Transmittal in
connection with the offer by CAB Merger Corp., a Georgia corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of Guardian Industries
Corp., a Delaware corporation, to purchase all outstanding shares of common
stock, no par value (the "Common Stock"), of Cameron Ashley Building Products,
Inc., a Georgia corporation, and the associated Series A Preferred Stock
purchase rights (the "Rights" and, together with the Common Stock, the
"Shares").
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<S> <C>
SIGN HERE
Number of Shares to be Tendered:* --------------------------------------------------------
--------------------------------------------------------
Signature(s)
--------------------------------------------------------
--------------------------------------------------------
Date: ------------------------ (Print Name(s))
--------------------------------------------------------
--------------------------------------------------------
(Print Address(es))
--------------------------------------------------------
(Area Code and Telephone Number(s))
--------------------------------------------------------
(Taxpayer Identification or
--------------------------------------------------------
Social Security Number(s))
</TABLE>
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
EXHIBIT 99.(a)(1)(F)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- --------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF--
- --------------------------------------------------------
<S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor,
the minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3)
for a designated ward,
minor or incompetent
person
7. a. The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under state
law
8. Sole proprietorship The owner(4)
account
- --------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF--
- --------------------------------------------------------
<S> <C>
9. A valid trust, estate, The legal entity (Do not
or pension trust furnish the identification
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
13. Association, club or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
- --------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- - An international organization or any agency or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a) of the Code.
- - An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1) of the Code.
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
- - Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
- - Payments described in section 6049(b)(5) of the Code to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451 of the Code.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Exempt payees described above must still complete the substitute Form W-9
enclosed herewith to avoid possible erroneous backup withholding. FILE
SUBSTITUTE FORM W-9 WITH THE PAYER, REMEMBERING TO CERTIFY YOUR TAXPAYER
IDENTIFICATION NUMBER ON PART III OF THE FORM, WRITE "EXEMPT" ON THE FACE OF THE
FORM AND SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N of the Code and their regulations.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file a tax return.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
<PAGE> 1
EXHIBIT 99.(a)(1)(G)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated May 12,
2000 and the related Letter of Transmittal and any amendments and supplements
thereto, and is being made to all holders of Shares. The Offer is not being made
to (nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. The Purchaser may, in
its discretion, however, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CAMERON ASHLEY BUILDING PRODUCTS, INC.
AT
$18.35 NET PER SHARE
BY
CAB MERGER CORP.,
AN INDIRECT WHOLLY-OWNED
SUBSIDIARY OF
GUARDIAN INDUSTRIES CORP.
CAB Merger Corp. (the "Purchaser"), a Georgia corporation and an indirect
wholly-owned subsidiary of Guardian Industries Corp., a Delaware corporation, is
offering to purchase all of the outstanding shares of common stock, no par value
(the "Common Stock"), of Cameron Ashley Building Products, Inc., a Georgia
corporation (the "Company"), together with the associated rights to purchase
Series A Preferred Stock issued pursuant to the Rights Agreement, dated as of
August 19, 1997, as amended, between the Company and SunTrust Bank, Atlanta, as
Rights Agent (the "Rights" and, together with the Common Stock, the "Shares"),
at a price of $18.35 per Share, net to the seller in cash, without interest
thereon (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated May 12, 2000 (the "Offer to Purchase") and
in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). The Offer is a third
party tender offer by the Purchaser to purchase at the Offer Price all Shares
tendered pursuant to the Offer. Following the consummation of the Offer, the
Purchaser intends to effect the Merger described below.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
<PAGE> 2
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY THE PURCHASER OR
ANY OF ITS AFFILIATES, REPRESENTS NOT LESS THAN A MAJORITY OF THE TOTAL ISSUED
AND OUTSTANDING SHARES OF THE COMPANY ON A FULLY-DILUTED BASIS AND (2) THE
EXPIRATION OR TERMINATION OF ANY AND ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE OFFER IS
ALSO SUBJECT TO OTHER CONDITIONS. THE OFFER IS NOT CONDITIONED UPON THE
PURCHASER OBTAINING FINANCING.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of April 28, 2000 (the "Merger Agreement"), by and among the Purchaser,
Guardian Fiberglass, Inc., a Delaware corporation ("Parent"), and the Company.
Pursuant to the Merger Agreement, as soon as practicable following the
completion of the Offer and the satisfaction or waiver of the conditions set
forth in the Merger Agreement, the Purchaser will be merged with and into the
Company (the "Merger") in accordance with the applicable provisions of the
Georgia Business Corporation Code. Following the Merger, the separate existence
of the Purchaser shall cease and the Company shall be the surviving corporation.
At the effective time of the Merger (the "Effective Time"), each Share then
issued and outstanding (other than (i) Shares held in the Company's treasury or
by any subsidiary of the Company, (ii) Shares held by the Purchaser, Parent or
any other affiliate of the Purchaser and (iii) Dissenting Shares (as defined in
the Merger Agreement)) will be converted into the right to receive $18.35, or
any higher price per Share paid pursuant to the Offer, without interest thereon,
in cash, and the Company shall become a wholly-owned subsidiary of Parent.
THE BOARD OF DIRECTORS OF THE COMPANY, BASED UPON THE UNANIMOUS
RECOMMENDATION OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS OF THE BOARD, (A)
HAS UNANIMOUSLY DETERMINED THAT THE CONSIDERATION TO BE PAID FOR EACH SHARE IN
THE OFFER, THE MERGER AND THE MERGER AGREEMENT IS FAIR TO, AND IN THE BEST
INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY (OTHER THAN PARENT AND ITS
AFFILIATES), (B) HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (C)
UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT
AND APPROVE THE MERGER.
Certain shareholders of the Company who, in the aggregate, own
approximately 4.3% of the outstanding Shares (together with options subject to
the Tender and Option Agreement, approximately 12.5% on a fully-diluted basis)
have entered into a Tender and Option Agreement with the Purchaser pursuant to
which they have, among other things, granted the Purchaser an irrevocable option
to acquire at $18.35 per Share, and, in the event such irrevocable option is not
theretofore exercised, to tender pursuant to the Offer, and not to withdraw,
their Shares.
Shareholders of record who tender Shares directly to the Depositary (as
defined below) will not be obligated to pay brokerage fees or commissions or,
subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes, if
any, on the purchase of Shares by the Purchaser pursuant to the Offer.
Shareholders who hold their Shares through a broker or bank should consult with
such institution as to whether it charges any service fees. The Purchaser will
pay all charges and expenses of SunTrust Bank, Atlanta, which is acting as the
depositary (the "Depositary"), and MacKenzie Partners, Inc., which is acting as
the information agent (the "Information Agent"), incurred in connection with the
Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn when, as and if the Purchaser gives oral or written notice to the
Depositary of its acceptance for payment of such Shares. Upon the terms and
subject to the conditions of the Offer, payment for Shares so accepted will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Purchaser and transmitting such payment to validly tendering
shareholders. Under no circumstances will interest on the purchase price for
Shares be paid by the Purchaser, regardless of any extension of the Offer or
delay in making such payment. In all cases, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates for such Shares ("Share
Certificates"), or timely confirmation of a book-entry transfer of such Shares,
into the Depositary's account at The Depositary Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (ii) the properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message (as defined in
Section 2 of the Offer to Purchase) and (iii) any other documents required by
the Letter of Transmittal.
<PAGE> 3
The Purchaser may, without the consent of the Company, extend the Offer one
or more times, up to July 31, 2000: (i) if at the then scheduled expiration date
of the Offer (which shall be not less than twenty (20) business days following
the commencement of the Offer), or any extension thereof, any of the conditions
to the Purchaser's obligation to accept for payment and pay for Shares shall not
be satisfied or waived; (ii) for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission or the staff thereof
applicable to the Offer; or (iii) if, as of such date, all of the conditions to
the Purchaser's obligations to accept payment for Shares are satisfied or
waived, but the number of Shares validly tendered and not withdrawn pursuant to
the Offer is less than 90% of the then outstanding Shares on a fully diluted
basis. The Purchaser shall not have any obligation to pay interest on the
purchase price for tendered Shares whether or not the Purchaser exercises such
rights. Any such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be made not later than 9:00 a.m.,
Eastern time, on the next business day after the previously scheduled Expiration
Date. The Purchaser does not currently intend to make a subsequent offering
period available following the Expiration Date pursuant to Rule 14d-11 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), although it
reserves the right to do so in its sole discretion.
The term "Expiration Date" means 12:00 Midnight, Eastern time, on Friday,
June 9, 2000 unless and until the Purchaser, in its sole discretion and subject
to the terms and conditions of the Merger Agreement and the Tender and Option
Agreement, extends the period of time for 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.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time on or prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after July 11, 2000 (or
such later date as may apply in case the Offer is extended). In order for a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder, if different from that of the person who tendered such Shares. If Share
Certificates to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined in Section 3 of the Offer to Purchase) unless such
Shares have been tendered for the account of any Eligible
<PAGE> 4
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and must
otherwise comply with the procedures of such Book-Entry Transfer Facility, in
which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the second sentence of this
paragraph. All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties.
The information required to be disclosed by Rule 14d-6(d)(1) under the
Exchange Act is contained in the Offer to Purchase and is incorporated herein by
reference.
In connection with the Offer, the Purchaser has requested and the Company
has provided the Purchaser with, the names and addresses of all record holders
of Shares and security position listings of Shares held in stock depositories.
The Offer to Purchase and the related Letter of Transmittal and, if required,
other relevant materials will be mailed to record holders of Shares whose names
appear on the Company's shareholder list provided by the Company, and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
list, or who are listed as participants in a clearing agency's security position
listing for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent as set forth below. Requests for copies of the Offer to Purchase and the
related Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent, and copies will be furnished promptly at the
Purchaser's expense. Shareholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer. The
Purchaser will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
May 12, 2000
<PAGE> 1
EXHIBIT 99.(d)(1)
AGREEMENT AND PLAN OF MERGER
by and among
CAMERON ASHLEY BUILDING PRODUCTS, INC.,
a Georgia corporation
GUARDIAN FIBERGLASS, INC.,
a Delaware corporation
and
CAB MERGER CORP.,
a Georgia corporation
Dated as of April 28, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I -- THE OFFER AND THE MERGER
Section 1.1 The Offer .....................................................2
Section 1.2 Company Actions ...............................................4
Section 1.3 The Merger ....................................................6
Section 1.4 Effective Time ................................................6
Section 1.5 Effects of the Merger .........................................6
Section 1.6 Amended and Restated Articles of Incorporation and Bylaws .....6
Section 1.7 Directors .....................................................7
Section 1.8 Officers ......................................................8
Section 1.9 Subsequent Actions ............................................8
Section 1.10 Conversion of Shares ..........................................8
Section 1.11 Stock Options and Warrants ....................................9
Section 1.12 Special Meeting of Shareholders ...............................9
Section 1.13 Merger Without Approval of Company Shareholders ..............10
ARTICLE II -- DISSENTING SHARES; PAYMENT FOR SHARES
Section 2.1 Dissenting Shares ............................................10
Section 2.2 Payment for Shares ...........................................11
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization and Qualification, Subsidiaries .................13
Section 3.2 Capitalization of the Company and its Subsidiaries ...........14
Section 3.3 Authority Relative to this Agreement, Consents and Approvals .16
Section 3.4 SEC Reports, Financial Statements ............................17
Section 3.5 Proxy Statement ..............................................18
Section 3.6 Consents and Approvals; No Violations ........................18
Section 3.7 No Default ...................................................19
Section 3.8 No Undisclosed Liabilities ...................................19
Section 3.9 Litigation ...................................................20
Section 3.10 Compliance with Applicable Law ...............................20
Section 3.11 Employee Benefit Matters .....................................21
Section 3.12 Environmental Laws and Regulations ...........................23
Section 3.13 Rights Agreement .............................................25
Section 3.14 Brokers ......................................................26
Section 3.15 Absence of Certain Changes ...................................26
Section 3.16 Taxes ........................................................26
Section 3.17 Intellectual Property ........................................28
Section 3.18 Labor Matters ................................................29
Section 3.19 Opinion of Financial Advisor..................................29
Section 3.20 Real Property ................................................30
Section 3.21 Material Contracts ...........................................31
Section 3.22 Suppliers and Customers.......................................32
Section 3.23 Accounts Receivable, Inventory ...............................33
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Section 3.24 Insurance ....................................................33
Section 3.25 Title and Condition of Properties ............................33
Section 3.26 Statements True and Correct ..................................34
Section 3.27 Board Recommendation .........................................34
Section 3.28 Required Vote ................................................34
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Organization .................................................34
Section 4.2 Authority Relative to this Agreement .........................34
Section 4.3 Consents and Approvals; No Violations ........................35
Section 4.4 Proxy Statement ..............................................35
Section 4.5 Financing ....................................................36
Section 4.6 Brokers ......................................................36
Section 4.7 No Default ...................................................36
Section 4.8 Litigation ...................................................36
Section 4.9 Compliance with Applicable Law ...............................36
ARTICLE V -- COVENANTS
Section 5.1 Conduct of Business of the Company ...........................37
Section 5.2 Acquisition Proposals ........................................40
Section 5.3 Access to Information ........................................41
Section 5.4 Additional Agreements; Reasonable Efforts ....................42
Section 5.5 Public Announcements .........................................43
Section 5.6 Indemnification ..............................................43
Section 5.7 State Takeover Laws ..........................................45
Section 5.8 Rights Agreement .............................................45
Section 5.9 Disclosure Schedule Supplements ..............................45
Section 5.10 Change of Control Agreements .................................45
ARTICLE VI -- CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the Merger ..46
ARTICLE VII -- TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination ..................................................48
Section 7.2 Effect of Termination ........................................50
Section 7.3 Fees and Expenses ............................................50
Section 7.4 Amendment ....................................................52
Section 7.5 Waiver .......................................................52
ARTICLE VIII -- MISCELLANEOUS
Section 8.1 Nonsurvival of Representations and Warranties ................52
Section 8.2 Entire Agreement; Assignment .................................52
Section 8.3 Validity .....................................................52
Section 8.4 Notices ......................................................53
Section 8.5 Governing Law ................................................54
Section 8.6 Descriptive Headings .........................................54
Section 8.7 Parties in Interest ..........................................54
Section 8.8 Signatures. ..................................................54
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Section 8.9 Definitions ..................................................54
SIGNATURES ..............................................................................55
INDEX OF DEFINED TERMS:
Acquisition Proposal .......................................................5.2(c)
Agreement ................................................................Preamble
Audit .....................................................................3.16(l)
Board ....................................................................Preamble
CERCLA ....................................................................3.12(b)
Certificates ...............................................................2.2(b)
Closing .......................................................................1.4
Code ......................................................................3.11(a)
Company ..................................................................Preamble
Company Balance Sheet .........................................................3.8
Company Benefit Plan ......................................................3.11(h)
Company Common Stock .....................................................Preamble
Company Directors ..........................................................1.7(a)
Company Disclosure Schedule ................................................3.1(a)
Company Material Adverse Effect ............................................3.1(b)
Company Permits ..............................................................3.10
Company SEC Documents ......................................................3.4(a)
Company Securities .........................................................3.2(a)
Dissenting Shares .............................................................2.1
Effective Time ................................................................1.4
Environmental Claims ......................................................3.12(d)
Environmental Law .........................................................3.12(b)
Environmental Permits .....................................................3.12(a)
ERISA .....................................................................3.11(a)
Exchange Act ...............................................................1.1(a)
Financial Advisor ..........................................................3.3(d)
GAAP .......................................................................3.4(a)
GBBC .....................................................................Preamble
Governmental Entity ...........................................................3.6
HSR Act .......................................................................3.6
Indebtedness ...............................................................3.2(e)
Indemnified Parties ........................................................5.6(c)
Intellectual Property .....................................................3.17(a)
Intent Notice ..............................................................5.2(b)
IRS .......................................................................3.11(a)
Liens ......................................................................3.2(b)
Litigation ....................................................................3.9
Material Contracts ...........................................................3.21
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
Materials of Environmental Concern ........................................3.12(b)
Merger ........................................................................1.3
Merger Consideration ......................................................1.10(a)
Minimum Condition ..........................................................1.1(a)
Offer ....................................................................Preamble
Offer Deadline .............................................................7.1(f)
Offer Documents ............................................................1.1(b)
Offer Price ................................................................1.1(a)
Offer to Purchase ..........................................................1.1(a)
Option .......................................................................1.11
Other Transactions .........................................................1.2(a)
Paying Agent ...............................................................2.2(a)
PCBs ......................................................................3.12(b)
Permitted Liens ............................................................3.2(b)
Person .....................................................................5.2(c)
Preferred Stock ............................................................3.2(a)
Premium Amount .............................................................5.6(b)
Proxy Statement ...........................................................1.12(d)
Purchaser ................................................................Preamble
Purchaser Material Adverse Effect .............................................4.3
Purchaser Permits .............................................................4.9
RCRA ......................................................................3.12(b)
Real Property ................................................................3.20
Restated Articles .............................................................1.6
Rights .....................................................................1.1(a)
Rights Agreement .........................................................Preamble
Rights Amendment ...........................................................1.2(a)
Schedule TO ...................................................................1.1
Schedule 14D-9 .............................................................1.2(b)
SEC ........................................................................1.1(a)
Securities Act .............................................................3.4(a)
Selling Shareholders .....................................................Preamble
Share or Shares ..........................................................Preamble
Special Meeting ...........................................................1.12(a)
Subsidiary .................................................................3.1(a)
Surviving Corporation .........................................................1.3
Tax Authority .............................................................3.16(l)
Taxes .....................................................................3.16(l)
Tax Returns ...............................................................3.16(l)
Tender and Option Agreement ..............................................Preamble
Transmittal Documents ......................................................2.2(b)
WARN Act ..................................................................3.18(b)
Warrants .....................................................................1.11
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C>
1999 Financial Statements ..................................................3.4(a)
ANNEXES:
Annex A -- Form of Tender and Option Agreement
Annex B -- Conditions to the Tender Offer
</TABLE>
v
<PAGE> 7
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of April 28,
2000, is entered into by and among Cameron Ashley Building Products Inc., a
Georgia corporation (the "Company"), Guardian, Fiberglass, Inc., a Delaware
corporation ("Purchaser"), and CAB Merger Corp., a Georgia corporation and a
wholly owned subsidiary of Purchaser ("Acquisition Sub").
WHEREAS, Purchaser proposes to cause Acquisition Sub to make a tender offer
(as it may be amended from time to time as permitted under this Agreement, the
"Offer") to purchase all of the issued and outstanding shares of common stock,
no par value, of the Company (hereinafter referred to as either the "Shares" or
the "Company Common Stock") at a price per share of Company Common Stock of
$18.35, net to each seller in cash, without interest, upon the terms and subject
to the conditions set forth in this Agreement, and the Board of Directors of the
Company has adopted resolutions approving, among other things, the Offer and the
Merger and recommending that the Company's shareholders accept the Offer; and
WHEREAS, concurrently with the execution and delivery of this Agreement and
as an inducement to Purchaser and Acquisition Sub to enter into this Agreement,
Acquisition Sub and certain shareholders are entering into tender and option
agreements in the form attached hereto as Annex A (the "Tender and Option
Agreement") pursuant to which such shareholders (the "Selling Shareholders")
have agreed to (i) grant Acquisition Sub an irrevocable option to purchase all
of their Shares, and (ii) tender and, in the event such irrevocable option is
not theretofore exercised, sell their Shares in the Offer and (iii) vote their
Shares in favor of the Merger (as defined below) in each case upon the terms and
subject to the conditions set forth therein; and
WHEREAS, as an inducement to Purchaser and Acquisition Sub to enter into
this Agreement, the Board of Directors of the Company (the "Board") has approved
the execution and delivery of the Tender and Option Agreement so that (i) the
restrictions on "business combinations" set forth in Sections 14-2-1110 through
14-2-1133 of the Georgia Business Corporation Code ("GBCC") do not and will not
apply to Purchaser and Acquisition Sub or affiliates or associates of Purchaser
and Acquisition Sub as a result of the execution and delivery of the Tender and
Option Agreement or the consummation of the transactions contemplated thereby or
by this Agreement, and (ii) the Rights Agreement between the Company and
SunTrust Bank, Atlanta, Georgia, as Rights Agent, dated as of August 19, 1997
(the "Rights Agreement") shall be amended to prevent this Agreement or the
Tender and Option Agreement from resulting in the distribution of right
certificates or Purchaser and Acquisition Sub or their affiliates from being an
Acquiring Person (as defined in the Rights Agreement); and
WHEREAS, the Boards of Directors of Purchaser and Acquisition Sub have
approved the execution and delivery of this Agreement and have determined that
it is advisable and in the best interests of their respective shareholders, that
the Company and Acquisition Sub combine pursuant to the Merger in which
Acquisition Sub will merge with and into the Company in accordance with the GBCC
and upon the terms and subject to the conditions set forth herein, with the
Company being the surviving corporation; and
<PAGE> 8
WHEREAS, the Board has, in light of and subject to the terms and conditions
set forth herein, in accordance with the recommendation of a duly constituted
special committee of independent members of the Board (the "Special Committee"),
after considering the long-term prospects and interests of the Company and its
shareholders (i) determined that the consideration to be paid for each Share in
the Offer and the Merger (other than Shares held by Purchaser, Acquisition Sub
or any affiliate thereof) is fair to the holders of such Shares and that the
Offer and the Merger are in the best interests of such shareholders, (ii)
approved and adopted this Agreement and (iii) resolved to recommend that the
holders of such Shares approve this Agreement and the Merger upon the terms and
subject to the conditions set forth herein; and
WHEREAS, Purchaser, Acquisition Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also prescribe various conditions to the Offer and the
Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, Purchaser, Acquisition Sub and the Company hereby agree as
follows:
ARTICLE I -- THE OFFER AND THE MERGER
Section 1.1 The Offer. (a) Subject to the conditions of this Agreement, as
promptly as practicable, but in no event later than ten (10) business days after
the date of the public announcement of the execution of this Agreement,
Purchaser shall cause Acquisition Sub to commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) the Offer to purchase for cash all of the issued and outstanding shares
of Company Common Stock, and the associated rights (the "Rights") issued
pursuant to the Rights Agreement, at a price of $18.35 per Share, net to the
seller in cash, without interest (such price, or such higher price per Share as
may be paid in the Offer, being referred to herein as the "Offer Price"). The
obligation of Acquisition Sub to accept for payment and pay for Shares tendered
pursuant to the Offer shall be subject (i) to there being validly tendered and
not withdrawn prior to the expiration of the Offer that number of Shares which,
together with any Shares beneficially owned by Purchaser or Acquisition Sub,
represents at least a majority of the Shares outstanding on a fully-diluted
basis on the date of purchase ("on a fully-diluted basis" meaning, as of any
date, the number of Shares outstanding plus all Shares the Company is then
required to issue pursuant to obligations outstanding at that date under
employee stock option or other benefit plans, outstanding warrants, outstanding
options of any kind, convertible securities, or otherwise (to the extent such
options, warrants, convertible securities or other rights are vested or
exercisable) (the "Minimum Condition")), and (ii) to the other conditions set
forth in Annex B hereto. Acquisition Sub shall, on the terms and subject to the
prior satisfaction or waiver of the conditions of the Offer, including, without
limitation, the Minimum Condition, accept for payment and pay for Shares
tendered as soon as practicable after it is legally permitted to do so under
applicable law. The Offer shall promptly be made by means of an offer to
purchase (the "Offer to Purchase") containing the terms set forth in this
Agreement, the Minimum Condition and the other conditions set forth in Annex B
hereto. Without the written consent of the Company, Acquisition
2
<PAGE> 9
Sub shall not decrease the Offer Price, decrease the number of Shares sought,
change the form of consideration to be paid in the Offer, increase the Minimum
Condition, extend the Offer or amend or add to the offer conditions set forth in
Annex B or amend, add or waive any other condition of the Offer in any manner
adverse to the Company or the holders of the Shares. Notwithstanding the
foregoing, but subject to any rights the Company may have under this Agreement,
Acquisition Sub may, without the consent of the Company, extend the Offer one or
more times, up to July 31, 2000, (i) if at the then scheduled expiration date of
the Offer (which shall be not less than twenty (20) business days following the
commencement of the Offer), or any extension thereof, any of the conditions to
Acquisition Sub's obligation to accept for payment and pay for shares of Company
Common Stock shall not be satisfied or waived; (ii) for any period required by
any rule, regulation or interpretation of the Securities and Exchange Commission
("SEC") or the staff of the SEC applicable to the Offer; or (iii) if, as of such
date, all of the conditions to Acquisition Sub's obligations to accept payment
for Shares are satisfied or waived, but the number of Shares validly tendered
and not withdrawn pursuant to the Offer equals less than 90% of the then
outstanding Shares on a fully-diluted basis. Acquisition Sub shall terminate the
Offer upon termination of this Agreement pursuant to its terms.
(b) On the date the Offer is commenced, Acquisition Sub shall file with the
SEC a Tender Offer Statement on Schedule TO with respect to the Offer (together
with all amendments and supplements thereto and including the exhibits thereto,
the "Schedule TO"). The Schedule TO will include, as exhibits, any
pre-commencement written communications to Company shareholders, the Offer to
Purchase and a form of letter of transmittal and summary advertisement
(collectively, together with any amendments and supplements thereto, the "Offer
Documents") with respect to the Offer. Purchaser and Acquisition Sub agree that
the Offer Documents shall comply in all material respects with the provisions of
applicable Federal securities laws and the rules and regulations promulgated
thereunder and, on the date filed with the SEC and on the date first published,
sent or given to the Company's shareholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
covenant is made by Acquisition Sub with respect to information supplied by the
Company in writing specifically for inclusion in the Offer Documents. Each of
Purchaser and Acquisition Sub further agrees to take all steps necessary to
cause the Offer Documents to be filed with the SEC and to be disseminated to
each of the holders of Shares, in each case as and to the extent required by
applicable Federal securities laws. Each of Purchaser and Acquisition Sub, on
the one hand, and the Company, on the other hand, agrees promptly to correct any
information provided by such party for use in the Offer Documents if and to the
extent that it shall have become false and misleading in any material respect
and Purchaser and Acquisition Sub further agree to take all steps necessary to
cause the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable Federal securities laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon the Offer Documents before
they are filed with the SEC. In addition, Purchaser and Acquisition Sub agree to
provide the Company and its counsel in writing with any comments Purchaser,
Acquisition Sub or its counsel may receive from time to time from the SEC or its
staff with respect to the Offer Documents promptly
3
<PAGE> 10
after the receipt of such comments. Purchaser, Acquisition Sub and its counsel
will advise the Company and its counsel of the substance of all communications
received by Purchaser, Acquisition Sub and its counsel from the SEC and its
staff relating to the Schedule TO, the Offer, the Merger, this Agreement or the
transactions contemplated thereby.
(c) Purchaser shall provide or cause to be provided to Acquisition Sub on a
timely basis the funds necessary to accept for payment, and pay for, any Shares
that Acquisition Sub becomes obligated to accept for payment, and pay for,
pursuant to the Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Special Committee and the Board,
at meetings duly called and held on the date or dates on or before which the
parties entered into this Agreement and the Tender and Option Agreement, have
unanimously adopted resolutions (i) determining that each of the Offer and the
Merger are fair to and in the best interests of the Company's shareholders
(other than Purchaser, Acquisition Sub and their affiliates); (ii) approving
this Agreement and the transactions contemplated hereby (including, without
limitation, (x) the acquisition of the Company by Purchaser or any of its
affiliates, and any purchase of Shares in connection therewith, by means of this
Agreement, the Offer, the Merger and the Tender and Option Agreement, and any
other transactions conducted to effectuate the acquisition of the Company by
Purchaser or its affiliates in accordance with this Agreement ("Other
Transactions")) and (y) any other transactions contemplated hereby and by the
foregoing clause (x)); (iii) resolving to recommend that the shareholders of the
Company accept the Offer, tender their Shares thereunder to Acquisition Sub and
approve and adopt this Agreement and the Merger, subject to the Company's rights
pursuant to Section 5.2; (iv) approving all of the actions and transactions
referenced herein, with the consequences that the requirements for "business
combinations" set forth in Sections 14-2-1110 through 14-2-1133 of the GBCC will
not be applicable to the Merger; and (v) approving an amendment to the Rights
Agreement, as necessary (the "Rights Amendment"), (A) to prevent this Agreement,
the Tender and Option Agreement or the consummation of any of the transactions
contemplated hereby or thereby, including without limitation, the publication or
other announcement of the Offer and the consummation of the Offer and the
Merger, from resulting in the distribution of separate right certificates or the
occurrence of a Distribution Date (as defined therein) and (B) to provide that
neither the Purchaser nor Acquisition Sub shall be deemed to be an Acquiring
Person (as defined therein) by reason of the transactions expressly provided for
in this Agreement and the Tender and Option Agreement. The Company hereby
consents to the inclusion in the Offer Documents of the recommendation of the
Special Committee and the Board described in the immediately preceding sentence.
The Company shall not amend, revoke, withdraw or modify the approval of
Purchaser's acquisition of the Company Common Stock by reason of the Offer, the
Merger or the Tender and Option Agreement so as to render the restrictions of
Sections 14-2-1110 through 14-2-1133 of the GBCC applicable thereto; provided,
however, that the Company may take any such action if this Agreement has been
terminated pursuant to Section 7.1(g) hereof and Acquisition Sub has been paid
the fees contemplated by Section 7.3 hereof.
4
<PAGE> 11
(b) Concurrently with the commencement of the Offer, the Company shall file
with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, and including the
exhibits thereto, the "Schedule 14D-9") which, except as provided in Section
5.2, shall contain the statements to the same effect as those referred to in
Section 1.2(a) hereof. The Schedule 14D-9 will comply in all material respects
with the provisions of applicable Federal securities laws, and the rules and
regulations promulgated thereunder, and, on the date filed with the SEC and on
the date first published, sent or given to the Company's shareholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no covenant is made by the Company with respect to
information supplied by Purchaser and Acquisition Sub in writing specifically
for inclusion in the Schedule 14D-9. The Company further agrees to take all
steps necessary to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable Federal securities laws. Each of the Company, on the one hand, and
Purchaser and Acquisition Sub, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false and misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to each of the
holders of the Shares, in each case as and to the extent required by applicable
Federal securities laws. Purchaser, Acquisition Sub and its counsel shall be
given a reasonable opportunity to review and comment upon the Schedule 14D-9
before it is filed with the SEC. In addition, the Company agrees to provide
Purchaser, Acquisition Sub and its counsel in writing any comments the Company
or its counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments. The
Company and its counsel will advise Purchaser, Acquisition Sub and its counsel
of the substance of all communications received by the Company from the SEC and
its staff relating to the Schedule 14D-9, the Merger, this Agreement or the
transactions contemplated hereby.
(c) In connection with the Offer and the Merger, the Company shall cause
its transfer agent to furnish Acquisition Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Acquisition Sub such information and assistance (including updated
lists of shareholders, security position listings and computer files) as
Acquisition Sub may reasonably request in communicating the Offer to the
Company's shareholders. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Merger, Purchaser and
Acquisition Sub and their agents shall hold in confidence the information
contained in any such labels, listings and files, will use such information only
in connection with the Offer and the Merger and, if this Agreement shall be
terminated, will, upon request, deliver, and will use their reasonable efforts
to cause their agents to deliver, to the Company, all copies and any extracts or
summaries from such information then in their possession or control.
5
<PAGE> 12
Section 1.3 The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the GBCC, at the Effective Time (as
hereinafter defined) the Company and Acquisition Sub shall consummate a merger
(the "Merger") pursuant to which (a) Acquisition Sub shall merge with and into
the Company and the separate corporate existence of Acquisition Sub shall
thereupon cease, (b) the Company shall be the successor or the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Georgia and (c) the corporate existence of the Company with all of its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger.
Section 1.4 Effective Time. As soon as practicable after the satisfaction
or waiver of the conditions set forth in Article VI, the parties hereto shall
cause (a) a Certificate of Merger to be executed and filed on the date of the
Closing (as hereinafter defined) (or on such other date as Purchaser and the
Company may agree) with the Secretary of State of Georgia in such form as
required by, and executed in accordance with the relevant provisions of, the
GBCC, and (b) all other filings or recordings required by the GBCC in connection
with the Merger. Prior to the filing referred to in this Section 1.4, a closing
(the "Closing") will be held at the offices of Locke Liddell & Sapp LLP, 2200
Ross Avenue, Suite 2200, Dallas, Texas 75201, at 10:00 a.m., Dallas, Texas time
(or such other place, date and time as the parties may agree in writing). The
Merger shall become effective at such time as such Certificate of Merger is duly
filed with the Secretary of State of Georgia, or at such later time specified in
such Certificate of Merger (the time the Merger becomes effective being referred
to herein as the "Effective Time"). Subject to the terms and conditions hereof,
unless otherwise mutually agreed upon in writing by the authorized officers of
the Company and Purchaser, the parties hereto shall use their reasonable efforts
to cause the Effective Time to occur on the first business day following the
last to occur of (i) the effective date (including expiration of any applicable
waiting period) of the last required consent of any Governmental Entity (as
defined below) having authority over and approving or exempting the Merger and
(ii) the date on which the shareholders of the Company approve this Agreement
and the Merger to the extent such approval is required by applicable law; or
such later date within two (2) business days thereof as may be specified by
Purchaser.
Section 1.5 Effects of the Merger. At the Effective Time, the Merger shall
have the effects as set forth in the applicable provisions of the GBCC. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of the
Company and Acquisition Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Acquisition Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
Section 1.6 Amended and Restated Articles of Incorporation and Bylaws.
(a) The Amended and Restated Articles of Incorporation (the "Restated
Articles") of the Company in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation until
amended in accordance with applicable law.
6
<PAGE> 13
(b) The Bylaws of the Company in effect at the Effective Time shall be the
Bylaws of the Surviving Corporation until amended in accordance with applicable
law.
Section 1.7 Directors. (a) Promptly upon the purchase of and acceptance for
payment for any Shares (including, without limitation, all Shares subject to the
Tender and Option Agreement) by Acquisition Sub or any affiliate of Acquisition
Sub pursuant to the Offer or the Tender and Option Agreement which represents
the Minimum Condition, Acquisition Sub shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board as is
equal to the product of the total number of directors then serving on such Board
(after giving effect to the directors designated by Acquisition Sub pursuant to
this Section) multiplied by the ratio of the aggregate number of Shares
beneficially owned by Acquisition Sub and any of its affiliates to the total
number of Shares then outstanding. The Company shall, upon request of
Acquisition Sub, take all action necessary to cause Acquisition Sub's designees
to be elected or appointed to the Board, including, without limitation,
increasing the size of the Board or, at the Company's election, securing the
resignations of such number of its incumbent directors as is necessary to enable
Acquisition Sub's designees to be so elected or appointed to the Board, and
shall cause Acquisition Sub's designees to be so elected or appointed. At such
time, the Company shall also cause persons designated by Acquisition Sub to
constitute the same percentage (rounded up to the next whole number) as is on
the Board of (i) each committee of the Board, (ii) each board of directors (or
similar body) of each Subsidiary (as defined below) of the Company and (iii)
each committee (or similar body) of each such board. In the event that
Acquisition Sub's designees are elected to the Board, until the Effective Time,
the Board shall have at least two directors who are directors on the date hereof
(the "Company Directors"). In such event, if either of the Company Directors is
unable to serve for any reason whatsoever, the other directors shall designate a
person to fill such vacancy who shall not be a designee, shareholder or
affiliate of Acquisition Sub to be a Company Director for purposes of this
Agreement. Notwithstanding anything in this Agreement to the contrary, in the
event that Acquisition Sub's designees are elected to the Board, after the
acceptance for payment of shares of Common Stock pursuant to the Offer and prior
to the Effective Time, the affirmative vote of the Company Directors shall be
required to (a) amend or terminate this Agreement by the Company, (b) exercise
or waive any of the Company's rights, benefits or remedies hereunder, (c) extend
the time for performance of Acquisition Sub's respective obligations hereunder
or (d) take any other action by the Board of Directors of the Company in
connection with this Agreement.
(b) Subject to applicable law, the Company shall promptly take all actions
required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under Section 1.7(a),
including mailing to shareholders as part of the Schedule 14D-9 the information
required by such Section 14(f) and Rule 14f-1, as is necessary to enable
Acquisition Sub's designees to be elected to the Board. Purchaser and
Acquisition Sub shall supply the Company with any information with respect to
either of them and their nominees, officers, directors and affiliates required
by such Section 14(f) and Rule 14f-1. The provisions of Section 1.7(a) are in
addition to and shall not limit any rights which Acquisition Sub or any of its
affiliates may have as a holder or beneficial owner of Shares as a matter of law
with respect to the election of directors or otherwise.
7
<PAGE> 14
(c) The directors of Acquisition Sub at the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Restated Articles and the Bylaws of the Surviving
Corporation until each such director's successor is duly elected or appointed
and qualified.
Section 1.8 Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Restated Articles and the Bylaws of the Surviving
Corporation until each such officer's successor is duly elected or appointed and
qualified.
Section 1.9 Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Acquisition Sub acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the officers and directors
of the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or Acquisition Sub, all such deeds,
bills of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
rights, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Agreement.
Section 1.10 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of any of Purchaser, Acquisition Sub
or the Company:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time, together with the associated
Rights issued pursuant to the Rights Agreement, other than (i) any Shares
to be canceled pursuant to Sections 1.10(b) and 1.10(c) and (ii) any
Dissenting Shares (as defined in Section 2.1 hereof), shall be canceled and
extinguished and be converted into the right to receive $18.35 in cash (the
"Merger Consideration"), payable to the holder thereof, without interest
thereon, upon the surrender of the certificate formerly representing such
Share in the manner provided in Section 2.2 hereof and less any required
withholding of Taxes (as hereinafter defined). From and after the Effective
Time, all such Shares shall no longer be outstanding and shall be deemed to
be canceled and retired and shall cease to exist, and each holder of a
certificate representing any such Shares shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
therefor, without interest thereon, upon the surrender of such certificate
in accordance with Section 2.2 hereof, or the right, if any, to receive
payment from the Surviving Corporation of the "fair value" of such Shares
as determined in accordance with Article 13 of the GBCC.
8
<PAGE> 15
(b) Each Share held in the treasury of the Company and each Share
owned by any Subsidiary of the Company immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
Acquisition Sub, the Company or the holder thereof, be canceled, retired
and case to exist and no payment or distribution shall be made with respect
thereto.
(c) Each issued and outstanding share of common stock, par value $0.01
per share, of Acquisition Sub, shall be converted into one (1) validly
issued, fully paid and nonassessable share of common stock, no par value,
of the Surviving Corporation.
Section 1.11 Stock Options and Warrants. At or immediately prior to the
Effective Time, each outstanding stock option (an "Option") to purchase Shares
granted under any stock option plan, compensation plan or arrangement of the
Company or outstanding warrant (a "Warrant") to purchase Shares shall be
canceled and the holder of each such Option or Warrant (whether or not then
vested or exercisable) shall be paid by the Company promptly after the Effective
Time for each such Option or Warrant an amount equal to the product of (a) the
excess, if any, of the Merger Consideration over the applicable exercise price
per Share and (b) the number of Shares each holder could have purchased
(assuming full vesting and exercisability of such Option or Warrant) had such
holder exercised such Option or Warrant in full immediately prior to the
Effective Time.
Section 1.12 Special Meeting of Shareholders. If required by applicable law
in order to consummate the Merger, the Company, acting through the Board, shall,
in accordance with applicable law, subject to the terms and conditions of this
Agreement:
(a) as soon as reasonably practicable, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Special Meeting") for
the purpose of considering and taking action upon the approval of the
Merger and the approval and adoption of this Agreement;
(b) except as permitted in Section 1.12(c) and 5.2 below, include in
the Proxy Statement (as hereinafter defined) the recommendation of the
Board that shareholders of the Company vote in favor of the approval of the
Merger and the approval and adoption of this Agreement;
(c) use reasonable efforts to obtain shareholder approval (subject to
the Board, after having consulted with legal counsel, determining in good
faith that the taking of such action would constitute a breach of the
Board's fiduciary obligations under applicable law);
(d) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and use its best
efforts to obtain and furnish the information required to be included by it
in the proxy or information statement and, after consultation with
Purchaser, respond promptly to any comments made by the SEC with respect to
the preliminary proxy or information statement, and cause a definitive
proxy or
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information statement, including any amendment or supplement thereto (such
proxy or information statement, together with any amendments or supplements
thereto, the "Proxy Statement") to be mailed to its shareholders at the
earliest practicable time; and
(e) incorporate into the Proxy Statement written information provided
by Purchaser concerning Purchaser and Acquisition Sub required to be
included in the Proxy Statement. The Company shall not be responsible or
liable for any untrue statement of a material fact or omission to state a
material fact required to be stated in the Proxy Statement or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, to the extent that any such untrue statement of
a material fact or omission to state a material fact was made by the
Company in reliance upon and in conformity with written information
concerning Purchaser or Acquisition Sub furnished to the Company by
Purchaser specifically for use in the Proxy Statement. Purchaser agrees
that the written information concerning Purchaser and Acquisition Sub
provided by it for inclusion in the Proxy Statement and each amendment or
supplement thereto, at the time of mailing thereof and at the time of the
meeting(s) of shareholders of the Company, will not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 1.13 Merger Without Approval of Company Shareholders.
Notwithstanding Section 1.12 hereof, in the event that Acquisition Sub or any
permitted assignee of Acquisition Sub shall acquire at least 90% of the
outstanding Shares, pursuant to the Offer, the Tender and Option Agreement or
otherwise, the parties hereto agree, subject to Article VI hereof, to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without approval of the Company's
shareholders, in accordance with Section 14-2-1104 of the GBCC. If the Board so
approves a merger pursuant to Section 14-2-1104, Acquisition Sub shall, and
shall cause any permitted assignee to, continue to hold not less than 90% of the
issued and outstanding shares of Company Common Stock until the consummation or
abandonment of such merger.
ARTICLE II -- DISSENTING SHARES; PAYMENT FOR SHARES
Section 2.1 Dissenting Shares. (a) Notwithstanding anything in this
Agreement to the contrary, any Shares held by a holder who has demanded and
perfected his demand for payment for his Shares in accordance with Article 13 of
the GBCC and as of the Effective Time has neither withdrawn nor lost his right
to such appraisal ("Dissenting Shares") shall not be converted into or represent
a right to receive the Merger Consideration pursuant to Section 1.10, but the
holder thereof shall be entitled to only such rights as are granted by the GBCC.
(b) Notwithstanding the provisions of Section 2.l(a), if any holder of
Shares who demands payment for his Shares under Article 13 of the GBCC
effectively withdraws or loses (through failure to perfect or otherwise) his
right to such payment under Article 13, then as of the Effective Time or
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the occurrence of such event, whichever later occurs, such holder's Shares shall
automatically be converted into and represent only the right to receive the
Merger Consideration as provided in Section 1.10(a), without interest thereon,
upon surrender of the certificate or certificates representing such Shares
pursuant to Section 2.2 hereof.
(c) The Company shall give Purchaser (i) prompt notice of any such demands
for payment under Article 13 of the fair value of any Shares, withdrawals of
such demands and any other instruments served pursuant to the GBCC received by
the Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for payment under the GBCC. The Company shall not
voluntarily make any payment with respect to any demands for payment and shall
not, except with the prior written consent of Purchaser, settle or offer to
settle any such demands.
Section 2.2 Payment for Shares.
(a) Prior to the Effective Time, Purchaser shall designate a bank or trust
company, reasonably acceptable to the Company, to act as paying agent in
connection with the Merger (the "Paying Agent") pursuant to a paying agent
agreement providing for the matters set forth in this Section 2.2 and otherwise
reasonably satisfactory to the Company. At the Effective Time, Purchaser shall
deposit, or cause to be deposited, in trust with the Paying Agent for the
benefit of holders of Shares the aggregate consideration to which such holders
shall be entitled at the Effective Time pursuant to Section 1.10. Such funds
shall be invested as directed by the Surviving Corporation pending payment
thereof by the Paying Agent to holders of the Shares. Earnings from such
investments shall be the sole and exclusive property of the Surviving
Corporation and no part thereof shall accrue to the benefit of the holders of
the Shares.
(b) As soon as reasonably practicable after the Effective Time, the Paying
Agent shall mail to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "Certificates"), whose Shares were
converted pursuant to Section 1.10 into the right to receive the Merger
Consideration (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Paying Agent and shall be
in such form and have such other provisions not inconsistent with this
Agreement) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger Consideration (together, the
"Transmittal Documents"). Upon surrender of a Certificate for cancellation to
the Paying Agent or to such other agent or agents as may be appointed by
Purchaser, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each Share formerly represented by such Certificate, without
any interest thereon, and less any applicable withholding Taxes, and the
Certificate so surrendered shall forthwith be canceled. If payment of the Merger
Consideration is to be made to a Person (as hereinafter defined) other than the
Person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall otherwise be in proper form for transfer, that the signatures
on the Certificate or any related stock power shall be properly guaranteed and
that the Person requesting
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such payment shall have paid any transfer and other Taxes required by reason of
the payment of the Merger Consideration to a Person other than the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such Tax either has been paid or
is not applicable. Until surrendered in accordance with the provisions of and as
contemplated by this Section 2.2 each Certificate (other than (i) Certificates
representing Shares subject to Sections 1.10(b) and 1.10(c) and (ii) Dissenting
Shares) shall be deemed at any time after the Effective Time to represent only
the right to receive the Merger Consideration in cash as contemplated by this
Section 2.2. Upon the surrender of Certificates in accordance with the terms and
instructions contained in the Transmittal Documents, Purchaser shall cause the
Paying Agent to pay the holder of such Certificates in exchange therefor cash in
an amount equal to the Merger Consideration multiplied by the number of Shares
represented by such Certificate (other than Certificates representing Dissenting
Shares and Certificates representing Shares held by Purchaser or in the treasury
of the Company).
(c) At the Effective Time, the stock transfer books of the Company shall be
closed and there shall not be any further registration of transfers of any
shares of capital stock thereafter on the records of the Company. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for the consideration provided for, and in
accordance with the procedures set forth, in this Article II. No interest shall
accrue or be paid on any cash payable upon the surrender of a Certificate or
Certificates that immediately before the Effective Time represented outstanding
Shares.
(d) From and after the Effective Time, the holders of Certificates
evidencing ownership of Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except as
otherwise provided herein or by applicable law.
(e) If any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed, the Surviving Corporation shall pay or cause to be
paid in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration for the Shares represented thereby. When authorizing such payment
of the Merger Consideration in exchange therefor, the Board of Directors of the
Surviving Corporation may, in its discretion and as a condition precedent to the
payment thereof, require the owner of such lost, stolen or destroyed Certificate
to give the Surviving Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Surviving Corporation
with respect to the Certificate alleged to have been lost, stolen or destroyed.
(f) Promptly following the date which is six (6) months after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any cash (including any earnings and interest received with
respect thereto), Certificates and other documents in its possession relating to
the Merger, which had been made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or similar laws) only as general
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<PAGE> 19
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon.
(g) The Merger Consideration paid in the Merger shall be net to the holder
of Shares in cash, subject to reduction only for any applicable federal
withholding Taxes or, as set forth in Section 2.2(b), stock transfer Taxes
payable by such holder.
(h) Notwithstanding anything to the contrary in this Section 2.2, none of
the Paying Agent, Purchaser or the Surviving Corporation shall be liable to any
holder of a Certificate formerly representing Shares for any amount properly
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If Certificates are not surrendered prior to two (2)
years after the Effective Time, unclaimed funds payable with respect to such
Certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any Person previously entitled thereto.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedules delivered to Purchaser prior to the
execution of this Agreement setting forth specific exceptions to the Company's
representations and warranties set forth herein (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to Purchaser as follows:
Section 3.1 Organization and Qualification, Subsidiaries. (a) The Company
Disclosure Schedule sets forth in Section 3.1(a) a complete list of all
Subsidiaries of the Company that are corporations (identifying its jurisdiction
of incorporation, each jurisdiction in which it is qualified and/or licensed to
transact business, and the number of shares owned and percentage ownership
interest represented by such share ownership) and all of its Subsidiaries that
are general or limited partnerships, limited liability companies or other
non-corporate entities (identifying the law under which such entity is
organized, each jurisdiction in which it is qualified and/or licensed to
transact business, and the amount and nature of the ownership interest therein).
Except as noted in Section 3.1(a) of the Company Disclosure Schedule, each of
the Company and its Subsidiaries is a corporation and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and (as to corporations) has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its businesses as now being conducted. Each Subsidiary of the Company
which is not a corporation has all power and authority under its governing
documents and the law under which it was organized to own, lease and operate its
properties and to carry on its businesses as now being conducted. The minute
book and other organizational documents for each of the Company and its
Subsidiaries have been made available to Purchaser for its review and, except as
disclosed in Section 3.1(a) of the Company Disclosure Schedule, are true and
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments thereto and all
proceedings of the board of directors and shareholders thereof. The Company has
heretofore delivered or made available to Purchaser accurate and complete copies
of the Restated Articles and Bylaws, as currently in effect,
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<PAGE> 20
of the Company and promptly will deliver to Purchaser, upon request, accurate
and complete copies of the certificate or articles of incorporation and bylaws,
as currently in effect, of each of its Subsidiaries. As used in this Agreement,
the term "Subsidiary" shall mean with respect to any party, any corporation or
other organization, whether incorporated or unincorporated or domestic or
foreign to the United States of which (i) such party or any other Subsidiary of
such party is a general partner or (ii) at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its Subsidiaries, or by such
party and one or more of its Subsidiaries.
(b) Each of the Company and its Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing would
not, individually or in aggregate, have a Company Material Adverse Effect. As
used in this Agreement, the term "Company Material Adverse Effect" shall mean
any change(s) or effect(s) that, individually or in the aggregate, are
materially adverse to the financial condition, business or results of operations
of the Company and its Subsidiaries, taken as a whole, excluding in all cases:
(i) events or conditions generally affecting the industry in which the Company
and its Subsidiaries operate or arising from changes in general business or
economic conditions; (ii) any effect resulting from any change in law or GAAP,
which generally affects entities such as the Company or its Subsidiaries; (iii)
events resulting from the execution and/or announcement of this Agreement,
including, without limitation, any material adverse change in the relationship
of Owens Corning or CertainTeed with the Company or its Subsidiaries; and (iv)
any effect resulting from compliance by the Company or any of its Subsidiaries
with the terms of this Agreement.
(c) Except as set forth in Section 3.1(c) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns (i) any equity
interest, or option to purchase such an interest, in any corporation or other
entity or (ii) marketable securities where the Company's or its Subsidiary's
equity interest in any entity exceeds five percent (5%) of the outstanding
equity of such entity on the date hereof.
Section 3.2 Capitalization of the Company and its Subsidiaries. (a) The
authorized capital stock of the Company consists of 20,000,000 shares of Company
Common Stock and 100,000 shares of preferred stock, no par value (the "Preferred
Stock"). As of the date hereof, 8,718,507 shares of Common Stock are issued and
outstanding and no shares of Preferred Stock are outstanding. As of the date
hereof, 1,189,911 shares of Company Common Stock and no shares of Preferred
Stock are held in the treasury of the Company. All of the Shares have been
validly issued, are fully paid, nonassessable and have been issued free of
preemptive rights. Section 3.2(a) of the Company Disclosure Schedule identifies
the number of shares of each class of capital stock of the Company which are
reserved and subject to any Company Benefit Plan (as defined in Section
3.11(h)), indicating the name of the plan, the date of the grant, the holder of
the option, the number of shares granted, the type of option and the exercise
price thereof. Section 3.2(a) of the Company Disclosure
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Schedule also identifies the number of shares of each class of capital stock of
the Company which are reserved and subject to any warrant of the Company,
indicating the warrant agreement, the date of the warrant, the holder of the
warrant, the number of shares subject to the warrant and the exercise price
thereof. The actions to be taken in Section 1.11 hereof with respect to all
outstanding options and warrants of the Company are permissible under the terms
of such options and warrants without any further action on the part of the
Company, Purchaser or the holders of any such options or warrants. As of the
date hereof, options to purchase 1,600,025 shares of Company Common Stock were
outstanding under Company Benefit Plans and warrants to purchase 200,000 shares
of Company Common Stock were outstanding. Except as set forth above and except
for the Rights issued pursuant to the Rights Agreement, there are outstanding
(i) no shares of capital stock or other voting securities of the Company, (ii)
no securities of the Company or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
(iii) no options or other rights to acquire from the Company or any of its
Subsidiaries, and no other contract, understanding, arrangement or obligation
(whether or not contingent) of the Company or any of its Subsidiaries to issue
or sell, directly or indirectly, any capital stock, voting securities,
securities convertible into or exchangeable for capital stock or voting
securities, or other securities of the Company or any of its Subsidiaries, or
any other ownership interests in the Company or any of its Subsidiaries and (iv)
no equity equivalents, interests in the ownership or earnings of the Company or
any of its Subsidiaries or other similar rights (collectively, "Company
Securities"). Except for the put options relating to the capital stock of Field
Marketing, Inc., there are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Company
Securities.
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, all of the outstanding capital stock of, or other ownership interests
in, each Subsidiary of the Company, is owned by the Company, directly or
indirectly, free and clear of any Lien (as hereinafter defined) or any other
limitation or restriction (including any restriction on the right to vote or
sell the same, except as may be provided as a matter of law) and is fully paid
and non-assessable and was issued free of preemptive rights. For purposes of
this Agreement, "Lien" shall mean, with respect to any asset (including, without
limitation, any security) any option, claim, mortgage, lien, pledge, charge,
security interest or encumbrance or restriction of any kind in respect of such
asset (other than rights or interests held by lessors or sublessors under
operating leases entered into in the ordinary course of business and other than
Permitted Liens). For purposes of this Agreement, "Permitted Liens" shall mean
(i) statutory Liens not yet delinquent, (ii) Liens with respect to the
properties or assets that do not, individually or in the aggregate, materially
detract from the value or interfere with the use of the properties or assets or
otherwise materially impair present business operations at such properties,
(iii) Liens for Taxes and other governmental charges not yet delinquent or the
validity of which are being contested in good faith by appropriate actions and
(iv) Liens reflected on the 1999 Financial Statements or Section 3.2(b) of the
Company Disclosure Schedule.
(c) The Shares and the Rights constitute the only class of equity
securities of the Company or any of its Subsidiaries registered or required to
be registered under the Exchange Act.
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(d) There are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of the capital stock of the Company or any of the Subsidiaries.
(e) Other than as set forth in the 1999 Financial Statements (as defined in
Section 3.4(a)) or in Section 3.2(e) of the Company Disclosure Schedule, there
is no outstanding material Indebtedness (as hereinafter defined) of the Company
or any of its Subsidiaries. Except as identified in the 1999 Financial
Statements or in Section 3.2(e) of the Company Disclosure Schedule, no such
Indebtedness of the Company or its Subsidiaries contains any restriction upon
(i) the prepayment of such Indebtedness, (ii) the incurrence of Indebtedness by
the Company or its Subsidiaries, respectively, or (iii) the ability of the
Company or its Subsidiaries to grant any Liens on its properties or assets. For
purposes of this Agreement, "Indebtedness" shall include (i) all indebtedness
for borrowed money or for the deferred purchase price of property or services
(other than current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices and operating
leases), (ii) any other indebtedness which is evidenced by a note, bond,
debenture or similar instrument, (iii) all obligations under financing leases,
(iv) all obligations in respect of acceptances issued or created, (v) all
liabilities secured by any Lien on any property and (vi) all guarantee
obligations.
Section 3.3 Authority Relative to this Agreement, Consents and Approvals.
(a) The Company has all the necessary corporate power and authority to execute
and deliver this Agreement and to consummate the Merger in accordance with the
terms hereof (subject to obtaining the necessary approval and adoption of this
Agreement and approval of the Merger by the shareholders of the Company as
contemplated by Section 1.12 hereof). The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the Merger
have been duly and validly authorized by the Board and, except for obtaining the
approval of the Company's shareholders as contemplated by Section 1.12 hereof,
no other corporate action or corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by the Company of the Merger. This Agreement has
been duly and validly executed and delivered by the Company, and assuming due
and valid authorization, execution and delivery by Purchaser and Acquisition
Sub, constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceedings may be brought).
(b) The Board of Directors of the Company has duly and validly approved and
taken all corporate action required to be taken by it for the consummation by
the Company of the transactions contemplated by this Agreement, including the
Offer, the Merger and the acquisition of Shares pursuant to the Offer, the
Merger, the Tender and Option Agreement, and any Other Transactions, including,
without limitation, all matters contemplated by Section 1.2(a)(ii) hereof. The
actions set forth in Section 1.2(a) are all the actions required, and are
sufficient, to render the relevant
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antitakeover provisions of Sections 14-2-1110 through 14-2-1133 of the GBCC
inapplicable to the Offer, the Merger, the Tender and Option Agreement and any
Other Transactions so long as this Agreement has not been terminated in
accordance with its terms.
(c) The Rights Amendment will be sufficient to render the Rights
inoperative with respect to any acquisition of Shares by the Acquisition Sub or
any of its affiliates pursuant to this Agreement and/or the Tender and Option
Agreement. As a result of the Rights Amendment, the Rights shall not be
exercisable as a result of the acceptance for payment of Shares pursuant to the
Offer and/or the purchase of Shares by Acquisition Sub pursuant to the Tender
and Option Agreement.
(d) Credit Suisse First Boston Corporation (the "Financial Advisor") has
consented to inclusion of its opinion in the Company's Schedule 14D-9 in such
form and substance as is satisfactory to such Financial Advisor.
Section 3.4 SEC Reports, Financial Statements. (a) Except as set forth on
Section 3.4(a) of the Company Disclosure Schedule, since October 31, 1998, the
Company has timely filed with the SEC all forms, reports, schedules, statements
and other documents required to be filed by it with the SEC pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and the SEC's rules
and regulations promulgated thereunder and the Exchange Act and the SEC's rules
and regulations promulgated thereunder, including, without limitation, any
financial statements or schedules included therein (any such documents filed
prior to the date hereof being collectively, the "Company SEC Documents"). At
the time filed, or in the case of registration statements on their respective
effective dates, the Company SEC Documents (i) complied in all material respects
with the applicable requirements of the Exchange Act and the Securities Act, as
the case may be, and the rules and regulations promulgated thereunder and (ii)
did not, at the time filed (or in the case of registration statements, at the
time of effectiveness), contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. No Subsidiary of the Company is required to file any
form, report or other document with the SEC. The audited financial statements
dated October 31, 1999 delivered to Purchaser (the "1999 Financial Statements")
and the financial statements included in the Company SEC Documents filed since
October 31, 1998 (i) have been prepared from, and are in accordance with, the
books and records of the Company and its Subsidiaries, (ii) complied in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, (iii) have been prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and (iv) fairly present, in all material
respects, the consolidated financial position and the consolidated results of
operations and cash flows (and changes in financial position, if any) of the
Company and its Subsidiaries as of the times and for the periods referred to
therein, except that any such Financial Statements that are unaudited, interim
financial statements were or are subject to normal and recurring year end
adjustments, which were not or are not expected to be material in amount or
effect.
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(b) The Company has heretofore delivered or made available to Purchaser, in
the form filed with the SEC (including any amendments thereto), (i) its Annual
Reports on Form 10-K for each of the three fiscal years ended October 31, 1996,
October 31, 1997 and October 31, 1998, (ii) all definitive proxy statements
relating to the Company's meetings of shareholders (whether annual or special)
held since October 31, 1998 and (iii) all other reports or registration
statements filed by the Company with the SEC since October 31, 1998.
(c) The Company has heretofore furnished or made available to Purchaser a
complete and correct copy of any amendments or modifications, which have not yet
been filed by the Company with the SEC, to all agreements, documents or other
instruments which previously had been filed by the Company and are currently in
effect.
Section 3.5 Proxy Statement. The Proxy Statement to be sent to the
shareholders of the Company in connection with the Special Meeting, as of the
date first mailed to the shareholders of the Company and at the time of the
Special Meeting will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Proxy Statement will, when filed by the Company
with the SEC, comply as to form in all material respects with the applicable
provisions of the Exchange Act and the SEC rules and regulations promulgated
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to the statements made in any of the foregoing
documents based on written information supplied by or on behalf of Purchaser,
Acquisition Sub or any of their respective affiliates specifically for inclusion
therein.
Section 3.6 Consents and Approvals; No Violations. No filing with or notice
to, and no permit, authorization, consent or approval of, any court or tribunal
or any foreign, provincial, federal, state, county or local administrative,
governmental or regulatory body, agency, authority (including a self-regulated
authority), instrumentality, commission, board or body (a "Governmental Entity")
is required on the part of the Company or any of its Subsidiaries for the
execution, delivery and performance by the Company of this Agreement or the
consummation by the Company of the Merger, except (a) in connection with the
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and comparable Canadian requirements, (b)
pursuant to the applicable requirements of the Exchange Act and the SEC's rules
and regulations promulgated thereunder, (c) the filing and recordation of the
Certificate of Merger pursuant to the GBCC or (d) where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings or
give such notice would not have a Company Material Adverse Effect. Except as
disclosed in Section 3.6 of the Company Disclosure Schedule, neither the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the Merger will (i) conflict with or result in
any breach of any provision of the respective Certificate or Articles of
Incorporation or Bylaws (or similar governing documents) of the Company or of
any its Subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) or require
any consent pursuant to, or result in the creation of any Lien on any asset of
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the Company or its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound or (iii) violate any order, writ, injunction,
decree, law, statute, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except in the case
of (ii) or (iii) for any such violations, breaches, defaults (or rights of
termination, amendment, cancellation or acceleration), Liens or failures to
obtain consents which would not, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 3.7 No Default. None of the Company or any of its Subsidiaries is
in default or violation (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation) of any term,
condition or provision of (a) its Certificate or Articles of Incorporation or
Bylaws (or similar governing documents), (b) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any of its Subsidiaries is now a party or by which any
of them or any of their respective properties or assets may be bound or (c) any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
the Company, any of its Subsidiaries or any of their respective properties or
assets, except in the case of (b) or (c) for violations, breaches or defaults
which would not, individually or in the aggregate, have a Company Material
Adverse Effect.
Section 3.8 No Undisclosed Liabilities. Except (a) for liabilities incurred
pursuant to the terms of this Agreement, (b) for liabilities that are accrued or
reserved against in the consolidated balance sheet of the Company included in
the 1999 Financial Statements (the "Company Balance Sheet"), or (c) as set forth
in Section 3.8 of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries has incurred any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that have, or would reasonably
be expected to have, a Company Material Adverse Effect or that would be required
by GAAP to be reflected or reserved against on a consolidated balance sheet, or
in the notes thereto, of the Company. Except as set forth in Section 3.8 of the
Company Disclosure Schedule, there is no Indebtedness of the Company and its
Subsidiaries which exceeds $50,000 and will accelerate or become due or result
in a right of redemption or repurchase on the part of the holder of such
Indebtedness (with or without due notice or lapse of time) as a result of this
Agreement or the Merger. Neither the Company nor any Subsidiary has incurred or
paid any liability since the date of the Company Balance Sheet except for such
liabilities incurred or paid (i) in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect or (ii) in
connection with the transactions contemplated by this Agreement. Except as
disclosed in the Company SEC Documents or in Section 3.8 of the Company
Disclosure Schedule, neither the Company nor any Subsidiary is directly or
indirectly liable, by guarantee, indemnity, or otherwise, upon or with respect
to, or obligated, by discount or repurchase agreement or in any other way, to
provide funds in respect to, or obligated to guarantee or assume any liability
of any Person for any amount in excess of $100,000. As used in this Section 3.8,
the term "liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty
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or endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
Section 3.9 Litigation. Except as disclosed in the Company SEC Documents or
in Section 3.9 of the Company Disclosure Schedule, there is no suit, claim,
complaint, action, arbitration, criminal prosecution, governmental or other
examination, investigation, hearing, administrative or other proceeding
(collectively, "Litigation") pending or, to the knowledge of the Company,
threatened against, affecting or involving the Company or any of its
Subsidiaries or any of their respective properties or assets before any
Governmental Entity which is reasonably likely to have a Company Material
Adverse Effect. Except as disclosed in the Company SEC Documents or in Section
3.9 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which is reasonably likely to have a Company Material Adverse Effect. Reserves
reflected on the 1999 Financial Statements are adequate for all Litigation
disclosed in the Company SEC Documents or in Section 3.9 of the Company
Disclosure Schedule. Section 3.9 of the Company Disclosure Schedule contains a
summary of all Litigation as of the date of this Agreement where the potential
liability is reasonably likely to exceed $25,000 (i) to which the Company or any
Subsidiary is a party or (ii) which names the Company or any Subsidiary as a
defendant or cross-defendant or for which the Company or any Subsidiary has any
potential liability.
Section 3.10 Compliance with Applicable Law. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which would not,
individually or in the aggregate, have a Company Material Adverse Effect. The
Company and its Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure so to comply would not have a Company Material
Adverse Effect. The businesses of the Company and its Subsidiaries are not being
and have not been conducted in violation of any law, ordinance or regulation of
any Governmental Entity, except for violations or possible violations which,
individually or in the aggregate, would not have a Company Material Adverse
Effect. None of the directors, officers, agents, representatives or employees of
the Company or its Subsidiaries (in their capacity as directors, officers,
agents, representatives or employees) has taken any action or made any omission
which would violate any law, ordinance or regulation of any Governmental Entity,
except for violations or possible violations which, individually or in the
aggregate, would not have a Company Material Adverse Effect. Except as set forth
in Sections 3.9 or 3.10 of the Company Disclosure Schedule or in the Company SEC
Documents, no investigation or review by any Governmental Entity with respect to
the Company or any of its Subsidiaries, or with respect to any of their
respective directors, officers, agents, representatives or employees (in regard
to actions taken or omissions made in their capacity as directors, officers,
agents, representatives or employees) is pending or, to the knowledge of the
Company, threatened. Excluded from the scope of this representation and warranty
are all matters related to Environmental Laws, Materials of Environmental
Concern or Environmental Claims (as such terms are defined in Section 3.12);
these
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excluded matters, to the extent subject to a representation and warranty under
this Agreement, are covered exclusively by Section 3.12.
Section 3.11 Employee Benefit Matters. (a) All Company Benefit Plans are
listed in Section 3.11 of the Company Disclosure Schedule or in the Company SEC
Documents. True and complete copies of the Company Benefit Plans (including: (i)
all trust agreements or other funding arrangements for such Company Benefit
Plans (including insurance contracts), and all amendments thereto, (ii) with
respect to any such Company Benefit Plans or amendments, all determination
letters, rulings, opinion letters, information letters, or advisory opinions
issued by the United States Internal Revenue Service, the United States
Department of Labor, or the Pension Benefit Guaranty Corporation after December
31, 1992, (iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports and summary annual reports prepared
for any Company Benefit Plan with respect to the most recent three (3) plan
years, (iv) the most recent summary plan descriptions and any material
modifications thereto and (v) any filing or compliance action taken under
Revenue Procedures 98-22, 99-13, or 99-31) have been provided or made available
to the Purchaser. Except as set forth in Section 3.11(a) of the Company
Disclosure Schedule, each Company Benefit Plan has been administered and
maintained in all material respects in compliance with its terms, with the
material provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), with the Internal Revenue Code of 1986, as amended (the
"Code"), and with all other applicable laws. Each Company Benefit Plan intended
to be qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service (the "IRS") to be so qualified and no event has
occurred that could reasonably be expected to adversely affect the qualified
status of such Company Benefit Plan or the tax-exempt status of any trust. All
government approvals for tax exemption of any trust applicable to a Company
Benefit Plan have been timely obtained and all such approvals as well as all IRS
determination letters applicable to a Company Benefit Plan continue in full
force and effect. Neither the Company nor any of its Subsidiaries has engaged in
a transaction with respect to any Company Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
the Company to a Tax imposed by either Section 4975 of the Code or Section
502(i) of ERISA. To the knowledge of the Company, there are no pending, nor has
the Company or any of its Subsidiaries received notice of any threatened, claims
against or otherwise involving any of the Company Benefit Plans (other than
routine claims for benefits). No Company Benefit Plan is under audit or
investigation by the IRS, the Department of Labor or the Pension Benefit
Guaranty Corporation and, to the knowledge of the Company, no such audit or
investigation is threatened. Except as listed on Section 3.11(a) of the Company
Disclosure Schedule, all contributions and other payments required to be made as
of the date of this Agreement to, or pursuant to, the Company Benefit Plans have
been made or accrued for in the 1999 Financial Statements. Neither the Company
nor any entity under "common control" with the Company within the meaning of
Section 4001 of ERISA has at any time contributed to, or been required to
contribute to, any "pension plan" (as defined in Section 3(2) of ERISA) that is
subject to Title IV of ERISA or Section 412 of the Code, including, without
limitation, any "multi-employer plan" (as defined in Sections 3(37) and
4001(a)(3) of ERISA) and neither the Company nor any such entity has at any time
incurred or could reasonably expect to incur any liability under Title IV of
ERISA. To the knowledge of the Company, neither the Company nor any of its
Subsidiaries nor any employee or
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agent thereof, has made any oral or written representation to any participant in
or beneficiary of a Company Benefit Plan, or to any other individual or entity
that is contrary to the written or otherwise preexisting terms and provisions of
any Company Benefit Plan, which representations (in the aggregate) could
reasonably create a material liability for the Company.
(b) Except as listed on Section 3.11(b) of the Company Disclosure Schedule
or in the Company SEC Documents, the consummation of the Merger will not (either
alone or upon the occurrence of any additional or subsequent events) constitute
an event under any Company Benefit Plan, employment or severance agreement,
trust, loan or other compensation or benefits agreement or arrangement that will
or may result in any payment (whether of severance pay, unemployment
compensation, golden parachute or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any current or former employee, officer, director,
agent or consultant of the Company or any Subsidiary. Except as listed on
Section 3.11(b) of the Company Disclosure Schedule, no such payment,
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits will cause a loss of tax deductions
under Section 280G of the Code.
(c) Except as listed on Section 3.11(c) of the Company Disclosure Schedule,
(i) neither the Company nor any of its Subsidiaries maintains or contributes to
any Company Benefit Plan which provides, or has any liability to provide, life
insurance, medical, severance or other employee welfare benefits to any employee
upon or with respect to periods following his retirement or termination of
employment, except as may be required by Section 4980B of the Code and (ii)
there are no restrictions on the rights of the Company to amend or terminate any
such retiree health or benefit Plan without incurring any liability thereunder.
(d) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of the Company and their respective beneficiaries, have been fully
reflected on the 1999 Financial Statements to the extent required by and in
accordance with GAAP.
(e) To the extent a Company Benefit Plan has excluded any individual from
coverage, such exclusion is (i) consistent with the written terms of the Company
Benefit Plan, (ii) enforceable under the terms of such Plan, (iii) consistent
with the terms of any agreement with such individual (whether written or oral)
and (iv) enforceable under applicable law.
(f) Neither the Company nor any of its Subsidiaries nor, to the knowledge
of the Company, any administrator or fiduciary of any Company Benefit Plan (or
any agent of any of the foregoing) has engaged in any transaction, or acted or
failed to act in any manner which could subject the Company or Purchaser to any
direct or indirect liability (by indemnity or otherwise) for breach of any
fiduciary, co-fiduciary or other duty under ERISA.
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(g) Except as listed on Section 3.11(g) of the Company Disclosure Schedule,
all Company Benefit Plan documents and annual reports or returns, audited or
unaudited financial statements, actuarial valuations, summary annual reports and
summary plan descriptions issued with respect to the Company Benefit Plans are
correct and complete and have been timely distributed to participants of the
Company Benefit Plans (as required by law).
(h) "Company Benefit Plan" means collectively, each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other incentive plan, any other written or
unwritten employee program, arrangement, agreement or understanding, whether
arrived at through collective bargaining or otherwise, any medical, vision,
dental or other health plan, any life insurance plan or any other employee
benefit plan or fringe benefit plan, including, without limitation, any
"employee benefit plan," as that term is defined in Section 3(3) of ERISA,
maintained by, sponsored in whole or in part by, or contributed to by the
Company or any of its Subsidiaries for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
and under which employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries are eligible to participate. Company Benefit
Plans include (but are not limited to) "employee benefit plans" as defined in
Section 3(3) of ERISA and any other plan, fund, policy, program, practice,
custom, understanding or arrangement providing compensation or other benefits to
any current or former officer or employee or director or independent contractor
of the Company, or any dependent or beneficiary thereof, maintained by the
Company or under which the Company has any obligation or liability, whether or
not they are or are intended to be (i) covered or qualified under the Code,
ERISA or any other applicable law, (ii) written or oral, (iii) funded or
unfunded, (iv) actual or contingent or (v) generally available to any or all
employees (or former employees) of the Company (or their beneficiaries of
dependents), including, without limitation, all incentive, bonus, deferred
compensation, flexible spending accounts, cafeteria plans, vacation, holiday,
medical, disability, share purchase or other similar plans, policies, programs,
practices or arrangements.
(i) Neither Purchaser nor the Company has any liability or obligation with
respect to any Company Benefit Plan (including any previously adopted Company
Benefit Plan) or any other employee benefit, plan, program, arrangement or
policy that covers employees of the Company, other than those listed on Schedule
3.11(i) of the Company Disclosure Schedule or reflected on the 1999 Financial
Statements or listed in the Company SEC Documents.
Section 3.12 Environmental Laws and Regulations. (a) Except as shown on
Section 3.12(a) of the Company Disclosure Schedule, and except for such failures
to comply which would not, individually or in the, aggregate, be reasonably
likely to have a Company Material Adverse Effect, the Company and each of its
Subsidiaries (i) is and has been in full compliance with all Environmental Laws
(as defined in Section 3.12(b)) and including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern (as defined in Section 3.12(b)) or
otherwise relating to the manufacture, generation, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern; (ii) has all permits, licenses, certificates, variances,
exemptions,
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orders, authorizations and approvals of Governmental Entities ("Environmental
Permits") required under all applicable Environmental Laws, except for those
Environmental Permits which, if the Company or a Subsidiary did not have, such
failure would not have a Company Material Adverse Effect; and (iii) is in
compliance with the terms and conditions of such Environmental Permits.
(b) For purposes of this Agreement, the term "Environmental Laws" shall
mean any and all codes, laws (including, without limitation, common law),
ordinances, regulations, reporting or licensing requirements, rules, or statutes
relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface, or subsurface
strata), including, without limitation (i) the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq.
("CERCLA"); (ii) the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., ("RCRA"); (iii)
the Emergency Planning and Community Right to Know Act (42 U.S.C. Sections 11001
et seq.); (iv) the Clean Air Act (42 U.S.C. Sections 7401 et seq.); (v) the
Clean Water Act (33 U.S.C. I 1251 et seq.); (vi) the Toxic Substances Control
Act (15 U.S.C. I 2601 et seq.); (vii) the Hazardous Materials Transportation Act
(49 U.S.C. Sections 5101 et seq.); (viii) any state, county, municipal or local
statues, laws or ordinances similar or analogous to the federal statutes listed
in parts (i) - (vii) of this subparagraph, (ix) any amendments to the statutes,
laws or ordinances listed in parts (i) - (viii) of this subparagraph, in
existence on the date hereof, (x) any rules, regulations, guidelines,
directives, orders or the like adopted pursuant to or implementing the statutes,
laws, ordinances and amendments listed in parts (i) - (ix) of this subparagraph
in existence on the date hereof; and (xi) any other law, statute, ordinance,
amendment, rule, regulation, guideline, directive, order or the like now in
effect relating to environmental, health or safety matters.
For purposes of this Agreement, the term "Materials of Environmental
Concern" shall mean any and all chemicals, substances, wastes, materials,
pollutants, contaminants, equipment or fixtures defined as or deemed hazardous
or toxic or otherwise regulated under any Environmental Law, including, without
limitation, RCRA hazardous wastes, CERCLA hazardous substances, pesticides and
other agricultural chemicals, oil and petroleum products or byproducts and any
constituents thereof, lead or lead-based paints or materials, radon, asbestos or
asbestos-containing materials and polychlorinated biphenyls ("PCBs").
(c) Except as shown on Section 3.12(c) of the Company Disclosure Schedule,
and except for such written communications which would not, individually or in
the aggregate, be reasonably likely to have a Company Material Adverse Effect,
neither the Company nor any of its Subsidiaries has received any written
communication whether from a Governmental Entity, citizens group, employee or
otherwise, that alleges that the Company or any of its Subsidiaries is not in
full compliance with or is potentially liable under any Environmental Laws. In
addition, no Lien has arisen on any properties or assets of the Company or any
Subsidiary under or as a result of any Environmental Law.
(d) Except as shown on Section 3.12(d) of the Company Disclosure Schedule,
and except for such Environmental Claims which would not, individually or in the
aggregate, be reasonably likely
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to have a Company Material Adverse Effect, the Company has not received written
notice of any claim, action, cause of action, investigation or notice (together,
"Environmental Claims") alleged, filed or being conducted by any Person alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (i) the presence, disposal, placement,
burial, migration or release, of any Materials of Environmental Concern at, on,
under, to or from any location or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law, that in either case
is pending or threatened against the Company or any of its Subsidiaries or
against any Person whose liability for any Environmental Claim the Company or
any of its Subsidiaries has retained or assumed either contractually or by
operation of law.
(e) Except as set forth in Section 3.12(e) of the Company Disclosure
Schedule, there has been no disposal, placement, burial or release of Materials
of Environmental Concern by the Company or any Subsidiary or, to the knowledge
of the Company, by any other Person, on, in, at or from any of the properties or
facilities owned or operated by the Company or any of its Subsidiaries, except
for such disposal, placement, burial or release which would not, individually or
in the aggregate, be reasonably likely to have a Company Material Adverse
Effect.
(f) Without in any way limiting the generality of the foregoing, except as
set forth in Section 3.12(f) of the Company Disclosure Schedule and, except for
any of the matters below which would not, individually or in the aggregate, be
reasonably likely to have a Company Material Adverse Effect, (i) there are no
above ground storage tanks, underground storage tanks, oil/water separators,
water treatment facilities or septic systems located on any property owned,
leased, operated or controlled by the Company or any of its Subsidiaries, (ii)
there is no asbestos contained in or forming part of any building, building
component, structure or office space owned, leased, operated or controlled by
the Company or any of its Subsidiaries and (iii) no PCBs or PCB-containing items
are used or stored at any property owned, leased, operated or controlled by the
Company or any of its Subsidiaries.
(g) Except as set forth in Section 3.12(g) of the Company Disclosure
Schedule, the Company and each of its Subsidiaries are not subject to any
Environmental Laws requiring the performance of site assessment for Materials of
Environmental Concern, or the removal or remediation of Materials of
Environmental Concern, or the giving of notice to or receiving the approval of
any Governmental Entity, or the recording or delivery to other Persons of any
disclosure document or statement pertaining to environmental matters by virtue
of the Merger or as a condition to the Merger.
Section 3.13 Rights Agreement. The Company has taken all necessary action
so that the execution of this Agreement, announcement or consummation of the
Offer and the Merger and announcement or consummation of the other transactions
contemplated by this Agreement do not and will not (a) cause the Rights issued
pursuant to the Rights Agreement to separate from the shares of Common Stock to
which they are attached or to be triggered or to become exercisable, (b) cause
any
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Person to become an Acquiring Person (as such term is defined in the Rights
Agreement) or (c) give rise to a Distribution Date or a Triggering Event (as
each such term is defined in the Rights Agreement). The Company has furnished to
Purchaser true and complete copies of all amendments to the Rights Agreement
that fulfill the requirements of this Section 3.13 and such amendments are in
full force and effect.
Section 3.14 Brokers. No broker, finder or investment banker other than the
Financial Advisor, a true and correct copy of whose engagement agreement has
been provided to Purchaser, is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger based upon arrangements made by or
on behalf of the Company.
Section 3.15 Absence of Certain Changes. Except as disclosed in Section
3.15 of the Company Disclosure Schedule or in the Company SEC Documents, since
October 31, 1999, the Company and each of its Subsidiaries have conducted their
respective businesses only in the ordinary course of business and consistent
with past practice and (a) there has not been any Company Material Adverse
Effect and (b) the Company has not taken any of the actions set forth in
paragraphs (a) through (r) of Section 5.1.
Section 3.16 Taxes. Except as set forth in Section 3.16 of the Company
Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has (i) duly filed (or
there have been filed on its behalf) with the appropriate Tax Authorities
(as hereinafter defined) all Tax Returns (as hereinafter defined) required
to be filed by it on or prior to the date of this Agreement, and each such
Tax Return is correct and complete in all material respects and (ii) duly
paid in full or, made adequate accruals and reserves in its books and
records in accordance with GAAP with full provision (or there has been paid
or such provision has been made on its behalf for its sole benefit and
recourse) for the payment of, all Taxes for all periods ending on or prior
to the date of this Agreement, except for those Taxes being contested in
good faith.
(b) There are no Liens for Taxes upon any property or assets of the
Company or any Subsidiary thereof, except for Liens for Taxes not yet due
and for which adequate reserves have been established in accordance with
GAAP with full provision made for the payment thereof.
(c) Neither the Company nor any of its Subsidiaries has made any
change in accounting methods, received a ruling from any Tax Authority or
signed an agreement with regard to Taxes reasonably likely to have a
Company Material Adverse Effect.
(d) No Audit (as hereinafter defined) by a Tax Authority is presently
pending with regard to any Taxes or Tax Returns of the Company or any of
its Subsidiaries and, to the knowledge of the Company, no such Audit is
threatened.
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(e) An Audit of each United States federal income Tax Return of the
Company or any of its Subsidiaries has been completed by the applicable Tax
Authorities (or the applicable statutes of limitation for the assessment of
Taxes for such periods have expired) for all periods through and including
1996, and no adjustments were asserted as a result of such Audits which
have not been finally resolved and fully paid.
(f) There are no agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment or payment of
any Taxes or deficiencies against the Company or any of its Subsidiaries,
and no power of attorney applicable to either the Company or any of its
Subsidiaries with respect to any Taxes is in force.
(g) Neither the Company nor any of its Subsidiaries is a party to, or
is bound by, any agreement, arrangement or policy relating to the
allocation, indemnification or sharing of Taxes.
(h) The Company, as the common parent of an affiliated group of
corporations (as defined in Section 1504 of the Code) consisting solely of
the Company and the Subsidiaries that are "includable corporations" (within
the meaning of Section 1504(b) of the Code), has filed since 1994 a
consolidated return for United States federal income Tax purposes on behalf
of itself and such Subsidiaries and neither the Company nor any of such
Subsidiaries has been a member of an affiliated group filing a consolidated
United States federal Tax Return other than the affiliated group in which
they are currently members and of which the Company is the common parent.
(i) With respect to completed pay periods, the Company and each of its
Subsidiaries has withheld from its employees, independent contractors,
creditors, stockholders, customers and third parties, and timely paid to
the appropriate Tax Authority, proper amounts in all material respects with
all Tax withholding provisions of applicable law.
(j) No power of attorney is currently in force with respect to any
matter relating to Taxes that could affect the Company or any of its
Subsidiaries.
(k) Neither the Company nor any Subsidiary shall become obligated in
connection with the closing of the Merger for the payment of any amount
described in Section 162(m)(1) of the Code.
(l) "Audit" means any audit, assessment or other examination relating
to Taxes by any Tax Authority or any judicial or administrative proceedings
relating to Taxes. "Tax" or "Taxes" means all federal, state, local and
foreign taxes, levies, tariffs, duties (including custom duties) and other
assessments and obligations (including liability with respect to unclaimed
property) of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, penalties or costs
applicable or related thereto, imposed, assessed or collected by any Tax
Authority. "Tax Authority" means the IRS and any
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other Governmental Entity (domestic or foreign) responsible for the
administration, assessment or collection of any Taxes. "Tax Returns" mean
all federal, state, local and foreign tax returns (including information
returns), declarations, statements, reports, requests, schedules and forms,
including other documents or information submitted in connection therewith
and any amendments thereto.
Section 3.17 Intellectual Property. (a) Each of the Company and its
Subsidiaries owns or has a license or other right to use all intellectual
property used in and material to the conduct of its business, including, without
limitation, all patents and patent applications, trademarks, trademark
registrations and applications, copyrights and copyright registrations and
applications, service marks and service names, computer software, technology
rights and licenses, know-how, trade secrets, proprietary processes and
formulae, franchises and inventions (collectively, the "Intellectual Property"),
free and clear of all Liens.
(b) Section 3.17(b) of the Company Disclosure Schedule sets forth a list of
all license agreements (other than license agreements for non-customized
third-party software) under which the Company or any of its Subsidiaries has
granted or received the right to use any Intellectual Property, and neither the
Company nor any of its Subsidiaries is in default under any such license.
(c) Except as disclosed in the Company SEC Documents or in Section 3.17(c)
of the Company Disclosure Schedule, no Person has a right to receive a royalty
or similar payment in respect of any item of Intellectual Property pursuant to
any contractual arrangements entered into by the Company or any of its
Subsidiaries or otherwise. To the knowledge of the Company, no former or present
employees, officers or directors of the Company or any Subsidiary hold any
right, title or interest, directly or indirectly, in whole or in part, in or to
any Intellectual Property.
(d) There are no claims or suits pending or, to the knowledge of the
Company, threatened (i) alleging that the conduct of the Company's or any of its
Subsidiary's business infringes upon or constitutes the unauthorized use of the
proprietary rights of any third party or (ii) challenging the ownership, use,
validity or enforceability of the Intellectual Property. To the knowledge of the
Company, no Intellectual Property of the Company or any Subsidiary is being
violated or infringed upon by any third party. There are no settlements,
consents, judgments, orders or other agreements which restrict the Company's or
any of its Subsidiary's rights to use any Intellectual Property.
(e) Except as set forth in the Company SEC Documents or in Section 3.17(e)
of the Company Disclosure Schedule, the Company has made no binding commitments
to make any material expenditure in relation to the hardware or software or
communications systems used or planned to be used in connection with the
Company's business. All material computer equipment and systems used by any of
the Company and its Subsidiaries and, to the knowledge of the Company, any major
supplier of the Company or its Subsidiaries recognize the advent of the year
2000 and can correctly recognize and manipulate date information relating to
dates on or after January 1, 2000, and the operation and functionality of such
computer systems has not been adversely affected by the advent of the year 2000
or any manipulation of data featuring date information relating to dates before,
on
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or after January 1, 2000, in each case, except for such failures to recognize,
manipulate, operate or function as would not reasonably be expected to have a
Company Material Adverse Effect.
Section 3.18 Labor Matters. (a) (i) There is no labor strike, dispute,
slowdown, stoppage or lockout actually pending, or to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries,
(ii) except as discussed on Section 3.18(a)(ii) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to or bound
by any collective bargaining or similar agreement with any labor organization,
or work rules or practices agreed to with any labor organization or employee
association applicable to employees of the Company or any of its Subsidiaries,
(iii) except as disclosed on Section 3.18(a)(iii) of the Company Disclosure
Schedule, none of the employees of the Company or any of its Subsidiaries is
represented by any labor organization and the Company does not have any
knowledge of any union organizing activities among the employees of the Company
or any of its Subsidiaries, (iv) there are no written personnel policies, rules
or procedures applicable to employees of the Company or any of its Subsidiaries,
other than the Company Benefit Plans and those set forth on Section 3.18(a)(iv)
of the Company Disclosure Schedule, true and correct copies of which have
heretofore been delivered or made available to Purchaser, (v) each of the
Company and its Subsidiaries is, and has at all times been, in compliance, in
all material respects, with all applicable laws and regulations respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health, and is not engaged in any
unfair labor practices as defined in the National Labor Relations Act or other
applicable laws, except for such non-compliance which has not had a Company
Material Adverse Effect, (vi) there is no unfair labor practice charge or
complaint against the Company pending or, to the knowledge of the Company,
threatened before the National Labor Relations Board or any similar state or
foreign agency, (vii) there is no material pending grievance arising out of any
collective bargaining agreement or other grievance procedure and (viii) to the
knowledge of the Company, no charges with respect to or relating to the Company
are pending before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices which, if
determined adversely to the Company, would have or could reasonably be expected
to have a Company Material Adverse Effect.
(b) In any ninety (90)-day period during the twelve (12) months ending on
the date of the Agreement, (i) neither the Company nor any of its Subsidiaries
has effectuated a "plant closing," (as defined in the Worker Adjustment and
Retraining Notification Act (the "WARN Act")) affecting any site of employment
or one or more facilities or operating units within any site of employment or
facility of the Company and (ii) there has not occurred a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of the
Company or any of its Subsidiaries; nor has the Company or any of its
Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state, local or foreign law or regulation.
Section 3.19 Opinion of Financial Advisor. The Financial Advisor has
delivered its opinion to the Special Committee and the Board to the effect that,
as of the date of this Agreement, and based upon and subject to the matters
stated in the opinion, the $18.35 per Share consideration to be
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received by the holders of Company Common Stock pursuant to the Offer and the
Merger Consideration to be received in the Merger by the holders of Shares
(other than Purchaser, Acquisition Sub and their affiliates) is fair from a
financial point of view to such holders. A copy of the written opinion will be
delivered to Purchaser promptly following receipt thereof by the Special
Committee.
Section 3.20 Real Property. (a) Section 3.20 of the Company Disclosure
Schedule sets forth a complete list of all real property owned or leased by the
Company or any of its Subsidiaries or otherwise used by the Company or any of
its Subsidiaries in, and material to, the conduct of their business or
operations (collectively, together with all buildings, structures and other
improvements and fixtures located on or under the land described in this Section
3.20 and all easements, rights and other appurtenances thereto, the "Real
Property"). The Company or its Subsidiaries has good title to the owned Real
Property and good leasehold interests in the leased Real Property, free and
clear of all Liens. Copies of (i) all deeds, title insurance policies (including
copies of exception documents thereunder) and surveys of the Real Property and
(ii) all documents evidencing all Liens upon the Real Property, to the extent
such are in the files and records of the Company, have been furnished or made
available to Purchaser or will be furnished or made available to Purchaser as
promptly as practicable after the date of this Agreement. Except for the matters
disclosed in the Company SEC Documents or in Section 3.20 of the Company
Disclosure Schedule, there are no proceedings, claims, disputes or, to the
Company's knowledge, conditions affecting any Real Property that would
reasonably be expected to curtail or interfere with the use of such property,
nor is an action of rezoning or eminent domain pending or, to the knowledge of
the Company, threatened for all or any portion of the Real Property.
(b) All buildings on the Real Property are free of material title and
physical defects which do not have, individually or in the aggregate, a Company
Material Adverse Effect.
(c) Each of the Company and its Subsidiaries has obtained all appropriate
certificates, licenses, permits, easements and rights of way, including proofs
of dedication, required to use and operate the Real Property in the manner in
which the Real Property is currently being used and operated, except for such
easements, certificates, licenses, permits or rights of way the failure of which
to have obtained does not have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) To the Company's knowledge, neither the Company nor any of its
Subsidiaries is in violation in any material respect of any applicable building,
zoning, health or other law, ordinance, regulation, contractual restriction or
covenant in respect of the use or occupation of the Real Property or structures
or their operations thereon.
Excluded from the scope of this representation and warranty are all matters
related to Environmental Laws, Materials of Environmental Concern or
Environmental Claims; these excluded matters, to the extent subject to a
representation and warranty under this Agreement, are covered by Section 3.12.
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Section 3.21 Material Contracts. (a) Section 3.21(a) of the Company
Disclosure Schedule lists each of the following contracts and agreements of the
Company and each of its Subsidiaries (such contracts and agreements, together
with all contracts and agreements disclosed in Section 3.17(b) of the Disclosure
Schedule, being "Material Contracts"):
(i) each contract, agreement and other arrangement for the purchase of
inventory, spare parts, other materials or personal property with any
supplier or for the furnishing of services to the Company or any of its
Subsidiaries or otherwise related to the businesses of the Company or any
of its Subsidiaries under the terms of which the Company or any of its
Subsidiaries: (A) have paid or otherwise given consideration of more than
$50,000 in the aggregate during the fiscal year ended October 31, 1999 or
(B) are likely to pay or otherwise give consideration of more than $250,000
in the aggregate over the remaining term of such contract, agreement or
other arrangement;
(ii) each contract, agreement and other arrangement with suppliers and
vendors for volume rebates associated with purchases of building products
under the terms of which the Company or any of its Subsidiaries: (A) have
paid or otherwise given consideration of more than $50,000 in the aggregate
during the fiscal year ended October 31, 1999 or (B) are likely to pay or
otherwise give consideration of more than $250,000 in the aggregate over
the remaining term of such contract, agreement or other arrangement;
(iii) each contract, agreement and other arrangement for the sale of
inventory or other personal property or for the furnishing of services by
the Company or any of its Subsidiaries which: (A) is likely to involve
consideration of more than $50,000 in the aggregate during the fiscal year
ended October 31, 1999 or (B) is likely to involve consideration of more
than $100,000 in the aggregate over the remaining term of the contract,
agreement or other arrangement;
(iv) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, consulting and advertising contracts and
agreements to which the Company or any of its Subsidiaries is a party;
(v) all management contracts (including those relating to severance,
change of control, termination or retirement) and contracts with
independent contractors or consultants (or similar arrangements) to which
the Company or any of its Subsidiaries is a party and which provide for
payments to any Person in any calendar year in excess of $50,000;
(vi) all contracts and agreements relating to Indebtedness of the
Company or any of its Subsidiaries in excess of $25,000 or to any direct or
indirect guaranty by the Company or any of its Subsidiaries of Indebtedness
of any other Person in excess of $25,000;
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(vii) all contracts and agreements that limit or purport to limit the
ability of the Company or any of its Subsidiaries to compete in any line of
business or with any Person or in any geographic area or during any period
of time;
(viii) any exchange-traded or over-the-counter swap, forward, future,
option, cap, floor or collar financial contract or any other interest rate
or foreign currency protection contract not included on its balance sheet
which is a financial derivative contract;
(ix) any other contract or amendment thereto that would be required to
be filed as an exhibit to a Form 10-K filed by Company with the SEC as of
the date of this Agreement (excluding this Agreement or any other
agreements contemplated by or related to this Agreement or the Merger);
(x) all contracts and agreements that provide indemnification rights
or obligations of the Company or any of its Subsidiaries, which provide for
potential payments after the Effective Time to any Person in excess of
$250,000; and
(xi) all other contracts and agreements, whether or not made in the
ordinary course of business, which are material to the Company and its
Subsidiaries, taken as a whole, or to the conduct of the business of the
Company and its Subsidiaries, taken as a whole, or the absence of which
would, in the aggregate, have or reasonably be expected to have a Company
Material Adverse Effect.
(b) Each Material Contract: (i) is legal, valid and binding on the Company
or the respective Subsidiary which is a party thereto and, to the knowledge of
the Company, the other parties thereto, and is in full force and effect and (ii)
upon consummation of the Merger, except to the extent that any consents set
forth in Section 3.6 of the Company Disclosure Schedule are not obtained, shall
continue in full force and effect without penalty or other adverse consequence.
Except as set forth in Section 3.21(b) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries (x) is in breach of, or default
under, any Material Contract or (y) to the knowledge of the Company, has
repudiated or waived any material provision thereunder.
(c) Except as shown at Section 3.21 of the Company Disclosure Schedule, no
other party to any Material Contract is, to the knowledge of the Company, in
material breach thereof or material default thereunder.
(d) Except as set forth in Section 3.21(d) of the Company Disclosure
Schedule, there is no contract, agreement or other arrangement granting any
Person any preferential right to purchase any Company Securities or any
properties or assets of the Company or any of its Subsidiaries.
Section 3.22 Suppliers and Customers. Since October 31, 1998, no material
licensor, vendor, supplier, licensee or customer of the Company or any of its
Subsidiaries has canceled or otherwise modified (in a manner materially adverse
to the Company) its relationship with the
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Company or its Subsidiaries and, to the Company's knowledge, (a) no such Person
has notified the Company or any of its Subsidiaries of its intention to do so
and (b) the consummation of the Merger will not affect any of such relationships
in a manner that would result in a Company Material Adverse Effect.
Section 3.23 Accounts Receivable, Inventory. (a) The accounts receivable of
the Company and its Subsidiaries as set forth on the Company Balance Sheet
delivered prior to the date of this Agreement or arising since the date thereof
are valid and genuine; have arisen out of bona fide sales and deliveries of
goods, performance of services and other business transactions in the ordinary
course of business consistent with past practice; and are not subject to valid
defenses, set-offs or counterclaims. The allowance for collection losses on the
Company Balance Sheet and reserves for the return of inventory have been
determined in accordance with GAAP consistently applied and, to the knowledge of
the Company, are sufficient to provide for any losses or returns which may be
sustained on realization of the accounts receivable or return of inventory shown
in the Company Balance Sheet.
(b) As of the date of the Company Balance Sheet, the inventories shown on
the Company Balance Sheet consisted in all material respects of items of a
quantity and quality usable or saleable in the ordinary course of business. All
of such inventories were acquired in the ordinary course of business. All such
inventories are valued on the Company Balance Sheet in accordance with GAAP,
applied on a basis consistent with the Company's past practices.
Section 3.24 Insurance. Section 3.24 of the Company Disclosure Schedule
lists the Company's material insurance policies. Such policies are in adequate
amounts and cover risks customarily insured against by businesses of the type
operated by the Company and its Subsidiaries. All such policies are in full
force and effect, all premiums with respect thereto covering all periods up to
and including the date of this Agreement have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
Such policies will remain in full force and effect through the respective dates
set forth in Section 3.24 of the Company Disclosure Schedule. Except as set
forth in Section 3.24 of the Company Disclosure Schedule, there are presently no
claims for amounts exceeding in any individual case $250,000 pending under such
policies of insurance and no notices of claims in excess of such amounts have
been given by the Company or any of its Subsidiaries under such policies.
Section 3.25 Title and Condition of Properties. The Company and its
Subsidiaries own good title, free and clear of all Liens, to all of the personal
property and assets shown on the Company Balance Sheet, except for assets which
have been disposed of to nonaffiliated third parties since the date of the
Company Balance Sheet, in the ordinary course of business. All of the machinery,
equipment and other tangible personal property and assets owned or used by the
Company or its Subsidiaries are in good condition and repair, except for
ordinary wear and tear not caused by neglect and are usable in the ordinary
course of business, except for any matter otherwise covered by this sentence
which would not have, individually or in the aggregate, a Company Material
Adverse Effect. All assets which are material to the Company's business on a
consolidated basis and held
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under leases or subleases by the Company or any of its Subsidiaries are held
under valid contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceedings may be brought), and each such contract is in
full force and effect.
Section 3.26 Statements True and Correct. No representation or warranty of
the Company contained in this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 3.27 Board Recommendation. The Board, at a meeting duly called and
held, has by unanimous vote of those directors present (who constituted all of
the directors then in office) (a) determined that this Agreement and the Merger
are fair to and in the best interests of the shareholders of the Company (other
than Purchaser or any affiliate thereof) and (b) resolved to recommend that such
holders of the shares of Common Stock approve and adopt this Agreement and
approve the Merger.
Section 3.28 Required Vote. The affirmative vote of the holders of shares
of Common Stock representing a majority of all shares entitled to vote at the
Special Meeting is required to approve and adopt this Agreement and approve the
Merger. No other vote of the shareholders of the Company is required by law, the
Restated Articles, the Bylaws of the Company or otherwise in order for the
Company to consummate the Merger.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
Section 4.1 Organization. Acquisition Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of Purchaser and Acquisition Sub
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Section 4.2 Authority Relative to this Agreement. Each of Purchaser and
Acquisition Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the Offer and the Merger in accordance
with the terms hereof. The execution, delivery and performance of this Agreement
by Purchaser and Acquisition Sub and the consummation of the Offer, the Merger
and the Tender and Option Agreement by Purchaser and Acquisition Sub have been
duly and validly authorized by the Board of Directors of Purchaser and the Board
of Directors of Acquisition Sub, and no other corporate action or other
proceedings on the part of Purchaser or Acquisition Sub are necessary to
authorize the execution and delivery by Purchaser and Acquisition
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Sub of this Agreement or to consummate the Offer, the Merger and the Tender and
Option Agreement. This Agreement has been duly and validly executed and
delivered by Purchaser and Acquisition Sub and, assuming due and valid
authorization, execution and delivery by the Company, constitutes a valid, legal
and binding agreement of Purchaser and Acquisition Sub, enforceable against
Purchaser and Acquisition Sub in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceedings may be brought).
Section 4.3 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, state securities or blue sky
laws, the HSR Act and the filing and recordation of a Certificate of Merger as
required by the GBCC, no filing with or notice to, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary for the execution
and delivery by Purchaser or Acquisition Sub of this Agreement or the
consummation by Purchaser or Acquisition Sub of the Offer and the Merger, except
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings or give such notice would not have a Purchaser Material
Adverse Effect. Neither the execution, delivery or performance of this Agreement
by Purchaser or Acquisition Sub, nor the consummation by Purchaser and
Acquisition Sub of the Offer and the Merger, will (a) conflict with or result in
any breach of any provision of the Certificate or Articles of Incorporation or
Bylaws of Purchaser or Acquisition Sub, (b) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration) or require any consent pursuant to, or result in the creation of
any Lien on any asset of Purchaser or Acquisition Sub under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which Purchaser or
Acquisition Sub is a party or by which either of them or any of their respective
properties or assets may be bound or (c) violate any order, writ, injunction,
decree, law, statute, rule or regulation applicable to Purchaser or Acquisition
Sub or any of their respective properties or assets, except in the case of (b)
or (c) for any such violations, breaches, defaults (or rights of termination,
amendment, cancellation or acceleration), Liens or failures to obtain consents
which would not individually or in the aggregate, have a Purchaser Material
Adverse Effect. As used in this Agreement, the term "Purchaser Material Adverse
Effect" shall mean any change or effect that is materially adverse to the
business, results of operations or condition (financial or otherwise) of
Purchaser or Acquisition Sub other than any change or effect that does not
affect Purchaser's or Acquisition Sub's ability to perform their respective
obligations under this Agreement.
Section 4.4 Proxy Statement. None of the information supplied by Purchaser
or Acquisition Sub in writing for inclusion in the Proxy Statement or the
Schedule 14D-9 will, at the respective times filed with the SEC and first
published or sent or given to holders of Shares, or at the time that it or any
amendment or supplement thereto is mailed to the Company's shareholders, at the
time of the Special Meeting or at the Effective Time, contain any untrue
statement of a material fact
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or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Section 4.5 Financing. Purchaser and Acquisition Sub have available funds
sufficient in amount to consummate the Offer and Merger pursuant to this
Agreement.
Section 4.6 Brokers. Except as set forth in a disclosure letter to be
provided separately to the Company by Purchaser, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the Offer and the Merger based upon arrangements made by or on
behalf of Purchaser.
Section 4.7 No Default. Neither Purchaser nor Acquisition Sub is in default
or violation (and no event has occurred which, with notice or the lapse of time
or both, would constitute a default or violation) of any term, condition or
provision of (a) its Articles of Incorporation or Bylaws, (b) any note, bond,
mortgage, indenture, lease, license, contract, agreement or other instrument or
obligation to which Purchaser or Acquisition Sub is now a party or by which
either of them or any of their respective properties or assets may be bound or
(c) any order, writ, injunction, decree, law, statute, rule or regulation
applicable to Purchaser or Acquisition Sub or any of their respective properties
or assets, except in the case of (b) or (c) for violations, breaches or defaults
that would not, individually or in the aggregate, have a Purchaser Material
Adverse Effect.
Section 4.8 Litigation. Except as would not reasonably be expected to have
a Purchaser Material Adverse Effect, there is no Litigation pending or, to the
knowledge of Purchaser, threatened against, affecting or involving Purchaser or
Acquisition Sub or any of their respective properties or assets before any
Governmental Entity, and neither Purchaser nor Acquisition Sub is subject to any
outstanding order, writ, injunction or decree.
Section 4.9 Compliance with Applicable Law. Purchaser and Acquisition Sub
hold all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Purchaser Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which would not,
individually or in the aggregate, have a Purchaser Material Adverse Effect.
Purchaser and Acquisition Sub are in compliance with the terms of the Purchaser
Permits, except where the failure so to comply would not have a Purchaser
Material Adverse Effect. The businesses of Purchaser and Acquisition Sub are not
being and have not been conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for violations or possible
violations which, individually or in the aggregate, would not have a Purchaser
Material Adverse Effect. None of the directors, officers, agents,
representatives or employees of Purchaser or Acquisition Sub (in their capacity
as directors, officers, agents, representatives or employees) has taken any
action or made any omission which would violate any law, ordinance or regulation
of any Governmental Entity, except for violations or possible violations which,
individually or in the aggregate, would not have a Purchaser Material Adverse
Effect. No investigation or review by any Governmental Entity with respect to
Purchaser or Acquisition Sub or with respect to any of their respective
directors, officers, agents, representatives or employees
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(in regard to actions taken or omissions made in their capacity as directors,
officers, agents, representatives or employees) is pending or, to the knowledge
of Purchaser, threatened.
ARTICLE V -- COVENANTS
Section 5.1 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement, during the period from the date hereof until the
Effective Time, each of the Company and its Subsidiaries will conduct its
operations in the ordinary course of business consistent with past practice and
preserve intact its business organization and assets and maintain its rights and
franchises. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement, until the Effective Time the
Company will not, and the Company will not permit its Subsidiaries to, without
the prior written consent of Purchaser (which will not be unreasonably withheld
or delayed):
(a) amend or propose to amend the charter, bylaws or other governing
instruments of the Company or any of its Subsidiaries;
(b) authorize for issuance, issue, sell, deliver, or agree or commit
to issue, sell or deliver, dispose of, encumber or pledge (whether through
the issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any securities,
except as disclosed in Section 5.1(b) of the Company Disclosure Schedule or
as required by agreements with the Company's employees under the Company
Benefit Plans as in effect as of the date hereof, or amend any of the terms
of any such securities or agreements outstanding as of the date hereof,
except as specifically contemplated by this Agreement;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, or redeem or otherwise acquire any of its securities, except
intercompany cash dividends in the ordinary course of business;
(d) (i) incur or assume any long-term or short-term debt or issue any
debt securities, except for borrowings under existing lines of credit in
the ordinary course of business and in amounts not in excess of an
aggregate of $1,000,000 (on a consolidated basis); (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person, except
in the ordinary course of business consistent with past practice and in
amounts not material to the Company and its Subsidiaries, taken as a whole,
and except for obligations of wholly owned Subsidiaries of the Company to
the Company or to other wholly owned Subsidiaries of the Company; (iii)
make any loans, advances or capital contributions to, or investments in,
any other Person (other than to wholly-owned Subsidiaries of the Company or
customary advances to employees in the ordinary course of business
consistent with past practice for
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reasonable business expenses not to exceed an aggregate amount of $5,000
outstanding to any employee at any time) or make any change in its existing
borrowing or lending arrangements for or on behalf of any such Person,
whether pursuant to, a Company Benefit Plan or otherwise; (iv) pledge or
otherwise encumber shares of capital stock of the Company or any of its
Subsidiaries; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any material Lien
thereupon;
(e) adopt a plan of complete or partial liquidation or adopt
resolutions providing for the complete or partial liquidation, dissolution,
consolidation, merger, restructuring or recapitalization of the Company or
any of its Subsidiaries;
(f) (i) make any change in the compensation payable or to become
payable to any of its officers, directors, employees, agents or consultants
(other than general increases in wages to employees in the ordinary course
consistent with past practice or other increases in each such instance as
disclosed in Section 5.1(f) of the Company Disclosure Schedule) or to
Persons providing management services; (ii) pay any severance or
termination cost or any bonus other than pursuant to written contracts in
effect on the date of this Agreement or disclosed in Section 5.1(f) of the
Company Disclosure Schedule or enter into or amend any severance agreements
with officers of the Company or any Subsidiary; (iii) make any loans to any
of its officers, directors, employees, affiliates, agents or consultants
(other than customary advances to employees in the ordinary course of
business consistent with past practice for reasonable business expenses not
to exceed an aggregate amount of $5,000 outstanding to any employee at any
time); (iv) adopt, amend or terminate any new or existing Company Benefit
Plan (other than as required by applicable law); (v) permit a new Option
Period (as such term is defined in the Employee Stock Purchase Plan) to
commence under the Employee Stock Purchase Plan after the Special Meeting;
or (vi) make any expenditures for business entertainment purposes for any
single event or occasion in excess of $1,000.
(g) acquire, sell, transfer, lease, encumber or dispose of any assets
outside the ordinary course of business or any assets which in the
aggregate are material to the Company and its Subsidiaries, taken as a
whole, or enter into any commitment or transaction outside the ordinary
course of business consistent with past practice which would be material to
the Company and its Subsidiaries, taken as a whole;
(h) except as may be required as a result of a change in law or in
GAAP, change any of the Tax or accounting principles or practices used by
it or make any material Tax election or amend any Tax Return previously
filed or settle any material Audit;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off
notes or accounts receivable other than in the ordinary course of business;
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(j) (i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any
contract or agreement other than in the ordinary course of business
consistent with past practice which would be material to the Company and
its Subsidiaries, taken as a whole; (iii) authorize any new capital
expenditure or expenditures which, individually, is in excess of $25,000
or, in the aggregate, are in excess of $50,000; (iv) make any capital
expenditure or expenditures which, individually, is in excess of $25,000
or, in the aggregate, are in excess of $50,000, provided, however, that no
capital expenditures shall be made (A) to implement any information
technology projects, (B) for transportation equipment, or (C) in respect of
Field Marketing & Management, Inc.; (v) take any action whatsoever to
implement or install the JD Edwards Software Program at any location at
which the JD Edwards Software Program is not currently installed; or (vi)
enter into or amend any contract, agreement commitment or arrangement
providing for the taking of any action that would be prohibited hereunder;
(k) discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business of liabilities fully reflected or reserved against in, or
contemplated by, the consolidated 1999 Financial Statements (or the notes
thereto) of the Company and its Subsidiaries or incurred in the ordinary
course of business consistent with past practice;
(l) permit any insurance policy naming the Company as a beneficiary or
a loss payable payee to be canceled or terminated without notice to
Purchaser, unless the Company shall have obtained a comparable replacement
policy;
(m) enter into or amend any employment contract between the Company or
any Subsidiary and any Person having a base salary thereunder in excess of
$100,000 per year (unless such amendment is required by law) that the
Company or any Subsidiary does not have the unconditional right to
terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time;
(n) commence or settle any Litigation other than in accordance with
past practice and, with respect to any settlement, for an amount greater
than $100,000;
(o) enter into, modify, amend or terminate any Material Contract
(including any standstill agreement, loan contract with an unpaid balance
exceeding $100,000 or any of the agreements referred to in Section 5.10
hereof) or waive, release, compromise or assign any material rights or
claims, except for modifications, in the ordinary course of business and
consistent with past practice, to quantities specified in purchase orders;
(p) take any action that would adversely affect the ability of any
party to this Agreement to perform its covenants and agreements under this
Agreement;
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(q) take any action that would cause an event of default under any
Material Contract;
(r) cause (or permit to exist) any circumstances that would result in
a Company Material Adverse Effect; or
(s) take, or agree in writing or otherwise to take, any of the actions
described in Sections 5.1(a) through 5.1(r) or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect as of the date when made.
Section 5.2 Acquisition Proposals. Except as hereinafter provided, neither
the Company nor any of its Subsidiaries shall, directly or indirectly, through
any officer, director, agent or otherwise, solicit, initiate or knowingly
encourage the submission of any proposal or offer from any Person (as
hereinafter defined) relating to any acquisition or purchase of all or (other
than in the ordinary course of business) a substantial portion of the assets of,
or a substantial equity interest in, the Company or any of its Subsidiaries or
any recapitalization, business combination or similar transaction with the
Company or any of its Subsidiaries (any such proposal or offer being an
"Acquisition Proposal") or participate in any negotiations regarding, or furnish
to any other Person any non-public information with respect to, or take any
other action to knowingly facilitate the making of an Acquisition Proposal.
Notwithstanding the foregoing provisions of this Section 5.2, (a) the Company
may engage in discussions or negotiations with a third party who seeks to
initiate such discussions or negotiations and may furnish such third party
information concerning the Company and its Subsidiaries, in each case only in
response to a request for such information or access which was not solicited,
initiated or knowingly encouraged by the Company or any of its affiliates, (b)
the Board or the Special Committee may take and disclose to the Company's
shareholders a position contemplated by Rule 14e-2 promulgated under the
Exchange Act and (c) following receipt of an Acquisition Proposal from a third
party, the Board or the Special Committee may withdraw or modify its
recommendation referred to in Section 1.12, but in each case referred to in the
foregoing clauses (a) through (c) only to the extent that the Board or the
Special Committee shall conclude in good faith after consultation with legal
counsel that the failure to take such action could reasonably be determined to
be a breach of the Board's or the Special Committee's fiduciary obligations to
the Company's shareholders under applicable law. In connection with any party's
Acquisition Proposal, the Company will enter into an appropriate confidentiality
agreement with such party. The Company will immediately cease all existing
activities, discussions and negotiations with any parties conducted heretofore
with respect to any Acquisition Proposal. From and after the execution of this
Agreement, the Company shall promptly notify Purchaser of the receipt of any
Acquisition Proposal, and, in any such notice to Purchaser, shall indicate in
reasonable detail the material terms thereof and the identity of the other party
or parties involved. Nothing in this Section 5.2 shall preclude the Company from
making any disclosure to its shareholders that is required under applicable law.
As used in this Agreement, "Person" shall mean a natural person, entity,
organization or association, including, but not limited to, a partnership,
corporation, limited liability company, business trust, joint stock
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company, trust, unincorporated association, joint venture, Governmental Entity,
group acting in concert or any person acting in a representative capacity.
Section 5.3 Access to Information. (a) Between the date hereof and the
Effective Time, the Company will give Purchaser and its authorized
representatives and Persons providing or committed to provide Purchaser with
financing for the Offer and the Merger and their representatives, reasonable
access to all employees, plants, offices, warehouses and other facilities and
properties and to all books and records of the Company and its Subsidiaries,
will permit Purchaser to make such inspections (including any physical
inspections or soil or groundwater investigations) as it may reasonably request
and will cause the Company's officers and those of its Subsidiaries to furnish
Purchaser with such financial and operating data and other information with
respect to the business and properties of the Company and any of its
Subsidiaries as Purchaser may from time to time reasonably request.
(b) Each of the Company and the Purchaser will hold and will cause its
consultants, advisors, representatives, agents and employees, including, without
limitation, its auditors, attorneys, financial advisors and other consultants
and advisors (including financing sources), to hold in confidence, unless
compelled to disclose by judicial or administrative process or, in the written
opinion of its legal counsel, by other requirements of law, all documents and
information concerning the other party furnished to it in connection with this
Agreement (except to the extent that such information can be shown to have been
(i) previously known by the disclosing party from sources other than the other
party, its directors, officers, representatives or affiliates, (ii) in the
public domain through no fault of the disclosing party or its affiliates or
(iii) later lawfully acquired by the disclosing party on a non-confidential
basis from other sources who are not known by the disclosing party to be bound
by a confidentiality agreement or otherwise prohibited from transmitting the
information to the disclosing party by a contractual, legal or fiduciary
obligation) and will not release or disclose such information to any other
Person, except its auditors, attorneys, financial advisors and other consultants
and advisors (including financing sources) in connection with this Agreement who
need to know such information. If the Merger is not consummated, such confidence
shall be maintained and, if requested by or on behalf of the Company or the
Purchaser, the other party hereto will, and will use all reasonable efforts to
cause its auditors, attorneys, financial advisors and other consultants, agents
and representatives to return or destroy all copies of written information
furnished by the Company or Purchaser, as applicable, for purposes of evaluating
the Merger. It is understood that each of the parties hereto shall be deemed to
have satisfied its obligation to hold such information confidential if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
(c) Prior to the consummation of the Merger, the Company and its
accountants, counsel, agents and other representatives shall cooperate with
Purchaser by providing information about the Company which is reasonably
necessary for Purchaser and its accountants, counsel, agents and other
representatives to prepare the syndication or other materials to be delivered to
potential financing sources in connection with the Merger and such other
documents and information with respect to such documents as may be reasonably
requested. Notwithstanding anything in this Agreement to the
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contrary, Purchaser may disclose, or cause its representatives to disclose, and
at the request of Purchaser, the Company shall disclose, information concerning
the Company and its Subsidiaries, and their respective businesses, assets and
properties, to prospective financing sources in connection with the Merger.
(d) Each party hereto agrees to give the other party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a material
breach of any representation, warranty, covenant or agreement of the other party
or which has had or is reasonably likely to have a Company Material Adverse
Effect or a Purchaser Material Adverse Effect, as applicable.
Section 5.4 Additional Agreements; Reasonable Efforts. (a) Prior to the
consummation of the Merger upon the terms and subject to the conditions of this
Agreement, each of Purchaser, Acquisition Sub and the Company agree to use its
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the Merger as promptly as practicable, including,
but not limited to, (i) the preparation and filing of all forms, registrations
and notices required to be filed to consummate the Offer and the Merger and the
taking of such actions as are necessary to obtain any requisite approvals,
consents, orders, exemptions or waivers by any third party or Governmental
Entity, (ii) the satisfaction of the other parties' conditions to the
consummation of the Merger and (iii) obtaining consents of all third parties
necessary, proper or advisable for the consummation of the Offer and the Merger.
In addition, no party hereto shall take any action after the date hereof that
would reasonably be expected to materially delay the obtaining of, or result in
not obtaining, any permission, approval or consent from any Governmental Entity
necessary to be obtained prior to the consummation of the Offer or the Merger.
(b) Prior to the consummation of the Merger, each party hereto shall
promptly consult with the other parties hereto with respect to, provide any
necessary information with respect to and provide the other parties (or their
counsel) copies of, all filings made by such party with any Governmental Entity
or any other information supplied by such party to a Governmental Entity in
connection with this Agreement, the Offer and the Merger. Each party hereto
shall promptly inform the other parties of any communication from any
Governmental Entity regarding the Offer or the Merger. If any party hereto or
affiliate thereof receives a request for additional information or documentary
material from any such Governmental Entity with respect to the Offer or the
Merger, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
parties, an appropriate response in compliance with such request. To the extent
that transfers of Company Permits are required as a result of execution of this
Agreement or consummation of the Offer or the Merger, the Company shall use
commercially reasonable efforts to effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement shall be
deemed to require Purchaser to (i) enter into any agreement with any
Governmental Entity or to consent to any order,
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decree or judgment requiring Purchaser to hold separate or divest, or to
restrict the dominion or control of Purchaser or any of its affiliates over, any
of the assets, properties or businesses of Purchaser, its affiliates or the
Company, in each case as in existence on the date hereof, or (ii) defend against
any Litigation brought by any Governmental Entity seeking to prevent the
consummation of the Merger.
Section 5.5 Public Announcements. Each of Purchaser and the Company agrees
that it will not issue any press release or otherwise make any public statement
with respect to this Agreement, the Offer or the Merger without the prior
consent of the other party, which consent shall not be unreasonably withheld or
delayed; provided, however, that such disclosure can be made without obtaining
such prior consent if (a) the disclosure is required by law or by obligations
pursuant to any listing agreement with any national securities exchange and (b)
the party making such disclosure has first used reasonable efforts to consult
with the other party about the form and substance of such disclosure.
Section 5.6 Indemnification. (a) Purchaser agrees that all rights to
indemnification or exculpation now existing in favor of the present and former
directors, officers, employees and agents of the Company and its Subsidiaries as
provided in their respective charters or bylaws or otherwise in effect as of the
date hereof with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect and shall not be
amended, repealed or otherwise modified for a period of six and one-half (6 1/2)
years from the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who prior to or at the Effective Time were such
present or former directors, officers, employees or agents of the Company or its
Subsidiaries.
(b) Purchaser shall cause the Surviving Corporation to maintain in effect
for not less than five (5) years from the Effective Time the policies of the
directors' and officers' liability and fiduciary insurance most recently
maintained by the Company (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 to the beneficiaries thereof
so long as such substitution does not result in gaps or lapses in coverage) with
respect to matters occurring prior to the Effective Time, provided that in no
event shall the Surviving Corporation be required to expend more than an amount
per year equal to 200% of the current annual premiums paid by the Company (the
"Premium Amount") to maintain or procure insurance coverage pursuant hereto, and
further provided that if the Surviving Corporation is unable to obtain the
insurance called for by this Section 5.6(b), the Surviving Corporation will
obtain the maximum insurance coverage obtainable for the Premium Amount per
year.
(c) After the Effective Time, Purchaser and the Surviving Corporation
shall, to the fullest extent that a Georgia corporation may now or hereafter
legally indemnify its own officers and directors, indemnify and hold harmless,
each present director or officer of the Company and each Subsidiary
(collectively, the "Indemnified Parties") against all costs and expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection
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with any claim, action, suit, proceeding or investigation (whether asserted or
commencing 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 or director occurring before or at the
Effective Time (including, without limitation, the Merger and all actions taken
in contemplation of, or to effect the Merger), for a period of six and one-half
(6 1/2) years after the date hereof. Without limiting the generality of the
foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) the Surviving Corporation or Purchaser, as the case may be,
shall pay as incurred, each Indemnified Party's legal and other expenses
(including costs of investigation and preparation), including the fees and
expenses of counsel selected by the Indemnified Party, which counsel shall be
reasonably satisfactory to the Surviving Corporation or Purchaser, promptly
after statements therefor are received and (ii) the Surviving Corporation and
Purchaser shall cooperate in the defense of any such matter; provided, however,
that neither the Surviving Corporation nor Purchaser shall be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld or delayed); and provided further that neither the
Surviving Corporation nor Purchaser shall be obligated pursuant to this Section
5.6(c) to pay the fees and expenses of more than one (1) counsel for all
Indemnified Parties in any single action, except to the extent that two (2) or
more of such Indemnified Parties shall have conflicting interests in the outcome
of such action; and provided further that, in the event that any claim for
indemnification is asserted or made within such six and one-half (6 1/2) year
period, all rights to indemnification in respect of such claim shall continue
until the disposition of such claim. The parties intend, to the extent not
prohibited by applicable law, that the indemnification provided for in this
Section 5.6(c) shall apply without limitation to negligent acts or omissions of
any Indemnified Party. Any determination to be made as to whether any
Indemnified Party has met any standard of conduct imposed by law shall be made
by legal counsel reasonably acceptable to such Indemnified Party, Purchaser and
the Surviving Corporation, retained at the Surviving Corporation's expense. The
Surviving Corporation or Purchaser shall pay all expenses, including counsel
fees and expenses, that any Indemnified Party may incur in enforcing the
indemnity and other obligations provided for in this Section 5.6.
Notwithstanding the foregoing, Purchaser and the Surviving Corporation shall
have no additional indemnification obligations hereunder with respect to any
costs that would otherwise be covered under the Surviving Corporation's
directors' and officers' liability and fiduciary insurance policies.
(d) In the event the Surviving Corporation or Purchaser or any of their
respective successors or assigns after the Effective Time (i) consolidates with
or merges into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
the Surviving Corporation or Purchaser, as the case may be, shall assume the
obligations set forth in this Section 5.6.
(e) This Section 5.6 is intended to benefit the Indemnified Parties and the
other Persons otherwise covered by this Section 5.6 and their respective heirs,
executors and personal representatives and shall be binding on the successors
and assigns of Purchaser and the Surviving Corporation. This Section 5.6 shall
not limit or otherwise adversely affect any rights any Indemnified Party or any
other Person otherwise covered by this Section 5.6 may have under any agreement
with
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the Company or any Subsidiary or the Company's or any Subsidiary's respective
Certificate or Articles of Incorporation or Bylaws.
(f) In consideration for the indemnification rights set forth herein, the
Company shall request prior to the Effective Time general releases from all
directors and former directors (who were directors at any time after October 31,
1997) and officers of the Company and the Subsidiaries releasing Purchaser, the
Company and the Subsidiaries and their officers, directors, employees and agents
of any claim that they or any of them may have against Purchaser, the Company or
its Subsidiaries (and their officers, directors, employees and agents),
exclusive of employment compensation obligations or obligations arising under
this Section 5.6.
Section 5.7 State Takeover Laws. The Company shall take all necessary steps
to exempt the Merger from, or if necessary to challenge the validity or
applicability of Sections 14-2-1110 through 14-2-1133 of the GBCC.
Section 5.8 Rights Agreement. The Company shall take all necessary action
(including, if required, redeeming all of the outstanding Rights (as defined in
the Rights Agreement) or amending or terminating the Rights Agreement) so that
(a) the entering into of this Agreement and consummation of the Merger do not
and will not result in any Person becoming able to exercise any Rights under the
Rights Agreement or enabling or requiring the Rights to be separated from the
shares of Common Stock to which they are attached or to be triggered or to
become exercisable and (b) no Rights are outstanding at the Effective Time.
Section 5.9 Disclosure Schedule Supplements. From time to time after the
date of this Agreement and prior to the Effective Time, the Company will
supplement or amend the Company Disclosure Schedule with respect to any matter
hereafter arising which, if existing or occurring at or prior to the date of
this Agreement, would have been required to be set forth or described in the
Company Disclosure Schedule or which is necessary to correct any information in
a schedule or in any representation and warranty of the Company which has been
rendered inaccurate thereby. For purposes of determining the accuracy of the
representations and warranties of the Company contained in this Agreement in
order to determine the fulfillment of the conditions set forth in Article VI,
the Company Disclosure Schedule shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to exclude
any information contained in any subsequent supplement or amendment thereto.
Section 5.10 Change of Control Agreements. The Company has change of
control agreements with the Persons listed in Section 5.10 of the Company
Disclosure Schedule which provide certain benefits upon (a) consummation of the
Merger and/or (b) a termination of employment following the Effective Time.
Purchaser shall take all appropriate steps necessary to, and will, give
reasonable advance notice prior to the acceptance for payment and payment for
Shares tendered in the Offer of its then present intention to continue
employment, or not to continue employment, to each such Person, provided,
however, it is acknowledged that such expression of present intention by
Purchaser does not create any rights in favor of any such Person and shall not
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constitute a binding commitment of Purchaser. The Company has previously made
written disclosure to Purchaser of the total estimated amount payable to such
Persons for all obligations owed to them under all contractual and Company
Benefit Plan arrangements assuming that the employment of each such Person was
terminated during the year in which the Effective Time occurred.
ARTICLE VI -- CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the Merger.
(a) The respective obligations of each party hereto to effect the Merger is
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part to
the extent permitted by applicable law:
(i) Shareholder Approval. Except as provided in Section 1.13, the
Merger and this Agreement shall have been approved and adopted by the
affirmative vote of the shareholders of the Company by the requisite vote.
(ii) Statutes, Court Orders. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or enforced by any court or Governmental Entity of competent
jurisdiction which prohibits, restrains, enjoins or restricts the
consummation of the Merger; and there shall be no order or injunction of a
court of competent jurisdiction in effect precluding consummation of the
Merger.
(iii) Regulatory Approvals. All consents of, filings and registrations
with, and notifications to, all Governmental Entities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by law for
consummation of the Merger shall have expired.
(iv) Consents and Approvals. Each party hereto shall have obtained any
and all consents required for consummation of the Merger (other than those
referred to in Section 6.1(a)(iii)) or for the preventing of any default
under any contract or permit of such party which, if not obtained or made,
is reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect or a Purchaser Material Adverse Effect, as
applicable.
(v) Purchase of Shares in Offer. Acquisition Sub shall have purchased
Shares of Company Common Stock sufficient to meet the Minimum Condition
pursuant to the Offer.
(b) The obligation of the Company to effect the Merger is also subject to
the satisfaction (or waiver) at or prior to the Closing of each of the following
additional conditions:
(i) Accuracy of Representations and Warranties. All representations
and warranties made by Purchaser and Acquisition Sub herein shall be true
and correct in all material respects (except for representations and
warranties qualified by materiality or Purchaser Material Adverse Effect
which shall be correct in all respects) when made and as
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of the Effective Time, with the same force and effect as though such
representations and warranties had been made on and as of the Effective
Time, except for changes permitted or contemplated by this Agreement and
except for representations and warranties that are made as of a specified
date or time, which shall be true and correct in all material respects
(except for representations and warranties qualified by materiality or
Purchaser Material Adverse Effect which shall be correct in all respects)
only as of such specific date or time.
(ii) Compliance with Covenants. Purchaser and Acquisition Sub shall
have performed in all material respects all obligations and agreements, and
complied in all material respects with all covenants, contained in this
Agreement to be performed or complied with by them prior to or as of the
Effective Time.
(iii) Officer's Certificate. The Company shall have received a
certificate of Purchaser and Acquisition Sub, dated as of the Closing Date,
signed by an executive officer of each of Purchaser and Acquisition Sub to
evidence satisfaction of the conditions set forth in Section 6.1(b)(i) and
(ii).
(c) The respective obligations of Purchaser and Acquisition Sub to effect
the Merger is also subject to the satisfaction (or waiver) at or prior to the
Closing of each of the following additional conditions:
(i) Accuracy of Representations and Warranties. All representations
and warranties made by the Company herein shall be true and correct in all
material respects (except for representations and warranties qualified by
materiality or Company Material Adverse Effect which shall be correct in
all respects and except that the representations and warranties set forth
at Section 3.2(a) shall be true and correct in all respects) when made and
as of the Effective Time, with the same force and effect as though such
representations and warranties had been made on and as of the Effective
Time, except for changes permitted or contemplated by this Agreement and
except for representations and warranties that are made as of a specified
date or time, which shall be true and correct in all material respects
(except for representations and warranties qualified by materiality or
Company Material Adverse Effect which shall be correct in all respects)
only as of such specific date or time.
(ii) Compliance with Covenants. The Company shall have performed in
all material respects all obligations and agreements, and complied in all
material respects with all covenants, contained in this Agreement to be
performed or complied with by it prior to or as of the Effective Time
(except that the covenant set forth in Section 5.1(a) shall have been
performed in all respects).
(iii) Officer's Certificate. Purchaser shall have received (A) a
certificate of the Company, dated as of the Closing Date, signed by an
executive officer of the Company, to evidence satisfaction of the
conditions set forth in Section 6.1(c)(i) and (ii) and (B) certified copies
of resolutions duly adopted by the Board and the Company's shareholders
evidencing
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the taking of all corporate action necessary to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
Merger.
(iv) Rights Agreement. A Triggering Event (as defined in the Rights
Agreement) shall not have occurred, and the Rights shall not have become
(A) non-redeemable or (B) exercisable for capital stock of Purchaser upon
consummation of the Merger.
ARTICLE VII -- TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time notwithstanding any
requisite approval and adoption of this Agreement and approval of the Merger by
the shareholders of the Company:
(a) by mutual written consent duly authorized by the Board of
Directors of the Company and the Board of Directors of each of Acquisition
Sub and Purchaser; or
(b) by Purchaser or the Company if (i) any court or Governmental
Entity of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement (including the
denial of any consent of a Governmental Entity required for consummation of
the Merger) and such order, decree, ruling or other action is or shall have
become final and nonappealable or (ii) if shares of Company Common Stock
shall not have been purchased pursuant to the Offer on or prior to October
31, 2000; provided, however, that the right to terminate this Agreement
under this Section 7.1(b)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of Acquisition Sub to purchase shares of
Company Common Stock pursuant to the Offer on or before such date; or
(c) by Purchaser if neither Purchaser nor Acquisition Sub is in
material breach of this Agreement and either (i) prior to the purchase of
shares of Company Common Stock pursuant to the Offer, the Board shall have
withdrawn, modified, failed to reaffirm or changed (including by amendment
of the Company's Schedule 14D-9) its recommendation or approval in respect
of the Offer, this Agreement or the Merger, or shall have adopted any
resolution to effect the foregoing, or shall have affirmed, recommended or
authorized entering into any other Acquisition Proposal; or (ii) prior to
the purchase of shares of Company Common Stock pursuant to the Offer, it
shall have been publicly disclosed, or Purchaser shall have learned, that
any person, entity or "group" (as that term is defined in Section 13(d)(3)
of the Exchange Act), other than Purchaser or its affiliates or any group
of which any of them is a member, shall have acquired beneficial ownership
(determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of
more than 14.9% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of
a group or otherwise, or shall have been granted an option, right, or
warrant, conditional
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or otherwise, to acquire beneficial ownership of more than 14.9% of any
class or series of capital stock of the Company (including the Shares); or
(d) by Purchaser if, prior to the purchase of Company Common Stock
pursuant to the Offer, there shall have been a breach of the Company's
representation set forth in Section 3.2(a) or covenant set forth in Section
5.1(c) or a material breach of any of the Company's other representations,
warranties or covenants which breach cannot be or has not been cured within
ten (10) days following receipt of written notice of such breach; or
(e) by the Company if, prior to the purchase of Shares sufficient to
meet the Minimum Condition pursuant to the Offer, there shall have been a
material breach of any of Purchaser's representations, warranties or
covenants which breach cannot be or has not been cured within ten (10) days
of the receipt of written notice thereof; or
(f) by the Purchaser if, due to an event that if occurring after the
commencement of the Offer, would result in a failure to satisfy any of the
conditions set forth in Annex B hereto, Acquisition Sub shall have failed
to commence the Offer on or prior to the tenth (10th) business day after
the public announcement of this Agreement (the "Offer Deadline"); provided
that Purchaser may not terminate this Agreement pursuant to this Section
7.1(f) if Purchaser or Acquisition Sub (x) is in material breach of this
Agreement or (y) has not exercised such right by the close of business on
or before the tenth (10th) business day following the Offer Deadline; or
(g) by the Company if, prior to the purchase of Shares sufficient to
meet the Minimum Condition by Acquisition Sub pursuant to the Offer, a
Person or group (other than Purchaser or any of its affiliates) shall have
made a bona fide Acquisition Proposal that the Board or the Special
Committee determines in good faith that failing to accept or recommend to
the Company's shareholders such Acquisition Proposal could reasonably be
determined to constitute a breach of the fiduciary duties of the Board or
the Special Committee to the Company's shareholders under applicable law
after consultation with (i) a nationally recognized investment banking firm
regarding the financial superiority of the Acquisition Proposal and (ii)
legal counsel; provided that such termination under this clause (g) shall
not be effective until payment of the fee required by Section 7.3 hereof;
or
(h) by Purchaser if Acquisition Sub shall have terminated the Offer,
or the Offer shall have expired without Acquisition Sub purchasing any
shares of Company Common Stock thereunder; provided that Purchaser may not
terminate this Agreement pursuant to this Section 7.1(h) if (x) Acquisition
Sub has failed to purchase shares of Company Common Stock in the Offer in
violation of the material terms thereof or (y) Acquisition Sub has not
exercised such right by the close of business on or before the fifth (5th)
business day following the termination or expiration of the Offer in
accordance with its terms; or
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(i) by the Company if Acquisition Sub or any of its affiliates shall
have failed to commence the Offer on or prior to the Offer Deadline other
than due to an event that if occurring after the commencement of the Offer,
would result in a failure to satisfy any of the conditions set forth in
Annex B hereto; provided, that the Company may not terminate this Agreement
pursuant to this Section 7.1(i) if the Company is in material breach of
this Agreement.
Section 7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, written notice thereof
shall forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than (a) the provisions of this Section 7.2 and Sections 5.3(b), 7.3 and Article
VIII hereof and (b) to the extent that, and for so long as, Acquisition Sub may
exercise the Option under the Tender and Option Agreement, the Company shall not
take action so as to make the Rights Agreement or the restrictions of Sections
14-2-1110 through 14-2-1133 of the GBCC applicable thereto. Nothing contained in
this Section 7.2 shall relieve any party from liability for any breach of this
Agreement.
Section 7.3 Fees and Expenses. (a) Except as otherwise provided in this
Section 7.3, each of the parties hereto shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with this Agreement and
the Merger, including filing and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants and counsel, except that the filing fee in connection with any HSR
Act filing or any other required consent or approval shall be shared equally by
Purchaser and Company.
(b) Notwithstanding the foregoing:
(i) if this Agreement is terminated by Purchaser pursuant to
Section 7.1(d),
(ii) if the Merger is not consummated as a result of the failure of
Company to satisfy any of the conditions set forth in
Section 6.1(c), or
(iii) if this Agreement is terminated by Purchaser pursuant to
Section 7.1(c)(i) or the Company pursuant to Section 7.1(g),
then Company shall promptly pay Purchaser the sum of (A) $1 million, which
amount represents the best estimate by the parties hereto of the value of
the management time, overhead, opportunity costs and other unallocated
costs of Purchaser incurred by or on behalf of Purchaser in connection with
this Agreement and the Merger which cannot be calculated with certainty,
plus (B) all the out-of-pocket costs and expenses of Purchaser, including
costs of counsel, investment bankers, actuaries and accountants up to but
not exceeding an additional $2 million in the aggregate.
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(c) If no payment is due under Section 7.3(b) and the Agreement is
terminated or the Merger is not consummated, then the Company shall
promptly pay Purchaser all the out-of-pocket costs and expenses of
Purchaser, including costs of counsel, investment bankers, actuaries and
accountants, up to but not exceeding $2 million in the aggregate unless
(i) the Agreement is terminated pursuant to Section 7.1(a) or 7.1(e),
or
(ii) the Merger is not consummated because the conditions set forth at
Section 6.1(b) are not satisfied.
(d) If, after the date of this Agreement and within twelve (12) months
following
(i) any termination of this Agreement
(1) by Purchaser pursuant to Section 7.1(c) or 7.1(d), or
(2) by Company pursuant to Section 7.1(g), or
(ii) failure to consummate the Merger by reason of any failure of
Company to satisfy the conditions enumerated in Section 6.1(c),
any third party shall acquire, merge with, combine with, purchase a
significant amount of assets of (including a significant amount of assets
of, or the stock of, any Subsidiary), or engage in any other business
combination with, or purchase any equity securities involving an
acquisition of 20% or more of the voting stock of, the Company on terms
that are financially superior to those of the Offer, or enter into any
letter of intent or agreement to do any of the foregoing (collectively, a
"Superior Business Combination"), such third party that is a party to the
Superior Business Combination shall pay to Purchaser, (A) upon execution of
such letter of intent or agreement relating to such Superior Business
Combination, the sum of (i) $1 million, which amount represents the best
estimate by the parties hereto of the value of the management time,
overhead, opportunity costs and other unallocated costs of Purchaser
incurred by or on behalf of Purchaser in connection with this Agreement and
the Offer which cannot be calculated with certainty, plus (ii) all the
out-of-pocket costs and expenses of Purchaser, including costs of counsel,
investment bankers, actuaries and accountants up to but not exceeding an
additional $2 million in the aggregate, and (B) upon the consummation of
any Superior Business Combination that occurs within the later of 24 months
from the date hereof or 12 months from the date of such letter of intent or
agreement, an amount in cash equal to the product of $8 million and the
percentage of the Company assets or equity securities acquired in the
Superior Business Combination, which sum represents additional compensation
for Purchaser's loss (including expenses) as a result of this Agreement not
being consummated. The amounts owed under the preceding clauses (A) and (B)
shall be reduced by any amounts previously paid to Purchaser pursuant to
subsection (b), (c) or (d) of this Section 7.3. In no event shall the
aggregate amount paid to Purchaser
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pursuant to all provisions of this Section 7.3 exceed $8 million. In the
event such third party shall refuse to pay such amounts within ten days of
demand therefor by Purchaser, the amounts shall be an obligation of Company
and shall be paid by Company promptly upon notice to Company by Purchaser.
(e) Nothing contained in this Section 7.3 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a party hereto
of the terms of this Agreement or otherwise limit the rights of the nonbreaching
party.
Section 7.4 Amendment. Subject to applicable law, this Agreement may be
amended by action taken by the Company and Purchaser at any time before or after
approval of the Merger by the shareholders of the Company but, after any such
approval, no amendment shall be made which requires the approval of such
shareholders under applicable law without such approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of the parties
hereto.
Section 7.5 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party, (b) waive any inaccuracies in the representations
and warranties of the other party contained herein or in any document,
certificate or writing delivered pursuant hereto or (c) waive compliance by the
other party with any of the agreements, covenants or conditions contained
herein. Any agreement on the part of any party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of either party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE VIII -- MISCELLANEOUS
Section 8.1 Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time.
Section 8.2 Entire Agreement; Assignment. This Agreement (a) constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
(including, without limitation, that certain Confidentiality Agreement, as
amended, between the Company and an affiliate of Purchaser) and (b) shall not be
assigned by operation of law or otherwise.
Section 8.3 Validity. If any provision of this Agreement, or the
application thereof to any Person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other Persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
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Section 8.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (including by facsimile with
written confirmation thereof) and unless otherwise expressly provided herein,
shall be delivered during normal business hours by hand, by Federal Express,
United Parcel Service or other nationally recognized overnight commercial
delivery service, or by facsimile notice, confirmation of receipt received,
addressed as follows, or to such other address as may be hereafter notified by
the respective parties hereto:
(a) If to Purchaser or Acquisition Sub:
Guardian Fiberglass, Inc.
2300 Harmon Road
Auburn Hills, Michigan 48326
Attention: David Clark, Chairman
Facsimile No.: (248) 340-2175
With a copy to:
Dykema Gossett PLLC
1577 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: D. Richard McDonald
Facsimile No.: (248) 203-0763
(b) If to the Company:
Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: Ronald R. Ross, Chairman and CEO
Facsimile No.: (214) 860-5148
With a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
Attention: Guy Kerr, Esq.
Facsimile No.: (214) 740-8800
With a copy to:
Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: John Davis, Vice President and General Counsel
Facsimile No.: (214) 860-5148
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Section 8.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard to
the principles of conflicts of law thereof. The parties hereto hereby agree and
consent to be subject to the exclusive jurisdiction of the United States
District Court for the District of Georgia in any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Merger. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by law, (a) any objection
that it may now or hereafter have to laying venue of any suit, action or
proceeding brought in such court and (b) any claim that any suit, action or
proceeding brought in such court has been brought in an inconvenient forum.
Section 8.6 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 8.7 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Section 5.6 and this Article VIII,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 8.8 Signatures. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement. Copies of signatures transmitted
via facsimile shall constitute original signatures for all purposes of this
Agreement.
Section 8.9 Definitions. For purposes of this Agreement, the term
"knowledge" shall mean with respect to the Company the actual knowledge of the
executive officers of the Company and the term "affiliate(s)" shall have the
meaning set forth in Rule 12b-2 of the Exchange Act. When a reference is made in
this Agreement to an Article, Section, Exhibit or Schedule, such reference shall
be to an Article, Section, Exhibit or Schedule to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation."
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
CAMERON ASHLEY BUILDING PRODUCTS, INC.
By: /s/ RONALD R. ROSS
-----------------------------------
Name: Ronald R. Ross
---------------------------------
Title: Chairman & CEO
---------------------------------
GUARDIAN FIBERGLASS, INC.
By: /s/ DAVID A. CLARK
-----------------------------------
Name: David A. Clark
---------------------------------
Title: Chairman
---------------------------------
CAB MERGER CORP.
By: /s/ DAVID A. CLARK
-----------------------------------
Name: David A. Clark
---------------------------------
Title: Chairman
---------------------------------
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Annex A
TENDER AND OPTION AGREEMENT
This TENDER AND OPTION AGREEMENT (the "Agreement") is entered into as
of April 28, 2000 by and between CAB Merger Corp., a Georgia corporation
("Acquisition Sub"), and each of the individuals a signatory to this Agreement
(the "Shareholders").
RECITALS
WHEREAS, concurrently herewith, Acquisition Sub is entering into an
Agreement and Plan of Merger (the "Merger Agreement") with Guardian Fiberglass,
Inc., a Delaware corporation ("Purchaser"), and Cameron Ashley Building
Products, Inc., a Georgia corporation (the "Company"), pursuant to which
Acquisition Sub will acquire the Company, on the terms and subject to the
conditions set forth in the Merger Agreement, by means of a tender offer by
Acquisition Sub (the "Offer") for all outstanding shares of common stock, no par
value, of the Company (the "Company Common Stock"), at $18.35 per share, net to
the seller in cash, without interest, followed by a merger (the "Merger") of
Acquisition Sub into the Company (capitalized terms used herein and not
otherwise defined are used as defined in the Merger Agreement); and
WHEREAS, as of the date hereof, the Shareholders together beneficially
own directly or indirectly shares of Company Common Stock, together with
the associated Rights (which stock and associated rights are referred to as the
"Existing Shares" and, together with any After-Acquired Shares (as defined
below), the "Shares"), which Existing Shares constitute approximately % of
the issued and outstanding shares of Company Common Stock; and
WHEREAS, as an inducement to Acquisition Sub to acquire the Company,
and as a condition to Acquisition Sub's willingness to enter into the Merger
Agreement and consummate the transactions contemplated thereby, Acquisition Sub
has required that the Shareholders agree, and the Shareholders have agreed (i)
to grant Acquisition Sub an irrevocable option to buy the Shares at $18.35 per
share (the "Option"); and (ii) to tender and, in the event such option is not
theretofore exercised, sell the Shares in the Offer and vote their Shares in
favor of the Merger, in each case upon the terms and subject to the conditions
set forth herein.
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, and such other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Agreement to Tender; Option.
1.1 Tender of Shares. Each Shareholder hereby agrees (a) to validly
tender (or cause the record owner of any Shares to tender) all Shares
beneficially owned by such Shareholder pursuant to the Offer, not later than the
fifth business day after commencement of the Offer or, with respect to
After-Acquired Shares, within one business day following the acquisition
thereof, (b) not to withdraw any Shares so tendered without the prior written
consent of Acquisition Sub except as
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otherwise provided in Section 1.1(c) and (c) to withdraw all Shares tendered in
the Offer immediately upon receipt of notice from Acquisition Sub that it is
exercising the Option in order that it may acquire such Shares in accordance
with Section 1.2(a) hereof. Each Shareholder hereby acknowledges and agrees that
Acquisition Sub's obligation to accept for payment and pay for the Shares in the
Offer is subject to the terms and conditions of the Offer.
1.2 Option.
(a) In order to induce Acquisition Sub to enter into the Merger
Agreement, and subject to the terms and conditions of this Agreement, each of
the Shareholders hereby irrevocably grants to Acquisition Sub the Option,
exercisable in whole but not in part from and after the date hereof, to purchase
Shares at a purchase price of $18.35 per Share. If (i) the Offer is terminated,
abandoned or withdrawn by Acquisition Sub (whether due to the failure of any of
the conditions thereto or otherwise) or (ii) the Merger Agreement is terminated
pursuant to Section 7.1(c), 7.1(d), 7.1(f) or 7.1(g), the Option shall continue
to be exercisable, in whole but not in part for a period of 90 days after the
date of the occurrence of such event, so long as (x) all applicable waiting
periods under the HSR Act required for the purchase of the Shares pursuant to
the Option upon such exercise shall have expired or been terminated and (y)
there shall not be in effect any preliminary or final injunction or other order
issued by any court or governmental, administrative or regulatory agency or
authority or legislative body or commission prohibiting the exercise of the
Option pursuant to this Agreement. In the event the Merger Agreement is
terminated other than pursuant to Section 7.1(c), 7.1(d), 7.1(f) or 7.1(g), the
Option shall terminate upon such termination of the Merger Agreement.
(b) In the event Acquisition Sub wishes to exercise the Option,
Acquisition Sub shall deliver written notice thereof to each of the
Shareholders, specifying the date, time and place for the closing of such
purchase. A closing of the purchase of Shares pursuant to the Option (a
"Closing") shall take place on the date, at the time and at the place specified
in such notice; provided, that if at such date any of the conditions specified
in Section 1.2(a)(x) or (y) hereof shall not have been satisfied or waived,
Acquisition Sub may postpone such Closing until a date within two business days
after such conditions are satisfied or waived. At the Closing, each of the
Shareholders will deliver to Acquisition Sub (in accordance with Acquisition
Sub's instructions) the certificates representing the Shares being purchased
pursuant to Section 1.2, duly endorsed or accompanied by stock powers duly
executed in blank. At such Closing, Acquisition Sub shall either (i) wire
transfer to the account designated by each Shareholder or (ii) deliver to each
Shareholder a certified or bank cashier's check payable to or upon the order of
such Shareholder, in each case in an amount equal to the number of Shares being
purchased from such Shareholder at such Closing multiplied by $18.35, in
immediately available funds.
1.3 Assignment of Dividends and Other Distributions. Each Shareholder
hereby assigns to Acquisition Sub any and all dividends and other distributions
that may be declared, set aside or paid by the Company with respect to such
Shareholder's Shares during the term of this Agreement.
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1.4 Title. Each Shareholder agrees that, in connection with the
transfer of his Shares to Acquisition Sub in the Offer or to Acquisition Sub
pursuant to the Option, he shall transfer to and unconditionally vest in the
Acquisition Sub good and valid title to such Shares, free and clear of all
claims, liens, restrictions, security interests, pledges, limitations and
encumbrances whatsoever, except those arising hereunder.
1.5 No Purchase. Acquisition Sub may allow the Offer to expire without
accepting for payment or paying for any Shares, as set forth in the Offer to
purchase, and Acquisition Sub may allow the Option to terminate without
purchasing all or any Shares pursuant to the exercise thereof. If any Shares are
not accepted for payment in accordance with the terms of the Offer or purchased
pursuant to the Option, they shall be returned to the respective Shareholder,
whereupon they shall continue to be held by such Shareholder subject to the
terms and conditions of this Agreement.
1.6 Certain Price Protection. If, within 12 months following the
exercise of the Option by Acquisition Sub, Acquisition Sub, directly or
indirectly, sells, transfers or otherwise disposes of any or all of the Shares
acquired upon exercise of the Option or the Offer to a third party (or realizes
cash proceeds in respect of such Shares as a result of a distribution to
shareholders of the Company following the sale of substantially all of the
Company's assets) in connection with a transaction whereby the third party is
acquiring the entire equity interest in the Company pursuant to a merger, tender
offer, exchange offer, sale of assets, sale of shares or a similar business
transaction (a "Subsequent Sale") at a per Share price in excess of $18.35 (the
"Subsequent Sale Price"), then Acquisition Sub will pay to each Shareholder,
within five (5) days of receipt of payment by Acquisition Sub, an amount equal
to such Shareholder's pro rata share of 50% of the excess of the Subsequent Sale
Price over $18.35 multiplied by the number of Shares sold in the Subsequent
Sale.
2. Voting. Each Shareholder hereby agrees that (for so long as the
Merger Agreement is in effect), at any meeting of the holders of Company Common
Stock, however called, or in connection with any written consent of the holders
of Company Common Stock, he shall vote (or cause to be voted) his Shares (a) in
favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions required
in furtherance thereof and hereof; (b) against any action or agreement that
would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or this Agreement; and (c) except as otherwise agreed to in writing in
advance by Acquisition Sub, against any of the following actions or agreements
(other than the Merger Agreement or the transactions contemplated thereby): (i)
any action or agreement that is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone or attempt to discourage or adversely
affect the Merger, the Offer and the transactions contemplated by this Agreement
and the Merger Agreement; (ii) any extraordinary corporate transaction, such as
a merger, consolidation or other business combination involving the Company and
its Subsidiaries; (iii) a sale, lease or transfer of a material amount of assets
of the Company or its Subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or its Subsidiaries; (iv)
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any change in the management or Board of Directors of the Company, except as
contemplated by the Merger Agreement; (v) any change in the present
capitalization or dividend policy of the Company; (vi) any amendment of the
Company's certificate of incorporation or bylaws; or (vii) any other material
change in the Company's corporate structure or business. Notwithstanding
anything to the contrary contained in this Agreement, each Shareholder who is
also a member of the Board of Directors of the Company shall be free to act in
his or her capacity as a member of the Board of Directors of the Company and to
discharge his or her fiduciary duty as such. At the request of Acquisition Sub,
each Shareholder, in furtherance of the voting agreement and the transactions
contemplated hereby and by the Merger Agreement, shall promptly execute and
deliver to Acquisition Sub an irrevocable proxy and irrevocably appoint
Acquisition Sub or its designees, its attorney and proxy to vote all Shares of
such Shareholder, for all purposes whatsoever, with full power of substitution.
Each such Shareholder acknowledges that this proxy (a) shall be coupled with an
interest, (b) constitutes, among other things, an inducement for Acquisition Sub
to enter into the Merger Agreement, and (c) shall be irrevocable and shall not
be terminated by operation of law upon the occurrence of any event. Any such
proxy shall terminate upon the termination of the Option. The provisions of this
Section 2 shall constitute a voting agreement under Section 14-2-731 of the
Georgia Business Corporation Code.
3. Representation and Warranties. Each Shareholder hereby severally and
not jointly represents and warrants to Acquisition Sub as follows:
3.1 Ownership of Shares; Purchase Rights. (a) On the date hereof, (i)
such Shareholder is the record owner of the Existing Shares as set forth
opposite such Shareholder's name on the signature page hereto and (ii) such
Existing Shares constitute all of the shares of Company Common Stock owned of
record and beneficially by each such Shareholder. Such Shareholder has sole
voting power, sole power of disposition and sole power to agree to all of the
matters set forth in this Agreement with respect to all of such Existing Shares,
with no limitations, qualifications or restrictions on such rights, and such
Existing Shares are the only shares of Company Common Stock over which such
Shareholder has such powers or otherwise are owned of record or beneficially by
such Shareholder as of the date hereof.
(b) On the date hereof, (i) such Shareholder is the beneficial owner of
the options and warrants as set forth opposite such Shareholder's name on the
signature page hereto and (ii) such Shareholder does not have any option or
other right to acquire Shares ("Purchase Right") except as indicated thereon.
3.2 Power, Binding Agreement. Such Shareholder has the legal capacity,
power and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by such
Shareholder will not violate any other agreement to which he is a party,
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly and validly executed and delivered by
such Shareholder and constitutes a valid and binding agreement of him,
enforceable against him in
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accordance with its terms, except that such enforceability may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights.
3.3 No Conflicts. Except for filings under the HSR Act and the Exchange
Act, (a) no filing with, and no permit, authorization, consent or approval of,
any Federal, state or foreign public body or authority is necessary for the
execution of this Agreement by such Shareholder and the consummation by such
Shareholder of the transactions contemplated hereby and (b) neither the
execution and delivery of this Agreement by such Shareholder nor the
consummation by such Shareholder of the transactions contemplated hereby nor
compliance by such Shareholder with any of the provisions hereof shall (i)
conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation to which such Shareholder is a party or by
which such Shareholder or any of his properties or assets may be bound or (ii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to such Shareholder or any of his properties or assets.
3.4 Encumbrances. The Shares owned by such Shareholder and the
certificates representing such Shares are now, and at all times during the term
hereof will be, held by such Shareholder, or by a nominee or custodian for the
benefit of such Shareholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder.
3.5 Finder's Fees. Except for the fee to be paid to Credit Suisse First
Boston Corporation, no investment banker, broker, financial advisor, finder or
other person is entitled to a commission or fee from Acquisition Sub or the
Company in respect of this Agreement or the transactions contemplated hereby
based upon any arrangement or agreement made by or on behalf of such
Shareholder, except as otherwise specifically provided in the Merger Agreement
or arrangements or agreements made by or on behalf of Acquisition Sub by its
authorized representatives.
3.6 Reliance by Acquisition Sub. Such Shareholder understands and
acknowledges that Acquisition Sub is entering into the Merger Agreement in
reliance upon such Shareholder's execution and delivery of this Agreement and
the representations, warranties and covenants of such Shareholder set forth
herein.
4. Other Covenants of the Shareholders. Each Shareholder hereby
severally and not jointly covenants and agrees as follows:
4.1 No Solicitation. Each Shareholder agrees that he shall comply with
the provisions of Section 5.2 of the Merger Agreement.
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4.2 Restriction on Transfer, Proxies and Non-Interference; Stop
Transfer Order.
(a) Each Shareholder hereby agrees, while this Agreement is in effect,
and except as specifically contemplated hereby, not to (i) offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or
other disposition of, any of his Shares or any interest therein, (ii) grant any
proxies or powers of attorney, deposit any of his Shares into a voting trust or
enter into a voting agreement with respect to any of his Shares or (iii) take
any action that would make any representation or warranty of any Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling any Shareholder from performing his obligations under this Agreement.
(b) In furtherance of the provisions of Section 4.2(a) hereof,
concurrently herewith the Shareholders shall and hereby do authorize the Company
to notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Existing Shares and any additional Shares of Common Stock
acquired by any Shareholder after the date hereof (and that this Agreement
places limits on the voting and transfer of such shares).
4.3 Confidentiality. Each Shareholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Shareholder hereby agrees
not to disclose or discuss such matters with anyone not a party to this
Agreement (other than counsel and advisors, if any) without the prior written
consent of Acquisition Sub, except for filings required pursuant to the Exchange
Act and the rules and regulations thereunder or disclosures such Shareholder's
counsel advises are necessary in order to fulfill his obligations imposed by
laws, in which event such Shareholder shall give notice of such disclosure to
Acquisition Sub as promptly as practicable so as to enable Acquisition Sub to
seek a protective order from a court of competent jurisdiction with respect
thereto.
4.4 Additional Shares. (a) Each Shareholder agrees, subject to the
following provisions of this Section 4.4(a), at the request of Acquisition Sub,
to exercise, exchange or convert his Rights into Shares of Company Common Stock,
so as to constitute After-Acquired Shares under this Agreement. In order to
facilitate the exercise at the request of Acquisition Sub of any such Right,
Acquisition Sub shall loan to any requesting Shareholder funds sufficient to
allow such Shareholder to exercise the Right. Such loan shall not be interest
bearing and, at Acquisition Sub's option, shall be secured by a pledge of the
shares of Company Common Stock acquired upon exercise of such Right.
(b) Each Shareholder hereby agrees to promptly notify Acquisition Sub
in writing of the number of After-Acquired Shares that may be acquired by such
Shareholder, if any, after the date hereof.
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4.5 Public Disclosure. Each Shareholder hereby agrees that Acquisition
Sub may publish and disclose in (i) the Offer Documents and (ii) if approval of
the Company's Shareholders is required under applicable law, the Proxy Statement
(including all documents and schedules filed with the SEC) his identity and
ownership of Company Common Stock and the nature of his commitments,
arrangements and understandings under this Agreement.
4.6 No Inconsistent Agreements. No Shareholder shall enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions of this Agreement.
4.7 Further Assurances. From time to time, at the other party's request
and without further consideration, each of the Acquisition Sub, on the one hand,
and a Shareholder, on the other, shall execute and deliver such additional
documents and take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
5. Miscellaneous.
5.1 Fees and Expenses. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
5.2 Survival of Representations and Warranties. Except for the
representations and warranties in Section 3.2 of this Agreement, the
representations and warranties contained in this Agreement shall not survive the
delivery of and payment for the Shares or termination of the Option in
accordance with this Agreement.
5.3 Effect of Representations, Warranties and Covenants of
Shareholders. The representations, warranties and covenants of the Shareholders
shall be several and not joint. The liability of each individual Shareholder
shall extend only to the representations, warranties and covenants of such
Shareholder and not to any representation, warranty or covenant of any other
Shareholder. No Shareholder shall have any liability for incidental or
consequential damages or any amount in excess of the aggregate purchase price
for his Shares.
5.4 Amendment and Modification. This Agreement may be amended, modified
and supplemented in any and all respects by written agreement of all parties
hereto.
5.5 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that any or all of the Acquisition Sub's respective rights,
interests and obligations hereunder may be assigned by the Acquisition Sub to
any other direct or indirect wholly owned subsidiary of Purchaser. Subject to
the preceding sentence,
A-7
<PAGE> 69
this Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties and their respective heirs, executors, legal representative or
successors and assigns or other transferees and any other successor in interest.
5.6 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
5.7 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon personal delivery, facsimile transmission
(which is confirmed), telex or delivery by an overnight express courier service
(delivery, postage or freight charges prepaid), or on the fourth day following
deposit in the United States mail (if sent by registered or certified mail,
return receipt requested, delivery, postage or freight charges prepaid),
addressed to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to a Shareholder: c/o Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: Ronald R. Ross, Chairman and CEO
Facsimile No.: (214) 860-5148
With a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
Attention: Guy Kerr, Esq.
Facsimile No.: (214) 740-8800
With a copy to:
Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: John Davis, Vice President and
General Counsel
Facsimile No.: (214) 860-5148
A-8
<PAGE> 70
If to Acquisition Sub, to: c/o Guardian Fiberglass, Inc.
2300 Harmon Road
Auburn Hills, Michigan 48326
Attention: David Clark, President
Facsimile No.: (248) 340-2175
with a copy to: Dykema Gossett PLLC
1577 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: D. Richard McDonald
Facsimile No.: (248) 203-0763
5.8 Definitions; Interpretation.
(a) As used in this Agreement, (i) the term "After-Acquired Shares"
shall mean any shares of Company Common Stock acquired directly or indirectly,
or otherwise beneficially owned, by any of the Shareholders in any capacity
after the date hereof and prior to the termination hereof, whether upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of a purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity (including a fiduciary capacity) or otherwise; (ii) the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act; and (iii) the phrases "beneficially own" or "beneficial ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing (without duplicative counting of the same securities by the same
holder, securities beneficially owned by a person shall include securities
beneficially owned by all other persons with whom such Person would constitute a
"group" within the meaning of Rule 13d-5 of the Exchange Act).
(b) When a reference is made in this Agreement to a Section, such
reference shall be to a Section in this Agreement unless otherwise indicated.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." The descriptive
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
5.10 Entire Agreement, No Third Party Beneficiaries, Rights of
Ownership. This Agreement (a) constitutes the entire agreement and supersedes
all prior agreements and understandings, both
A-9
<PAGE> 71
written and oral, among the parties with respect to the subject matter hereof,
and (b) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
5.11 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
5.12 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia without giving effect to the
principles of conflicts of law thereof.
5.13 Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
A-10
<PAGE> 72
IN WITNESS WHEREOF, Acquisition Sub and each of the Shareholders have
caused this Agreement to be duly executed as of the day and year first above
written.
CAB MERGER CORP.
By:
-----------------------
SHAREHOLDERS:
<TABLE>
<CAPTION>
Purchase Rights
---------------------------------
Shares Options Warrants
- ------ ------- --------
<S> <C> <C> <C>
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
- ------- -------- ------- ---------------------------------
======= ======== =======
</TABLE>
A-11
<PAGE> 73
ANNEX B
CONDITIONS TO THE TENDER OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and not
in limitation of) Acquisition Sub's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Acquisition Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Acquisition Sub's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered Shares, and may terminate the
Offer as to any Shares not then paid for, if (i) the applicable waiting period
under the HSR Act has not expired or terminated prior to the expiration of the
Offer, (ii) the Minimum Condition has not been satisfied or waived or (iii) if
at any time on or after April 28, 2000, and before the time for payment for
Shares, any of the following events shall exist:
(a) any domestic or foreign Federal, state or local governmental,
regulatory or administrative agency or authority or legislative body or
commission shall have instituted any action, proceeding, application, claim
or suit, or shall have promulgated, entered, enforced, enacted, issued or
made expressly applicable to the Offer or the Merger any statute, rule,
regulation, judgment, order or injunction which directly or indirectly (1)
challenges, seeks to make illegal, prohibits or makes illegal, or imposes
any material adverse limitations on, Purchaser's or Acquisition Sub's
ownership or operation (or that of any of their respective subsidiaries or
affiliates) of all or a material portion of the businesses or assets of
Purchaser or Acquisition Sub taken as a whole, or of the Company or its
Subsidiaries taken as a whole, or compels Purchaser or Acquisition Sub or
their affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or its subsidiaries, taken as a whole,
(2) challenges, seeks to make illegal, prohibits or makes illegal the
acceptance for payment, payment for or purchase of Shares or the
consummation of the Offer or the Merger, (3) restricts the ability of
Acquisition Sub, or renders Acquisition Sub unable, to accept for payment,
pay for or purchase some or all of the Shares, (4) imposes material
limitations on the ability of Purchaser or Acquisition Sub to exercise full
rights of ownership of the Shares, including, without limitation, the right
to vote the Shares purchased by Acquisition Sub on all matters presented to
the Company's shareholders, (5) seeks to obtain or obtains material damages
as a result of the transactions contemplated by the Offer or the Merger, or
(6) seeks to require divestiture by Purchaser or Acquisition Sub or any of
their subsidiaries or affiliates of any Shares, and in the case of (5) or
(6) above, is likely to have a Company Material Adverse Effect, provided
that Acquisition Sub shall have used reasonable efforts to cause any such
judgment, order or injunction to be vacated or lifted;
(b) the Company shall have breached its representations and
warranties, or failed to perform or comply with any of its covenants and
agreements contained in the Merger Agreement, which breach or failure shall
have a Company Material Adverse Effect;
B-1
<PAGE> 74
(c) the Merger Agreement shall have been terminated in accordance with
its terms;
(d) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Purchaser or its affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 14.9% of any class or series of capital stock of the
Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted an option,
right or warrant, conditional or otherwise, to acquire beneficial ownership
of more than 14.9% of any class or series of capital stock of the Company
(including the Shares); or (ii) any person or group shall have entered into
a definitive agreement or agreement in principle with the Company with
respect to an Acquisition Proposal or other business combination with the
Company;
(e) the Company's Board of Directors shall have withdrawn, modified,
failed to reaffirm or changed (including by amendment of the Schedule
14D-9) its approval or recommendation of the Offer, this Agreement or the
Merger in a manner adverse to Purchaser or Acquisition Sub or shall have
adopted any resolution to effect the foregoing, or shall have affirmed,
recommended or authorized entering into any other Acquisition Proposal,
which in the judgment of Acquisition Sub, in any such case, and regardless of
the circumstances (including any action or inaction by Purchaser or Acquisition
Sub other than a material breach of this Agreement by Purchaser or Acquisition
Sub) giving rise to such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment or payments.
The foregoing conditions are for the sole benefit of Acquisition Sub and
may be waived by Acquisition Sub, in whole or in part, at any time and from time
to time in the discretion of Acquisition Sub. The failure by Acquisition Sub at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
Should the Offer be terminated pursuant to any of the foregoing provisions,
all tendered Shares not theretofore accepted for payment shall forthwith be
returned to the tendering shareholders.
B-2
<PAGE> 1
EXHIBIT 99.(d)(2)
TENDER AND OPTION AGREEMENT
This TENDER AND OPTION AGREEMENT (the "Agreement") is entered into as
of April 28, 2000 by and between CAB Merger Corp., a Georgia corporation
("Acquisition Sub"), and each of the individuals a signatory to this Agreement
(the "Shareholders").
RECITALS
WHEREAS, concurrently herewith, Acquisition Sub is entering into an
Agreement and Plan of Merger (the "Merger Agreement") with Guardian Fiberglass,
Inc., a Delaware corporation ("Purchaser"), and Cameron Ashley Building
Products, Inc., a Georgia corporation (the "Company"), pursuant to which
Acquisition Sub will acquire the Company, on the terms and subject to the
conditions set forth in the Merger Agreement, by means of a tender offer by
Acquisition Sub (the "Offer") for all outstanding shares of common stock, no par
value, of the Company (the "Company Common Stock"), at $18.35 per share, net to
the seller in cash, without interest, followed by a merger (the "Merger") of
Acquisition Sub into the Company (capitalized terms used herein and not
otherwise defined are used as defined in the Merger Agreement); and
WHEREAS, as of the date hereof, the Shareholders together beneficially
own directly or indirectly 382,574 shares of Company Common Stock, together with
the associated Rights (which stock and associated rights are referred to as the
"Existing Shares" and, together with any After-Acquired Shares (as defined
below), the "Shares"), which Existing Shares constitute approximately 4.3% of
the issued and outstanding shares of Company Common Stock; and
WHEREAS, as an inducement to Acquisition Sub to acquire the Company,
and as a condition to Acquisition Sub's willingness to enter into the Merger
Agreement and consummate the transactions contemplated thereby, Acquisition Sub
has required that the Shareholders agree, and the Shareholders have agreed (i)
to grant Acquisition Sub an irrevocable option to buy the Shares at $18.35 per
share (the "Option"); and (ii) to tender and, in the event such option is not
theretofore exercised, sell the Shares in the Offer and vote their Shares in
favor of the Merger, in each case upon the terms and subject to the conditions
set forth herein.
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, and such other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Agreement to Tender; Option.
1.1 Tender of Shares. Each Shareholder hereby agrees (a) to validly
tender (or cause the record owner of any Shares to tender) all Shares
beneficially owned by such Shareholder pursuant to the Offer, not later than the
fifth business day after commencement of the Offer or, with respect to
After-Acquired Shares, within one business day following the acquisition
thereof, (b) not to withdraw any Shares so tendered without the prior written
consent of Acquisition Sub except as
<PAGE> 2
otherwise provided in Section 1.1(c) and (c) to withdraw all Shares tendered in
the Offer immediately upon receipt of notice from Acquisition Sub that it is
exercising the Option in order that it may acquire such Shares in accordance
with Section 1.2(a) hereof. Each Shareholder hereby acknowledges and agrees that
Acquisition Sub's obligation to accept for payment and pay for the Shares in the
Offer is subject to the terms and conditions of the Offer.
1.2 Option.
(a) In order to induce Acquisition Sub to enter into the Merger
Agreement, and subject to the terms and conditions of this Agreement, each of
the Shareholders hereby irrevocably grants to Acquisition Sub the Option,
exercisable in whole but not in part from and after the date hereof, to purchase
Shares at a purchase price of $18.35 per Share. If (i) the Offer is terminated,
abandoned or withdrawn by Acquisition Sub (whether due to the failure of any of
the conditions thereto or otherwise) or (ii) the Merger Agreement is terminated
pursuant to Section 7.1(c), 7.1(d), 7.1(f) or 7.1(g), the Option shall continue
to be exercisable, in whole but not in part for a period of 90 days after the
date of the occurrence of such event, so long as (x) all applicable waiting
periods under the HSR Act required for the purchase of the Shares pursuant to
the Option upon such exercise shall have expired or been terminated and (y)
there shall not be in effect any preliminary or final injunction or other order
issued by any court or governmental, administrative or regulatory agency or
authority or legislative body or commission prohibiting the exercise of the
Option pursuant to this Agreement. In the event the Merger Agreement is
terminated other than pursuant to Section 7.1(c), 7.1(d), 7.1(f) or 7.1(g), the
Option shall terminate upon such termination of the Merger Agreement.
(b) In the event Acquisition Sub wishes to exercise the Option,
Acquisition Sub shall deliver written notice thereof to each of the
Shareholders, specifying the date, time and place for the closing of such
purchase. A closing of the purchase of Shares pursuant to the Option (a
"Closing") shall take place on the date, at the time and at the place specified
in such notice; provided, that if at such date any of the conditions specified
in Section 1.2(a)(x) or (y) hereof shall not have been satisfied or waived,
Acquisition Sub may postpone such Closing until a date within two business days
after such conditions are satisfied or waived. At the Closing, each of the
Shareholders will deliver to Acquisition Sub (in accordance with Acquisition
Sub's instructions) the certificates representing the Shares being purchased
pursuant to Section 1.2, duly endorsed or accompanied by stock powers duly
executed in blank. At such Closing, Acquisition Sub shall either (i) wire
transfer to the account designated by each Shareholder or (ii) deliver to each
Shareholder a certified or bank cashier's check payable to or upon the order of
such Shareholder, in each case in an amount equal to the number of Shares being
purchased from such Shareholder at such Closing multiplied by $18.35, in
immediately available funds.
1.3 Assignment of Dividends and Other Distributions. Each Shareholder
hereby assigns to Acquisition Sub any and all dividends and other distributions
that may be declared, set aside or paid by the Company with respect to such
Shareholder's Shares during the term of this Agreement.
2
<PAGE> 3
1.4 Title. Each Shareholder agrees that, in connection with the
transfer of his Shares to Acquisition Sub in the Offer or to Acquisition Sub
pursuant to the Option, he shall transfer to and unconditionally vest in the
Acquisition Sub good and valid title to such Shares, free and clear of all
claims, liens, restrictions, security interests, pledges, limitations and
encumbrances whatsoever, except those arising hereunder.
1.5 No Purchase. Acquisition Sub may allow the Offer to expire without
accepting for payment or paying for any Shares, as set forth in the Offer to
purchase, and Acquisition Sub may allow the Option to terminate without
purchasing all or any Shares pursuant to the exercise thereof. If any Shares are
not accepted for payment in accordance with the terms of the Offer or purchased
pursuant to the Option, they shall be returned to the respective Shareholder,
whereupon they shall continue to be held by such Shareholder subject to the
terms and conditions of this Agreement.
1.6 Certain Price Protection. If, within 12 months following the
exercise of the Option by Acquisition Sub, Acquisition Sub, directly or
indirectly, sells, transfers or otherwise disposes of any or all of the Shares
acquired upon exercise of the Option or the Offer to a third party (or realizes
cash proceeds in respect of such Shares as a result of a distribution to
shareholders of the Company following the sale of substantially all of the
Company's assets) in connection with a transaction whereby the third party is
acquiring the entire equity interest in the Company pursuant to a merger, tender
offer, exchange offer, sale of assets, sale of shares or a similar business
transaction (a "Subsequent Sale") at a per Share price in excess of $18.35 (the
"Subsequent Sale Price"), then Acquisition Sub will pay to each Shareholder,
within five (5) days of receipt of payment by Acquisition Sub, an amount equal
to such Shareholder's pro rata share of 50% of the excess of the Subsequent Sale
Price over $18.35 multiplied by the number of Shares sold in the Subsequent
Sale.
2. Voting. Each Shareholder hereby agrees that (for so long as the
Merger Agreement is in effect), at any meeting of the holders of Company Common
Stock, however called, or in connection with any written consent of the holders
of Company Common Stock, he shall vote (or cause to be voted) his Shares (a) in
favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions required
in furtherance thereof and hereof; (b) against any action or agreement that
would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or this Agreement; and (c) except as otherwise agreed to in writing in
advance by Acquisition Sub, against any of the following actions or agreements
(other than the Merger Agreement or the transactions contemplated thereby): (i)
any action or agreement that is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone or attempt to discourage or adversely
affect the Merger, the Offer and the transactions contemplated by this Agreement
and the Merger Agreement; (ii) any extraordinary corporate transaction, such as
a merger, consolidation or other business combination involving the Company and
its Subsidiaries; (iii) a sale, lease or transfer of a material amount of assets
of the Company or its Subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or its Subsidiaries; (iv)
3
<PAGE> 4
any change in the management or Board of Directors of the Company, except as
contemplated by the Merger Agreement; (v) any change in the present
capitalization or dividend policy of the Company; (vi) any amendment of the
Company's certificate of incorporation or bylaws; or (vii) any other material
change in the Company's corporate structure or business. Notwithstanding
anything to the contrary contained in this Agreement, each Shareholder who is
also a member of the Board of Directors of the Company shall be free to act in
his or her capacity as a member of the Board of Directors of the Company and to
discharge his or her fiduciary duty as such. At the request of Acquisition Sub,
each Shareholder, in furtherance of the voting agreement and the transactions
contemplated hereby and by the Merger Agreement, shall promptly execute and
deliver to Acquisition Sub an irrevocable proxy and irrevocably appoint
Acquisition Sub or its designees, its attorney and proxy to vote all Shares of
such Shareholder, for all purposes whatsoever, with full power of substitution.
Each such Shareholder acknowledges that this proxy (a) shall be coupled with an
interest, (b) constitutes, among other things, an inducement for Acquisition Sub
to enter into the Merger Agreement, and (c) shall be irrevocable and shall not
be terminated by operation of law upon the occurrence of any event. Any such
proxy shall terminate upon the termination of the Option. The provisions of this
Section 2 shall constitute a voting agreement under Section 14-2-731 of the
Georgia Business Corporation Code.
3. Representation and Warranties. Each Shareholder hereby severally and
not jointly represents and warrants to Acquisition Sub as follows:
3.1 Ownership of Shares; Purchase Rights. (a) On the date hereof, (i)
such Shareholder is the record owner of the Existing Shares as set forth
opposite such Shareholder's name on the signature page hereto and (ii) such
Existing Shares constitute all of the shares of Company Common Stock owned of
record and beneficially by each such Shareholder. Such Shareholder has sole
voting power, sole power of disposition and sole power to agree to all of the
matters set forth in this Agreement with respect to all of such Existing Shares,
with no limitations, qualifications or restrictions on such rights, and such
Existing Shares are the only shares of Company Common Stock over which such
Shareholder has such powers or otherwise are owned of record or beneficially by
such Shareholder as of the date hereof.
(b) On the date hereof, (i) such Shareholder is the beneficial owner of
the options and warrants as set forth opposite such Shareholder's name on the
signature page hereto and (ii) such Shareholder does not have any option or
other right to acquire Shares ("Purchase Right") except as indicated thereon.
3.2 Power, Binding Agreement. Such Shareholder has the legal capacity,
power and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by such
Shareholder will not violate any other agreement to which he is a party,
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly and validly executed and delivered by
such Shareholder and constitutes a valid and binding agreement of him,
enforceable against him in
4
<PAGE> 5
accordance with its terms, except that such enforceability may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights.
3.3 No Conflicts. Except for filings under the HSR Act and the Exchange
Act, (a) no filing with, and no permit, authorization, consent or approval of,
any Federal, state or foreign public body or authority is necessary for the
execution of this Agreement by such Shareholder and the consummation by such
Shareholder of the transactions contemplated hereby and (b) neither the
execution and delivery of this Agreement by such Shareholder nor the
consummation by such Shareholder of the transactions contemplated hereby nor
compliance by such Shareholder with any of the provisions hereof shall (i)
conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation to which such Shareholder is a party or by
which such Shareholder or any of his properties or assets may be bound or (ii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to such Shareholder or any of his properties or assets.
3.4 Encumbrances. The Shares owned by such Shareholder and the
certificates representing such Shares are now, and at all times during the term
hereof will be, held by such Shareholder, or by a nominee or custodian for the
benefit of such Shareholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder.
3.5 Finder's Fees. Except for the fee to be paid to Credit Suisse First
Boston Corporation, no investment banker, broker, financial advisor, finder or
other person is entitled to a commission or fee from Acquisition Sub or the
Company in respect of this Agreement or the transactions contemplated hereby
based upon any arrangement or agreement made by or on behalf of such
Shareholder, except as otherwise specifically provided in the Merger Agreement
or arrangements or agreements made by or on behalf of Acquisition Sub by its
authorized representatives.
3.6 Reliance by Acquisition Sub. Such Shareholder understands and
acknowledges that Acquisition Sub is entering into the Merger Agreement in
reliance upon such Shareholder's execution and delivery of this Agreement and
the representations, warranties and covenants of such Shareholder set forth
herein.
4. Other Covenants of the Shareholders. Each Shareholder hereby
severally and not jointly covenants and agrees as follows:
4.1 No Solicitation. Each Shareholder agrees that he shall comply with
the provisions of Section 5.2 of the Merger Agreement.
5
<PAGE> 6
4.2 Restriction on Transfer, Proxies and Non-Interference; Stop
Transfer Order.
(a) Each Shareholder hereby agrees, while this Agreement is in effect,
and except as specifically contemplated hereby, not to (i) offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or
other disposition of, any of his Shares or any interest therein, (ii) grant any
proxies or powers of attorney, deposit any of his Shares into a voting trust or
enter into a voting agreement with respect to any of his Shares or (iii) take
any action that would make any representation or warranty of any Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling any Shareholder from performing his obligations under this Agreement.
(b) In furtherance of the provisions of Section 4.2(a) hereof,
concurrently herewith the Shareholders shall and hereby do authorize the Company
to notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Existing Shares and any additional Shares of Common Stock
acquired by any Shareholder after the date hereof (and that this Agreement
places limits on the voting and transfer of such shares).
4.3 Confidentiality. Each Shareholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Shareholder hereby agrees
not to disclose or discuss such matters with anyone not a party to this
Agreement (other than counsel and advisors, if any) without the prior written
consent of Acquisition Sub, except for filings required pursuant to the Exchange
Act and the rules and regulations thereunder or disclosures such Shareholder's
counsel advises are necessary in order to fulfill his obligations imposed by
laws, in which event such Shareholder shall give notice of such disclosure to
Acquisition Sub as promptly as practicable so as to enable Acquisition Sub to
seek a protective order from a court of competent jurisdiction with respect
thereto.
4.4 Additional Shares. (a) Each Shareholder agrees, subject to the
following provisions of this Section 4.4(a), at the request of Acquisition Sub,
to exercise, exchange or convert his Rights into Shares of Company Common Stock,
so as to constitute After-Acquired Shares under this Agreement. In order to
facilitate the exercise at the request of Acquisition Sub of any such Right,
Acquisition Sub shall loan to any requesting Shareholder funds sufficient to
allow such Shareholder to exercise the Right. Such loan shall not be interest
bearing and, at Acquisition Sub's option, shall be secured by a pledge of the
shares of Company Common Stock acquired upon exercise of such Right.
(b) Each Shareholder hereby agrees to promptly notify Acquisition Sub
in writing of the number of After-Acquired Shares that may be acquired by such
Shareholder, if any, after the date hereof.
6
<PAGE> 7
4.5 Public Disclosure. Each Shareholder hereby agrees that Acquisition
Sub may publish and disclose in (i) the Offer Documents and (ii) if approval of
the Company's Shareholders is required under applicable law, the Proxy Statement
(including all documents and schedules filed with the SEC) his identity and
ownership of Company Common Stock and the nature of his commitments,
arrangements and understandings under this Agreement.
4.6 No Inconsistent Agreements. No Shareholder shall enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions of this Agreement.
4.7 Further Assurances. From time to time, at the other party's request
and without further consideration, each of the Acquisition Sub, on the one hand,
and a Shareholder, on the other, shall execute and deliver such additional
documents and take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
5. Miscellaneous.
5.1 Fees and Expenses. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
5.2 Survival of Representations and Warranties. Except for the
representations and warranties in Section 3.2 of this Agreement, the
representations and warranties contained in this Agreement shall not survive the
delivery of and payment for the Shares or termination of the Option in
accordance with this Agreement.
5.3 Effect of Representations, Warranties and Covenants of
Shareholders. The representations, warranties and covenants of the Shareholders
shall be several and not joint. The liability of each individual Shareholder
shall extend only to the representations, warranties and covenants of such
Shareholder and not to any representation, warranty or covenant of any other
Shareholder. No Shareholder shall have any liability for incidental or
consequential damages or any amount in excess of the aggregate purchase price
for his Shares.
5.4 Amendment and Modification. This Agreement may be amended, modified
and supplemented in any and all respects by written agreement of all parties
hereto.
5.5 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that any or all of the Acquisition Sub's respective rights,
interests and obligations hereunder may be assigned by the Acquisition Sub to
any other direct or indirect wholly owned subsidiary of Purchaser. Subject to
the preceding sentence,
7
<PAGE> 8
this Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties and their respective heirs, executors, legal representative or
successors and assigns or other transferees and any other successor in interest.
5.6 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
5.7 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon personal delivery, facsimile transmission
(which is confirmed), telex or delivery by an overnight express courier service
(delivery, postage or freight charges prepaid), or on the fourth day following
deposit in the United States mail (if sent by registered or certified mail,
return receipt requested, delivery, postage or freight charges prepaid),
addressed to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to a Shareholder: c/o Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: Ronald R. Ross, Chairman and CEO
Facsimile No.: (214) 860-5148
With a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
Attention: Guy Kerr, Esq.
Facsimile No.: (214) 740-8800
With a copy to:
Cameron Ashley Building Products, Inc.
11651 Plano Road
Dallas, Texas 75243
Attention: John Davis, Vice President and
General Counsel
Facsimile No.: (214) 860-5148
8
<PAGE> 9
If to Acquisition Sub, to: c/o Guardian Fiberglass, Inc.
2300 Harmon Road
Auburn Hills, Michigan 48326
Attention: David Clark, President
Facsimile No.: (248) 340-2175
with a copy to: Dykema Gossett PLLC
1577 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: D. Richard McDonald
Facsimile No.: (248) 203-0763
5.8 Definitions; Interpretation.
(a) As used in this Agreement, (i) the term "After-Acquired Shares"
shall mean any shares of Company Common Stock acquired directly or indirectly,
or otherwise beneficially owned, by any of the Shareholders in any capacity
after the date hereof and prior to the termination hereof, whether upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of a purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity (including a fiduciary capacity) or otherwise; (ii) the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act; and (iii) the phrases "beneficially own" or "beneficial ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing (without duplicative counting of the same securities by the same
holder, securities beneficially owned by a person shall include securities
beneficially owned by all other persons with whom such Person would constitute a
"group" within the meaning of Rule 13d-5 of the Exchange Act).
(b) When a reference is made in this Agreement to a Section, such
reference shall be to a Section in this Agreement unless otherwise indicated.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." The descriptive
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
5.10 Entire Agreement, No Third Party Beneficiaries, Rights of
Ownership. This Agreement (a) constitutes the entire agreement and supersedes
all prior agreements and understandings, both
9
<PAGE> 10
written and oral, among the parties with respect to the subject matter hereof,
and (b) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
5.11 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
5.12 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia without giving effect to the
principles of conflicts of law thereof.
5.13 Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
10
<PAGE> 11
IN WITNESS WHEREOF, Acquisition Sub and each of the Shareholders have
caused this Agreement to be duly executed as of the day and year first above
written.
CAB MERGER CORP.
By: /s/ David A. Clark
----------------------
David A. Clark
Chairman
<TABLE>
<CAPTION>
SHAREHOLDERS:
Purchase Rights
---------------------------------
Shares Options Warrants
- ------ ------- --------
<S> <C> <C> <C>
21,221 64,601 0 /s/ John H. Bradberry
-------------------------------
2,000 7,667 0 /s/ J. Veronica Biggins
-------------------------------
560 43,443 0 /s/ John S. Davis
-------------------------------
700 33,536 0 /s/ Fred Franklin
-------------------------------
109,462 50,000 0 /s/ Charles S. Gaffney
-------------------------------
0 5,667 0 /s/ Harry K. Hornish, Jr.
-------------------------------
0 10,000 0 /s/ John P. Klingsroot
-------------------------------
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
11,053 8,788 0 /s/ Gary A. Konke
---------------------------------
0 10,000 0 /s/ Rod Matthews
---------------------------------
805 43,339 0 /s/ Thomas R. Miller
---------------------------------
137,502 236,189 0 /s/ Walter J. Muratori
---------------------------------
66,944 260,179 0 /s/ Ronald R. Ross
---------------------------------
21,110 27,885 0 /s/ J. Harrell Spivey
---------------------------------
6,717 100,000 0 /s/ Garold E. Swan
---------------------------------
4,500 0 0 /s/ Alan K. Swift
- ------- -------- ------- ---------------------------------
382,574 901,294 0
======= ======== =======
</TABLE>
12
<PAGE> 1
EXHIBIT 99.(d)(3)
February 10, 2000
Guardian Industries Corp.
2300 Harmon Road
Auburn Hills, Michigan 48328-1714
Attn: David Clark, Chairman & Duane Faulkner, President--
Building Products Group
Gentlemen:
In connection with your consideration of a possible transaction with
Cameron Ashley Building Products, Inc. (the "Company"), you have requested
information concerning the Company. This confidentiality agreement amends and
supersedes the prior letter agreement executed by the Company and you on
February 7, 2000. As a condition to your being furnished such information, you
agree to treat any information concerning the Company (whether prepared by the
Company, its advisors or otherwise) which is furnished to you by or on behalf of
the Company (herein collectively referred to as the "Evaluation Material") in
accordance with the provisions of this letter and to take or abstain from taking
certain other actions herein set forth. The term "Evaluation Material" does not
include information which (i) is already in your possession, provided that such
information is not known by you to be subject to another confidentiality
agreement with, or other obligation of secrecy to, the Company or another party,
or (ii) becomes generally available to the public other than as a result of a
disclosure by you or your directors, officers, employees, agents, lenders,
co-investors or advisors, or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its advisors,
provided that such source is not known by you to be bound by a confidentiality
agreement with, or other obligation of secrecy to, the Company or another party.
You hereby agree that the Evaluation Material will be used solely for
the purpose of evaluating a possible transaction between the Company and you,
and that such information will be kept confidential by you, your advisors,
lenders, co-investors and their representatives; provided, however, that (i) any
of such information may be disclosed to your directors, officers, employees,
lenders, co-investors (including for the purposes of this agreement, the
principal shareholders of Builder Marts of America, Inc.) and representatives of
the same who need to know such information for the purpose of evaluating any
such possible transaction between the Company and you (it being understood that
such directors, officers, employees, lenders, co-investors and representatives
shall be informed by you of the confidential nature of such
<PAGE> 2
information and shall be directed by you to treat such information
confidentially), and (ii) any disclosure of such information may be made to
which the Company consents in writing.
You hereby acknowledge that you are aware, and that you will advise
such directors, officers, employees, lenders, co-investors and representatives
who are informed as to the matters which are the subject of this letter, that
the United States securities laws prohibit any person who has received from an
issuer material, non-public information concerning the matters which are the
subject of this letter from purchasing or selling securities of such issuer 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.
Unless the Company has disclosed the existence of your offer or has
indicated an intention to pursue an offer or transaction that is not financially
superior to your offer, without the prior written consent of the Company, you
will not, and will direct such directors, officers, employees, lenders,
co-investors and representatives not to, disclose to any person either the fact
that discussions or negotiations are taking place concerning a possible
transaction between the Company and you or any of the terms, conditions or other
facts with respect to any such possible transaction, including the status
thereof.
You hereby acknowledge that the Evaluation Material is being furnished
to you in consideration of your agreement that you will not, directly or
indirectly, propose or state a willingness to propose to the Company or any
other person any transaction between you and the Company and/or its security
holders involving any of its securities or security holders unless the Company
shall have requested in writing that you make such a proposal or the Company has
indicated an intention to pursue an offer or transaction that is not financially
superior to your (provided you are still actively pursuing a transaction similar
to the one currently proposed). Further, you will not acquire, or assist, advise
or encourage any other persons in acquiring, directly or indirectly, control of
the Company or in excess of 4.9% of the Company's securities or any of the
Company's businesses or assets for a period of two years from the date of this
letter unless the Company shall have consented in advance in writing to such
acquisition or has indicated an intention to pursue an offer or transaction that
is not financially superior to yours (provided you are still actively pursuing a
transaction similar to the one currently proposed). In the event that the
Company terminates all discussions with third parties for a change of control
transaction and does not pursue a transaction with any party as contemplated by
this letter, the restrictions of this paragraph will end one year from the date
of this letter.
If after the date of this agreement, the Company enters into a
confidentiality agreement with a third party in connection with a proposed
change of control transaction between the Company and such third party, and such
agreement contains restrictions different than the restrictions in the foregoing
paragraph, the Company will promptly notify you and you will have the option to
amend this agreement to include such different terms.
2
<PAGE> 3
Although the Company has endeavored to include in the Evaluation
Material information known to it which it believes to be relevant for the
purpose of your investigation, you understand that neither the Company nor any
of its representatives or advisors have made or make any representation or
warranty as to the accuracy or completeness of the Evaluation Material. You
agree that neither the Company nor its representatives or advisors shall have
any liability to you or any of your representatives or advisors resulting from
the use of the Evaluation Material.
In the event that you do not proceed with the transaction that is the
subject of this letter within a reasonable time, you shall promptly redeliver to
the Company all written Evaluation Material and any other written material
containing or reflecting any information in the Evaluation Material (whether
prepared by the Company, its advisors or otherwise) and will not retain any
copies, extracts or other reproductions in whole or in part of such written
material. All documents, memoranda, notes and other writings whatsoever prepared
by you or your advisors. based on the information in the Evaluation Material
shall be destroyed, and such destruction shall be certified in writing to the
Company by an authorized officer supervising such destruction.
You agree that unless and until a definitive agreement between the
Company and you with respect to any transaction referred to in the first
paragraph of this letter has been executed and delivered, neither the Company
nor you will be under any legal obligation of any kind whatsoever with respect
to such a transaction by virtue of this or any written or oral expression with
respect to such a transaction by any of its directors, officers, employees,
agents or any other representatives or the advisors or representatives thereof
except, in the case of this letter, for the matters specifically agreed to
herein. The agreement set forth in this paragraph may be modified or waived only
by a separate writing by the Company and you expressly so modifying or waiving
such agreement.
You agree that the Company shall be entitled to equitable relief,
including injunction and specific performance, in the event of any breach of the
provisions of this agreement, in addition to all other remedies available to the
Company at law or in equity. You further agree to waive any requirement for the
security or posting of any bond in connection with such remedy.
It is further understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder. You agree to reimburse, hold harmless and indemnify the
Company and its directors, officers, employees, advisors and representatives
from any damage, loss or expense including attorneys' fees and expenses,
incurred as a result of the disclosure or use of the Evaluation Material by you
or your directors, officers, employees, lenders, co-investors and
representatives contrary to the terms of this agreement or any other breach by
you
3
<PAGE> 4
or your directors, officers, employees, lenders, co-investors or representatives
of any of the terms and provisions thereof.
Very truly yours
CAMERON ASHLEY BUILDING
PRODUCTS, INC.
By: /s/ Ronald R. Ross
--------------------------------
Ronald R. Ross, Chairman and CEO
Confirmed and Agreed to this 10th
day of February, 2000:
GUARDIAN INDUSTRIES CORP.
By: /s/ David A. Clark
--------------------------
David A. Clark, Chairman,
Building Products Group
4
