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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
MIKASA, INC.
(Name of Issuer)
(Name of Person(s) Filing Statement)
------------------------
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
59862T 10 9
(CUSIP Number of Class of Securities)
------------------------
RAYMOND B. DINGMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MIKASA, INC.
20633 SOUTH FORDYCE AVENUE
LONG BEACH, CA 90810
(310) 886-3700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of the Person(s) Filing Statement)
COPIES OF COMMUNICATIONS TO:
JOHN D. HUSSEY, ESQUIRE
TURNER SWAN, ESQUIRE
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
333 SOUTH HOPE STREET, 48TH FLOOR
LOS ANGELES, CA 90071
(213) 620-1780
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August 8, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
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CALCULATION OF FILING FEE*
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Transaction Valuation: $20,000,000 Amount of Filing Fee: $4,000
</TABLE>
*Based upon purchase of 1,777,777 shares at the maximum tender offer price,
$11.25 per share.
/ / 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: ___________________ Filing party: __________________
Form or registration no.: ___________________ Date filed: __________________
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ITEM 1. SECURITY AND ISSUER.
(a) The issuer is Mikasa, Inc., a Delaware corporation (the "Company"), and
its principal executive offices are located at 20633 South Fordyce Avenue, Long
Beach, CA 90810.
(b) This Schedule relates to a tender offer by the Company to purchase up to
1,777,777 shares (or such lesser number of shares as are properly tendered) of
its Common Stock, par value $.01 per share ("Shares"), at prices, net to the
seller in cash, not greater than $11.25 nor less than $9.375 per Share as
specified by stockholders, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 8, 1996, and in the related Letter
of Transmittal (which together constitute the "Offer"), copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively. Reference is made
to the "Introduction," Section 1 -- "Number of Shares; Proration; Extension of
the Offer," Section 8 -- "Background of the Offer" and Section 12 "Transactions
and Arrangements Concerning the Shares" in the Offer to Purchase, each of which
is incorporated herein by reference.
(c) Reference is made to the "Introduction" and Section 7 -- "Price Range of
Shares; Dividends" in the Offer to Purchase, each of which is incorporated
herein by reference.
(d) This Schedule is being filed by the issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Reference is made to Section 10 -- "Source and Amount of Funds" in the Offer
to Purchase, which Section is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is made to the "Introduction," Section 6 -- "Certain Conditions of
the Offer," Section 7 -- "Price Range of Shares; Dividends," Section 8 --
"Background of the Offer," Section 9 -- "Certain Information Concerning the
Company," Section 12 "Transactions and Arrangements Concerning the Shares" and
Section 14 -- "Effects of the Offer on the Market for the Common Stock;
Registration under the Exchange Act" in the Offer to Purchase, each of which is
incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is made to the "Introduction," Section 8 -- "Background of the
Offer" and Section 12 -- "Transactions and Arrangements Concerning the Shares"
in the Offer to Purchase, each of which is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Reference is made to the "Introduction," Section 8 -- "Background of the
Offer" and Section 12 -- "Transactions and Arrangements Concerning the Shares,"
in the Offer to Purchase, each of which is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is made to the "Introduction" and Section 16 -- "Fees and
Expenses" in the Offer to Purchase, each of which is incorporated herein by
reference.
ITEM 7. FINANCIAL INFORMATION.
Reference is made to Section 9 -- "Certain Information Concerning the
Company" in the Offer to Purchase, the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, and on the Company's Quarterly Reports
on Form 10-Q for the periods ended March 31 and June 30, 1996, each of which is
incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Reference is made to Section 8 -- "Background of the Offer" and Section
12 -- "Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase, which Sections are incorporated herein by reference.
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(b) Reference is made to Section 13 -- "Certain Legal Matters; Regulatory
Approvals" in the Offer to Purchase, which Section is incorporated herein by
reference.
(c) Reference is made to Section 14 -- "Effects of the Offer on the Market
for Shares; Registration under the Exchange Act" in the Offer to Purchase, which
Section is incorporated herein by reference.
(d) None.
(e) Reference is made to the Offer to Purchase and the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, and are incorporated herein by reference in their entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) -- Offer to Purchase, dated August 8, 1996
(a)(2) -- Letter of Transmittal (including Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9)
(a)(3) -- Notice of Guaranteed Delivery
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(6) -- Letter to the Company's Stockholders from the President and Chief Executive
Officer of the Company
(a)(7) -- Text of Press Release, dated August 7, 1996
(a)(8) -- Form of Tombstone Advertisement
*(b)(1) -- Note Purchase Agreements dated as of May 1, 1993 by and among Mikasa, Inc.,
American Commercial, Incorporated and various Noteholders with Notes
issued pursuant thereto
**(b)(2) -- Revolving Credit Agreement dated May 19, 1993 by and among Mikasa, Inc.,
American Commercial, Incorporated, The First National Bank of Boston and
The Tokai Bank, Ltd. with Notes issued pursuant thereto
(c)(1) -- Stock Purchase Agreement dated August 6, 1996, between Alfred J. Blake and
Mikasa, Inc.
(c)(2) -- Employment and Consulting Agreement dated August 6, 1996 between Alfred J.
Blake and American Commercial, Incorporated and Mikasa, Inc.
(d) -- None
(e) -- Not Applicable
(f) -- None
</TABLE>
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* Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (No. 33-76708) filed March 21, 1994 and
amended on May 3, 1994 and May 24, 1994 as Exhibit No. 10.11, which
Registration Statement became effective May 25, 1994.
** Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (No. 33-76708) filed March 21, 1994 and
amended on May 3, 1994 and May 24, 1994 as Exhibit No. 10.12, which
Registration Statement became effective May 25, 1994.
2
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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.
Mikasa, Inc.
By /s/ RAYMOND B. DINGMAN
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Raymond B. Dingman
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Date: August 8, 1996
3
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MIKASA, INC.
OFFER TO PURCHASE FOR CASH
UP TO 1,777,777 SHARES OF ITS COMMON STOCK AT A PRICE NOT GREATER THAN $11.25
NOR LESS THAN $9.375 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON SEPTEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
Mikasa, Inc., a Delaware corporation (the "Company"), hereby invites its
stockholders to tender shares of its Common Stock, par value $.01 per share
("Shares"), to the Company at a price or prices, net to the seller in cash,
specified by the tendering stockholder of not greater than $11.25 nor less than
$9.375 per Share, in specified increments, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). On or after the Expiration
Date (as defined in Section 1), the Company will, upon the terms and subject to
the conditions of the Offer, determine a single per Share price (not greater
than $11.25 nor less than $9.375 per Share), net to the seller in cash (the
"Purchase Price") that it will pay for Shares properly tendered and not
withdrawn pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price which will allow it to purchase 1,777,777 Shares (or
such lesser number of Shares as are properly tendered at prices not greater than
$11.25 nor less than $9.375 per Share) pursuant to the Offer. All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
before the Expiration Date will be purchased at the Purchase Price, upon the
terms and subject to the conditions of the Offer, including the proration and
conditional tender terms described below. The Company reserves the right, in its
sole discretion, to purchase more than 1,777,777 Shares pursuant to the Offer,
but the Company does not, in any event, intend to purchase more Shares than can
be purchased for an aggregate Purchase Price of $20 million. See Sections 1 and
15.
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THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof, with any required signature guarantees, in accordance
with the instructions in the Letter of Transmittal, mail or deliver it and any
other documents required by the Letter of Transmittal to The First National Bank
of Boston, the depositary for the Offer (the "Depositary"), and either mail or
deliver the certificates for such Shares to the Depositary along with the Letter
of Transmittal or follow the procedure for book-entry transfer set forth in
Section 3, or (2) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder. A
stockholder who has Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such stockholder
desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available (or who cannot follow the procedure for
book-entry transfer on a timely basis) or who cannot transmit the Letter of
Transmittal and all other required documents to the Depositary before the
Expiration Date (as defined in Section 1), should tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
TO PROPERLY TENDER SHARES, STOCKHOLDERS MUST PROPERLY COMPLETE THE LETTER OF
TRANSMITTAL AND THE SECTION THEREOF RELATING TO THE PRICE AT WHICH THEY ARE
TENDERING SHARES.
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NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH STOCKHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE SUCH STOCKHOLDER'S OWN
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
------------------------
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE"). On August 6, 1996, the last full trading day before the
announcement of the terms of the Offer, the closing price of the Shares on the
NYSE was $9.625 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR THE SHARES.
------------------------
Any questions or requests for assistance, 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 address and telephone number set forth
on the back cover of this Offer to Purchase. Stockholders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
------------------------
August 8, 1996
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
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TABLE OF CONTENTS
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PAGE
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INTRODUCTION.................................................................................................... 1
THE OFFER....................................................................................................... 2
1. NUMBER OF SHARES; PRORATION; EXTENSION OF THE OFFER.................................................. 2
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.......................................................... 3
3. PROCEDURE FOR TENDERING SHARES AND CONDITIONAL TENDERS............................................... 4
4. WITHDRAWAL RIGHTS.................................................................................... 6
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE....................................... 7
6. CERTAIN CONDITIONS OF THE OFFER...................................................................... 8
7. PRICE RANGE OF SHARES; DIVIDENDS..................................................................... 10
8. BACKGROUND OF THE OFFER.............................................................................. 10
9. CERTAIN INFORMATION CONCERNING THE COMPANY........................................................... 15
10. SOURCE AND AMOUNT OF FUNDS........................................................................... 19
11. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS............................................................ 20
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES.................................................. 23
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.......................................................... 23
14. EFFECTS OF THE OFFER ON THE MARKET FOR THE COMMON STOCK; REGISTRATION UNDER THE EXCHANGE ACT......... 24
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.................................................. 24
16. FEES AND EXPENSES.................................................................................... 25
17. MISCELLANEOUS........................................................................................ 25
OPINION OF DILLON, READ & CO. INC................................................................................ Appendix A
</TABLE>
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To the Holders of Common Stock of Mikasa, Inc.:
INTRODUCTION
Mikasa, Inc., a Delaware corporation (the "Company"), hereby invites its
stockholders to tender Shares of its Common Stock, par value $.01 per share
("Shares"), to the Company at a price or prices, net to the seller in cash,
specified by the tendering stockholder, of not greater than $11.25 nor less than
$9.375 per Share, in specified increments, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). On or after the Expiration
Date (as defined in Section 1), the Company will, upon the terms and subject to
the conditions of the Offer, determine a single per Share Purchase Price (not
greater than $11.25 nor less than $9.375 per Share), net to the seller in cash
(the "Purchase Price") that it will pay for Shares properly tendered and not
withdrawn pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price which will allow it to purchase 1,777,777 Shares (or
such lesser number of Shares as are properly tendered at prices not greater than
$11.25 nor less than $9.375 per Share) pursuant to the Offer. All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
prior to the Expiration Date will be purchased at the Purchase Price, upon the
terms and subject to the conditions of the Offer, including the proration and
conditional tender terms described below. The Company reserves the right, in its
sole discretion, to purchase more than 1,777,777 Shares pursuant to the Offer,
but the Company does not, in any event, intend to purchase more Shares than can
be purchased for an aggregate Purchase Price of $20 million. See Sections 1 and
15.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
The Holders of vested but unexercised options under the Company's Long-Term
Incentive Plan ("Incentive Plan") and Non-Employee Directors Stock Option Plan
("Directors Plan") may exercise such options for cash and tender some or all of
the Shares issued upon exercise.
As of the close of business on August 6, 1996, there were 20,045,853 Shares
outstanding (after giving effect to the private purchase transaction effected on
August 6, 1996, described in Section 8) and 2,325,000 Shares were reserved for
issuance in connection with the Company's Incentive Plan and Directors Plan. The
1,777,777 Shares that the Company is offering to purchase in the Offer represent
approximately 8.87% of the Shares outstanding as of August 6, 1996.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS (THE "BOARD") MAKES ANY
RECOMMENDATION AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH
STOCKHOLDER'S SHARES PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE SUCH
STOCKHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS EXECUTIVE OFFICERS OR
DIRECTORS INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
If, at the Expiration Date a greater number of Shares is properly tendered
and not withdrawn than will be accepted for purchase by the Company, the Company
will accept Shares for purchase, first, from all Shares properly tendered by any
Odd Lot Holder (as defined in Section 1) who tenders all Shares beneficially
owned by such Odd Lot Holder at or below the Purchase Price (and does not
withdraw them prior to the Expiration Date) and complies with the requirements
set forth in Section 2, and, second, from all other Shares properly tendered at
or below the Purchase Price and not withdrawn on a pro rata basis. See Sections
1 and 2. If any stockholder tenders Shares and does not wish to have such Shares
purchased subject to proration, such stockholder may tender Shares subject to
the condition that a specified minimum number, if any, must be purchased. See
Section 3. All Shares not purchased pursuant to the Offer, including Shares
tendered at prices greater than the Purchase Price and Shares not purchased
because of proration or conditional tenders, will be returned to the tendering
stockholders at the Company's expense. Tendering stockholders will not be
obligated to pay
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brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. However, stockholders should be aware that under certain circumstances
proceeds from the sale of Shares pursuant to the Offer may be treated as a
dividend taxable as ordinary income rather than as capital gain. See Section 11.
The Company will pay all fees and expenses of Dillon, Read & Co. Inc. ("Dillon
Read"), its financial advisor, The First National Bank of Boston (the
"Depositary") and Georgeson & Company Inc. (the "Information Agent") in
connection with the Offer. See Section 16.
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE"). On August 6, 1996, the last full trading day before the
announcement of the terms of the Offer, the closing price of the Shares on the
NYSE was $9.625 per Share. See Section 7. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
THE OFFER
1. NUMBER OF SHARES; PRORATION; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and will purchase) up to 1,777,777 Shares or such lesser
number of Shares as are properly tendered (and not withdrawn in accordance with
Section 4) before the Expiration Date at a price (determined in the manner set
forth below) not greater than $11.25 nor less than $9.375 per Share. The term
"Expiration Date" means 5:00 P.M., Eastern Time, on September 6, 1996, unless
the Company extends the period of time for which the Offer is open, in which
event "Expiration Date" shall refer to the latest time and date at which the
Offer as so extended shall expire. For a description of the Company's rights to
extend the period of time during which the Offer is open and to delay, terminate
or amend the Offer, see Section 6 and Section 15. Subject to the purchase of
Shares properly tendered and not withdrawn by Odd Lot Holders as set forth in
Section 2, if the Offer is oversubscribed, Shares duly tendered will be subject
to proration.
The Company reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. See Section 15. There can be no assurance, however,
that the Company will exercise its right to extend the Offer.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions.
The Company will, upon the terms and subject to the conditions of the Offer,
determine the Purchase Price (not greater than $11.25 nor less than $9.375 per
Share) that it will pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the price specified by
the tendering stockholders. The Company will select a single per Share Purchase
Price that will allow it to buy 1,777,777 Shares (or such lesser number as are
properly tendered at prices not greater than $11.25 nor less than $9.375 per
Share) pursuant to the Offer.
All Shares purchased pursuant to the Offer will be purchased at the Purchase
Price. The Company reserves the right, in its sole discretion, to purchase more
than 1,777,777 Shares pursuant to the Offer, but the Company does not, in any
event, intend to purchase more Shares than can be purchased for an aggregate
Purchase Price of $20 million. If (a) the Company (i) increases or decreases the
range of prices at which Shares may be properly tendered, (ii) increases the
number of Shares being sought and any such increase exceeds 2% of the
outstanding Shares or (iii) decreases the number of Shares being sought, and (b)
the Offer is scheduled to expire less than ten business days from and including
the date that notice of such increase or decrease is first published, sent or
given in the manner specified in Section 15, the Offer will be extended for ten
business days from and including the date of such notice. For the purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday or
federal holiday and consists of the time period from 12:01 A.M. through 12:00
Midnight, Eastern Time.
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All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering stockholders
at the Company's expense as promptly as practicable (which, in the event of
proration, is expected to be approximately 12 NYSE trading days) following the
Expiration Date.
If the number of Shares properly tendered at or below the Purchase Price and
not withdrawn before the Expiration Date is less than or equal to 1,777,777
Shares (or such greater number of Shares as the Company may elect to purchase
pursuant to the Offer), the Company, upon the terms and subject to the
conditions of the Offer, will purchase at the Purchase Price all Shares so
tendered and not withdrawn.
If the number of Shares properly tendered at or below the Purchase Price and
not withdrawn before the Expiration Date is greater than 1,777,777 Shares (or
such greater number of Shares as the Company may elect to purchase pursuant to
the Offer), the Company, upon the terms and subject to the conditions of the
Offer, will accept Shares for purchase in the following order of priority:
(a) first, all Shares properly tendered and not withdrawn before the
Expiration Date by any stockholder who beneficially owned as of the close of
business on August 8, 1996, and who continues to own beneficially until the
Expiration Date an aggregate of fewer than 100 Shares (each an "Odd Lot
Holder") who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at a
price at or below the Purchase Price (partial and conditional tenders
will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
(b) second, after purchase of all the foregoing Shares, all Shares
conditionally tendered at a below the Purchase Price in accordance with
Section 3 for which the condition was satisfied, and all other Shares
properly and unconditionally tendered at prices at or below the Purchase
Price and not withdrawn before the Expiration Date on a pro rata basis, if
necessary (with adjustments to avoid purchases of fractional Shares).
In the event that proration of tendered Shares is required, the Company will
determine the final proration factor as promptly as practicable after the
Expiration Date. Proration for each stockholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares tendered by
such stockholder to the number of Shares tendered by all stockholders, other
than Odd Lot Holders, at or below the Purchase Price, subject to the conditional
tender provisions of Section 3. Although the Company does not expect that it
will be able to announce the final proration factor until approximately seven
NYSE trading days after the Expiration Date, it will announce the Purchase Price
and preliminary results of proration by press release as promptly as practicable
after the Expiration Date. Stockholders may obtain such preliminary information
from the Information Agent and may be able to obtain such information from their
brokers or financial advisors.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer, will
accept for purchase, without proration, all Shares properly tendered and not
withdrawn before the Expiration Date by or on behalf of Odd Lot Holders. See
Section 1. To avoid proration, however, an Odd Lot Holder must properly tender
all Shares that such Odd Lot Holder beneficially owns. Partial or conditional
tenders will not qualify for this preference. This preference is not available
to owners of 100 or more Shares even if such owners have separate stock
certificates for fewer than 100 Shares. Any Odd Lot Holder wishing to tender all
Shares beneficially owned by such Odd Lot Holder pursuant to the Offer and to
qualify for this preference must complete the box captioned "Odd Lots" on the
Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery.
See Section 3.
3
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3. PROCEDURE FOR TENDERING SHARES AND CONDITIONAL TENDERS
PROPER TENDER OF SHARES. For Shares to be properly tendered pursuant to the
Offer:
(a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile copy thereof) with any required signature guarantees, and
any other documents required by the Letter of Transmittal, must be received
before the Expiration Date by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase; or
(b) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
IN ACCORDANCE WITH INSTRUCTION 1 OF THE LETTER OF TRANSMITTAL, STOCKHOLDERS
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE
SECTION CAPTIONED "PRICE PER SHARE" ON THE LETTER OF TRANSMITTAL IN THE SPACE
PROVIDED IN THE BOX ENTITLED "DESCRIPTION OF SHARES TENDERED" THE PRICE (IN THE
SPECIFIED INCREMENTS) AT WHICH THEIR SHARES ARE BEING TENDERED. STOCKHOLDERS WHO
DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER
OF TRANSMITTAL FOR EACH PRICE AT WHICH SHARES ARE TENDERED, PROVIDED THAT THE
SAME SHARES CANNOT BE TENDERED (UNLESS PROPERLY WITHDRAWN PREVIOUSLY IN
ACCORDANCE WITH THE TERMS OF THE OFFER) AT MORE THAN ONE PRICE. IN ORDER TO
PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE
APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
It is a violation of Rule 14e-4 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), for a person to tender Shares for his or her
own account unless such person (i) has a net long position equal to or greater
than the amount of (x) Shares tendered or (y) other securities immediately
convertible into, exercisable or exchangeable for the amount of Shares tendered
and will acquire such Shares for tender by conversion, exercise or exchange of
such other securities and (ii) will cause such Shares to be delivered in
accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. The tender of Shares pursuant to any one of the procedures
described in this Section will constitute the tendering stockholder's
representation and warranty that (i) such stockholder has a net long position in
the Shares being tendered within the meaning of Rule 14e-4 under the Exchange
Act, and (ii) the tender of such Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will constitute
a binding agreement between the tendering stockholder and the Company upon the
terms and subject to the conditions of the Offer.
CONDITIONAL TENDERS OF SHARES. Under certain circumstances and subject to
the exceptions set forth in Section 1, the Company may prorate the number of
Shares purchased pursuant to the Offer. As discussed in Section 11 herein, the
number of Shares to be purchased from a particular stockholder might affect the
tax treatment of such purchase to such stockholder and such stockholder's
decision as to whether or not to tender. Each stockholder is urged to consult
with such stockholder's own tax advisors with respect to the tax consequences to
the stockholder of tendering Shares pursuant to the Offer. Accordingly, a
stockholder may tender Shares subject to the condition that a specified minimum
number of such stockholder's Shares tendered pursuant to a Letter of Transmittal
or Notice of Guaranteed Delivery must be purchased if any such Shares so
tendered are purchased. Any stockholder desiring to make such a conditional
tender must so indicate in the box captioned "Conditional Tender" in such Letter
of Transmittal or, if applicable, the Notice of Guaranteed Delivery.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate such minimum number of Shares. If the
effect of accepting tenders on a pro rata basis would be to reduce the number of
Shares to be purchased from any stockholder below the minimum
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<PAGE>
number so specified, such tender will automatically be regarded as withdrawn
(except as provided in the next paragraph) and all Shares tendered by such
stockholder pursuant to such Letter of Transmittal or Notice of Guaranteed
Delivery will be returned as promptly as practicable thereafter.
IN THE EVENT OF PRORATION, ANY SHARES TENDERED PURSUANT TO A CONDITIONAL
TENDER FOR WHICH THE MINIMUM REQUIREMENTS ARE NOT SATISFIED MAY NOT BE ACCEPTED
AND MAY THEREBY BE DEEMED WITHDRAWN.
SIGNATURE GUARANTEES AND METHODS OF DELIVERY. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is signed by
the registered owner of the Shares (which term, for purposes of this Section 3,
includes any participant in The Depository Trust Company or the Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith, and payment and delivery are to be made directly to such
registered owner at such owner's address shown on the records of the Company, or
if Shares are tendered for the account of a financial institution that is a
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion
Program (including most banks, savings and loan associations and brokerage
houses) (each such entity being hereinafter referred to as an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 2 of the Letter
of Transmittal. If a certificate representing Shares is registered in the name
of a person other than the person signing a Letter of Transmittal, or if payment
is to be made, or certificates for Shares not purchased or tendered are to be
issued, to a person other than the registered owner, the certificate must be
endorsed or accompanied by an appropriate stock power, in either case signed
exactly as the name of the registered owner appears on the certificate, with the
signature on the certificate or stock power guaranteed by an Eligible
Institution. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and any other documents required by the
Letter of Transmittal.
The method of delivery of all documents, including stock certificates, the
Letter of Transmittal and any other required documents, is at the election and
risk of the tendering stockholder. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended.
FEDERAL BACKUP WITHHOLDING. Absent an exemption under the applicable law
concerning "backup withholding" of federal income tax, the Depositary will be
required to withhold, and will withhold, 31% of the gross proceeds otherwise
payable to a stockholder (or other payee) pursuant to the Offer unless the
stockholder (or other payee) provides such person's tax identification number
(social security number or employer identification number), certifies that such
number is correct and certifies that such person is not subject to backup
federal income tax withholding. Each tendering stockholder, other than a
noncorporate foreign stockholder, should complete and sign the main signature
form and the Substitute Form W-9 included as part of the Letter of Transmittal
so as to provide the information and certifications necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a manner
satisfactory to the Company and the Depositary. Noncorporate foreign
stockholders generally should complete and sign a Form W-8, Certificate of
Foreign Status, a copy of which may be obtained from the Depositary, in order to
avoid backup withholding.
For a discussion of certain other federal income tax consequences of the
Offer, see Section 11. Each stockholder is urged to consult with such
stockholder's own advisors for advice concerning the federal, state and local
tax consequences of the Offer.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such
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<PAGE>
Shares into the Depositary's account in accordance with such facility's
procedure for such transfer. Even though delivery of Shares may be effected
through book-entry transfer into the Depositary's account at one of the
Book-Entry Transfer Facilities, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees and
other required documents, must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase before the Expiration Date, or the guaranteed delivery procedure set
forth below must be followed. Delivery of the Letter of Transmittal and any
other required documents to one of the Book-Entry Transfer Facilities does not
constitute delivery to the Depositary.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's stock certificates are not immediately
available (or the procedure for book-entry transfer cannot be followed on a
timely basis) or time will not permit the Letter of Transmittal and all other
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all the following conditions
are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail or facsimile transmission)
before the Expiration Date, a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form the Company has provided with
this Offer to Purchase; and
(c) the certificates for all tendered Shares in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities), together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) and any other documents required by the Letter of Transmittal, are
received by the Depositary within three NYSE trading days after the date of
execution of such Notice of Guaranteed Delivery.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted and the validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders determined by it not to be in proper form or the acceptance for payment
of which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer and
any defect or irregularity in the tender of any particular Shares. No tender of
Shares will be deemed properly made until all defects or irregularities have
been cured or waived. Neither the Company, the Depositary, the Information Agent
nor any other person is or will be obligated to give notice of any defects or
irregularities in tenders, and none of them will incur any liability for failure
to give any such notice.
4. WITHDRAWAL RIGHTS
Shares tendered pursuant to the Offer may be withdrawn at any time before
the Expiration Date. Thereafter, such tenders are irrevocable, except that they
may be withdrawn after October 4, 1996 unless previously accepted for payment as
provided in the Offer.
For a withdrawal to be effective, the Depositary must timely receive (at one
of its addresses set forth on the back cover of this Offer to Purchase) a
written or facsimile transmission notice of withdrawal. Any notice of withdrawal
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and, if different from the name of the
person who tendered the Shares, the name of the registered owner of such Shares.
If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
stockholder must also submit the serial numbers shown on the particular
certificates evidencing such Shares and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (except in the case of
Shares tendered by an Eligible Institution). If Shares have
6
<PAGE>
been delivered pursuant to the procedure for book-entry transfer set forth in
Section 3, the notice of withdrawal must specify the name and the number of the
account at the applicable Book-Entry Transfer Facility to be credited with the
withdrawn Shares and otherwise comply with the procedures of such facility.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. Neither the
Company, the Depositary, the Information Agent nor any other person is or will
be obligated to give any notice of any defects or irregularities in any notice
of withdrawal, and none of them will incur any liability for failure to give any
such notice. A withdrawal of a tender of Shares may not be rescinded, and Shares
properly withdrawn shall thereafter be deemed not to be validly tendered for
purposes of the Offer. Withdrawn Shares, however, may be retendered before the
Expiration Date by again following one of the procedures described in Section 3.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer (including,
without limitation, those set forth in Section 6), as soon as practicable after
the Expiration Date, the Company will purchase and pay the Purchase Price for
1,777,777 Shares (subject to increase or decrease as provided in Sections 1 and
15) or such lesser number of Shares as are properly tendered and not withdrawn
as permitted in Section 4. For purposes of the Offer, the Company will be deemed
to have accepted for payment (and thereby purchased), subject to proration,
Shares which are tendered and not withdrawn when, as and if the Company gives
oral or written notice to the Depositary of the Company's acceptance of such
Shares for payment pursuant to the Offer.
In the event that proration of tendered Shares is required, the Company will
determine the final proration factor as promptly as practicable after the
Expiration Date. Although the Company does not expect that it will be able to
announce the final proration factor until approximately seven NYSE trading days
after the Expiration Date, it will announce the Purchase Price and the
preliminary results of proration by press release as promptly as practicable
after the Expiration Date. Stockholders may obtain such preliminary information
from the Information Agent and may be able to obtain such information from their
brokers or financial advisors. Certificates for all Shares not purchased
pursuant to the Offer, including Shares not purchased because of proration, will
be returned to the tendering stockholders (or, in the case of Shares delivered
by book-entry transfer, such Shares will be credited to the account maintained
with one of the Book-Entry Transfer Facilities by the participant therein who so
delivered such Shares) at the Company's expense as promptly as practicable
(which, in the event of proration, is expected to be approximately 12 NYSE
trading days following the Expiration Date).
Payment for Shares purchased pursuant to the Offer will be made by the
Company by depositing the aggregate Purchase Price therefor with the Depositary,
which will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering stockholders.
Notwithstanding any other provision hereof, payment for Shares accepted pursuant
to the Offer will in all cases be made only after timely receipt by the
Depositary of certificates for such Shares (or timely confirmation to the
Depositary by a Book-Entry Transfer Facility of book-entry transfer of such
Shares), a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) with any required signature guarantees and any other required
documents. Under no circumstances will the Company pay interest on the Purchase
Price, regardless of any delay in making payment.
The Company will pay any stock transfer taxes on the transfer and sale of
Shares purchased pursuant to the Offer. If, however, payment is to be made to,
or certificates for Shares not purchased or tendered are to be registered in the
name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person(s)
signing the Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered
7
<PAGE>
holder or such other person) payable on account of the transfer to such person
will be deducted from the Purchase Price unless evidence satisfactory to the
Company of the payment of such taxes or an exemption therefrom is submitted. See
Instruction 7 of the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A NONCORPORATE FOREIGN STOCKHOLDER, A FORM W-8, WHICH IS OBTAINABLE FROM
THE DEPOSITARY) MAY BE SUBJECT TO A FEDERAL BACKUP WITHHOLDING TAX OF 31% OF THE
GROSS PROCEEDS TO BE PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE
OFFER. SEE SECTIONS 3 AND 11.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) the Company's right to extend, amend or terminate the
Offer at any time in its sole discretion, the Company shall not be required to
accept for payment or pay for any Shares tendered, and may terminate or amend
the Offer if, before acceptance for payment of or payment for any Shares, any of
the following events shall have occurred (or shall have been determined by the
Company to have occurred):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or tribunal or any other person, domestic or foreign,
or before any court, authority, agency or tribunal that (i) challenges the
acquisition of Shares pursuant to the Offer, or (ii) in the sole judgment of
the Company, could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of its
subsidiaries or materially impair the Offer's contemplated benefits to the
Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company, or
any of its subsidiaries, by any court, authority, agency or tribunal which,
in the Company's sole judgment, would or might directly or indirectly (i)
make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment or pay for, some or all of the Shares, (iii)
materially impair the contemplated benefits of the Offer to the Company, or
(iv) materially affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a
whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or any of its subsidiaries;
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act), has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding Shares, whether
through the acquisition of stock, the formation of a group, the grant of any
option or right, or otherwise other than as disclosed in a Schedule 13D or
13G on file with the Securities and Exchange Commission (the "Commission")
as of August 8, 1996 or (ii) any such person that on or prior to August 8,
1996, had filed such a Schedule with the Commission thereafter shall have
acquired or shall propose to acquire, whether through the acquisition of
stock, the formation of a group, the grant of any option or right, or
otherwise, beneficial ownership of additional Shares representing 2% or more
of the outstanding Shares (after giving effect to the private purchase
transaction described in Section 8);
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (ii) any
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<PAGE>
significant decline in the economic or financial condition in the United
States or abroad that could have a material adverse effect on the Company's
business or operations or on any trading in the Shares, (iii) the
declaration of a banking moratorium or any limitation on the extension of
credit by lending institutions in the United States, (iv) the commencement
of a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States, or (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
in the Company's sole judgment, a material acceleration or worsening
thereof;
(e) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger, acquisition or other business
combination proposal for the Company shall have been proposed, announced or
made by another person;
(f) there shall have occurred any event that has resulted, or may in the
sole judgment of the Company result, in an actual or threatened change in
the business, condition (financial or other), income, operations, stock
ownership or prospects of the Company and its subsidiaries, taken as a
whole;
(g) there shall have occurred any decline in the Dow Jones Industrial
Average or the Standard & Poor's Composite 500 Stock Index by an amount in
excess of 10% measured from the close of business on August 8, 1996; or
(h) there shall be a reasonable likelihood that the purchase of Shares
pursuant to the Offer will cause either (i) the Shares to be held of record
by fewer than 300 persons, or (ii) the Shares not to be eligible for listing
on either the NYSE or the Nasdaq Stock Market inter-dealer quotation system
("Nasdaq").
and, in the sole judgment of the Company, such event makes it inadvisable to
proceed with the Offer or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company, in whole or in part, at any time and
from time to time in its sole discretion. The Exchange Act requires that all
conditions to the Offer must be satisfied or waived before the final Expiration
Date. In certain cases, waiver of a condition to the Offer would require an
extension of the Offer. See Section 15.
The Company's failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right; the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts or circumstances; and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the events described above and any
related judgment by the Company regarding the inadvisability of proceeding with
the acceptance for payment or payment for any tendered Shares shall be final and
binding on all parties.
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7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and principally traded on the NYSE under the symbol
"MKS." The table below sets forth, for the periods indicated, the high and low
reported sale prices per Share on the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal Year Ended December 31, 1994:
First Quarter................................... [Not Yet Publicly
Traded]
Second Quarter.................................. $16 1/8 $14
Third Quarter................................... 16 3/8 12 1/2
Fourth Quarter.................................. 16 7/8 15 1/4
Fiscal Year Ended December 31, 1995:
First Quarter................................... $17 5/8 $15 3/8
Second Quarter.................................. 17 1/8 12 3/4
Third Quarter................................... 15 7/8 13 3/4
Fourth Quarter.................................. 14 5/8 12 5/8
Fiscal Year Ending December 31, 1996:
First Quarter................................... $13 7/8 $11 1/4
Second Quarter.................................. 12 1/4 10 7/8
Third Quarter (to August 6)..................... 11 1/8 9 1/8
</TABLE>
On August 6, 1996, the last full trading day before the announcement of the
Offer, the closing price of the Shares on the NYSE was $9.625 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company paid no dividends on its Common Stock during fiscal year 1995
and 1994. For the foreseeable future the Company intends to retain its earnings
for the operation and expansion of its business. In addition, the Company has
loan agreements with its senior note holders and revolving credit lenders which
limit the Company's future ability to pay dividends. (See Section 10 for a
description of the credit facilities.)
8. BACKGROUND OF THE OFFER
Since the Company's initial public offering in the second quarter of 1994,
the Company has consistently generated cash and maintained a significant cash,
cash equivalents and short-term investment position. At December 31, 1995, the
Company maintained cash, cash equivalents and short-term investments of $73.7
million ($44.7 million at June 30, 1996). Historically, the Company's cash
balance has fluctuated during the year reflecting the seasonal nature of its
business. For example, in 1995, monthly cash, cash equivalents and short term
investments balances ranged from $76.0 million to $30.7 million.
During each of the last three fiscal years, the Company has increased its
net (after tax) income over the prior year ($29.8 million in 1995, $28.8 million
in 1994, $25.2 million in 1993 and $21.8 million in 1992) and increased its net
sales over the prior year ($362 million in 1995, $332 million in 1994, $299
million in 1993 and $256 million in 1992). Net cash from operations was $2.0
million in 1995, $20.0 million in 1994 and $19.7 million in 1993. Net cash from
operations in 1995 was significantly below prior years due primarily to an
inventory build up which the Company does not expect to be duplicated in 1996.
The Company's stock price reached a high in the first quarter of 1995 and has
since trended downward.
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The Company's business is seasonal, with higher sales and net income in the
third and fourth quarters, with particular emphasis on the fourth quarter. The
Company has typically used net cash from operations and its cash reserves during
the first nine months of the year to build inventories and fund receivables in
anticipation of the fourth quarter selling season. In 1995, the Company ended
the year with higher than expected inventory levels resulting in an $18.0
million decrease in net cash provided by operations to $2.0 million, as compared
to the prior fiscal year level of $20.0 million. The Company's availability of
net cash from operations is ultimately dependent on the results of operations of
the fourth quarter.
On July 31, 1996, the Company announced its financial results for the six
months ended June 30, 1996 (the "current period"), and reported that the
Company's earnings declined compared with the same period in 1995 (the "prior
period"). Net sales during the current period decreased 0.7% over the prior
period (from $146.6 million to $145.7 million), accounted for by a decrease of
15.9% ($11.3 million) in the U.S. retail account channel of distribution offset
in part by an increase in net sales in the U.S. direct consumer channel of
distribution of 11.1% ($7.4 million) over the prior period, and by an increase
in international sales of 33.2% ($8.5 million) over the prior period. While
gross profits for the current period increased 0.9% (from $64.5 million to $65.1
million) over the prior period, selling, general and administrative expenses for
the current period increased 17.7% (from $51.0 million to $60.0 million) over
the prior period. Expenses associated with stores open for less than one year
accounted for $5.1 million of the $9 million increase in selling, general and
administrative expenses. Additionally, during the current period, the Company
charged $4.1 million in non-recurring pre-tax charges related to anticipated
closings of ten stores that have not performed to the Company's expectations.
The stock is currently trading near its lowest price since the Company's
initial public offering. The Offer represents the opportunity to distribute cash
to the Company's stockholders permitting them to invest it according to their
own objectives.
During the last twelve months, the Company has explored opportunities to
maximize stockholder value. The Company has considered various strategic
opportunities including opportunities for growth through acquisitions of
synergistic businesses, possible substantial investments in the Company by
financial investors and a possible combination with third parties. At this time,
none of such opportunities is being explored. Should appropriate opportunities
arise in the future, the Company may elect to pursue them, although there is no
assurance that such opportunities will develop or that the Company will
determine that it should pursue them.
In the second quarter of 1996, Alfred J. Blake, the current Chairman and
Chief Executive Officer, proposed that the Board consider a management
succession plan that would enable Mr. Blake to transition his current
responsibilities. Informal discussions subsequently ensued between Mr. Blake and
other members of management and certain directors. As part of such succession
plan, Mr. Blake expressed a desire to reduce his holdings in the Company (which
were 27.8% of the outstanding Common Stock on August 6, 1996 prior to the
consummation of the Blake Purchase, as defined below), a willingness to sell
shares at a discount from market provided that a transaction could be structured
to achieve capital gains treatment on the sale, and a willingness to remain the
Company's largest individual stockholder.
On July 11, 1996, the Board met and concluded that it would be in the best
interest of the Company and its stockholders to arrange for a succession of
management. The Board authorized management to develop a succession plan under
which (i) Mr. Blake would resign as Chief Executive Officer and concentrate his
efforts on product development, sourcing, and certain international operations,
(ii) Mr. Blake would sell a significant portion of his stock back to the Company
at a discount from the market price, (iii) Raymond B. Dingman, the Company's
President and Chief Operating Officer, would become the Chief Executive Officer
and (iv) the Company would commence a tender offer to its public stockholders of
an aggregate dollar amount equal to the aggregate dollar amount paid for Mr.
Blake's shares. The Board authorized the engagement of an investment banker to
act as financial advisor with respect to the proposed transactions. The Board
also authorized the
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negotiation of an employment and consulting agreement and stock purchase
agreement between the Company and Mr. Blake. The Board's approval of such
negotiations was conditioned on the Company undertaking, with its financial
advisor and other professional advisors, a study of the feasibility of a tender
offer of an equal dollar amount to the public stockholders to permit the public
stockholders to achieve liquidity. Mr. Blake abstained from all decisions by the
Board involved in this process.
In determining to explore the public tender offer, the Board considered,
among other things, the limited trading liquidity in the Company's Shares, and
the fact that a public tender offer would provide stockholders an opportunity to
sell their Shares to the Company at a price which may reflect a premium over the
price available in the open market immediately prior to the announcement of the
Offer (without the usual transaction costs associated with market sales), the
Company's current cash position, the Company's history of cash generation from
operations and cash needs, and the potential short and long term impact on
earnings per Share of a tender offer. Management engaged Dillon Read to advise
the Company on the feasibility of a public tender offer. The Board also
considered that the Company expects that its future cash provided by operations
and available credit facilities will be sufficient to enable the Company to meet
the anticipated future needs of the Company's business.
In considering these transactions, the Board determined that it would not be
feasible for Mr. Blake to participate in a tender offer on a pro-rata basis with
other stockholders without a significant possibility that such sale would be
taxed to Mr. Blake as a dividend at ordinary income rates as opposed to a sale
subject to capital gains rates.
Subsequent to the July 11, 1996 Board meeting, management negotiated with
Mr. Blake the terms of a stock purchase at a discount, and an employment
agreement that would carry the management succession plan into effect, which
transactions with Mr. Blake were designed to be made in conjunction with the
making of this Offer to stockholders.
On August 2, 1996, the Board, without Mr. Blake, met and received a status
report from management of the principal terms negotiated with Mr. Blake with
respect to the succession plan and of the principal terms of the contemplated
public tender offer, including the primary terms of an employment and consulting
arrangement with Mr. Blake, the purchase of $20 million of Common Stock held by
Mr. Blake and the plan to conduct a "Dutch Auction" tender offer to public
stockholders in the amount of $20 million following the repurchase of stock from
Mr. Blake. Brenda W. Flores, the Chief Financial Officer made a preliminary
status report to the Board regarding the source of funds to be used for the
purchases of stock from Mr. Blake and from stockholders in the tender offer, and
the impact the transactions were expected to have on Company finances, earnings
per Share, cash flow and the Company's existing loan covenants. It was reported
that the contemplated transactions would not require consents, waivers or
approvals from any of the Company's lenders. At the same August 2 Board meeting,
Dillon Read preliminarily reviewed with the Board the status of its engagement
with respect to the purchase of stock from Mr. Blake and the tender offer.
On August 6, 1996, the Board, without Mr. Blake, met and considered for
approval a Stock Purchase Agreement between the Company and Mr. Blake (the
"Blake Purchase Agreement") for the purchase by the Company of 2,234,637 Shares
(constituting approximately 10.03% of Shares then outstanding) (the "Blake
Shares") for a cash purchase price of $8.95 per Share (the "Blake Purchase").
The purchase price of $8.95 per Share for the Blake Shares was 7% less than the
closing price of Shares on the NYSE on August 6, 1996. The Blake Purchase
Agreement provided that Mr. Blake agree not to tender shares into the Offer and
not to take any of the following actions without obtaining the prior consent of
the Board:
(a) acquire stock in the Company other than pursuant to exercises of
options or pursuant to stock splits, stock dividends and the like;
(b) except in certain limited circumstances, transfer any Company stock
for one year and thereafter not transfer stock other than (i) pursuant to
Rule 144, (ii) in a public offering of the stock of the Company which
requires registration in which Mr. Blake's stock is included, (iii) to
12
<PAGE>
the Company or a group or person approved by the Company or (iv) in other
transactions subject to the Company's right of first refusal so long as the
transaction does not result in a single person or group having control;
(c) solicit proxies in opposition to the election of any director
nominated by the Board for election to the Board, solicit proxies in
opposition to any proposal of the Board or participate in or support an
election contest with respect to any director;
(d) participate in or with or support a group or entity seeking to
acquire control of the Company;
(e) negotiate with third parties regarding any transaction involving an
investment in the Company, a change in control of the Company or a sale of
more than 5% of stock in the Company; and
(f) deposit Company Stock in a voting trust not controlled by Mr. Blake,
a family member or a charitable trust.
The Blake Purchase Agreement contains the Company's agreement to have the Board
nominate Mr. Blake for election to the Board at the conclusion of each term
served by Mr. Blake so long as Mr. Blake beneficially owns at least 5% of the
Common Stock of the Company. The Blake Purchase Agreement also grants Mr. Blake
incidental registration ("piggyback") rights, providing that if the Company
determines to register any of its Shares (with certain exceptions), Mr. Blake
will have the opportunity to elect to have all or part of his Shares included in
such registration at the Company's expense, with certain limitations.
Under the Blake Purchase Agreement, the Company also agreed: (i) not to
purchase Shares for 180 days after the Offer if such purchase would have a
substantial likelihood of being integrated with the Offer for purposes of Mr.
Blake's capital gains tax calculations, and (ii) without obtaining the prior
consent of Mr. Blake, not to reduce the low end of the price range of the Offer,
purchase Shares in the Offer at a price lower than the low end of such price
range, or expend more than $20 million for the purchase of Shares in the Offer.
In addition to the Blake Purchase Agreement, at the August 6, 1996 meeting,
the Board considered for approval an Employment and Consulting Agreement (the
"Employment Agreement") that implements the succession plan. Under the
Employment Agreement, Mr. Blake is to serve in the capacity as Chairman of the
Board for a two year period and, during such period, concentrate his efforts on
product development, sourcing and certain international operations. The
Employment Agreement provides that Mr. Blake receive an annual base salary
beginning at $312,000 plus benefits. After the two year period, Mr. Blake will
serve as a consultant for six years for an annual payment of $200,000.
At the August 6, 1996 meeting, the Company also considered for approval this
Offer. In connection with these transactions, the Board was advised by its
financial advisor, Dillon Read. The Board also received a written opinion from
Dillon Read to the effect that, based upon the procedures followed, factors
considered and assumptions made by Dillon Read as set forth in its opinion,
including a review of the potential pro forma financial effects (as prepared by
management) of the Blake Purchase and the Offer on the Company and a review of
the financial terms of the Blake Purchase and of certain recent repurchase
transactions, that as of the date of its opinion, (i) the consideration to be
paid by the Company in connection with the Blake Purchase is fair, from a
financial point of view, to the stockholders of the Company other than Mr.
Blake, and (ii) it is not unreasonable for the Board to conclude that the Blake
Purchase and the Offer represent a reasonable financial alternative for the
Company to undertake. Dillon Read, like the Company and its Board, has not
expressed any opinion and does not make any recommendation as to whether any
stockholder should tender any or all of such stockholders' Shares pursuant to
the Offer. Robert H. Hotz, a managing director of Dillon Read, serves as a
director of the Company. The full text of Dillon Read's opinion, which sets
forth the assumptions made, matters considered and limitations on the review
undertaken by Dillon Read, is
13
<PAGE>
attached hereto as Appendix A and is incorporated herein by reference. Dillon
Read has advised the Board that it does not believe that any person other than
the Board has the legal right under state law to rely on its opinion and, in the
absence of any governing precedent, would resist any assertion otherwise by any
such person.
On August 6, 1996, after due consideration, the Board approved the Blake
Purchase Agreement, the Employment Agreement and this Offer, and the Company and
Mr. Blake executed the Blake Purchase Agreement and the Employment Agreement and
closed the Blake Purchase.
THE OFFER. The Offer is designed to afford to stockholders who are
considering the sale of their Shares an opportunity to sell a portion, and,
perhaps all, of such Shares to the Company for a higher price than that which
has been recently available in the open market, without the usual transaction
costs associated with market sales. In addition, the Offer will allow qualified
Odd Lot Holders whose Shares are purchased pursuant to the Offer to avoid the
payment of brokerage commissions and any applicable odd lot discount chargeable
on a sale of Shares that otherwise could apply to open market transactions.
However, proceeds of sales pursuant to the Offer may under certain circumstances
be treated as a dividend taxable as ordinary income to a stockholder rather than
capital gain. See Section 11 herein. To the extent the purchase of Shares in the
Offer results in a reduction in the number of stockholders of record, the costs
to the Company for services to stockholders will be reduced.
The Offer also allows stockholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company, if they so desire.
Stockholders whose Shares are not tendered or purchased in the Offer will obtain
a proportionate increase in their ownership interest in the Company, and thus in
the Company's future earnings and assets, as a result of the acquisition of
Shares by the Company pursuant to the Offer and the Blake Purchase and the
corresponding reduction in the number of outstanding Shares.
NEITHER THE COMPANY, THE BOARD NOR DILLON READ MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OF OR ALL SUCH STOCKHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE SUCH STOCKHOLDER'S OWN
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
Shares acquired by the Company pursuant to the Offer and the Blake Purchase
will be treasury shares and will be deemed to be issued but not outstanding
shares and will be available for the Company to reissue without further
stockholder action (except as may be required by applicable law or the rules of
the NYSE on which the Shares are traded). Shares could be issued for such
purposes as, among others, the acquisition of businesses, the raising of
additional capital for use in the Company's business, the distribution of stock
dividends and the implementation of employee benefit plans.
As of the close of business on August 6, 1996, the Company had issued and
outstanding an aggregate of 20,045,853 Shares (which number reflects
consummation of the Blake Purchase on such date) and 2,325,000 Shares were
reserved for issuance in connection with the Company's Incentive Plan and
Directors Plan, of which 1,833,000 of such reserved Shares remained available
for the granting of additional options. Assuming 1,777,777 Shares are tendered
and purchased pursuant to the Offer, the Company's purchase will represent
approximately 8.87% of the Shares then outstanding, or approximately 8.81% on a
fully diluted basis (assuming the exercise of all outstanding stock options that
were exercisable as of such date). As of the close of business on August 6,
1996, all directors and executive officers of the Company as a group owned an
aggregate of approximately 11,493,392 Shares (including approximately 45,000
Shares that may be acquired pursuant to the exercise of stock options that were
exercisable as of such date or that will become exercisable prior to the
Expiration Date), or approximately 57.2% of the Shares then outstanding,
assuming the exercise of all such options.
14
<PAGE>
The Company has been advised by its executive officers and directors that
they do not intend to tender any Shares. However, all executive officers and
directors reserve the right otherwise to dispose of their Shares if they so
desire.
Mr. Blake has agreed with the Company that none of the Shares beneficially
owned by him will be tendered and sold to the Company pursuant to the Offer.
After giving effect to the consummation of the Blake Purchase and the repurchase
of Shares by the Company pursuant to the Offer (assuming 1,777,777 Shares are
tendered and purchased pursuant to the Offer), Mr. Blake will own approximately
21.7% of the outstanding Shares, assuming no outstanding options are exercised,
and approximately 21.3% of the outstanding Shares, assuming the exercise of all
outstanding options.
Except as disclosed in this Offer to Purchase, the Company currently has no
firm plans or proposals that relate to or would result in: (i) the acquisition
by any person of a material amount of additional securities of the Company or
the disposition of a material amount of securities of the Company; (ii) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its significant subsidiaries; (iii)
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries; (iv) any material change in the present Board or management of the
Company; (v) any material change in the present dividend policy, or indebtedness
or capitalization of the Company; (vi) any other material change in the
Company's corporate structure or business; (vii) any change in the Company's
Articles of Incorporation or By-laws or other actions which may impede the
acquisition of control of the Company by any person; (viii) a class of equity
securities of the Company being delisted from a national securities exchange;
(ix) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(x) the suspension of the Company's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
Subject to applicable laws and regulations and restrictions set forth in its
credit agreements (see Section 10), the Company in the future may purchase
additional Shares on the open market, in private transactions, through tender
offers or otherwise. Any such purchases may be on the same terms or on terms
which are more or less favorable to stockholders than the terms of the Offer.
Any possible future purchases of Shares by the Company would depend on many
factors, including among others, the market price of the Shares, the results of
the Offer, the Company's business and financial position and general economic
and market conditions. Rule 13e-4 under the Exchange Act generally prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date.
Certain pro forma financial effects of the purchase of the Shares pursuant
to the Blake Purchase and the Offer are described in Section 9.
9. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a leading designer, developer and marketer of quality
tabletop products. The Company's wide range of products includes ceramic
dinnerware, crystal stemware, crystal serveware, stainless steel flatware, gifts
and decorative accessories for the home. The Company develops product designs
through its internal staff, independent designers and jointly through certain of
its varied factory relationships.
The Company was originally incorporated in California in 1936 and during its
early years was primarily a trading company. In the 1950's, the Company entered
the dinnerware market and the Mikasa trademark was adopted. Over the past 20
years, the Company's product lines have been gradually broadened to include
other tabletop items. During that period, as the Company owns no manufacturing
facilities, it diversified its sources of supply, which traditionally had been
based in Japan. Today, the Company's products are manufactured in 22 countries,
including the United States. The Company distributes its products in the United
States through both retail account and direct
15
<PAGE>
consumer channels. Internationally, the Company sells its products through
authorized distributors primarily in selected countries. In 1985, certain
members of the Company's senior management team acquired control of the Company
from its original founders.
The Company was reincorporated in Delaware in 1994. The principal executive
offices of the Company are located at 20633 South Fordyce Avenue, Long Beach,
California 90810.
SUMMARY HISTORICAL FINANCIAL INFORMATION. The summary consolidated
historical financial information for the years ended December 31, 1995 and
December 31, 1994 set forth below has been derived from, and should be read in
conjunction with, the audited financial statements (including the related notes
thereto) included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (the "Form 10-K"). The summary financial information for the
six month periods ended June 30, 1996 and June 30, 1995, has been derived from,
and should be read in conjunction with, the unaudited financial statements for
such periods included in the Company's Quarterly Reports on Form 10-Q for the
periods ended March 31 and June 30, 1996 (the "Forms 10-Q"). Such summary
financial information is qualified in its entirety by reference to such reports
and all financial statements and related notes contained therein. The Form 10-K
and the Forms 10-Q are available for examination, and copies are obtainable, in
the manner set forth below in this Section 9 under "Additional Information."
The financial information for the six month periods ended June 30, 1996 and
June 30, 1995 has not been audited, but in the opinion of management contains
all adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of such information. Results for the six month periods are not
necessarily indicative of results for the full year.
MIKASA, INC.
SUMMARY HISTORICAL FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
---------------------------- ------------------------------------
JUNE 30, 1996 JUNE 30, 1995 DECEMBER 31, 1995 DECEMBER 31, 1994
------------- ------------- ----------------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Income Statement:
Net sales.................................. $ 145,696 $ 146,674 $ 362,453 $ 331,609
Income from operations..................... 971 13,544 49,209 49,332
Income before taxes........................ 420 13,690 48,699 47,053
Net income................................. $ 254 $ 8,337 $ 29,772 $ 28,799
Balance Sheet (at end of period):
Working capital............................ $ 207,754 $ 200,934 $ 219,267 $ 192,813
Total assets............................... 291,681 265,244 299,012 261,646
Total long-term debt....................... 60,000 60,000 60,000 60,000
Stockholders' equity....................... 200,016 180,106 $ 200,068 $ 170,544
Per Share Data (a):
Net income per common share................ 0.01 0.37 1.34 1.34
Book value per share....................... $ 8.98 8.08 $ 8.98 $ 7.91
Ratio of earnings to fixed charges:........ 2.82 4.06 3.86 3.73
</TABLE>
- ------------------------
(a) Weighted average number of shares of Common Stock outstanding during the six
month periods ended June 30, 1996 and June 30, 1995 was 22,280,490 and
22,280,490, respectively, and during the years ended December 31, 1995 and
December 31, 1994 was 22,280,490 and 21,536,000, respectively.
CURRENT PERIOD. On July 31, 1996, the Company announced its financial
results for the second quarter and six months ended June 30, 1996. The Company
reported that net sales for the second
16
<PAGE>
quarter of 1996 (the "current quarter") were $76.5 million compared to $76.9
million in the comparable quarter of 1995 (the "prior quarter"). The Company
reported a net loss of $0.8 million, or ($0.03) per Share for the current
quarter, compared to net income of $4.6 million, or $0.21 per Share, in the
prior quarter. Earnings for the current quarter included a one-time pre-tax
charge of $4.1 million, or $0.11 per Share after-tax, related to certain
anticipated store closures. Without this one-time charge, net income and
earnings per Share for the current quarter would have been $1.7 million and
$0.08, respectively.
During the current period, net sales were $145.6 million, compared to $146.6
million for the prior period. Net income before the one-time charge was $2.7
million or $0.12 per Share, compared to net income of $8.3 million, or $0.37 per
Share, last year. Including the one-time charge, earnings per Share for the
recent six months were $0.01.
The Company reported that the current quarter operating results reflected
higher operating expenses associated with its expanded retail store base
compared to the prior quarter and lower than expected domestic sales. During the
current quarter, direct sales to consumers through Company owned stores
increased 6%, however, comparable store sales for the current quarter compared
to the prior quarter, declined 4.5%. Also during the current quarter, management
decided to close ten retail stores that were not meeting the Company's
expectations. The $4.1 million non-recurring pre-tax charge reported reflects
estimated closure costs. The Company believes these closures should have a
positive impact on future earnings. The Company will continue to review store
performance to identify any stores that are not performing to the Company's
expectations.
The Company reported that sales to its retail account customers decreased
13% during the current quarter, compared to the prior quarter, because of
several factors, including reduced orders resulting from the continued
consolidation in the department store and mass merchant markets and the election
of certain customers to switch to electronic data interchange. During the
current quarter international sales grew 49% compared with the prior quarter,
reflecting the additional sales of the Company's Canadian subsidiary acquired in
the fall of 1995.
FORWARD-LOOKING INFORMATION. Certain statements or assumptions continued in
Section 8 -- "Background of the Offer" and Section 9 -- "Certain Information
Concerning the Company," including statements with respect to inventory levels
in future periods and the impact of store closures, contain or are based on
"forward-looking" information (as defined in the Private Securities Litigation
and Reform Act of 1995) that involves risk and uncertainties inherent in the
Company's business. Actual outcomes are dependent upon the Company's successful
performance of internal plans, its ability to control inventory levels, customer
changes in short range and long range plans, domestic and international
competition in the Company's product areas, successful completion of
construction within current cost estimates, continued acceptance of existing
products and the development and acceptance of new products, performance issues
with key suppliers, changes in government import and export policies, risks
related to international transactions and hedging strategies, as well as general
economic risks and uncertainties.
SUMMARY PRO FORMA FINANCIAL INFORMATION (UNAUDITED). The following
unaudited pro forma financial information is based upon historical financial
results of the Company which have been adjusted to reflect the consummation of
the Blake Purchase and the Offer, assuming (i) 2,133,333 Shares are purchased in
the Offer for $9.375 per Share, or (ii) 1,777,777 Shares are purchased in the
Offer for $11.25 per Share, net to the seller in cash, for an aggregate cost to
the Company of approximately $40,700,000, including estimated related fees and
expenses of the Blake Purchase and the Offer of approximately $700,000 (see
Section 16).
The summary pro forma balance sheet data as of June 30, 1996 and December
31, 1995, assume that the repurchase of Shares by the Company pursuant to the
Blake Purchase and the Offer had occurred as of the respective balance sheet
dates. The summary pro forma income statement data for the six month period
ended June 30, 1996 and the year ended December 31, 1995 assume that the
17
<PAGE>
repurchase of Shares by the Company pursuant to the Blake Purchase and the Offer
had occurred as of January 1, 1996 and January 1, 1995, respectively. See the
notes to the Summary Pro Forma Financial Information below in this Section 9.
The estimated financial effects of the repurchase of Shares by the Company
pursuant to the Blake Purchase and the Offer and related financings presented in
the pro forma financial information are not necessarily indicative of either the
Company's financial position or the results of its operations that would have
been achieved had the Offer or the Blake Purchase actually occurred on the dates
specified above, nor are they necessarily indicative of the results of the
Company's future operations. The pro forma financial information should be read
in conjunction with the accompanying financial statements and related notes of
the Company in the Form 10-K and the Forms 10-Q referred to above, and the
summary historical financial information set forth above in this Section 9.
MIKASA, INC.
SUMMARY PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------------------------------- -------------------------------------
AS AT $9.375 AT $11.25 AS AT $9.375 AT $11.25
REPORTED PER SHARE PER SHARE REPORTED PER SHARE PER SHARE
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Income Statement:
Net sales........................ $ 145,696 $ 145,696 $ 145,696 $ 362,453 $ 362,453 $ 362,453
Income from operations........... 971 971 971 49,209 49,209 49,209
Income/(loss) before income taxes
(a)............................. 420 (672) (672) 48,669 46,182 46,182
Net income/(loss) (b)............ $ 254 $ (407) $ (407) $ 29,772 $ 28,253 $ 28,253
Balance Sheet (at end of period):
Working capital (c).............. $ 207,754 $ 167,054 $ 167,054 $ 219,267 $ 178,567 $ 178,567
Total assets (c)................. 291,681 250,981 250,981 299,012 258,312 258,312
Total long-term debt............. 60,000 60,000 60,000 60,000 60,000 60,000
Stockholders' equity (c)......... 200,016 159,316 159,316 $ 200,068 159,368 159,368
Per Share (d):
Net income per share............. $ 0.01 $ (0.02) $ (0.02) $ 1.34 $ 1.58 $ 1.55
Book value per share............. $ 8.98 $ 8.89 $ 8.72 $ 8.98 $ 8.90 $ 8.72
Ratio of earnings to fixed
charges:........................ 2.82 2.62 2.62 3.86 3.50 3.50
</TABLE>
- ------------------------
(a) Net increases in interest expense relate to the assumed use of cash, cash
equivalents, short-term investments and, in 1995, the revolving credit
facility sufficient to repurchase the Blake Shares and Shares. The weighted
average interest rates assumed for the reduction of interest income from the
investment of cash, cash equivalents and short-term investments are 5.3% and
5.9% for the six months ended June 30, 1996 and for the year ended December
31, 1995, respectively. The interest rate assumed for the use of the
revolving credit facility in 1995 is 8.75%.
(b) Adjustment described in note (a) above, net of corresponding income tax
effects.
(c) Reflects the purchase of the 2,234,637 Blake Shares and the purchase of (i)
2,133,333 Shares at $9.375 per Share, or (ii) 1,777,777 Shares at $11.25 per
Share, pursuant to the Offer.
(d) All per share information has been adjusted to reflect the adjustments
described in note (a). At an Offer price of $9.375, pro forma average number
of shares of Common Stock outstanding during
18
<PAGE>
both the six months ended June 30, 1996 and the year ended December 31, 1995
was 17,912,000. At an Offer price of $11.25, pro forma average number of
shares of Common Stock outstanding during both the six months ended June 30,
1996 and the year ended December 31, 1995 was 18,268,000.
ADDITIONAL INFORMATION. The Company is subject to the informational
reporting requirements of the Exchange Act and in accordance therewith the
Company files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC") relating to its business,
financial condition and other matters. The Company is required to disclose in
such proxy statements and reports certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal owners of the Company's securities and
any material interest of such persons in transactions with the Company. The
Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with
the SEC which includes certain additional information relating to the Offer. The
reports, proxy statements and other information, including the Schedule 13E-4,
filed by the Company with the SEC can be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
SEC at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661.
Copies of such material also can be obtained at prescribed rates from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549,
and such information is also accessible through the web site maintained by the
SEC (web site address: http:// www.sec.gov).
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Company to consummate the Blake
Purchase and the Offer and to pay related fees and expenses related to the Offer
is estimated to be approximately $40,700,000. The amount of $20,000,000 was
required by the Company to purchase 2,234,637 Shares from Mr. Blake pursuant to
the Blake Purchase Agreement at a price of $8.95 per Share. If 1,777,777 Shares
are purchased by the Company pursuant to the Offer at $11.25 per Share, net to
the seller in cash, the aggregate cost to the Company, including estimated
related fees and expenses of the Offer (and the Blake Purchase), is expected to
be approximately $20,700,000. The Company has funded the Blake Purchase through
the use of existing cash, cash equivalents, short-term investments and existing
credit facilities, and anticipates that it will fund the purchase of Shares
pursuant to the Offer and the payment of related fees and expenses through
existing cash, cash equivalents, short term investments and credit facilities.
See "Summary Pro Forma Financial Information (Unaudited)" in Section 9 for
further information concerning the assumed cost of funds for the Blake Purchase
and the Offer.
The Company's credit facilities include an unsecured revolving credit
agreement with The First National Bank of Boston and Tokai Bank, Ltd. in the
amount of $50 million. The maturity date is May 19, 1998, subject to automatic
extensions of one year beyond the current maturity date at the end of each year
unless either bank delivers a notice of intention not to extend the maturity
date. At June 30, 1996, $4 million had been used for letters of credit under the
revolving credit facility and $46 million was unused and available. Borrowings
in the form of loans bear interest at the higher of the lead bank's "Base Rate"
or the Federal Funds Rate plus 0.5%. At June 30, 1996, this rate was 8.25%.
Borrowings in the form of acceptances bear interest at the lead bank's quoted
treasury rate for comparable time periods and amounts plus 0.5%. The interest
rate in effect at June 30, 1996 was 5.70%.
The Company is party to unsecured senior note agreements in the amount of
$60 million entered into through a private placement of debt which notes bear
interest at 6.66% per annum payable semi-annually and mature on May 19, 2003.
The principal is due in equal annual installments of $10 million from 1998
through 2003.
19
<PAGE>
Under the terms of the 1993 unsecured revolving credit and senior note
agreements, the Company is required to maintain certain financial ratios. The
most restrictive covenant requires the Company to maintain a minimum ratio of
income before interest, income taxes and fixed charges to interest and fixed
charges of 1.5 to 1.0. The Company's revolving credit and senior note agreements
contain restrictive covenants regarding cash distributions to stockholders,
including the payment of dividends. Such cash distributions made or authorized
since December 31, 1992 shall not exceed $1,000,000 plus 50% of the aggregate
consolidated net income (or in the case of a consolidated net loss, minus 100%
of such net loss) for the period commencing on December 31, 1992 and ending on
the date such a distribution would be made, provided no event of default exists
or otherwise would exist. No consents are required under the restrictive
covenants in the revolving credit and senior note agreements for this Offer and
for the Blake Purchase.
11. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
IN GENERAL. Set forth below is a summary of the principal federal income
tax consequences of a sale of Shares pursuant to the Offer under the Internal
Revenue Code of 1986, as amended to date (the "Code").
The summary is based on the Code, existing and proposed Treasury
regulations, administrative pronouncements and judicial decisions now in effect,
all of which are subject to change (possibly on a retroactive basis). The
summary deals only with Shares held as capital assets within the meaning of
Section 1221 of the Code and does not address foreign, state or local tax
consequences, nor does it address estate or gift tax considerations.
Furthermore, the summary does not address all aspects of federal income taxation
that may be relevant to investors in light of their particular circumstances or
to certain types of investors subject to special treatment under the federal
income tax laws (such as dealers in securities or currencies, tax-exempt
organizations, life insurance companies, other financial institutions,
pass-through entities, regulated investment companies, foreign stockholders, or
stockholders holding the Shares as part of a conversion transaction or a hedging
transaction, or as a position in a straddle for tax purposes).
Each stockholder is urged to consult and rely on the stockholder's own tax
advisor with respect to the tax consequences to the stockholder of tendering
Shares pursuant to the Offer.
A stockholder's exchange of Shares for cash pursuant to the Offer will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. As
discussed more fully below, cash received by most stockholders pursuant to the
Offer may be treated as a dividend taxable as ordinary income.
TREATMENT AS A SALE OR EXCHANGE. Generally, a transfer of Shares to the
Company pursuant to the Offer will be treated as a sale or exchange of the
Shares (rather than as a dividend distribution) if the receipt of cash upon the
sale (a) is "substantially disproportionate" with respect to the stockholder,
(b) results in a "complete termination" of the stockholder's interest in the
Company or (c) is "not essentially equivalent to a dividend" with respect to the
stockholder. These tests (the "Section 302 tests") are discussed more fully
below.
The Company believes that, in determining whether any of the Section 302
tests is met, its purchases of Shares pursuant to the Blake Purchase and the
Offer should be treated as part of a single integrated transaction. However,
such transactions are separate and are not dependent upon each other. In
addition, a stockholder must take into account not only Shares actually owned by
the stockholder, but also Shares that are constructively owned pursuant to
Section 318 of the Code. Under Section 318, a stockholder may constructively own
Shares actually owned, and in some cases constructively owned, by certain
related individuals or entities and Shares which may be acquired by exercise of
an option or by conversion. Substantially contemporaneous dispositions or
acquisitions of Shares by a stockholder or related individuals or entities
(including market purchases and sales) may be deemed to be part of a single
integrated transaction to be taken into account in determining whether any of
the Section 302 tests has been satisfied. In the event that the Offer is
over-subscribed, the Company's purchase of Shares pursuant to the Offer will be
prorated. Thus, in such case, even if all the Shares
20
<PAGE>
actually and constructively owned by a stockholder are tendered pursuant to the
Offer, not all of the Shares will be purchased by the Company, which in turn may
affect the stockholder's ability to satisfy the Section 302 tests.
The Section 302 tests are as follows:
(a) SUBSTANTIALLY DISPROPORTIONATE TEST. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of the outstanding Shares actually and
constructively owned by the stockholder immediately following the exchange
of Shares pursuant to the Offer (treating Shares purchased pursuant to the
Blake Purchase and purchased pursuant to the Offer as not outstanding) is
less than 80% of the percentage of the outstanding Shares actually and
constructively owned by the stockholder immediately before the Blake
Purchase (treating Shares purchased pursuant to the Blake Purchase and
purchased pursuant to the Offer as outstanding).
(b) COMPLETE TERMINATION TEST. The receipt of cash by a stockholder
will be a complete termination of the stockholder's interest if either (i)
all of the Shares actually and constructively owned by the stockholder are
sold pursuant to the Offer or (ii) all of the Shares actually owned by the
stockholder are sold pursuant to the Offer and the stockholder is eligible
to waive, and effectively waives, the attribution of Shares constructively
owned by the stockholder in accordance with the procedures described in
Section 302(c)(2) of the Code. Stockholders considering terminating their
interest in accordance with Section 302(c)(2) of the Code should consult
with their own tax advisors.
(c) NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND TEST. The receipt of cash
by a stockholder will be not essentially equivalent to a dividend if the
stockholder's sale of Shares pursuant to the Offer results in a "meaningful
reduction" in the stockholder's interest in the Company as compared to such
stockholder's interest immediately before the Blake Purchase. Whether the
receipt of cash by a stockholder will be "not essentially equivalent to a
dividend" will depend upon the individual stockholder's facts and
circumstances. The Internal Revenue Service (the "IRS") has indicated in
published rulings that even a small reduction in the proportionate interest
of a small minority stockholder in a publicly held corporation who exercises
no control over corporate affairs may constitute such a "meaningful
reduction." See Rev. Rul. 76-385, 1976-2 C.B. 92. Stockholders expecting to
rely upon the "not essentially equivalent to a dividend" test should consult
their own tax advisors as to its application in their particular situation.
If any of the Section 302 tests are satisfied, and the sale of the Shares is
therefore treated as a "sale or exchange" for federal income tax purposes, the
tendering stockholder will recognize gain or loss equal to the difference
between the amount of cash received by the stockholder and the stockholder's tax
basis in the Shares sold pursuant to the Offer. Any such gain or loss will be
capital gain or loss, and will be long term capital gain or loss if the Shares
have been held for more than one year. Long term capital gains are subject to
taxation at a maximum, marginal federal income tax rate of 28% for non-corporate
taxpayers and 39% for corporate taxpayers. (Pending legislative proposals would
reduce these rates; stockholders should consult their tax advisors concerning
the status and potential effects of such legislation.)
TREATMENT AS A DIVIDEND. If none of the Section 302 tests are satisfied,
the amount of cash received by a tendering stockholder will be treated as a
dividend taxable as ordinary income (without reduction for the tax basis of the
Shares sold pursuant to the Offer) to the extent of the stockholder's share of
the Company's earnings and profits. Ordinary income is subject to taxation at a
maximum, marginal federal income tax rate of 39.6% for non-corporate taxpayers,
and 39% for corporate taxpayers. The stockholder's basis in the Shares sold
pursuant to the Offer would be added to such stockholder's basis in its
remaining Shares, if any. If none of the Section 302 tests are satisfied, any
cash received for Shares pursuant to the Offer in excess of the Company's
earnings and profits will be treated, first, as a non-taxable return of capital
to the extent of the stockholder's basis for all of such stockholder's shares,
and, thereafter, as a capital gain to the extent it exceeds such basis.
21
<PAGE>
As noted above, the Company believes that, in determining whether any of the
Section 302 tests are met, purchases pursuant to the Blake Purchase and the
Offer must be treated as part of a single integrated transaction. However, such
transactions are separate and are not dependent upon each other. Accordingly,
each stockholder should compare its percentage interest in the Company
immediately before the Blake Purchase with its percentage interest in the
Company immediately after the Offer. Because of the Shares purchased by the
Company from Mr. Blake pursuant to the Blake Purchase, it is possible that a
stockholder's percentage interest will be higher after the Offer than before the
Blake Purchase. Any stockholder whose interest in the Company either remains
constant or increases as a result of the Blake Purchase and the Offer will be
unable to satisfy any Section 302 test and, therefore, will be subject to the
dividend treatment described above. A stockholder seeking sale or exchange
treatment should consult with the stockholder's own tax advisor concerning the
extent to which sales of Common Stock in the open market would be taken into
account in determining whether the stockholder's interest in the Company has
been reduced and, if so, how many Shares must be sold.
SPECIAL RULES FOR CORPORATE STOCKHOLDERS. If a sale of Shares by a
corporate stockholder is treated as a dividend, the corporate stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Code, subject to applicable limitations. Corporate Stockholders should,
however, consider the effect of Section 246(c) of the Code, which disallows the
70% dividends-received deduction with respect to stock that is held for 45 days
or less. For this purpose, the length of time a taxpayer is deemed to have held
stock may be reduced by periods during which the taxpayer's risk of loss with
respect to the stock is diminished by reason of the existence of certain options
or other transactions. Moreover, under Section 246A of the Code, if a corporate
stockholder has incurred indebtedness directly attributable to an investment in
Shares, the 70% dividends-received deduction may be reduced. In addition, any
amount received by a corporate stockholder pursuant to the Offer that is treated
as a dividend may constitute an "extraordinary dividend" under Section 1059 of
the Code. For this purpose, all dividends received by a stockholder within, and
having their ex-dividend date within, an 85-day period (expanded to a 365-day
period in the case of dividends received in such period that in the aggregate
exceed 20% of the stockholder's adjusted tax basis in the Shares) are aggregated
and may also be treated as extraordinary dividends. Accordingly, if applicable,
a corporate stockholder would be required under Section 1059(a) of the Code to
reduce its basis (but not below zero) in its Shares by the non-taxed portion of
the dividend (i.e., the portion of the dividend for which a deduction is
allowed), and if such portion exceeds the stockholder's tax basis for its
Shares, to treat the excess as gain from the sale of such Shares in the year in
which a sale or disposition of such Shares occurs (which, in certain
circumstances, may be the year in which Shares are sold pursuant to the Offer).
Proposed tax legislation (including both the Revenue Reconciliation Bill of
1995, which was passed by Congress but vetoed by the President, and a separate
proposal by the President) would require under all circumstances that any such
excess be treated as gain at the time that Shares are sold pursuant to the
Offer, and would also provide that if a redemption is treated as a dividend by
reason of option attribution under Section 318, such dividend will (except as
provided in regulations) be treated as an "extraordinary dividend" for purposes
of gain recognition under Section 1059(a).
FOREIGN STOCKHOLDERS. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign stockholder or his agent, unless the Company determines either that a
reduced rate of withholding is applicable pursuant to a tax treaty or that an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States. For this purpose, a foreign stockholder is
any stockholder that is not (a) a citizen or resident of the United States, (b)
a corporation, partnership or other entity created or organized in or under the
laws of the United States, or (c) any estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
22
<PAGE>
Without definite knowledge to the contrary, the Company will determine
whether a stockholder is a foreign stockholder by reference to the stockholder's
address. A foreign stockholder may be eligible to file for a refund of such tax
or a portion of such tax if such stockholder (a) meets the Section 302 tests
described above, (b) is entitled to a reduced rate of withholding pursuant to a
treaty and the Company withheld at a higher rate, or (c) is otherwise able to
establish that no tax or a reduced amount of tax was due. In order to claim an
exemption from withholding on the ground that gross proceeds paid pursuant to
the Offer are effectively connected with the conduct of a trade or business by a
foreign stockholder within the United States or that the foreign stockholder is
entitled to the benefits of a tax treaty, the foreign stockholder must deliver
to the Depositary a properly executed statement claiming such exemption or
benefits. Such statements may be obtained from the Depositary. Foreign
stockholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedures.
BACKUP WITHHOLDING. Each tendering stockholder must provide certain
information through the Letter of Transmittal to avoid the 31% federal "backup
withholding" tax on the gross proceeds payable pursuant to the Offer. See
Section 3.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE
BY THEM PURSUANT TO THE OFFER IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor, to the best of the Company's knowledge, any of the directors or executive
officers of the Company, or any affiliates or any associates of any of the
foregoing, has effected any transactions in the Shares during the 40 business
days prior to the date of this Offer, other than the Blake Purchase (see Section
8).
Except as set forth in this Offer to Purchase, neither the Company nor, to
the best of the Company's knowledge, any of its affiliates, directors or
executive officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company (including without
limitation any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies, consents or authorizations).
See Section 8 for information concerning the intentions of executive
officers and directors concerning participating in the Offer.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that appears to
be material to its business that might be adversely affected by its acquisition
of Shares as contemplated in the Offer or of any approval or other action by any
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, that would be required for the Company's acquisition or
ownership of Shares pursuant to the Offer. Should any such approval or other
action be required, the Company currently contemplates that it will seek such
approval or other action. The Company cannot predict whether it may determine
that it is required to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company intends to make all required
filings under the Exchange Act. The Company's obligation under the Offer to
accept Shares for payment is subject to certain conditions. See Section 6.
23
<PAGE>
14. EFFECTS OF THE OFFER ON THE MARKET FOR THE COMMON STOCK; REGISTRATION UNDER
THE EXCHANGE ACT
The Company's purchase of Shares pursuant to the Blake Purchase and the
Offer will reduce the number of Shares that might otherwise trade publicly, and
the Offer will likely reduce the number of stockholders. The Shares are
registered under the Exchange Act which requires, among other things, that the
Company furnish certain information to its stockholders and to the SEC and
comply with the SEC's proxy rules in connection with meetings of the Company's
stockholders. Registration of the Common Stock under the Exchange Act may be
terminated upon application by the Company to the SEC if the Common Stock is
held of record by fewer than 300 persons and not quoted on the NYSE. Further,
under NYSE rules, the Shares may be subject to delisting by the NYSE if the
number of beneficial owners of shares falls below a certain number. However, the
Company does not believe that the Offer will result in delisting its Common
Stock from the NYSE or termination of registration of the Common Stock under the
Exchange Act. If for any reason the Offer results in a delisting on the NYSE,
the Company intends to apply for listing on Nasdaq.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will continue
to be "margin securities" for purposes of the Federal Reserve Board's margin
regulations.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time and regardless of whether or not any of the events set
forth in Section 6 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of any Shares by giving oral or written
notice of such extension to the Depositary and making a public announcement
thereof. During any such extension, all Shares previously tendered and not
purchased or withdrawn will remain subject to the Offer, except to the extent
that such Shares may be withdrawn as set forth in Section 4. The Company also
expressly reserves the right, in its sole discretion, and regardless of whether
or not any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to terminate the Offer and not accept
for payment or pay for any Shares not theretofore accepted for payment or paid
for or, subject to applicable law, to postpone payment for Shares upon the
occurrence of any of the conditions specified in Section 6 or otherwise by
giving oral or written notice of such termination or postponement to the
Depositary and making a public announcement thereof. The Company's reservation
of the right to delay payment for Shares which it has accepted for payment is
limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires
that the Company pay the consideration offered or return the Shares tendered
promptly after termination or withdrawal of a tender offer. Subject to
compliance with applicable law, the Company further reserves the right, in its
sole discretion, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to owners of Shares or by decreasing the number of Shares being sought in the
Offer) or to waive the limitation on the maximum number of shares to be
purchased pursuant to the Offer. Amendments to the Offer may be made at any time
or from time to time effected by public announcement thereof, such announcement,
in the case of an extension, to be issued no later than 9:00 a.m., Eastern Time,
on the next business day after the previously scheduled Expiration Date. Any
disclosure of a material change in the information published, sent or given to
stockholders will be disseminated promptly to stockholders in a manner
reasonably designed to inform stockholders of such change. Without limiting the
manner in which the Company may choose to make a public announcement pursuant to
or concerning the Offer, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement, other than by making a release to the Dow Jones News
Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Company will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated
under the Exchange Act. The minimum period during which the Offer must remain
open following material changes in the terms of the Offer or information
concerning the Offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances then existing,
including the relative materiality of the changed terms or information. If (a)
the
24
<PAGE>
Company (i) increases or decreases the price at which Shares may be properly
tendered, (ii) increases the number of Shares being sought and such increase
exceeds 2% of the outstanding Shares, or (iii) decreases the number of Shares
being sought, and (b) the Offer is scheduled to expire at any time earlier than
the expiration of a period ending on the tenth business day from and including
the date that notice of such increase or decrease is first published, sent or
given, the Offer will be extended until the expiration of such ten business day
period.
16. FEES AND EXPENSES
The Company retained Dillon Read as its financial advisor in connection with
the Blake Purchase to provide an opinion to the Company and its Board with
respect to whether (i) the consideration to be paid by the Company in connection
with the Blake Purchase is fair, from a financial point of view, to the holders
of Common Stock of the Company other than Mr. Blake, and (ii) it is not
unreasonable for the Board to conclude that the Blake Purchase and the Offer
represent a reasonable financial alternative for the Company to undertake. See
Section 8 and Appendix A. Dillon Read will receive a fee of $400,000 for such
services. The Company also will reimburse Dillon Read for its reasonable out-of-
pocket expenses relating to the Offer (including up to $25,000 in attorneys'
fees) and has agreed to indemnify it against certain liabilities in connection
with the Offer, including certain liabilities under the federal securities laws.
Dillon Read also has rendered to the Company in the past and may in the
future render to the Company investment banking and other advisory services for
which it has received or will receive customary compensation from the Company
for such services.
The Company has retained Georgeson & Company Inc. as Information Agent and
The First National Bank of Boston as Depositary in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone, telex,
facsimile transmission and personal interview and may request brokers, dealers
and other nominee security holders to forward materials relating to the Offer to
beneficial owners. The Information Agent and the Depositary will each receive
reasonable and customary compensation for their services in connection with the
Offer and will be reimbursed for their reasonable out-of-pocket expenses. The
Company has agreed to indemnify the Depositary and Information Agent against
certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws.
The Company will not pay any fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting Shares pursuant to
the Offer. The Company will, however, on request, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in
respect of the Offer to the beneficial owners for which they act as nominees. No
broker, dealer, commercial bank or trust company has been authorized to act as
an agent for the Company for the purpose of the Offer. The Company will not pay
(or cause to be paid) any stock transfer taxes on its purchase of Shares
pursuant to the Offer, except as otherwise provided in Instruction 7 of the
Letter of Transmittal.
17. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. The Company is not aware of any jurisdiction where the making of
the Offer or the tender of Shares would not be in compliance with applicable
law. If the Company becomes aware of any jurisdiction where the making of the
Offer or the tender of Shares is not in compliance with any applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction in which 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 the Company's behalf by
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
Mikasa, Inc.
August 8, 1996
25
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted from Eligible Institutions. The Letter of
Transmittal, certificates for Shares and any other required documents should be
sent or delivered by each stockholder of the Company or his or her broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one
of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889 Confirm by Telephone:
Mail Stop 45-02-53 (617) 575-3400
Boston, Massachusetts 02105
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Banc Boston Trust Company of New York
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be obtained from the Information Agent as set forth below, and will
be furnished promptly at the Company's expense. You may also contact your local
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC. LOGO
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: 212-440-9800
ALL OTHERS CALL TOLL FREE: 1-800-223-2064
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER COMMON STOCK
OF
MIKASA, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 8, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., EASTERN TIME, ON SEPTEMBER 6, 1996,
UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889 Confirm by Telephone:
Mail Stop 45-02-53 (617) 575-3400
Boston, Massachusetts 02105
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Banc Boston Trust Company of New York
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC. LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: 212-440-9800
All Others Call Toll Free: 1-800-223-2064
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used only if (a) certificates for Shares
(as defined below) are to be delivered with it or (b) Shares are being delivered
by book-entry transfer to the account maintained by the Depositary at The
Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company
("PDTC") (collectively, the "Book-Entry Transfer Facilities") as set forth in
Section 3 of the Offer to Purchase (as defined below).
Stockholders whose stock certificates are not immediately available (or who
cannot follow the procedure for book-entry transfer on a timely basis) or who
cannot transmit this Letter of Transmittal and all other required documents to
the Depositary before the Expiration Date (as defined in Section 1 of the Offer
to Purchase) may nevertheless tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 3.
A stockholder owning beneficially as of the close of business on August 8,
1996 and who continues to own beneficially until the Expiration Date an
aggregate of fewer than 100 Shares and who satisfies the other requirements set
forth in Instruction 8, may have all such Shares purchased before proration, if
any, of the purchase of other Shares pursuant to the Offer.
<PAGE>
Delivery of the Letter of Transmittal and the other required documents to
one of the Book-Entry Transfer Facilities does not constitute delivery to the
<TABLE>
<CAPTION>
Depositary.
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 1, 4 AND 5)
<CAPTION>
PRINT NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S)
(PLEASE FILL IN, EXACTLY AS NAME(S) CERTIFICATES ENCLOSED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH SIGNED ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)** TENDERED
<CAPTION>
<S> <C> <C> <C>
* Need not be completed if Shares are delivered by Book-Entry Transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates
delivered to the Depositary are being tendered. See Instruction 5.
<CAPTION>
</TABLE>
<PAGE>
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO AN ACCOUNT
MAINTAINED BY THE DEPOSITARY AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
Check Box of Applicable Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
Transaction Code Number:
/ / CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Stockholder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
Check Box of Applicable Book-Entry Transfer Facility and Give Account Number if Delivered by
Book-Entry Transfer:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
Transaction Code Number:
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Mikasa, Inc., a Delaware corporation (the
"Company"), the above-described shares of Common Stock, par value $.01, of the
Company ("Shares"), at the price per Share indicated in this Letter of
Transmittal, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 8, 1996 (the "Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
herewith in accordance with and subject to the terms and 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 Company all right, title and interest in
and to all the Shares tendered hereby, or orders the registration of such Shares
delivered by book-entry transfer, that are purchased pursuant to the Offer and
hereby irrevocably constitutes and appoints the depositary for the offer (the
"Depositary") the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to:
(a) deliver certificates for such Shares, or transfer ownership of such Shares
on the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidence of transfer and
authenticity, to or upon the order of the Company, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price (as defined below)
with respect to such Shares; (b) present certificates for such Shares for
cancellation and transfer of such Shares on the Company's books; and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer.
<PAGE>
The undersigned hereby represents and warrants that: (a) the undersigned
"owns" the Shares tendered hereby within the meaning of Rule 14e-4 promulgated
under the Securities Exchange Act of 1934, as amended, and has full power and
authority to validly tender, sell, assign and transfer the Shares tendered
hereby; (b) the tender of Shares by the undersigned complies with Rule 14e-4;
(c) when and to the extent the Company accepts the Shares for purchase, the
Company will acquire good, marketable and unencumbered title thereto, free and
clear of all security interests, liens, charges, encumbrances, conditional sales
agreements or other obligations relating to their sale or transfer, and not
subject to any adverse claim; (d) on request, the undersigned will execute and
deliver any additional documents the Depositary or the Company deems necessary
or desirable to complete the assignment, transfer and purchase of the Shares
tendered hereby; and (e) the undersigned has read and agrees to all the terms of
the Offer.
The undersigned understands that the Company will determine a single per
Share price (not greater than $11.25 nor less than $9.375 per Share), net to the
seller in cash (the "Purchase Price") that it will pay for Shares properly
tendered and not withdrawn pursuant to the Offer taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
undersigned understands that the Company will select the Purchase Price that
will allow it to buy 1,777,777 Shares (or such lesser number of Shares as are
properly tendered at prices not greater than $11.25 nor less than $9.375 per
Share) pursuant to the Offer. The undersigned understands that all Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase)
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including its proration and conditional tender
provisions, and that the Company will return all other Shares, including Shares
tendered and not withdrawn at prices greater than the Purchase Price and Shares
not purchased because of proration or conditional tenders.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under the circumstances set forth in the
Offer to Purchase, the Company may terminate or amend the Offer or may not be
required to accept for payment any of the Shares tendered herewith or may accept
for payment, pro rata with Shares tendered by other stockholders, fewer than all
the Shares tendered herewith. In addition, the Company reserves the right, in
its sole discretion, to purchase more than 1,777,777 Shares pursuant to the
Offer, but the Company does not, in any event, intend to purchase more Shares
than can be purchased for an aggregate Purchase Price of $20 million.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE NOT GREATER THAN $11.25
NOR LESS THAN $9.375 AT WHICH
SHARES ARE BEING TENDERED, IN THE INCREMENTS SPECIFIED BELOW
(SEE INSTRUCTION 3)
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED,
OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
/ / $9.375 / / $9.50 / / $10.00 / / $10.50 / / $11.00
/ / $9.75 / / $10.25 / / $10.75 / / $11.25
</TABLE>
- --------------------------------------------------------------------------------
IF PORTIONS OF SHARE HOLDINGS ARE BEING TENDERED AT
MORE THAN ONE PRICE, USE A
SEPARATE LETTER OF TRANSMITTAL
FOR EACH PRICE SPECIFIED.
- --------------------------------------------------------------------------------
<PAGE>
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated herein and in the Offer to Purchase, this tender is irrevocable.
Unless otherwise indicated under "Special Payment Instructions," the check
for the Purchase Price will be issued, and certificates evidencing any Shares
not tendered or not accepted for payment will be returned and/or issued, to the
order of the undersigned and mailed to the address appearing under "Description
of Shares Tendered." If both the "Special Delivery Instructions" and the
"Special Payment Instructions" are completed, the check for the Purchase Price
will be issued, and any certificates evidencing any Shares not tendered or
accepted for payment will be delivered and/or issued, to and in the name of the
person or persons so indicated. In the case of book-entry delivery of Shares,
the account maintained at the Book-Entry Transfer Facility indicated above will
be credited with any Shares not accepted for payment. The undersigned recognizes
that the Company has no obligation pursuant to the "Special Payment
Instructions" to transfer any Shares from the name(s) of the registered
holder(s) thereof if the Company does not accept for payment any of the Shares
so tendered.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<TABLE>
<S> <C>
SPECIAL DELIVERY INSTRUCTIONS SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2, 5, 6 AND 10) (SEE INSTRUCTIONS 2, 5, 6 AND 10)
To be completed ONLY if the check for To be completed ONLY if the check for the
the aggregate Purchase Price of Shares aggregate Purchase Price of Shares pur-
purchased and/or certificates for Shares chased and/or certificates for Shares not
not tendered or not purchased are to be tendered or not purchased are to be issued
mailed to someone other than the in the name of someone other than the
undersigned or to the undersigned at an undersigned.
address other than that shown below the Issue any / / check and/or / /
undersigned's signature. certificates to:
Mail / / check and/or / / certificates Name:
to: (Please Print)
Name: Address:
(Please
Print) (Include Zip Code)
Address:
(Taxpayer Identification or Social
(Include Zip Security Number)
Code)
</TABLE>
<TABLE>
<S> <C>
ODD LOTS CONDITIONAL TENDER
SHARES WILL NOT RECEIVE INSTRUCTIONS
AN ODD LOTS PREFERENCE A tendering stockholder may condition his
UNLESS THIS SECTION IS COMPLETED or her tender of Shares upon the purchase
To be completed ONLY if Shares are being by the Company of a specified minimum
tendered by or on behalf of a person who number of the Shares tendered hereby, all
beneficially owned as of the close of as described in the Offer to Purchase,
business on August 8, 1996, and who will particularly in Section 3. Unless at least
continue to own beneficially until the such minimum number of Shares is purchased
Expiration Date an aggregate of fewer than by the Company pursuant to the terms of
100 Shares. the Offer, none of the Shares tendered
The undersigned either (check one box): hereby will be purchased. It is the
/ / was the beneficial owner as of the tendering stockholder's responsibility to
close of business on August 8, 1996 calculate such minimum number of Shares,
and will continue to be the and each stockholder is urged to consult
beneficial owner until the Expiration his or her own tax advisor with respect to
Date of an aggregate of fewer than the possible consequences of electing, or
100 Shares and is tendering all such failing to elect, a conditional tender of
Shares, or Shares. Unless the box below has been
completed and a minimum specified, the
/ / is an "Eligible Institution" (as tender will be deemed unconditional.
defined in Instruction 1) that (i) is / / the tender of Shares by the
tendering, for the beneficial owners Undersigned is conditioned upon the
thereof, Shares with respect to which purchase by the Company of a
it is the record owner and (ii) specified minimum.
believes, based upon representations Minimum number of Shares that must be
made to it by each such beneficial purchased, if any are purchased:
owner, that each such beneficial Shares
owner beneficially owned as of the
close of business on August 8, 1996,
and will continue to own beneficially
until the Expiration Date an
aggregate of fewer than 100 Shares,
and is tendering all such Shares.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SIGN HERE
(See Instructions 2 and 6)
(Please Complete Substitute Form W-9 Below)
............................................................................................
Signature(s) of Owner(s)
Name(s) ....................................................................................
(Please Print)
Date .......................................................................................
Capacity (full title) ......................................................................
Address ....................................................................................
............................................................................................
(Include Zip Code)
Area Code and Telephone Number .............................................................
Tax Identification or Social Security Number ...............................................
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to become
registered holder(s) by certificates and documents transmitted herewith. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 6)
Authorized Signature .......................................................................
Name .......................................................................................
(Please Print)
Title ......................................................................................
Name of Firm ...............................................................................
Address ....................................................................................
(Include Zip Code)
Area Code and Telephone No. ................................................................
Dated.......................................................................................
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I -- Please provide your Social Security Number
FORM W-9 TIN on the appropriate line at OR --------------------------
DEPARTMENT OF THE TREASURY right and certify by signing Employer Identification Number
INTERNAL REVENUE SERVICE and dating below
PAYOR'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN)
PART II - CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my current taxpayer identification number (or I am waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding because (i) I am exempt from backup withholding or
(ii) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject
to backup withholding as a result of a failure to report all interest or dividends, or (iii)
the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part II above if you have been
notified by the IRS that you are subject to backup withholding because of under reporting
interest or dividends on your tax return. However, if after being notified by the IRS that you
are subject to backup withholding you received another notification from the IRS that you are no
longer subject to backup withholding, do not cross out item (2).
SIGNATURE: ---------------- DATE: ----------------, 199 -- PART III
AWAITING TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART III OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) 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 (b) I intend to mail or deliver such an application
in the near future. I understand that if I do not provide a taxpayer
identification number to the payer before the earliest of (i) the date of
payment or (ii) sixty (60) days after the date of this Certificate, 31% of
all reportable payments made to me may be withheld.
Signature
------------------------------------------ Date
-----------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. PRICE PER SHARE. Stockholders desiring to tender Shares pursuant to the
Offer must properly indicate in the section captioned "Price (In Dollars) Per
Share" in the space provided in the box entitled "Description of Shares
Tendered" the price (in the specified increments) at which their Shares are
being tendered. Stockholders who desire to tender Shares at more than one price
must complete a separate Letter of Transmittal for each price at which Shares
are tendered, provided that the same Shares cannot be tendered (unless properly
withdrawn previously in accordance with the terms of the Offer) at more than one
price. In order to properly tender shares, one and only one price box must be
checked in the appropriate section on each Letter of Transmittal.
2. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (each such entity being hereinafter referred to as an "Eligible
Institution") that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchanges Medallion Program (including most banks, savings and loan associations
and brokerage houses). Signatures on this Letter of Transmittal need not be
guaranteed if (a) this Letter of Transmittal is signed by the registered owner
of the Shares (which term, for purposes of this document, shall include any
participant in one of the Book-Entry Transfer Facilities whose name appears on a
security position listing as the owner of Shares) tendered herewith and such
owner has not completed either of the boxes entitled "Special Payment
Instructions" or "Special Delivery Instructions" on this Letter of Transmittal
or (b) such Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
3. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if (a) certificates
are to be forwarded with it to the Depositary or (b) delivery of Shares is to be
made by book-entry transfer pursuant to the procedure set forth in Section 3 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer of all Shares delivered electronically
into the Depositary's account at one of the Book-Entry Transfer Facilities,
together in each case with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Depositary at one of its addresses set forth on the front page of this
Letter of Transmittal on or before the Expiration Date (as defined in the Offer
to Purchase). Delivery of documents to one of the Book-Entry Transfer Facilities
does not constitute delivery to the Depositary.
Stockholders whose certificates are not immediately available (or who cannot
follow the procedures for book-entry transfer on a timely basis) or who cannot
transmit this Letter of Transmittal and all other required documents to reach
the Depositary before the Expiration Date, may nevertheless tender their Shares
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution, (b) the Depositary must receive (by hand,
mail or facsimile transmission), before the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form the Company has provided with the Offer to Purchase and (c) the
certificates for all tendered Shares in proper form for transfer (or
confirmation of a book-entry transfer of all such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within five New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of
the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING STOCK CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Except as expressly provided in this Letter of Transmittal or in the Offer
to Purchase, no alternative, conditional or contingent tenders will be accepted,
and no fractional Shares will be purchased. By executing this Letter of
Transmittal (or a facsimile thereof), each tendering stockholder waives any
right to receive any notice of the acceptance of such stockholder's tender.
4. INADEQUATE SPACE. If the space provided in the box entitled
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
<PAGE>
5. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to stockholders
who deliver Shares by book-entry transfer.) If fewer than all the Shares
evidenced by any certificate delivered to the Depositary are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered." If such Shares are purchased, a new certificate for the
remainder of the Shares evidenced by the old certificate(s) will be sent to and
in the name of the registered holder(s) (unless otherwise specified by such
holder(s) having completed either of the boxes entitled "Special Delivery
Instructions" or "Special Payment Instructions" on this Letter of Transmittal)
as soon as practicable following the expiration or termination of the Offer. All
Shares represented by the certificates listed and delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS; AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificates without any change
whatsoever.
(b) If any of the Shares tendered herewith are registered in the names of
two or more owners, each such owner must sign this Letter of Transmittal.
(c) If any of the Shares tendered herewith are registered in different names
on different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
(d) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, no endorsements of certificates or separate stock
powers are required unless payment is to be made and/or certificates for Shares
not tendered or not purchased are to be issued to a person other than the
registered holder(s). If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Shares tendered herewith, however, the
certificates must be endorsed or accompanied by appropriate stock powers, in
either case, signed exactly as the name(s) of the registered holder(s) appear on
the certificates for such Shares. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 2.
(e) If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing and must submit proper
evidence satisfactory to the Company of the authority of such person so to act.
7. STOCK TRANSFER TAXES. The Company will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the aggregate Purchase Price is to be made
to, or certificates for Shares not tendered or accepted for purchase are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such person) payable on
account of the transfer to such person will be deducted from the aggregate
purchase price unless satisfactory evidence of payment of such taxes or
exemption therefrom is submitted.
8. ODD LOTS. As described in Sections 1 and 2 of the Offer to Purchase, if
the number of Shares properly tendered and not withdrawn before the Expiration
Date is greater than 1,777,777 (or such greater number of Shares as the Company
may elect to purchase pursuant to the Offer), the Company, upon the terms and
subject to the conditions of the Offer, will accept Shares for purchase first
from all Shares properly tendered and not withdrawn before the Expiration Date
by any stockholder who beneficially owned as of the close of business on August
8, 1996, and who continues to own beneficially until the Expiration Date, an
aggregate of fewer than 100 Shares, who tendered all Shares beneficially owned
by such person at or below the Purchase Price (partial and conditional tenders
of Shares will not qualify for this preference) and who completed the box
captioned "Odd Lots" in this Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery. This preference will not be available unless the
box above entitled "Odd Lots" is completed.
9. IRREGULARITIES. All questions as to the number of Shares to be accepted
and the validity, form, eligibility (including time of receipt) and acceptance
for payment of any tender of Shares will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
The Company reserves the absolute right to reject any or all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular Shares. The Company's
interpretation of the terms and
<PAGE>
conditions of the Offer (including these instructions) shall be final and
binding on all parties. No tender of Shares will be deemed properly made until
all defects or irregularities have been cured or waived. Neither the Company,
the Depositary, the Information Agent nor any other person is or will be
obligated to give notice of any defects or irregularities in tenders, and none
of them will incur any liability for failure to give any such notice.
10. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
aggregate Purchase Price of any Shares purchased is to be issued to, or any
Shares not tendered or not purchased are to be returned in the name of, a person
other than the person(s) signing this Letter of Transmittal or if the check or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
in the box entitled "Description of Shares Tendered," the boxes entitled
"Special Payment Instructions" and/or "Special Delivery Instructions" on this
Letter of Transmittal should be completed.
11. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at the address and 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.
12. SUBSTITUTE FORM W-9. Except as provided below under "Important Tax
Information," each tendering stockholder 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. Failure to provide
the information on the form may subject the tendering stockholder to a $50
penalty and a 31% federal back-up withholding tax may be imposed on the payments
made to the stockholder or other payee with respect to Shares purchased pursuant
to the Offer.
13. FOREIGN STOCKHOLDER WITHHOLDING. Foreign stockholders should note that
the 30% U.S. withholding tax generally applicable to corporate distributions
will apply to the proceeds payable pursuant to the Offer, unless either a
reduced rate of withholding is applicable pursuant to a tax treaty or an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States.
FACSIMILE COPIES OF THIS LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH
BELOW.
IMPORTANT TAX INFORMATION
GENERAL. Under current U.S. federal income tax law, a stockholder whose
tendered Shares are accepted for payment is required by law to provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on the Substitute Form W-9 below. If the Depositary is not provided with
the correct TIN, the Internal Revenue Service may subject the stockholder or
other payee to a $50 penalty. In addition, payments that are made to such
stockholder or other payee with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding for federal income tax purposes.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of, and by signing and dating, the Substitute Form W-9. In order for a
foreign individual to qualify as an exempt recipient, the stockholder must
submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments to be made to the stockholder or other payee. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
<PAGE>
PURPOSE OF SUBSTITUTE FORM W-9
PURPOSE OF FORM W-9. To prevent backup federal income tax withholding in
connection with payments that are made with respect to Shares tendered in the
Offer, you must provide the Depositary with your correct TIN by completing the
Substitute Form W-9 below, certifying that the TIN provided on Substitute Form
W-9 is correct and that either (A) you have not been notified by the Internal
Revenue Service that you are subject to backup withholding or (B) the Internal
Revenue Service has notified you that you are no longer subject to backup
withholding.
If you have not been issued a TIN and have applied for one, or if you intend
to apply for one in the near future, check the box in Part III and sign and date
both the Substitute Form W-9 and the "Certificate of Taxpayer Awaiting
Identification Number." You then have generally 60 days within which to provide
the Depositary with your TIN and a new Substitute Form W-9. If you fail to do
so, the Depositary will withhold 31% from any payments and distributions made to
you thereafter until a TIN and new Substitute Form W-9 are provided.
WHAT NUMBER TO GIVE THE DEPOSITARY
WHAT NUMBER TO GIVE THE DEPOSITARY. The stockholder is required to give the
Depositary the TIN (e.g., social security number or federal employer
identification number) of the record owner of the Shares or of the last
transferee appearing on the transfers attached to, or endorsed on, the
certificates evidencing the Shares. If the Shares are registered in more than
one name or are not registered 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.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY EXECUTED FACSIMILE
THEREOF), TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY
MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889 Confirm by Telephone:
Mail Stop 45-02-53 (617) 575-3400
Boston, Massachusetts 02105
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Banc Boston Trust Company of New York
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC. LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: 212-440-9800
All Others Call Toll Free: 1-800-223-2064
<PAGE>
MIKASA, INC.
NOTICE OF GUARANTEED DELIVERY
OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as defined
below) if:
(a) certificates for Common Stock, par value $.01 per share ("Shares"), of
Mikasa, Inc., a Delaware corporation (the "Company"), are not immediately
available; or
(b) the procedure for book-entry transfer (set forth in Section 3 of the
Company's Offer to Purchase, dated August 8, 1996 (the "Offer to
Purchase")) cannot be followed on a timely basis; or
(c) time will not permit the Letter of Transmittal and all other required
documents to be delivered to the depositary for the Offer (the
"Depositary") before the Expiration Date (as defined in Section 1 of the
Offer to Purchase).
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Stockholder Services Division (617) 575-2233
Post Office Box 1889 Confirm by Telephone:
Mail Stop 45-02-53 (617) 575-3400
Boston, Massachusetts 02105
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Banc Boston Trust Company of New York
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER
OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE
INSTRUCTIONS TO THE LETTER OF TRANSMITTAL, SUCH SIGNATURE GUARANTEE MUST APPEAR
IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF
TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to the Company, at a price per Share
indicated below not greater than $11.25 nor less than $9.375, in the specified
increments, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares indicated below pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE NOT GREATER THAN $11.25
NOR LESS THAN $9.375 AT WHICH
SHARES ARE BEING TENDERED, IN THE INCREMENTS SPECIFIED BELOW
(SEE INSTRUCTION 3 OF LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED,
OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
/ / $9.375 / / $9.50 / / $10.00 / / $10.50 / / $11.00
/ / $9.75 / / $10.25 / / $10.75 / / $11.25
</TABLE>
- --------------------------------------------------------------------------------
IF PORTIONS OF SHARE HOLDINGS ARE BEING TENDERED AT
MORE THAN ONE PRICE, USE A
SEPARATE NOTICE OF GUARANTEED DELIVERY
FOR EACH PRICE SPECIFIED.
- --------------------------------------------------------------------------------
Number of Shares tendered:______________________________________________________
Certificate Nos. (if available):________________________________________________
If Shares will be delivered by book-entry transfer:
Name of Tendering Institution:__________________________________________________
Account No.:____________________________________________________________________
at: ____________________________________________________________________________
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
------------------------------------
<PAGE>
ODD LOTS
(SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL)
To be completed ONLY if Shares are being tendered by or on behalf of a
person who beneficially owned as of the close of business on August 8, 1996, and
who will continue to own beneficially until the Expiration Date, an aggregate of
fewer than 100 Shares. The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on August 8, 1996, and
will continue to be the beneficial owner until the Expiration Date, of an
aggregate of fewer than 100 Shares, and is tendering all such Shares, or
/ / is an "Eligible Institution" that (i) is tendering, for the beneficial
owners thereof, Shares with respect to which it is the record owner, and
(ii) believes, based upon representations made to it by each such beneficial
owner, that each such beneficial owner beneficially owned as of the close of
business on August 8, 1996, and will continue to own beneficially until the
Expiration Date, an aggregate of fewer than 100 Shares, and is tendering all
such Shares.
CONDITIONAL TENDER INSTRUCTIONS
A tendering stockholder may condition his or her tender of Shares upon the
purchase by the Company of a specified minimum number of the Shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 3
thereof. Unless at least such minimum number of Shares is purchased by the
Company pursuant to the terms of the Offer, none of the Shares tendered hereby
will be purchased. It is the tendering stockholder's responsibility to calculate
such minimum number of Shares, and each stockholder is urged to consult his or
her own tax advisor with respect to the possible consequences of electing, or
failing to elect, a conditional tender of Shares. Unless this box has been
completed and a minimum specified, the tender will be deemed unconditional.
/ / The tender of Shares by the undersigned is conditioned upon the purchase by
the Company of a specified minimum.
Minimum number of Shares that must be purchased, if any are purchased:
____________ Shares
SIGNATURES
__________________________________ __________________________________
(Signature(s)) (Name(s) (Please Print))
__________________________________ __________________________________
(Signature(s)) (Name(s) (Please Print))
__________________________________
(Address Line 1)
__________________________________ __________________________________
(Address Line 2) (Include Zip Code) (Area Code and Telephone No.)
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an "Eligible Institution," guarantees that (a) the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, (b) such tender of
Shares complies with Rule 14e-4 and (c) the Depositary will receive either the
stock certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company, in any such case together with a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) and any other
required documents, all within five New York Stock Exchange trading days after
the date of execution of this notice.
_________________________________
(Name of Firm)
_________________________________
(Authorized Signature)
_________________________________
(Name)
_________________________________
(Address)
_________________________________
(Zip Code)
Date:______________________________________ ____________________________
(Area Code and Telephone No.)
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
<PAGE>
MIKASA, INC.
OFFER TO PURCHASE FOR CASH
UP TO 1,777,777 SHARES OF ITS
COMMON STOCK AT A PRICE NOT GREATER
THAN $11.25 NOR LESS THAN $9.375 PER SHARE
AUGUST 8, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Mikasa, Inc., a Delaware corporation (the "Company"), has appointed us to
act as Information Agent in connection with its "Dutch Auction" tender offer
pursuant to which the Company is inviting its stockholders to tender its Common
Stock, par value $.01 per share ("Shares"), at a price or prices, net to the
seller in cash, not greater than $11.25 nor less than $9.375 per Share, in
specified increments, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated August 8, 1996 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer").
On or after the Expiration Date (as defined in Section 1 of the Offer to
Purchase), the Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $11.25 nor less than
$9.375 per Share), net to the seller in cash (the "Purchase Price") that it will
pay for Shares properly tendered and not withdrawn pursuant to the Offer taking
into account the Shares so tendered and the prices specified by tendering
stockholders. The Company will select the Purchase Price which will allow it to
purchase 1,777,777 Shares (or such lesser number of Shares as are properly
tendered at prices not greater than $11.25 nor less than $9.375 per Share)
pursuant to the Offer. All Shares properly tendered at prices at or below the
Purchase Price and not withdrawn before the Expiration Date will be Purchased at
the Purchase Price, upon the terms and subject to the conditions of the Offer,
including its proration and conditional tender provisions.
The Company reserves the right, in its sole discretion, to purchase more
than 1,777,777 Shares pursuant to the Offer, but the Company does not, in any
event, intend to purchase more Shares than can be purchased for an aggregate
Purchase Price of $20 million. The Offer is not conditioned upon any minimum
number of Shares being validly tendered. The Offer is, however, subject to
certain other conditions. See Section 6 of the Offer to Purchase.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD PARTICIPATE IN THE OFFER.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
(1) Offer to Purchase dated August 8, 1996;
(2) Letter of Transmittal for your use and for the information of your
clients;
(3) Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available (or the procedures
for book-entry transfer cannot be followed on a timely basis) or time
will not permit the Letter of Transmittal and all other required
documents to reach the depositary for the Offer (the "Depositary") before
the Expiration Date;
(4) Letter to Clients 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;
(5) Letter from Raymond B. Dingman, President and Chief Executive Officer of
the Company, dated August 8, 1996, to stockholders of the Company;
-1-
<PAGE>
(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
(7) A return envelope addressed to the Depositary.
PLEASE BRING THE OFFER TO THE ATTENTION OF YOUR CLIENTS AS PROMPTLY AS
POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
P.M., EASTERN TIME, ON SEPTEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Company 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
Company will pay any stock transfer taxes with respect to the transfer and sale
of Shares to it or its order pursuant to the Offer, except as otherwise provided
in Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificates representing the tendered Shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3 of the Offer to Purchase, tenders may be made even
though stock certificates are not immediately available (or the procedures for
book-entry transfer cannot be followed on a timely basis) or time will not
permit the Letter of Transmittal and all other required documents to reach the
Depositary before the Expiration Date, if such tenders are made by or through an
Eligible Institution (as defined in the Offer to Purchase). Certificates for
Shares so tendered in proper form for transfer (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of the
"Book-Entry Transfer Facilities" described in the Offer to Purchase), together
with a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and any other documents required by the Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of a properly completed and
duly executed Notice of Guaranteed Delivery.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. STOCKHOLDERS MUST
MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT NO EXECUTIVE OFFICERS OR
DIRECTORS OF THE COMPANY INTEND TO TENDER SHARES PURSUANT TO THE OFFER.
Requests for additional copies of the enclosed material and any questions
you have with respect to the Offer should be addressed to the Information Agent
at its address and telephone number set forth on the back cover of the Offer to
Purchase.
Very truly yours,
GEORGESON & COMPANY INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL MAKE YOU OR ANY
OTHER PERSON THE AGENT OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY
OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL
ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL
ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY CONTAINED IN SUCH MATERIAL.
-2-
<PAGE>
MIKASA, INC.
OFFER TO PURCHASE FOR CASH
UP TO 1,777,777 SHARES OF ITS COMMON
STOCK AT A PRICE NOT GREATER THAN
$11.25 NOR LESS THAN $9.375 PER SHARE
To Our Clients: August 8, 1996
Enclosed for your consideration are the Offer to Purchase dated August 8,
1996 (the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the "Dutch Auction" tender
offer by Mikasa, Inc., a Delaware corporation (the "Company"). The Company is
inviting its stockholders to tender its Common Stock, par value $.01 per share
(the "Shares"), at a price or prices, net to the seller in cash, specified by
the tendering stockholder of not greater than $11.25 nor less than $9.375 per
Share, in specified increments, upon the terms and subject to the conditions of
the Offer.
On or after the Expiration Date (as defined in Section 1 of the Offer to
Purchase), the Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $11.25 nor less than
$9.375 per Share), net to the seller in cash (the "Purchase Price") that it will
pay for Shares properly tendered and not withdrawn pursuant to the Offer taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the Purchase Price which will
allow it to purchase 1,777,777 Shares (or such lesser number of Shares as are
properly tendered at prices not greater than $11.25 nor less than $9.375 per
Share) pursuant to the Offer. All Shares properly tendered at prices at or below
the Purchase Price and not withdrawn before the Expiration Date will be
purchased at the Purchase Price, upon the terms and subject to the conditions of
the Offer, including its proration and conditional tender terms.
All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering stockholders
at the Company's expense as promptly as practicable following the Expiration
Date. The Company reserves the right, in its sole discretion, to purchase more
than 1,777,777 Shares pursuant to the Offer, but the Company does not, in any
event, intend to purchase more shares than can be purchased for an aggregate
Purchase Price of $20 million. See Section 1 of the Offer to Purchase.
We are (or our nominee is) the holder of record of Shares held for your
account. As such, we are the only ones who can tender your Shares, and then only
pursuant to your instructions. The Letter of Transmittal is for your information
only and cannot be used by you to tender Shares we hold for your account.
Please instruct us whether you wish us to tender any of or all the Shares we
hold for your account upon the terms and subject to the conditions of the Offer.
We call your attention to the following:
1. You may tender any portion of or all your Shares as indicated in the
attached instruction form.
2. The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 6 of the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at
5:00 p.m., Eastern Time, on September 6, 1996, unless the Offer is extended.
4. The Offer is for 1,777,777 Shares, representing approximately 8.87%
of the Shares outstanding as of the close of business on August 6, 1996, and
approximately 8.81% of the sum of the Shares then outstanding plus all
Shares which may be issued upon the exercise of outstanding vested stock
options under the Company's Long-Term Incentive Plan and Non-Employee
Directors Stock Option Plan.
<PAGE>
5. You have the right to tender Shares subject to the condition that a
specified minimum of your Shares so tendered are purchased. See Section 3 of
the Offer to Purchase.
6. Tendering stockholders will not be obligated to pay any brokerage
commissions, solicitation fees or, subject to Instruction 7 of the Letter of
Transmittal, any stock transfer taxes with respect to the transfer and sale
of Shares to the Company pursuant to the Offer.
7. If you owned beneficially as of the close of business on August 8,
1996, and will continue to own beneficially until the Expiration Date, an
aggregate of fewer than 100 Shares, you are tendering all such Shares, you
do not withdraw such Shares before the Expiration Date and you complete the
box captioned "Odd Lots" in the attached instruction form, the Company, upon
the terms and subject to the conditions of the Offer, will accept all such
Shares for purchase before any proration of the purchase of other Shares
tendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the attached instruction form.
If you desire to make a conditional tender of Shares, you must calculate and
indicate the minimum number of Shares to be accepted for tender. An envelope to
return your instruction form to us is enclosed. If you authorize us to tender
your Shares, we will tender all such Shares unless you specify otherwise on the
instruction form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE. THE OFFER, PRORATION
PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
SEPTEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
As described in Section 1 of the Offer to Purchase and subject to matters
described therein, if the number of Shares properly tendered and not withdrawn
before the Expiration Date is greater than 1,777,777 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company, upon the terms and subject to the conditions of the Offer, will
accept Shares for purchase in the following order of priority:
a. first, all Shares properly tendered and not withdrawn before the
Expiration Date by any stockholder who beneficially owned as of the close
of business on August 8, 1996, and who continues to own beneficially
until the Expiration Date, an aggregate of fewer than 100 Shares (each an
"Odd Lot Holder") who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at a
price at or below the Purchase Price (partial tenders will not
qualify for this preference), and
(2) completes the box captioned "Odd Lots" on the Letter of Transmittal
and, if applicable, on the Notice of Guaranteed Delivery, and
b. second, after purchase of all the foregoing Shares, all other Shares
conditionally tendered in accordance with Section 3 of the Offer to
Purchase for which the condition was satisfied, and all other Shares
properly and unconditionally tendered at prices at or below the Purchase
Price and not withdrawn before the Expiration Date on a pro rata basis,
if necessary (with adjustments to avoid purchases of fractional Shares).
This Offer is not being made to, nor will the Company accept tenders from or
on behalf of, owners of Shares residing in any jurisdiction in which the making
of the Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. In any jurisdiction in which 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 the Company's behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH UP TO 1,777,777 SHARES
OF COMMON STOCK OF MIKASA, INC.
The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase dated August 8, 1996 and the related Letter of Transmittal (which
together constitute the "Offer"), in
<PAGE>
connection with the "Dutch Auction" tender offer by Mikasa, Inc., a Delaware
corporation (the "Company"), inviting stockholders to tender its Common Stock,
par value $.01 per share (the "Shares"), at a price or prices, net to the seller
in cash, not greater than $11.25 nor less than $9.375 per Share, upon the terms
and subject to the conditions of the Offer.
The undersigned hereby instruct(s) you to tender to the Company the number
of Shares indicated below or, if no number is indicated, all Shares you hold for
the account of the undersigned, upon the terms and subject to the conditions of
the Offer.
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE NOT GREATER THAN $11.25
NOR LESS THAN $9.375 AT WHICH
SHARES ARE BEING TENDERED, IN THE INCREMENTS SPECIFIED BELOW
(SEE INSTRUCTION 3 OF LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED,
OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
/ / $9.375 / / $9.50 / / $10.00 / / $10.50 / / $11.00
/ / $9.75 / / $10.25 / / $10.75 / / $11.25
</TABLE>
- --------------------------------------------------------------------------------
IF PORTIONS OF SHARE HOLDINGS ARE BEING TENDERED AT
MORE THAN ONE PRICE, USE A
SEPARATE COPY OF THIS LETTER
FOR EACH PRICE SPECIFIED.
- --------------------------------------------------------------------------------
Aggregate number of Shares to be tendered by you for the account of the
undersigned:*
_____________ Shares
*Unless otherwise indicated, all the Shares held for the account of the
undersigned will be tendered.
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned
beneficially owned as of the close of business on August 8, 1996, and will
continue to own beneficially until the Expiration Date an aggregate of fewer
than 100 Shares and is tendering all such Shares.
CONDITIONAL TENDER INSTRUCTIONS
/ / A tendering stockholder may condition his tender of Shares upon the
purchase by the Company of a specified minimum number of the Shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 3
thereof. Unless at least such minimum number of Shares is purchased by the
Company pursuant to the terms of the Offer, none of the Shares tendered
hereby will be purchased. It is the tendering stockholder's responsibility
to calculate such minimum number of Shares, and each stockholder is urged to
consult his or her own tax advisor with respect to the possible consequences
of electing, or failing to elect, a conditional tender of Shares. Unless
this box has been checked and a minimum specified, the tender will be deemed
unconditional.
The tender of Shares by the undersigned is conditioned upon the purchase by
the Company of a specified minimum.
<PAGE>
Minimum number of Shares that must be purchased, if any are purchased:
_____________ Shares
------------------------------------
SIGNATURE BOX
Signature(s) ___________________________________________________________________
Dated ___________________________________________________________________, 199__
Name(s) and Address(es) ________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Area Code and Telephone No. ____________________________________________________
Taxpayer Identification or Social Security Number ______________________________
------------------------------------
<PAGE>
[LOGO]
August 8, 1996
To Our Stockholders:
We are pleased to inform you that Mikasa, Inc. (the "Company") is offering
to purchase up to 1,777,777 shares (representing approximately 8.87% of the
currently outstanding shares) of its Common Stock from its stockholders for a
price not greater than $11.25 nor less than $9.375 per share (the "Purchase
Price"). The Company is conducting the offer through a procedure commonly
referred to as a "Dutch Auction." This procedure allows you to select the price
or prices within the specified price range at which you are willing to sell your
shares to the Company.
The offer gives stockholders the opportunity to sell their shares at a price
greater than market prices prevailing prior to announcement of the offer. On
August 6, 1996, the last trading day prior to the announcement of the offer, the
closing price for the Common Stock on the New York Stock Exchange was $9.625 per
share. Any stockholder whose shares are purchased in the offering will receive
the total purchase price in cash and will not incur the usual transaction costs
associated with open-market sales. Furthermore, any stockholders owning an
aggregate of less than 100 shares whose shares are purchased pursuant to the
offer, will avoid the applicable odd lot discounts payable on sales of odd lots
on the New York Stock Exchange.
The Company will pay the same per share Purchase Price for all shares the
Company purchases. If the number of shares properly tendered is equal to or less
than the number of shares the Company seeks to purchase through the offer, the
Purchase Price will be the highest price specified by a tendering stockholder.
If tendering stockholders properly tender more than the number of shares the
Company seeks to purchase through the offer, the Company will take into account
the number of shares so tendered and certain other factors (see Section 1 of the
accompanying Offer to Purchase) and select the Purchase Price which will allow
the Company to buy the number of shares that it seeks to purchase through the
offer. In such circumstances, the Company would not purchase the shares of any
tendering stockholder who specified a price per share above the Purchase Price.
All shares properly tendered at prices at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) will be purchased by the Company at the Purchase Price, net
to the seller in cash, subject to the terms and conditions described in the
Offer to Purchase and the related Letter of Transmittal. Those terms and
conditions include, among other things, provisions relating to possible
proration, conditional tender and the tender of odd lots. All shares which are
tendered and not purchased will be returned promptly to the stockholder.
The Company reserves the right, in its sole discretion, to purchase more
than 1,777,777 shares pursuant to the Offer, but the Company does not, in any
event, intend to purchase more shares than can be purchased for an aggregate
Purchase Price of $20 million.
The tender offer is explained in detail in the enclosed Offer to Purchase
and Letter of Transmittal. If you wish to tender your shares, detailed
instructions on how to tender shares are also in the enclosed materials. We
encourage you to read these materials carefully before making any decision with
respect to the tender offer.
Neither the Company nor its Board of Directors makes any recommendation
whether any stockholder should participate in the offer.
Please note that the tender offer is scheduled to expire at 5:00 P.M.,
Eastern Time, on September 6, 1996, unless extended by the Company. Questions
regarding the tender offer should be directed to Georgeson & Company Inc., the
Information Agent, at 1-800-223-2064 (toll free).
Sincerely,
RAYMOND B. DINGMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
EXHIBIT 99.(A)(7)
FOR: MIKASA, INC.
APPROVED BY: Brenda W. Flores
Chief Financial Officer
(310) 866-3700
CONTACT: Morgen-Walke Associates, Inc.
Doug Sherk, Jenifer Kirtland, David Gennarelli
(415) 296-7383
Elissa Grabowski, Emily Dupree
(212) 850-5600
FOR IMMEDIATE RELEASE
- ---------------------
MIKASA ANNOUNCES $20 MILLION DUTCH AUCTION TENDER OFFERING
Raymond B. Dingman Elected Chief Executive Officer
LONG BEACH, CA/AUGUST 7, 1996 - Mikasa, Inc. (NYSE:MKS) today announced that
its Board of Directors has authorized the commencement of a $20 million "Dutch
Auction" self-tender offer. The tender offer price range will be from $9.375
to $11.25 net per share in cash. The offer, which is scheduled to begin
tomorrow, is expected to expire at 5:00 p.m., EST, on Friday, September 6,
1996, unless extended. On August 6, 1996, Mikasa shares closed at $9.625.
The tender offer will be subject to various terms and conditions
described in offering materials to be distributed to stockholders beginning
tomorrow. Under the terms of the Dutch Auction offer, Mikasa stockholders
will be given the opportunity to specify prices within the Company's stated
price range at which they are willing to tender their shares. Upon receipt of
the tenders, Mikasa will determine a final price that enables it to purchase
up to the stated amount of shares from those stockholders who agreed to sell
at or below the selected purchase price. All shares purchased will be at that
selected purchase price. If more than 1,777,777 shares (or such greater
number of shares as the Company may elect to purchase pursuant to the offer)
are tendered at or below the purchase price, there will be a proration. The
tender offer will not be contingent upon any minimum number of shares being
tendered. Mikasa currently has 22,280,490 shares of Common Stock outstanding.
Neither the Company nor its Board of Directors makes any recommendation
to stockholders as to whether to tender or refrain from tendering their
shares. Each stockholder must make the decision whether to tender shares and,
if so, how many shares and at what price or prices shares should be tendered.
The Company has been advised that none of its executive officers or directors
intends to tender shares pursuant to the offer.
<PAGE>
-2-
"The Board believes that the Company's Common Stock is substantially
undervalued at current trading levels. After evaluating the current financial
condition of the Company, the Board determined that stockholder value would
be best served by implementing the offer described herein," stated Raymond B.
Dingman, president of Mikasa.
Additionally, Mikasa announced a management succession plan which was
implemented at the request of its chairman and chief executive officer, Mr.
Alfred J. Blake. Under the plan, Mr. Raymond B. Dingman, 50, has been elected
chief executive officer. Mr. Dingman succeeds Mr. Blake, 58, who continues as
chairman of the board and has entered into a two year employment contract,
which will be followed by a consulting period with Mikasa. Mr. Dingman
previously served as president and chief operating officer and will continue
to serve as president of the Company. As part of the management succession
plan, Mikasa also announced an agreement to purchase 2.2 million shares of
common stock from Mr. Blake at a price of $8.95 per share, or seven percent
below the August 6, 1996 closing price. After the purchase, Mr. Blake will
remain the largest stockholder of Mikasa with 4.0 million shares.
The Company indicated it would fund the repurchase of shares from Mr.
Blake with available cash, cash equivalents and short-term investments, and
would use remaining cash, cash equivalents, short term investments and
available credit under existing credit facilities to finance the tender offer
and its working capital needs.
Dillon, Read & Co. Inc. has been retained as the Company's financial
advisor. Boston EquiServe will be the Depositary for the offer, and
Georgeson & Company Inc. will serve as the Information Agent.
"By turning over my responsibilities as chief executive officer to
Raymond, I will be able to primarily devote my efforts going forward to
product development and sourcing in Europe and the Far East along with
certain of our international operations," stated Mr. Blake. "Under Raymond's
leadership, I am confident that Mikasa will continue its growth," Mr. Blake
added.
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"Alf Blake has led Mikasa to become recognized throughout the world as
one of the leading companies in our industry," Mr. Dingman commented. "We
are pleased that he has agreed to continue as our chairman, as well as to
continue his product development and sourcing responsibilities. We also
believe that Alf's added focus and valued experience will serve to strengthen
our growing international business."
Mikasa, Inc. is a leading designer, developer and marketer of quality
tabletop products in the United States and selected international markets.
The Company markets its products to retail accounts including department
stores, specialty retail stores and mass merchants, and through Company
operated retail stores.
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer (as defined below) is made solely by the Offer
to Purchase, dated August 8, 1996, and the related Letter of Transmittal. The
Offer is being made to all holders of Shares; provided, that 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 making or accepting the Offer would violate
that jurisdiction's laws. In those jurisdictions whose 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 Company by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
MIKASA, INC.
UP TO 1,777,777 OF ITS COMMON STOCK
AT A PURCHASE PRICE OF NOT GREATER THAN
$11.25 NOR LESS THAN $9.375 PER SHARE
Mikasa, Inc., a Delaware corporation (the "Company"), hereby invites its
stockholders to tender shares of its Common Stock, par value $.01 per share
("Shares"), to the Company at a price or prices, net to the seller in cash,
specified by the tendering stockholder of not greater than $11.25 nor less than
$9.375 per Share, in specified increments, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 8, 1996 and in the
related Letter of Transmittal (which together constitute the "Offer").
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to other conditions. See Section 6 of
the Offer to Purchase.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
TIME, ON FRIDAY, SEPTEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
On or after the Expiration Date (as defined below), the Company will, upon
the terms and subject to the conditions of the Offer, determine a single per
Share price (not greater than $11.25 nor less than $9.375 per Share), net to the
seller in cash (the "Purchase Price") that it will pay for Shares properly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
Company will select the Purchase Price which will allow it to purchase 1,777,777
Shares (or such lesser number of Shares as are properly tendered at prices not
greater than $11.25 nor less than $9.375 per Share) pursuant to the Offer. All
Shares properly tendered at prices at or below the Purchase Price and not
withdrawn before the Expiration Date will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer, including the
proration and conditional tender terms described in the Offer to Purchase. The
Company reserves the right, in its sole discretion, to purchase more than
1,777,777 Shares pursuant to the Offer, but the Company does not, in any event,
intend to purchase more Shares than can be purchased for an aggregate Purchase
Price of $20 million. Shares not purchased because of proration and conditional
tenders will be returned.
The term "Expiration Date" means 5:00 P.M., Eastern Time, on September 6,
1996, unless the Company shall have extended the period of time for which the
Offer is open, in which event the term "Expiration Date" shall refer to the
latest time and date at which the Offer, as so extended by the Company, shall
expire. For a description of the Company's rights to extend the period of time
during which the Offer is open and to delay, terminate or amend the Offer, see
Section 6 and Section 15 of the Offer to Purchase. Subject to the purchase of
Shares properly tendered and not withdrawn by Odd Lot Holders as set forth in
Section 2 of the Offer to Purchase, if the Offer is oversubscribed, Shares
properly tendered and not withdrawn or subject to an unsatisfied condition
before the Expiration Date will be subject to proration. The proration period
also expires on the Expiration Date.
<PAGE>
If the number of Shares properly tendered at or below the Purchase Price and
not withdrawn before the Expiration Date is less than or equal to 1,777,777
Shares (or such greater number of Shares as the Company may elect to purchase
pursuant to the Offer), the Company, upon the terms and subject to the
conditions of the Offer, will purchase at the Purchase Price all Shares so
tendered and not withdrawn.
If the number of Shares properly tendered at or below the Purchase Price and
not withdrawn before the Expiration Date is greater than 1,777,777 Shares (or
such greater number of Shares as the Company may elect to purchase pursuant to
the Offer), the Company, upon the terms and subject to the conditions of the
Offer, will accept Shares for purchase in the following order of priority: (a)
first, all Shares properly tendered and not withdrawn before the Expiration Date
by any stockholder who beneficially owned as of the close of business on August
8, 1996, and who continues to own beneficially until the Expiration Date an
aggregate of fewer than 100 shares (each, an "Odd Lot Holder"), and (b) then,
after purchase of all the foregoing Shares, subject to the conditional tender
provisions described in Section 3 of the Offer to Purchase, all other Shares
properly tendered and not withdrawn before the Expiration Date on a pro rata
basis, if necessary (with adjustments to avoid purchases of fractional Shares).
The Offer is designed to afford to stockholders who are considering the sale
of their Shares an opportunity to sell a portion, and, perhaps all, of such
Shares to the Company for a higher price than that which has been recently
available in the open market, without the usual transaction costs associated
with market sales. In addition, the Offer will allow qualified Odd Lot Holders
whose Shares are purchased pursuant to the Offer to avoid the payment of
brokerage commissions and any applicable odd lot discount chargeable on a sale
of Shares that otherwise could apply to open market transactions. However,
proceeds of sales pursuant to the Offer may under certain circumstances be
treated as a dividend taxable as ordinary income to a stockholder rather than
capital gain. See Section 11 of the Offer to Purchase. To the extent the
purchase of Shares in the Offer results in a reduction in the number of
stockholders of record, the costs to the Company for services to stockholders
will be reduced.
The Offer also allows stockholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company, if they so desire.
Stockholders whose Shares are not tendered or purchased in the Offer will obtain
a proportionate increase in their ownership interest in the Company, and thus in
the Company's future earnings and assets, as a result of the acquisition of
Shares by the Company pursuant to the Offer and the corresponding reduction in
the number of outstanding Shares. Prior to the Offer, on August 6, 1996, the
Company purchased 2,234,637 Shares from Alfred J. Blake (the "Blake Purchase"),
the Company's Chief Executive Officer, at a price of $8.95 per Share, which was
7% less than the closing price of Shares on the New York Stock Exchange on
August 6, 1996. See Section 8 of the Offer to Purchase for a detailed
description of the Blake Purchase.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD TENDER ALL OR ANY OF SUCH STOCKHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
The Company reserves the right to extend the period during which the Offer
is open by giving notice to the Depositary (as defined in the Offer to Purchase)
and making a public announcement. Tender of Shares made pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless previously
accepted for payment by the Company, after 5:00 P.M., Eastern Time on October 4,
1996. For a withdrawal to be effective, a written or facsimile transmission
Notice of Withdrawal must be timely received by the Depositary at one of the
addresses or the facsimile number set forth on the back cover of the Offer to
Purchase and must contain the information described in Section 4 of the Offer to
Purchase.
The Company will be deemed to have purchased tendered Shares if and when it
gives oral or written notice to the Depositary of its acceptance of such Shares
for payment pursuant to the Offer.
The information required to be disclosed by Rule 13e-4(d)(1) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase
<PAGE>
and is incorporated herein by reference. The Offer to Purchase and the related
Letter of Transmittal contain important information that should be read before
any decision is made with respect to the Offer.
Copies of the Offer to Purchase and the related Letter of Transmittal are
being mailed to record holders of Shares and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
Any questions or requests for assistance may be directed to the Information
Agent at its telephone number and address listed below. Requests for additional
copies of the Offer to Purchase, the Letter of Transmittal or other tender offer
materials may be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense. Stockholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC. LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), is entered into as
of August 6, 1996, between Alfred J. Blake ("Stockholder") and Mikasa, Inc., a
Delaware corporation (the "Company").
WHEREAS, Stockholder is a Director, the Chairman of the Board and the
Chief Executive Officer of the Company; and
WHEREAS, Stockholder desires to sell 2,234,637 shares of common stock,
par value $.01 ("Common Stock"), he owns in the Company (the "Stock") to the
Company on the terms and subject to the conditions set forth herein; and
WHEREAS, Company desires to purchase the Stock from Stockholder on the
terms and subject to the conditions set forth herein; and
WHEREAS, contemporaneously with the purchase of the Stock, the Company
intends to make a "Dutch Auction" tender offer to stockholders (not including
the Stockholder) inviting them to tender shares of Common Stock to the Company
for prices not less than $9.375 per share and not more than $11.25 per share;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the parties, intending to
be legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the terms listed on EXHIBIT A
shall have the meanings ascribed to them on EXHIBIT A.
2. SALE OF THE SHARES
2.1 SALE OF STOCK. Pursuant to the terms of this Agreement, at the
Closing (as defined below), Stockholder shall sell, transfer, assign
and deliver the Stock to the Company, and the Company shall purchase
and acquire the Stock from Stockholder.
2.2 PURCHASE PRICE AND PAYMENT. The aggregate purchase price (the
"Purchase Price") for the Stock shall be $20,000,000.00.
1
<PAGE>
3. CLOSING
3.1 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place immediately following the
execution and delivery of this Agreement.
3.2 DELIVERIES BY THE COMPANY TO STOCKHOLDER. At the Closing, the Company
shall pay the Purchase Price to Stockholder by (at the election of
Stockholder) wire transfer of federal funds or by delivery of a
Company check. The Company will apply federal income tax withholding
rules as appropriate in accordance with Stockholder's representation
and warranty in PARA 11.7 below.
3.3 DELIVERIES BY STOCKHOLDER TO THE COMPANY. At the Closing, Stockholder
shall deliver or cause to be delivered to the Company certificates
evidencing the Stock, accompanied by stock powers with signature
guarantees and such other documents as may be reasonably requested by
the Company, or such other evidence of transfer and assignment as the
Company may reasonably request.
3.4 RESIGNATION. Effective as of the Closing, Stockholder hereby resigns
as Chief Executive Officer of the Company.
4. ACTIONS REQUIRING BOARD CONSENT. Subsequent to Closing, Stockholder shall
not take any of the following actions in respect of shares of the Company,
including those owned by Stockholder, without obtaining the prior consent of the
board of directors:
4.1 Acquire stock in the Company in addition to his Remainder Stock other
than pursuant to exercises of options or pursuant to stock splits,
stock dividends and the like;
4.2 Transfer Remainder Stock other than (subject to PARA 4.5 below):
(i) pursuant to Rule 144, (ii) in a public offering of the stock of
the Company which requires registration in which such Remainder Stock
is included, (iii) to the Company or a group or person approved by the
Company or (iv) in other transactions subject to the Company's Right
of First Refusal so long as the transaction does not result in a
single person or group having control;
4.3 (i) Solicit proxies in opposition to the election of any director
nominated by the board of directors for election to the board, (ii)
solicit proxies in opposition to any proposal of the board of
directors or (iii) participate in, or otherwise support directly or
indirectly, an election contest with respect to any director (other
than through the voting of shares);
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<PAGE>
4.4 Participate in or with, or otherwise support directly or indirectly, a
group or entity seeking to acquire control;
4.5 Notwithstanding PARA 4.2 above, transfer any Remainder Stock for one
year after the Closing;
4.6 Negotiate with or provide information to third parties with respect to
any transaction involving an investment in the Company, a change in
control of the Company or a sale of more than 5% of stock in the
Company; or
4.7 Deposit Remainder Stock in a voting trust where voting control is
vested in a person other than Stockholder, a family member of
Stockholder, Stockholder's executor, estate or heirs, or a charitable
organization designated by Stockholder.
4.8 It is understood that none of the foregoing restrictions is intended
to impair Stockholder's ability to duly function as a director of the
Company.
5. COMPANY RIGHT OF FIRST REFUSAL. In the event Stockholder desires to
transfer Remainder Stock in accordance with PARA 4.2(iv) above, the Company
shall have a Right of First Refusal as follows. Stockholder shall deliver to
the Company a written notice of intention to transfer stock (an "Offer Notice").
The Offer Notice (i) shall set forth the terms upon which Stockholder proposes
to transfer Remainder Stock, (ii) shall include a copy of any offer for purchase
received by Stockholder ("Offer"), (iii) shall state the name and address of the
proposed purchaser and (iv) shall specify any terms and conditions of such
transfer not set forth in the Offer. The Company or its nominee shall have the
option to purchase part or all of the stock subject to the Offer at the price
and on the terms stated in the Offer Notice. The Company shall exercise such
option by delivering written notice of such exercise to Stockholder within 10
days after delivery of the Offer Notice and delivering the purchase price for
such shares within 20 days after delivery of the Offer Notice. If the Company
does not exercise such option, Stockholder shall be entitled to transfer
Remainder Stock in the transaction described in the Offer Notice for a period of
30 days after expiration of the 10-day period described above, and if the
transfer is not completed within such 30 day period, Stockholder's sale of
Remainder Stock shall remain subject to the conditions of this Agreement.
6. INCIDENTAL REGISTRATION -- "PIGGYBACK" RIGHTS
6.1 NOTICE. At any time after the period referred to in PARA 4.5 above,
if the Company determines to register any of its Common Stock for its
own account or the account of another stockholder (other than a
registration relating solely to employee benefit
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<PAGE>
plans, or a registration relating solely to a Rule 145 transaction or
a registration on any registration form that does not permit secondary
sales), the Company will:
6.1.1 Give Stockholder written notice thereof ("Registration
Notice") not later than 15 days prior to the date of filing
of a registration statement relating to the Common Stock to
be registered; and
6.1.2 Include in such registration (and any related qualification
under blue sky laws or other compliance), except as set
forth in PARA 6.3 and PARA 6.9 below, and in any
underwriting involved therein, all the Remainder Stock
specified in a written request made by Stockholder within
10 days after the date of the Company's transmission of the
Registration Notice. Such written request may specify all
or part of Stockholder's Remainder Stock.
6.2 UNDERWRITING. If the registration involves an underwriting, the
Company shall so advise Stockholder in the Registration Notice. In
such event, Stockholder's right to registration pursuant to this
PARA 6 shall be conditioned upon the Stockholder's participation in
such underwriting and the inclusion of Stockholder's Remainder Stock
in the underwriting to the extent provided herein. If Stockholder
proposes to distribute his securities through such underwriting, he
shall (together with the Company and any other participating
stockholders) enter into an underwriting agreement in customary form
with the representative of the underwriter or underwriters selected by
the Company.
6.3 LIMITATIONS. Except as otherwise provided in PARA 6.9 below, if the
representative of the underwriters advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the representative may limit the number of shares to be
included in the registration and underwriting. The Company shall so
advise Stockholder and the number of shares that are entitled to be
included in the registration and underwriting shall be allocated as
set forth in PARA 6.9. If Stockholder does not agree to the terms
(applicable to all participating stockholders equally) of any such
underwriting, he shall be excluded therefrom by written notice from
the Company or the underwriter. Any stock excluded or withdrawn from
such underwriting (including stock held by stockholders other than
Stockholder seeking to participate) shall be withdrawn from such
registration.
6.4 ADDITIONS. If shares are withdrawn from the registration under
PARA 6.3 above, the Company shall then offer to Stockholder (so long
as his shares were not the shares withdrawn under PARA 6.3) the right
to include additional securities in the registration in an aggregate
amount equal to the number of shares so withdrawn or pro rata (in
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<PAGE>
accordance with PARA 6.9 below) with any other participating
stockholders, as the case may be.
6.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant
to this PARA 6 (exclusive of underwriting discounts and the fees of
any separate counsel for the Stockholder) shall be borne by the
Company. All underwriting discounts relating to securities so
registered and fees of counsel for the Stockholder shall be borne by
the Stockholder.
6.6 REGISTRATION PROCEDURES. Where Stockholder is participating in a
registration pursuant to this PARA 6, the Company will keep
Stockholder advised in writing as to the initiation and completion of
each registration thereof. At its expense, the Company will use its
best efforts to:
6.6.1 Keep such registration effective until the termination of
the offering described in the registration statement
relating thereto (subject to the terms and conditions of any
underwriting agreement), or, in the event of a "shelf
registration" under Rule 415, for a period of 120 days
(provided that Rule 415 permits an offering on a continuous
or delayed basis), provided in either case that applicable
rules under the Securities Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (A) includes any prospectus
required by Section 10(a)(3) of the Securities Act or
(B) reflects facts or events representing a material or
fundamental change in the information set forth in the
registration statement, the incorporation by reference of
information required to be included in (A) and (B) above to
be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration
statement (excluding information relating to the plan of
distribution or other items required by law to be set forth
in the registration statement itself); it being understood
and agreed that the terms and conditions of any underwriting
agreement shall prevail notwithstanding anything to the
contrary in this PARA 6.6.1;
6.6.2 Prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection with such registration
statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
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<PAGE>
6.6.3 Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement
to the prospectus, as Stockholder from time to time may
reasonably request;
6.6.4 Cause all Remainder Stock registered thereunder to be listed
on each securities exchange on which similar securities
issued by the Company are then listed;
6.6.5 Provide a transfer agent and registrar for all stock
registered pursuant to such registration statement and a
CUSIP number for all such stock, in each case not later than
the effective date of such registration;
6.6.6 Make all reasonably necessary and appropriate filings in
respect of the Remainder Stock to be registered thereunder
pursuant to applicable state securities and Blue Sky laws;
6.6.7 Use its best efforts to cause its counsel and independent
accountants to deliver customary opinions and "comfort"
letters in respect of information included in such
registration statement and prospectus;
6.6.8 Otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its
stockholders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months, but not
more than 18 months, beginning with the first month after
the effective date of the registration statement, which
earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
and
6.6.9 Make available for inspection by Stockholder (at
Stockholder's cost), and any attorney, accountant or other
agent retained by Stockholder (at Stockholder's cost)
(collectively, "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Company (collectively, "Records") as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility under the Securities Act, and cause the
Company's officers, directors, employees, counsel and
independent accountants to supply information reasonably
requested by any such Inspector in connection with such
Registration Statement (excluding, in the case of counsel to
the Company, information deemed privileged). Records which
the Company determines, in good faith, to be confidential
and which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors (other than to
Stockholder) unless (i) the
6
<PAGE>
disclosure of such records is necessary to avoid or correct
a misstatement or omission in the applicable Registration
Statement or (ii) the release of such records is ordered
pursuant to subpoena or other order from a court of
competent jurisdiction. Stockholder agrees that he will,
upon learning that disclosure of such records is sought in a
court of competent jurisdiction, give notice to the Company
and allow the Company, at the Company's expense, to
undertake appropriate action to prevent the disclosure of
records deemed confidential.
6.7 INFORMATION BY STOCKHOLDER. Stockholder shall furnish to the Company
such information regarding Stockholder and the distribution proposed
by Stockholder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration,
qualification or compliance referred to in this PARA 6.
6.8 TRANSFER OF REGISTRATION RIGHTS. Notwithstanding anything to the
contrary in the definition of "transfer" on Exhibit A hereto, the
right to cause the Company to register securities granted to
Stockholder by the Company under this PARA 6 may not be transferred to
any party except to any trust for the benefit of (i) Mr. Blake,
(ii) his spouse (including any former, current or future spouse), or
(iii) his lineal descendants, so long as Mr. Blake is the trustee of
such trust; provided, however that any such trust shall continue to
hold any such transferred registration rights for a period of three
years after the termination of Mr. Blake's services as trustee by
reason of his death or incapacity.
6.9 ALLOCATION OF PIGGY-BACK REGISTRATION OPPORTUNITIES.
6.9.1 Stockholder acknowledges that it may not be able to sell all
of its Remainder Stock designated under PARA 6 in an
offering. If all of the stock requested to be included in a
registration on behalf of Stockholder, the Company or other
participating stockholders, if any, cannot be so included as
a result of limitations on the aggregate number of shares of
stock that may be so included, the number of shares of stock
that may be so included shall be allocated among
Stockholder, the Company and other participating
stockholders requesting inclusion of shares, as set forth in
this PARA 6.9.
6.9.2 If an allocation of registration rights is required under
this PARA 6.9, the Company shall include in the registration
(i) the securities the Company proposes to sell and (ii) the
Remainder Stock Stockholder proposes to sell and the stock
each other participating stockholder proposes to sell in
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<PAGE>
proportion to the number of shares each participating
stockholder proposes to sell pursuant to this clause (ii).
6.10 DELAY OF REGISTRATION. Stockholder shall not have any right to take
any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this PARA 6.
6.11 CONFIDENTIAL INFORMATION. Stockholder acknowledges that the
information received by him pursuant hereto may be confidential and
for his use only and he will not use such confidential information in
violation of the Exchange Act or reproduce, disclose or disseminate
such information to any other person (other than his employees or
agents having a need to know the contents of such information and his
attorneys) except in connection with (i) the exercise of rights under
this PARA 6, or (ii) the exercise of a "due diligence" or similar
defense in any action or proceeding brought under federal or state
securities laws to which he is or may be a party, unless the Company
has made such information available to the public generally or
Stockholder is required to disclose such information by law or a
governmental body.
7. LEGEND ON CERTIFICATES. All stock certificates representing Remainder
Stock held or acquired by Stockholder after the Closing shall contain the
following statement, in addition to any other legends required by law or
appearing thereon:
"Sale, transfer, assignment, pledge or hypothecation of the
stock represented by this certificate is subject to the
provisions of that certain Stock Purchase Agreement dated
August 6, 1996 copies of which are on file at the principal
office of the Company."
8. BOARD NOMINATION. Company agrees to place Alfred J. Blake's name in
nomination for a seat on the board of directors at the conclusion of each
director's term served by Mr. Blake so long as Mr. Blake beneficially owns at
least 5% of the Common Stock of the Company and is not incapacitated due to
Disability (as defined in the Employment and Consulting Agreement entered of
even date herewith) which, in the judgment of the board of directors, renders
him incapable of discharging the duties of a director. Mr. Blake understands
and agrees that, by placing Mr. Blake's name in nomination, the Company in no
way assures that Mr. Blake will be elected to the board.
9. EMPLOYMENT. Stockholder agrees to serve with the Company after the Closing
on the terms and conditions set forth in the form of Employment and Consulting
Agreement attached hereto as EXHIBIT B.
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10. BOARD AND STOCKHOLDER DETERMINATIONS. In accordance with board policy and
state law, Stockholder understands that he shall not be permitted to vote as a
director on matters in which he has an interest, including the Company's
decisions to give consents or exercise options under this Agreement.
11. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to the Company as follows:
11.1 AUTHORITY. Stockholder has full right, power, authority and capacity
to execute and deliver this Agreement and to consummate and perform
the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Stockholder and (assuming the
due authorization, execution and delivery hereof by the Company)
constitutes the legal, valid and binding obligation of Stockholder,
enforceable against him in accordance with its terms, except as may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights and remedies generally, and subject as to
enforceability to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
11.2 CONSENTS. No consent, approval, waiver, license or authorization or
other action by or filing with any person or governmental authority is
required on the part of Stockholder in connection with the execution
and delivery by Stockholder of this Agreement or the consummation by
Stockholder of the transactions contemplated hereby.
11.3 OWNERSHIP OF STOCK. The Stock is owned lawfully of record and
beneficially by Stockholder, free and clear of all liens,
encumbrances, restrictions and claims of every kind whatsoever, and
upon purchase of the Stock by the Company in accordance with the terms
of this Agreement, the Company shall have acquired good title to such
Stock free and clear of all liens, encumbrances, restrictions and
claims of every kind whatsoever.
11.4 DISCOUNT IN PURCHASE PRICE. Stockholder understands that: (a) he is
selling the Stock pursuant to this Agreement at a discount to current
market price, (b) contemporaneously with the Closing, the Company will
engage in a "Dutch Auction" tender offer to other stockholders in
which they will be invited to tender shares of Common Stock for prices
not less than $9.375 and not more than $11.25, and that Stockholder
will not be participating in such tender offer, (c) subsequent to the
Closing, the Company may have opportunities outside of the ordinary
course of business which could cause the market price of the Company's
stock to vary materially and (d) by selling the Stock, Stockholder is
voluntarily
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foregoing participation in such opportunities with respect to the
Stock. The Company agrees that, without the prior consent of
Stockholder, the Company will not (i) reduce the low end of the price
range of the Tender Offer, (ii) purchase shares of Common Stock in the
Tender Offer at any price lower than the low end of such price range
or (iii) expend for the purchase of shares of Common Stock in the
Tender Offer an aggregate amount of more than $20,000,000.
The Company further agrees that, for a period of 180 days following
the Tender Offer, the Company will notify Stockholder of any proposed
purchase ("Proposed Purchase") of Common Stock by the Company and, if
counsel for Stockholder produces a written opinion that the Proposed
Purchase would have a substantial likelihood of being integrated with
the Tender Offer, the Company will either (i) not engage in the
Proposed Purchase or (ii) produce a written opinion by its counsel
that the Proposed Purchase would not have a substantial likelihood of
being integrated with the Tender Offer. If conflicting opinions of
counsel are produced, counsel for Stockholder and counsel for the
Company shall mutually select a third independent counsel (to be
engaged by the Company) to opine as to whether the Proposed Purchase
would have a substantial likelihood of being integrated with the
Tender Offer. In such event, the parties agree that the Company shall
only engage in the Proposed Purchase if such third opinion of counsel
concludes that the Proposed Purchase would not have a substantial
likelihood of being integrated with the Tender Offer.
11.5 ACCESS TO INFORMATION. Stockholder is fully familiar with the current
status of the business and future prospects of the Company and has had
an opportunity to discuss the Company's business, management,
financial affairs and future prospects with its management and to
obtain all information which he believes necessary to an informed
decision to sell the Stock. Stockholder is well-versed in financial
matters and is able to protect his interests in connection with the
transactions contemplated hereby by reason of (a) his relationships
with the Company and certain of its officers and directors, (b) his
sophisticated business and financial experience and (c) the
sophisticated business and financial experience of his financial
adviser and other advisers. Stockholder has relied on his own
knowledge and experience and that of his financial advisers and has
not relied on the representations of others regarding the value of the
Stock.
11.6 UNDISCLOSED INFORMATION. Stockholder does not possess any information
that would cause him to believe that the Company's filings under the
Exchange Act, including the Form 10-Q filed for the period ended
June 30, 1996, as of the date filed, make any untrue statement of a
material fact or omit to state a material fact
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necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.
11.7 ADDRESS. Effective as of the receipt of payment of the Purchase
Price, Stockholder's address is in the United States as follows:
c/o Joseph S. Muto, Esq.
Mikasa, Inc.
20633 So. Fordyce Avenue
Long Beach, CA 90810
Stockholder certifies under penalty of perjury that his Social
Security Number is ###-##-#### and that he has not been notified by
the Internal Revenue Service that he is subject to backup withholding
as a result of a failure to report all interest or dividends.
11.8 NO OTHER REPRESENTATIONS. Other than as specifically set forth in
this Agreement, Stockholder has made no representations or warranties
(written or oral, express or implied) to the Company in respect of the
transactions contemplated hereby.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Stockholder as follows:
12.1 AUTHORITY The Company has full corporate power and authority to
execute and deliver this Agreement and to consummate and perform the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation and performance of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of the Company. This
Agreement has been duly and validly executed and delivered by the
Company and (assuming the due execution and delivery hereof by
Stockholder) constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights and remedies generally, and subject
as to enforceability to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
12.2 CONSENTS. No consent, approval, waiver, license or authorization or
other action by or filing with any person or governmental authority is
required on the part of the Company in connection with the execution
and delivery by the Company of this
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Agreement or the consummation by the Company of the transactions
contemplated hereby.
12.3 UNDISCLOSED INFORMATION. The Company does not possess any information
that would cause it to believe that the Company's filings under the
Exchange Act, including the Form 10-Q filed for the period ended
June 30, 1996, as of the date filed, make any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements made, in the light of the circumstances under
which they were made, not misleading.
12.4 NO OTHER REPRESENTATIONS. Other than as specifically set forth in
this Agreement, the Company has made no representations or warranties
(written or oral, express or implied) to Stockholder in respect of the
transactions contemplated hereby.
13. TERMINATION. The provisions of PARA 4 of this Agreement shall terminate
upon the occurrence of any of the following events:
13.1 Any reorganization, merger or consolidation involving another
corporation in which the Company is not the survivor and which results
in a change of control;
13.2 Any transaction involving the Company as a result of which the Company
is controlled by a person, group, corporation or other entity (in
which Stockholder has no material interest) which did not control the
Company as of the date hereof.
13.3 The liquidation or dissolution of the Company;
13.4 The mutual agreement of the parties; or
13.5 At such time as Stockholder owns less than 5% of the outstanding stock
of the Company.
14. ARBITRATION. Any dispute arising out of this Agreement shall be settled by
arbitration by a single arbitrator in accordance with the commercial arbitration
rules of Judicial Arbitration and Mediation Services, Inc. Arbitration shall be
conducted in New York City. The parties agree that New York City is a
reasonable and convenient place for any arbitration hereunder, and agree to
submit to the jurisdiction of the New York courts with respect to any dispute or
judgment relating to this Agreement. Any judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. The arbitrator
shall not have any authority to award punitive or any other non-compensatory
damages. The decision of the arbitrator shall be binding upon the parties and
shall be reviewable only in the event of gross error of law. Any party may
pursue the remedy of specific performance of this Agreement, or seek an
injunction in the event of a breach of this
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Agreement or in aid of exercising any power granted hereunder, or any
combination thereof, in any court having jurisdiction without resort to
arbitration. Any party may pursue the remedy of specific performance of this
Agreement, or seek a preliminary or permanent injunction in the event of any
breach of this Agreement or in aid of exercising any power granted hereunder, or
any combination thereof, in any court having jurisdiction thereof without resort
to arbitration.
15. INDEMNIFICATION.
15.1 The Company shall indemnify and hold harmless Stockholder against any
and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any
claim or litigation), to which he may become subject, insofar as such
losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any inaccuracy in the
representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder; and will
reimburse Stockholder for any legal and other expenses as such
expenses are reasonably incurred in connection with investigating,
defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
15.2 Stockholder shall indemnify and hold harmless the Company against any
and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any
claim or litigation), to which it may become subject, insofar as such
losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any inaccuracy in the
representations and warranties of Stockholder contained herein or any
failure of Stockholder to perform its obligations hereunder; and will
reimburse the Company for any legal and other expenses as such
expenses are reasonably incurred in connection with investigating,
defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
16. GENERAL PROVISIONS
16.1 SURVIVAL. The representations and warranties made herein shall
survive the execution and delivery of this Agreement and the Closing.
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16.2 FURTHER ASSURANCES. Each party hereto shall execute and deliver such
other documents or agreements as may be necessary or desirable for the
implementation of this Agreement and the consummation of the
transactions contemplated hereby.
16.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns,
heirs and personal representatives.
16.4 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which together
shall constitute one and the same document.
16.5 GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by and construed and enforced in accordance with the laws
of the State of New York as in effect from time to time, without
regard to any principles of choice of laws or conflicts of law.
16.6 HEADINGS. The paragraph and other headings contained in this
Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
16.7 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter
hereof and supersedes any prior negotiations, agreements,
understandings or arrangements between the parties with respect to the
subject matter hereof.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed and delivered on the day and year first above written.
"COMPANY"
Mikasa, Inc.
By: /s/ JOSEPH S. MUTO
______________________________
Title: Secretary
______________________________
"STOCKHOLDER"
/s/ ALFRED J. BLAKE
________________________________________
Alfred J. Blake
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EXHIBIT A
DEFINITIONS
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONTROL" (including the terms "controlling," "controlled by" and "under common
control with") shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management or policies of the Company,
whether through the ownership of voting securities, by contract or otherwise;
provided, however, that a person or group shall be deemed in control where such
person or group possesses, directly or indirectly, the right to vote 25% or more
of the voting securities or receive 25% or more of the net profits of the
Company.
"EXCHANGE ACT" shall mean the Securities Exchange of 1934, as amended, or any
similar successor federal statute and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
"GROUP"shall have the definition set forth in Section 13(d)(3) of the Securities
Exchange Act of 1934;
"REGISTER," "REGISTERED" and "REGISTRATION" shall refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses incurred in effecting any
registration pursuant to this Agreement including, without limitation, all
registration, qualification, filing fees, printing expenses, listing fees,
escrow fees, fees and disbursements of counsel for the Company, Blue Sky fees
and expenses of any regular or special audits or "cold" comfort letters
incidental to or required by such registration.
"REMAINDER STOCK" shall mean the remaining stock in the Company held by
Stockholder immediately after the Closing plus any stock acquired by Stockholder
thereafter.
"RIGHT OF FIRST REFUSAL" shall mean the Company's option rights as set forth in
PARA 4 of this Agreement.
"RULE 144" shall mean Rule 144 as promulgated by the SEC under the Securities
Act, as such rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
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"RULE 145" shall mean Rule 145 as promulgated by the SEC under the Securities
Act, as such rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
"RULE 415" shall mean Rule 415 as promulgated by the SEC under the Securities
Act, as such rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
similar successor federal statute and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission.
"STOCKHOLDER" shall mean (i) Alfred J. Blake, or (ii) any trust for the benefit
of Mr. Blake, his spouse (including any former, current or future spouse) or his
lineal descendants, so long as Mr. Blake is the trustee of such trust.
"TRANSFER" shall mean to sell or in any other way directly or indirectly
transfer, assign, pledge, hypothecate, distribute or otherwise dispose of,
either voluntarily or involuntarily, including without limitation, by will, the
laws of descent, legal separation or divorce; provided, that such term shall not
include, except as otherwise provided in PARA 6.8, any transfer or any other
disposition to (i) a bona fide charitable organization by gift, (ii) the spouse
or lineal descendants of transferor, (iii) a trust for the benefit of
transferor, his spouse (including any former, current or future spouse) or
lineal descendants, or (iv) pursuant to a pledge or encumbrance; provided, that
any permitted transferee, including any beneficiary of any pledge or
encumbrance, hereunder shall agree to be bound by the terms hereof prior to such
transfer, pledge or encumbrance.
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EXHIBIT B
EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT (this "Agreement") is entered
into as of August 6, 1996, by and among American Commercial, Incorporated, a
California corporation ("ACI"), Mikasa, Inc., a Delaware corporation ("Mikasa"),
and Alfred J. Blake (the "Executive"). ACI and Mikasa are collectively referred
to herein as the "Companies." Unless expressly stated otherwise herein, the
benefits and obligations of the Companies hereunder shall be deemed to be
benefits and obligations of both ACI and Mikasa, and the performance of any
obligation by the one shall be deemed performance by the other.
WHEREAS, the Executive has been serving as the Chairman of the Board
and Chief Executive Officer of the Companies; and
WHEREAS, the Executive and the Companies desire to put into effect a
succession plan whereby the Companies will continue to employ the Executive upon
the terms and conditions specified in this Agreement and the Executive desires
to remain in the employ of the Companies upon such terms and conditions; and
WHEREAS, the Companies and the Executive desire to set forth in a
written agreement the terms and conditions of Executive's employment with the
Companies and to make provision for the rendering of services thereafter;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained in this Agreement, the parties, intending to be legally
bound, hereby agree as follows:
1. EMPLOYMENT. During the Employment Term, the Companies hereby agree to
continue to employ the Executive and the Executive hereby agrees to remain
in the employ of the Companies upon the terms and conditions set forth
below.
2. TERM. Employment shall be for a term (the "Employment Term") commencing on
the date hereof and expiring two years from the date hereof, subject to
termination under Section 7 and to the consulting arrangement provided for
in Section 11.
3. DUTIES OF THE EXECUTIVE. During the Employment Term, the Executive shall
serve as the Chairman of the Board of each of the Companies, serving in
such capacity at the pleasure of the Companies' boards of directors. The
Executive shall devote substantially all of his normal working time and his
best efforts, full attention and energies to the business of the Companies.
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During the Employment Term, the Executive will have three chief
responsibilities in addition to the customary role as Chairman of the
Board: (1) to concentrate his efforts on product development and sourcing,
focusing primarily on Europe and the Far East, (2) to hire and train a
skilled team to succeed to his design and supplier responsibilities at the
termination of the Employment Term, and (3) to devote a portion of his time
to certain of the Companies' international operations.
4. COMPENSATION
4.1 BASE SALARY. During the Employment Term, the Executive shall be paid
a base salary of $312,000 per annum payable at the times and in the
manner consistent with the Companies' general policies regarding
compensation of executive employees. Any increases in such base
salary, if any, shall be determined in the discretion of Mikasa's
Compensation Committee in accordance with company policy.
4.2 BONUS; INCENTIVE AWARDS. The Executive shall be eligible to receive
an annual bonus as determined in the discretion of Mikasa's
Compensation Committee in accordance with Mikasa company policy, and
to receive stock option grants under Mikasa's Long-Term Incentive Plan
(the "Incentive Plan") (subject to plan terms and eligibility
requirements) in the discretion of the Compensation Committee in
accordance with Mikasa company policy.
5. EXECUTIVE BENEFITS. In addition to the compensation described in
Section 4, the Companies shall make available to the Executive, subject to
the terms and conditions of the applicable plans (including without
limitation the eligibility rules thereof), participation for the Executive
and his eligible dependents in all Company-sponsored employee welfare
benefit plans and all plans intended to benefit executives which are
adopted or maintained by the Companies, including without limitation the
Defined Benefit Pension Plan and the Incentive Plan..
6. EXPENSES. Executive shall be paid or reimbursed for reasonable and
necessary expenses incurred by the Executive in connection with his duties
on behalf of the Companies in accordance with the general policies of the
Companies.
7. TERMINATION
7.1 INVOLUNTARY TERMINATION. The Executive's Employment Term may be
terminated by the Companies for any reason by written notice. The
Executive will be treated as having been involuntarily terminated by
the Companies if the Executive terminates his employment with the
Companies under the following circumstances:
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(i) the Companies have breached any material provision of this
Agreement and within 30 days after notice thereof from the Executive,
the Companies have failed to cure such breach; (ii) a successor or
assign (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of either of the Companies fails to assume liability under this
Agreement or enter into a substitute agreement satisfactory to the
Executive; (iii) the boards of directors of the Companies elect to
give notice of termination pursuant to this Section 7.1 other than for
Cause (as defined below); or (iv) Executive's employment is terminated
by reason of Disability (as defined below) or death.
7.2 VOLUNTARY TERMINATION. Upon 120 days' prior notice to the Companies,
the Executive may voluntarily terminate his Employment Term under this
Agreement. The Executive's termination for Cause during the
Employment Term shall constitute a voluntary termination of employment
for purposes of this Agreement.
7.3 TERMINATION OF COMPENSATION AND BENEFITS. Subject to Section 8 and
any benefit continuation requirements of applicable laws, in the event
the Executive's Employment Term is voluntarily terminated, the
compensation and benefit obligations of the Companies under Sections 4
and 5 shall cease as of the effective date of such termination, except
for any compensation and benefits earned or accrued but unpaid through
such date.
8. TERMINATION PAYMENTS AND BENEFITS. If the Executive's employment is
involuntarily terminated by the Companies prior to the end of the
Employment Term, then the Companies shall be obligated to pay to the
Executive (or his survivors, as the case may be) certain termination
payments and make available certain benefits during the termination payment
period as set forth in subsections 8.1 through 8.8 below. Notwithstanding
the foregoing, if the Executive's employment is terminated by the Companies
for Cause, the Companies shall not be obligated to make any such
termination payments, other than all compensation and benefits earned and
accrued but unpaid to the date of termination.
8.1 TERMINATION PAYMENT PERIOD. Termination payments under subsection 8.2
shall be made for the balance of the Employment Term.
8.2 CALCULATION OF TERMINATION PAYMENTS. Termination payments shall equal
the base salary payments Executive would have received under
subsection 4.1 above had there been no involuntary termination, for
the balance of the Employment Term.
8.3 METHOD OF PAYMENT. Termination payments shall be paid to the
Executive in accordance with the Companies' regular payroll schedule.
If the Executive should
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die while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid to the
Executive's surviving spouse or, if she is not then living, to the
Executive's estate.
8.4 BENEFITS.
8.4.1 During the termination payment period as set forth above in
subsection 8.1, the Companies shall use best efforts to
maintain in full force and effect for the continued benefit
of the Executive all employee welfare benefit plans and
perquisite programs in which the Executive was entitled to
participate immediately prior to the Executive's termination
or shall arrange to make available to the Executive benefits
substantially similar to those which the Executive would
otherwise have been entitled to receive if his employment
had not been terminated. Such welfare benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions toward the premium
payments) under which the Executive was entitled to
participate immediately prior to his termination.
8.4.2 From the end of the termination payment period until the
Executive reaches the age of 65, the Companies will provide
medical and dental coverage to the Executive on terms
substantially similar to those available to their executive
officers.
8.4.3 From the end of the termination payment period until the
current spouse of the Executive reaches the age of 65, the
Companies will provide medical and dental coverage to such
spouse on terms substantially similar to those available to
spouses of their executive officers.
8.4.4 If Executive's involuntary termination prior to the end of
the Employment Term causes Executive to qualify for less
annual retirement benefits under the Defined Benefit Pension
Plan than he would have qualified for had he served to the
end of the Employment Term, the Companies will make an
additional payment to Executive in conjunction with each
benefit payment made under the plan equal to the difference
between Executive's actual payment and what he would have
received had he not been involuntarily terminated.
8.4.5 Except as expressly provided to the contrary herein, any
termination payments hereunder shall not be taken into
account for purposes of any retirement plan or other benefit
plan sponsored by the Companies, except as otherwise
expressly required by such plans or applicable law.
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8.4.6 Any unvested options held by the Executive received under
the Incentive Plan or as other compensation from the
Companies shall, upon involuntary termination by the
Companies, be deemed vested. In addition, the termination
of the employment period shall be deemed to be a
"retirement" for purposes of the Incentive Plan.
8.5 TERMINATION FOR CAUSE. For purposes of this Agreement, "Cause" shall
mean:
8.5.1 the willful and continued failure by the Executive to
substantially perform his duties hereunder (other than any
such failure resulting from the Executive's Disability as
defined herein) after demand for substantial performance is
delivered by the Companies to the Executive that
specifically identifies the manner in which the Companies
believe the Executive has not substantially performed his
duties,
8.5.2 the doing of any act, or the failure to act, on the
Executive's part done or omitted to be done by him not in
good faith and without reasonable belief that his action or
omission was in the best interests of the Companies the
effect of which, in the judgment of the Board, is materially
adverse to the Companies, or
8.5.3 the material breach of the Confidentiality, Nonsolicitation
and Noncompete Agreement set forth in Section 9.
8.6 DISABILITY DEFINED. "Disability" shall mean the Executive's
incapacity due to physical or mental illness to substantially perform
his duties on a full-time basis for six consecutive months and, within
thirty days after a notice of termination is thereafter given by the
Companies, the Executive shall not have returned to the full-time
performance of the Executive's duties; provided, however, if the
Executive shall not agree with a determination to terminate him
because of Disability, the question of the Executive's disability
shall be subject to the certification of a qualified medical doctor
agreed to by the Companies and the Executive or, in the event of the
Executive's incapacity to designate a doctor, the Executive's legal
representative. In the absence of agreement between the Companies and
the Executive, each party shall nominate a qualified medical doctor
and the two doctors shall select a third doctor, who shall make the
determination as to Disability.
8.7 NO OBLIGATION TO MITIGATE. The Executive is under no obligation to
mitigate damages or the amount of any payment provided for hereunder
by seeking other employment or otherwise; provided, however, that the
Executive's coverage under
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the Companies' welfare benefit plans will terminate when the Executive
becomes covered under any employee benefit plan made available by
another employer and covering the same type of benefits. The
Executive shall notify the Companies within thirty days after the
commencement of any such benefits.
8.8 FORFEITURE. Notwithstanding anything to the contrary in this
Agreement, any right of the Executive to receive termination payments
and benefits hereunder and to be engaged as a consultant under Section
11 below shall be forfeited in the event of any termination for Cause
or to the extent of any amounts payable after any breach of Section 9
by the Executive.
9. CONFIDENTIALITY, NONSOLICITATION AND NONCOMPETE AGREEMENT
9.1 CONFIDENTIAL INFORMATION. The Executive acknowledges that in the
course of his employment by the Companies, he has had and will or may
have access to and has been and will or may become informed of
confidential and secret information which is a competitive asset of
the Companies ("Confidential Information"), including without
limitation (i) the terms of any agreement between the Companies and
any employee, customer or supplier, (ii) pricing strategy,
(iii) merchandising and marketing methods, (iv) product development
ideas and strategies, (v) personnel training and development programs,
(vi) financial results, (vii) strategic plans and demographic
analyses, (viii) proprietary computer and systems software and
(ix) any other material non-public information concerning the
Companies, their employees, suppliers or customers. The Executive
agrees that he will keep all Confidential Information in strict
confidence during the term of his employment by the Companies and
thereafter and will never directly or indirectly make known, divulge,
reveal, furnish, make available or use any Confidential Information
(except in the course of his regular authorized duties on behalf of
the Companies). The Executive agrees that the obligations of
confidentiality hereunder shall survive termination of his employment
at the Companies regardless of any actual or alleged breach by the
Companies of this Agreement and shall continue for two years following
such termination provided that such obligation shall terminate earlier
(i) as to Confidential Information that shall have become, through no
action of the Executive, publicly available or (ii) as to Confidential
Information which the Executive is required by law to disclose (after
giving the Companies notice and an opportunity to contest such
requirement). The Executive's obligations under this Section 10 are
in addition to, and not in limitation or preemption of, all other
obligations of confidentiality which the Executive may have to the
Companies under general legal or equitable principles.
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9.2 COPIES. Except in the ordinary course of the Companies' business, the
Executive has not made, nor shall at any time following the date of
this Agreement make or cause to be made, any copies, pictures,
duplicates, facsimiles or other reproductions or recordings or any
abstracts or summaries including or reflecting Confidential
Information. All documents (including data stored on magnetic disk,
tape or other computer storage medium) and other property furnished to
the Executive by the Companies or otherwise acquired or developed by
the Companies shall at all times be the property of the Companies.
Upon termination of the Executive's employment by the Companies, the
Executive shall return to the Companies any such documents or other
property of the Companies which are in the possession, custody or
control of the Executive.
9.3 NO SOLICITATION. In the event of the Executive's voluntary or
involuntary termination of employment at the Companies, the Executive
agrees that he will not in any capacity, on his own behalf or on
behalf of any other firm, person or entity, for a period of two years,
solicit, or assist in the solicitation of, any employee of either
Company to terminate his or her employment with such Company.
9.4 COVENANT NOT TO COMPETE. In the event of the Executive's voluntary or
involuntary termination of employment at the Companies, during the
period the Executive renders consulting services pursuant to Section
11 hereunder and for an additional period of two years after such
consulting period (or, if there is no consulting period due to
voluntary termination, for a period of two years after the Executive's
termination of employment), the Executive agrees that he shall not
engage directly or indirectly in any business that the Companies
conduct in any country from which the Companies generate $5,000,000 or
more of their net sales (except to the extent of a less than 1%
ownership interest in the outstanding shares of a public company),
unless otherwise mutually agreed by the parties.
9.5 SPECIFIC PERFORMANCE. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this Section 9 (referred to
collectively as the Confidentiality, Nonsolicitation and Noncompete
Agreement) would cause irreparable harm to the Companies and that the
Companies' remedy at law for any such violation would be inadequate.
In recognition of the foregoing, the Executive agrees that, in
addition to any other relief afforded by law or this Agreement
(including damages sustained by a breach of this Agreement and any
forfeitures under Section 8) and without any necessity or proof of
actual damages, the Companies shall have the right to enforce this
Agreement by specific remedies, including without limitation temporary
and permanent injunctions, and the parties understand and agree that
damages, forfeitures under Section 8 and injunctions
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shall all be proper modes of relief and are not to be considered as
alternative remedies.
10. POST-TERMINATION ASSISTANCE. The Executive agrees that after termination
of the Employment Term and the consulting period provided for in Section 11
below, he will provide such information and assistance to the Companies as
may reasonably be requested in connection with any litigation in which the
Companies or any of their affiliates is or may become a party; provided,
however, that the Companies agree to reimburse the Executive for any
related expenses, including travel expenses.
11. CONSULTING ARRANGEMENT. Unless Executive voluntarily terminates this
Agreement or is involuntarily terminated for Cause before the end of the
Employment Term, the Companies agree to engage the Executive as a
consultant for a period of six years following the end of the Employment
Term. During such consulting period, the Executive shall be considered an
employee of the Companies for purposes of participation in the Companies'
employee benefit, bonus and option plans, including without limitation the
Defined Benefit Pension Plan and the Incentive Plan. During such consulting
period, the Executive shall provide consulting services as may be
reasonably requested by the Companies' Chief Executive Officer or
President, and the Companies shall pay the Executive an annual amount equal
to $200,000 payable in accordance with the Companies' regular payroll
schedule and shall provide reasonable office and secretarial
accommodations. Such payments shall be in addition to any compensation
payable to Executive under Section 8 of this Agreement. The Companies
shall reimburse travel and other business expenses incurred by Executive in
connection with providing consulting services consistent with the
Companies' policies.
12. ARBITRATION. Any dispute arising out of this Agreement shall be settled by
arbitration by a single arbitrator in accordance with the commercial
arbitration rules of Judicial Arbitration and Mediation Services, Inc.
Arbitration shall be conducted in New York City. The parties agree that
New York City is a reasonable and convenient place for any arbitration
hereunder, and agree to submit to the jurisdiction of the New York courts
with respect to any dispute or judgment relating to this Agreement. Any
judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The arbitrator shall not have any authority to
award punitive or any other non-compensatory damages. The decision of the
arbitrator shall be binding upon the parties and shall be reviewable only
in the event of gross error of law. Any party may pursue the remedy of
specific performance of this Agreement, or seek an injunction in the event
of a breach of this Agreement or in aid of exercising any power granted
hereunder, or any combination thereof, in any court having jurisdiction
without resort to arbitration.
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Notwithstanding the foregoing, neither the Companies nor the Executive
shall be required to seek or participate in arbitration regarding any
matter arising under the Executive's Confidentiality, Nonsolicitation and
Noncompete Agreement contained in Section 9, but may pursue resolution of
such matter in a court of competent jurisdiction in New York.
13. AGREEMENT. This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the subject
matter hereof and contains all of the covenants and agreements between the
parties with respect to such subject matter. Each party to this Agreement
acknowledges that no representations, inducements, promises or other
agreements, orally or otherwise, have been made by any party, or anyone
acting on behalf of any party, pertaining to the subject matter hereof
which are not embodied herein, and that no other agreement, statement or
promise pertaining to the subject matter hereof that is not contained in
this Agreement shall be valid or binding on either party.
14. WITHHOLDING OF TAXES. The Companies may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the
Companies are required to withhold pursuant to any law or government
regulation or ruling.
15. SUCCESSORS AND BINDING AGREEMENT
15.1 COMPANIES. This Agreement will be binding upon and inure to the
benefit of each of the Companies and any successors to either thereof
by merger, consolidation, reorganization or otherwise, but will not
otherwise be assignable, transferable or delegable by either of the
Companies.
15.2 EXECUTIVE. This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
15.3 ASSIGNMENT RESTRICTIONS. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other,
assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 15.1
and 15.2. Without limiting the generality or effect of the foregoing,
the Executive's right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of
a security interest or otherwise, other than by a transfer by the
Executive's will or by the laws of descent and distribution and, in
the event of any attempted assignment or transfer contrary to this
Section 15, the Companies shall have no liability to pay any amount so
attempted to be assigned, transferred or delegated.
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16. NOTICES. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to
have been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof confirmed), or five business
days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three business days
after having been sent by a nationally recognized overnight courier
service, addressed to either Company (to the attention of the Secretary of
the respective Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any party
may have furnished to the others in writing and in accordance herewith,
except that notices of changes of address shall be effective only upon
receipt.
17. GOVERNING LAW. The validity, interpretation, construction and performance
of this Agreement will be governed by and construed in accordance with the
substantive laws of the State of New York, without giving effect to the
principles of choice of laws or conflicts of law.
18. VALIDITY. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances will not
be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid or legal.
19. SURVIVAL OF PROVISIONS. The covenants, agreements, representations and
warranties contained in this Agreement shall survive any termination or
expiration of this Agreement or the termination of the Executive's
Employment Term.
20. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Companies. No waiver by either
party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. Unless otherwise noted, references to "Sections" are to
sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
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21. 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 together
will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"COMPANIES"
American Commercial, Inc.
By: ___________________________________
Its: ___________________________________
Mikasa, Inc.
By: ___________________________________
Its: ___________________________________
"EXECUTIVE"
________________________________________
Alfred J. Blake
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EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT (this "Agreement") is entered
into as of August 6, 1996, by and among American Commercial, Incorporated, a
California corporation ("ACI"), Mikasa, Inc., a Delaware corporation ("Mikasa"),
and Alfred J. Blake (the "Executive"). ACI and Mikasa are collectively referred
to herein as the "Companies." Unless expressly stated otherwise herein, the
benefits and obligations of the Companies hereunder shall be deemed to be
benefits and obligations of both ACI and Mikasa, and the performance of any
obligation by the one shall be deemed performance by the other.
WHEREAS, the Executive has been serving as the Chairman of the Board
and Chief Executive Officer of the Companies; and
WHEREAS, the Executive and the Companies desire to put into effect a
succession plan whereby the Companies will continue to employ the Executive upon
the terms and conditions specified in this Agreement and the Executive desires
to remain in the employ of the Companies upon such terms and conditions; and
WHEREAS, the Companies and the Executive desire to set forth in a
written agreement the terms and conditions of Executive's employment with the
Companies and to make provision for the rendering of services thereafter;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained in this Agreement, the parties, intending to be legally
bound, hereby agree as follows:
1. EMPLOYMENT. During the Employment Term, the Companies hereby agree to
continue to employ the Executive and the Executive hereby agrees to remain
in the employ of the Companies upon the terms and conditions set forth
below.
2. TERM. Employment shall be for a term (the "Employment Term") commencing on
the date hereof and expiring two years from the date hereof, subject to
termination under Section 7 and to the consulting arrangement provided for
in Section 11.
3. DUTIES OF THE EXECUTIVE. During the Employment Term, the Executive shall
serve as the Chairman of the Board of each of the Companies, serving in
such capacity at the pleasure of the Companies' boards of directors. The
Executive shall devote substantially all of his normal working time and his
best efforts, full attention and energies to the business of the Companies.
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During the Employment Term, the Executive will have three chief
responsibilities in addition to the customary role as Chairman of the
Board: (1) to concentrate his efforts on product development and sourcing,
focusing primarily on Europe and the Far East, (2) to hire and train a
skilled team to succeed to his design and supplier responsibilities at the
termination of the Employment Term, and (3) to devote a portion of his time
to certain of the Companies' international operations.
4. COMPENSATION
4.1 BASE SALARY. During the Employment Term, the Executive shall be paid
a base salary of $312,000 per annum payable at the times and in the
manner consistent with the Companies' general policies regarding
compensation of executive employees. Any increases in such base
salary, if any, shall be determined in the discretion of Mikasa's
Compensation Committee in accordance with company policy.
4.2 BONUS; INCENTIVE AWARDS. The Executive shall be eligible to receive
an annual bonus as determined in the discretion of Mikasa's
Compensation Committee in accordance with Mikasa company policy, and
to receive stock option grants under Mikasa's Long-Term Incentive Plan
(the "Incentive Plan") (subject to plan terms and eligibility
requirements) in the discretion of the Compensation Committee in
accordance with Mikasa company policy.
5. EXECUTIVE BENEFITS. In addition to the compensation described in
Section 4, the Companies shall make available to the Executive, subject to
the terms and conditions of the applicable plans (including without
limitation the eligibility rules thereof), participation for the Executive
and his eligible dependents in all Company-sponsored employee welfare
benefit plans and all plans intended to benefit executives which are
adopted or maintained by the Companies, including without limitation the
Defined Benefit Pension Plan and the Incentive Plan..
6. EXPENSES. Executive shall be paid or reimbursed for reasonable and
necessary expenses incurred by the Executive in connection with his duties
on behalf of the Companies in accordance with the general policies of the
Companies.
7. TERMINATION
7.1 INVOLUNTARY TERMINATION. The Executive's Employment Term may be
terminated by the Companies for any reason by written notice. The
Executive will be treated as having been involuntarily terminated by
the Companies if the Executive terminates his employment with the
Companies under the following circumstances:
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(i) the Companies have breached any material provision of this
Agreement and within 30 days after notice thereof from the Executive,
the Companies have failed to cure such breach; (ii) a successor or
assign (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of either of the Companies fails to assume liability under this
Agreement or enter into a substitute agreement satisfactory to the
Executive; (iii) the boards of directors of the Companies elect to
give notice of termination pursuant to this Section 7.1 other than for
Cause (as defined below); or (iv) Executive's employment is terminated
by reason of Disability (as defined below) or death.
7.2 VOLUNTARY TERMINATION. Upon 120 days' prior notice to the Companies,
the Executive may voluntarily terminate his Employment Term under this
Agreement. The Executive's termination for Cause during the
Employment Term shall constitute a voluntary termination of employment
for purposes of this Agreement.
7.3 TERMINATION OF COMPENSATION AND BENEFITS. Subject to Section 8 and
any benefit continuation requirements of applicable laws, in the event
the Executive's Employment Term is voluntarily terminated, the
compensation and benefit obligations of the Companies under Sections 4
and 5 shall cease as of the effective date of such termination, except
for any compensation and benefits earned or accrued but unpaid through
such date.
8. TERMINATION PAYMENTS AND BENEFITS. If the Executive's employment is
involuntarily terminated by the Companies prior to the end of the
Employment Term, then the Companies shall be obligated to pay to the
Executive (or his survivors, as the case may be) certain termination
payments and make available certain benefits during the termination payment
period as set forth in subsections 8.1 through 8.8 below. Notwithstanding
the foregoing, if the Executive's employment is terminated by the Companies
for Cause, the Companies shall not be obligated to make any such
termination payments, other than all compensation and benefits earned and
accrued but unpaid to the date of termination.
8.1 TERMINATION PAYMENT PERIOD. Termination payments under subsection 8.2
shall be made for the balance of the Employment Term.
8.2 CALCULATION OF TERMINATION PAYMENTS. Termination payments shall equal
the base salary payments Executive would have received under
subsection 4.1 above had there been no involuntary termination, for
the balance of the Employment Term.
8.3 METHOD OF PAYMENT. Termination payments shall be paid to the
Executive in accordance with the Companies' regular payroll schedule.
If the Executive should
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die while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid to the
Executive's surviving spouse or, if she is not then living, to the
Executive's estate.
8.4 BENEFITS.
8.4.1 During the termination payment period as set forth above in
subsection 8.1, the Companies shall use best efforts to
maintain in full force and effect for the continued benefit
of the Executive all employee welfare benefit plans and
perquisite programs in which the Executive was entitled to
participate immediately prior to the Executive's termination
or shall arrange to make available to the Executive benefits
substantially similar to those which the Executive would
otherwise have been entitled to receive if his employment
had not been terminated. Such welfare benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions toward the premium
payments) under which the Executive was entitled to
participate immediately prior to his termination.
8.4.2 From the end of the termination payment period until the
Executive reaches the age of 65, the Companies will provide
medical and dental coverage to the Executive on terms
substantially similar to those available to their executive
officers.
8.4.3 From the end of the termination payment period until the
current spouse of the Executive reaches the age of 65, the
Companies will provide medical and dental coverage to such
spouse on terms substantially similar to those available to
spouses of their executive officers.
8.4.4 If Executive's involuntary termination prior to the end of
the Employment Term causes Executive to qualify for less
annual retirement benefits under the Defined Benefit Pension
Plan than he would have qualified for had he served to the
end of the Employment Term, the Companies will make an
additional payment to Executive in conjunction with each
benefit payment made under the plan equal to the difference
between Executive's actual payment and what he would have
received had he not been involuntarily terminated.
8.4.5 Except as expressly provided to the contrary herein, any
termination payments hereunder shall not be taken into
account for purposes of any retirement plan or other benefit
plan sponsored by the Companies, except as otherwise
expressly required by such plans or applicable law.
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8.4.6 Any unvested options held by the Executive received under
the Incentive Plan or as other compensation from the
Companies shall, upon involuntary termination by the
Companies, be deemed vested. In addition, the termination
of the employment period shall be deemed to be a
"retirement" for purposes of the Incentive Plan.
8.5 TERMINATION FOR CAUSE. For purposes of this Agreement, "Cause" shall
mean:
8.5.1 the willful and continued failure by the Executive to
substantially perform his duties hereunder (other than any
such failure resulting from the Executive's Disability as
defined herein) after demand for substantial performance is
delivered by the Companies to the Executive that
specifically identifies the manner in which the Companies
believe the Executive has not substantially performed his
duties,
8.5.2 the doing of any act, or the failure to act, on the
Executive's part done or omitted to be done by him not in
good faith and without reasonable belief that his action or
omission was in the best interests of the Companies the
effect of which, in the judgment of the Board, is materially
adverse to the Companies, or
8.5.3 the material breach of the Confidentiality, Nonsolicitation
and Noncompete Agreement set forth in Section 9.
8.6 DISABILITY DEFINED. "Disability" shall mean the Executive's
incapacity due to physical or mental illness to substantially perform
his duties on a full-time basis for six consecutive months and, within
thirty days after a notice of termination is thereafter given by the
Companies, the Executive shall not have returned to the full-time
performance of the Executive's duties; provided, however, if the
Executive shall not agree with a determination to terminate him
because of Disability, the question of the Executive's disability
shall be subject to the certification of a qualified medical doctor
agreed to by the Companies and the Executive or, in the event of the
Executive's incapacity to designate a doctor, the Executive's legal
representative. In the absence of agreement between the Companies and
the Executive, each party shall nominate a qualified medical doctor
and the two doctors shall select a third doctor, who shall make the
determination as to Disability.
8.7 NO OBLIGATION TO MITIGATE. The Executive is under no obligation to
mitigate damages or the amount of any payment provided for hereunder
by seeking other employment or otherwise; provided, however, that the
Executive's coverage under
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the Companies' welfare benefit plans will terminate when the Executive
becomes covered under any employee benefit plan made available by
another employer and covering the same type of benefits. The
Executive shall notify the Companies within thirty days after the
commencement of any such benefits.
8.8 FORFEITURE. Notwithstanding anything to the contrary in this
Agreement, any right of the Executive to receive termination payments
and benefits hereunder and to be engaged as a consultant under Section
11 below shall be forfeited in the event of any termination for Cause
or to the extent of any amounts payable after any breach of Section 9
by the Executive.
9. CONFIDENTIALITY, NONSOLICITATION AND NONCOMPETE AGREEMENT
9.1 CONFIDENTIAL INFORMATION. The Executive acknowledges that in the
course of his employment by the Companies, he has had and will or may
have access to and has been and will or may become informed of
confidential and secret information which is a competitive asset of
the Companies ("Confidential Information"), including without
limitation (i) the terms of any agreement between the Companies and
any employee, customer or supplier, (ii) pricing strategy,
(iii) merchandising and marketing methods, (iv) product development
ideas and strategies, (v) personnel training and development programs,
(vi) financial results, (vii) strategic plans and demographic
analyses, (viii) proprietary computer and systems software and
(ix) any other material non-public information concerning the
Companies, their employees, suppliers or customers. The Executive
agrees that he will keep all Confidential Information in strict
confidence during the term of his employment by the Companies and
thereafter and will never directly or indirectly make known, divulge,
reveal, furnish, make available or use any Confidential Information
(except in the course of his regular authorized duties on behalf of
the Companies). The Executive agrees that the obligations of
confidentiality hereunder shall survive termination of his employment
at the Companies regardless of any actual or alleged breach by the
Companies of this Agreement and shall continue for two years following
such termination provided that such obligation shall terminate earlier
(i) as to Confidential Information that shall have become, through no
action of the Executive, publicly available or (ii) as to Confidential
Information which the Executive is required by law to disclose (after
giving the Companies notice and an opportunity to contest such
requirement). The Executive's obligations under this Section 10 are
in addition to, and not in limitation or preemption of, all other
obligations of confidentiality which the Executive may have to the
Companies under general legal or equitable principles.
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9.2 COPIES. Except in the ordinary course of the Companies' business, the
Executive has not made, nor shall at any time following the date of
this Agreement make or cause to be made, any copies, pictures,
duplicates, facsimiles or other reproductions or recordings or any
abstracts or summaries including or reflecting Confidential
Information. All documents (including data stored on magnetic disk,
tape or other computer storage medium) and other property furnished to
the Executive by the Companies or otherwise acquired or developed by
the Companies shall at all times be the property of the Companies.
Upon termination of the Executive's employment by the Companies, the
Executive shall return to the Companies any such documents or other
property of the Companies which are in the possession, custody or
control of the Executive.
9.3 NO SOLICITATION. In the event of the Executive's voluntary or
involuntary termination of employment at the Companies, the Executive
agrees that he will not in any capacity, on his own behalf or on
behalf of any other firm, person or entity, for a period of two years,
solicit, or assist in the solicitation of, any employee of either
Company to terminate his or her employment with such Company.
9.4 COVENANT NOT TO COMPETE. In the event of the Executive's voluntary or
involuntary termination of employment at the Companies, during the
period the Executive renders consulting services pursuant to Section
11 hereunder and for an additional period of two years after such
consulting period (or, if there is no consulting period due to
voluntary termination, for a period of two years after the Executive's
termination of employment), the Executive agrees that he shall not
engage directly or indirectly in any business that the Companies
conduct in any country from which the Companies generate $5,000,000 or
more of their net sales (except to the extent of a less than 1%
ownership interest in the outstanding shares of a public company),
unless otherwise mutually agreed by the parties.
9.5 SPECIFIC PERFORMANCE. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this Section 9 (referred to
collectively as the Confidentiality, Nonsolicitation and Noncompete
Agreement) would cause irreparable harm to the Companies and that the
Companies' remedy at law for any such violation would be inadequate.
In recognition of the foregoing, the Executive agrees that, in
addition to any other relief afforded by law or this Agreement
(including damages sustained by a breach of this Agreement and any
forfeitures under Section 8) and without any necessity or proof of
actual damages, the Companies shall have the right to enforce this
Agreement by specific remedies, including without limitation temporary
and permanent injunctions, and the parties understand and agree that
damages, forfeitures under Section 8 and injunctions
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shall all be proper modes of relief and are not to be considered as
alternative remedies.
10. POST-TERMINATION ASSISTANCE. The Executive agrees that after termination
of the Employment Term and the consulting period provided for in Section 11
below, he will provide such information and assistance to the Companies as
may reasonably be requested in connection with any litigation in which the
Companies or any of their affiliates is or may become a party; provided,
however, that the Companies agree to reimburse the Executive for any
related expenses, including travel expenses.
11. CONSULTING ARRANGEMENT. Unless Executive voluntarily terminates this
Agreement or is involuntarily terminated for Cause before the end of the
Employment Term, the Companies agree to engage the Executive as a
consultant for a period of six years following the end of the Employment
Term. During such consulting period, the Executive shall be considered an
employee of the Companies for purposes of participation in the Companies'
employee benefit, bonus and option plans, including without limitation the
Defined Benefit Pension Plan and the Incentive Plan. During such consulting
period, the Executive shall provide consulting services as may be
reasonably requested by the Companies' Chief Executive Officer or
President, and the Companies shall pay the Executive an annual amount equal
to $200,000 payable in accordance with the Companies' regular payroll
schedule and shall provide reasonable office and secretarial
accommodations. Such payments shall be in addition to any compensation
payable to Executive under Section 8 of this Agreement. The Companies
shall reimburse travel and other business expenses incurred by Executive in
connection with providing consulting services consistent with the
Companies' policies.
12. ARBITRATION. Any dispute arising out of this Agreement shall be settled by
arbitration by a single arbitrator in accordance with the commercial
arbitration rules of Judicial Arbitration and Mediation Services, Inc.
Arbitration shall be conducted in New York City. The parties agree that
New York City is a reasonable and convenient place for any arbitration
hereunder, and agree to submit to the jurisdiction of the New York courts
with respect to any dispute or judgment relating to this Agreement. Any
judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The arbitrator shall not have any authority to
award punitive or any other non-compensatory damages. The decision of the
arbitrator shall be binding upon the parties and shall be reviewable only
in the event of gross error of law. Any party may pursue the remedy of
specific performance of this Agreement, or seek an injunction in the event
of a breach of this Agreement or in aid of exercising any power granted
hereunder, or any combination thereof, in any court having jurisdiction
without resort to arbitration.
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Notwithstanding the foregoing, neither the Companies nor the Executive
shall be required to seek or participate in arbitration regarding any
matter arising under the Executive's Confidentiality, Nonsolicitation and
Noncompete Agreement contained in Section 9, but may pursue resolution of
such matter in a court of competent jurisdiction in New York.
13. AGREEMENT. This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the subject
matter hereof and contains all of the covenants and agreements between the
parties with respect to such subject matter. Each party to this Agreement
acknowledges that no representations, inducements, promises or other
agreements, orally or otherwise, have been made by any party, or anyone
acting on behalf of any party, pertaining to the subject matter hereof
which are not embodied herein, and that no other agreement, statement or
promise pertaining to the subject matter hereof that is not contained in
this Agreement shall be valid or binding on either party.
14. WITHHOLDING OF TAXES. The Companies may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the
Companies are required to withhold pursuant to any law or government
regulation or ruling.
15. SUCCESSORS AND BINDING AGREEMENT
15.1 COMPANIES. This Agreement will be binding upon and inure to the
benefit of each of the Companies and any successors to either thereof
by merger, consolidation, reorganization or otherwise, but will not
otherwise be assignable, transferable or delegable by either of the
Companies.
15.2 EXECUTIVE. This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
15.3 ASSIGNMENT RESTRICTIONS. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other,
assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 15.1
and 15.2. Without limiting the generality or effect of the foregoing,
the Executive's right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of
a security interest or otherwise, other than by a transfer by the
Executive's will or by the laws of descent and distribution and, in
the event of any attempted assignment or transfer contrary to this
Section 15, the Companies shall have no liability to pay any amount so
attempted to be assigned, transferred or delegated.
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<PAGE>
16. NOTICES. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to
have been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof confirmed), or five business
days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three business days
after having been sent by a nationally recognized overnight courier
service, addressed to either Company (to the attention of the Secretary of
the respective Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any party
may have furnished to the others in writing and in accordance herewith,
except that notices of changes of address shall be effective only upon
receipt.
17. GOVERNING LAW. The validity, interpretation, construction and performance
of this Agreement will be governed by and construed in accordance with the
substantive laws of the State of New York, without giving effect to the
principles of choice of laws or conflicts of law.
18. VALIDITY. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances will not
be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid or legal.
19. SURVIVAL OF PROVISIONS. The covenants, agreements, representations and
warranties contained in this Agreement shall survive any termination or
expiration of this Agreement or the termination of the Executive's
Employment Term.
20. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Companies. No waiver by either
party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. Unless otherwise noted, references to "Sections" are to
sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
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<PAGE>
21. 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 together
will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"COMPANIES"
American Commercial, Inc.
By: /s/ JOSEPH S. MUTO
__________________________________
Its: Secretary
__________________________________
Mikasa, Inc.
By: /s/ JOSEPH S. MUTO
___________________________________
Its: Secretary
__________________________________
"EXECUTIVE"
/s/ ALFRED J. BLAKE
________________________________________
Alfred J. Blake
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