<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
CASTECH ALUMINUM GROUP INC.
(Name of Subject Company)
CALC CORPORATION
(Bidder)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
148380108
(CUSIP Number of Class of Securities)
MARK V. KAMINSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMMONWEALTH ALUMINUM CORPORATION
1200 MEIDINGER TOWER
LOUISVILLE, KY 40202
(502) 589-8100
(Name, Address, and Telephone Numbers of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
------------------------------
COPY TO:
JOSEPH B. FRUMKIN
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
CALCULATION OF FILING FEE
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TRANSACTION
VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$281,309,692 $56,261.94
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* For purposes of calculating the filing fee only. This calculation
assumes 13,722,424 shares (equal to the sum of (i) 12,942,443 shares of Common
Stock issued and outstanding as of August 21, 1996, according to CasTech
Aluminum Group Inc. and (ii) 779,981 shares of Common Stock issuable pursuant to
outstanding exercisable options of CasTech Aluminum Group Inc.) at $20.50 per
share.
** 1/50 of 1% of Transaction Value.
/ / 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.
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Amount previously paid: Filing party:
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Form or registration no: Date filed:
</TABLE>
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is CasTech Aluminum Group Inc., a
Delaware corporation (the "Company"), and the address of its principal executive
offices is 2630 El Presidio Street, Long Beach, CA 90810.
(b) The class of securities to which this statement relates is the Common
Stock, par value $0.01 per share (the "Shares"), of the Company. The information
set forth in the Introductory Section and Section 1 of the Offer to Purchase
(the "Offer to Purchase") annexed hereto as Exhibit 1 is incorporated herein by
reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) The information set forth in Section 9 of the Offer to Purchase
is incorporated herein by reference. The name, business address, present
principal occupation or employment, the material occupations, positions, offices
or employments for the past five years and citizenship of each director and
executive officer of Commonwealth Aluminum Corporation, a Delaware corporation
("Parent"), and of CALC Corporation, a Delaware corporation (the "Purchaser"),
which is a direct wholly-owned subsidiary of Parent, and the name, principal
business and address of any corporation or other organization in which such
occupations, positions, offices and employments are or were carried on are set
forth in Schedule I hereto and incorporated herein by reference.
(e); (f) During the last five years, neither the Purchaser nor Parent, nor,
to the best of Parent's knowledge, any of the directors or executive officers of
the Purchaser or Parent has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such law.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introductory Section and Sections
9, 11 and 12 of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference. See also Exhibit (b)(1).
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The information set forth in the Introductory Section and Sections 7 and 12
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in Sections 9 and 12 of the Offer to
Purchase is incorporated herein by reference.
2
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introductory Section and Sections 9, 11 and
12 of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSON RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 16 of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference. See Exhibit (g)(1).
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 7 of the Offer to Purchase is
incorporated herein by reference.
(e) Not applicable.
(f) Not applicable.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal with respect to the Shares.
(a)(3) Form of letter, dated August 22, 1996, to brokers, dealers, commercial banks,
trust companies and nominees.
(a)(4) Form of letter to be used by brokers, dealers, commercial banks, trust
companies and nominees to their clients.
(a)(5) Form of newspaper advertisement, dated August 22, 1996.
(a)(6) Notice of Guaranteed Delivery.
(a)(7) IRS Guidelines to Substitute Form W-9.
(a)(8) Press Release, dated August 19, 1996.
(b)(1) Commitment Letter, dated August 18, 1996, between Parent and National
Westminster Bank Plc.
(c)(1) Agreement and Plan of Merger, dated as of August 19, 1996, among the Company,
Parent and the Purchaser.
(c)(2) Confidentiality Letter, dated July 26, 1996, between Parent and the Company.
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g)(1) Audited Financial Statements for the two years ended December 31, 1995 of
Parent.
(Incorporated by reference to Parent's Annual Report on Form 10-K for the year
ended
December 31, 1995)
</TABLE>
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: August 22, 1996
COMMONWEALTH ALUMINUM CORPORATION
By: /s/ MARK V. KAMINSKI
-----------------------------------------
Name: Mark V. Kaminski
Title: President and Chief Executive
Officer
CALC CORPORATION
By: /s/ MARK V. KAMINSKI
-----------------------------------------
Name: Mark V. Kaminski
Title: President and Chief Executive
Officer
<PAGE>
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
AT
$20.50 NET PER SHARE
BY
CALC CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
COMMONWEALTH ALUMINUM CORPORATION
------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, SEPTEMBER 19, 1996, UNLESS THE
OFFER IS EXTENDED.
-----------------
THE BOARD OF DIRECTORS OF CASTECH ALUMINUM GROUP INC. (THE "COMPANY") HAS
UNANIMOUSLY APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN AND
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
-------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH WILL CONSTITUTE AT LEAST A MAJORITY OF THE TOTAL SHARES OUTSTANDING
ON A FULLY DILUTED BASIS AND AS WILL PERMIT THE PURCHASER TO EFFECT THE MERGER
WITHOUT THE VOTE OF ANY PERSON OTHER THAN THE PURCHASER AND (2) ANY WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF THE SHARES
PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. SEE SECTION 14.
-------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES (AS DEFINED HEREIN), SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF
TRANSMITTAL ACCOMPANYING THIS OFFER TO PURCHASE IN ACCORDANCE WITH THE
INSTRUCTIONS IN THE LETTER OF TRANSMITTAL, HAVE SUCH STOCKHOLDER'S SIGNATURE
THEREON GUARANTEED IF REQUIRED BY INSTRUCTION 1 TO THE LETTER OF TRANSMITTAL,
MAIL OR DELIVER THE LETTER OF TRANSMITTAL OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER OF SHARES EFFECTED PURSUANT TO THE PROCEDURE SET FORTH IN SECTION 2, AN
AGENT'S MESSAGE (AS DEFINED HEREIN) IN LIEU OF THE LETTER OF TRANSMITTAL, AND
ANY OTHER REQUIRED DOCUMENTS TO THE DEPOSITARY (AS DEFINED HEREIN) AND EITHER
DELIVER THE LETTER OF TRANSMITTAL TOGETHER WITH THE CERTIFICATE(S) REPRESENTING
THE TENDERED SHARES OR DELIVER SUCH SHARES PURSUANT TO THE PROCEDURE FOR
BOOK-ENTRY TRANSFER SET FORTH IN SECTION 2, OR (2) REQUEST SUCH STOCKHOLDER'S
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE
TRANSACTION FOR SUCH STOCKHOLDER. STOCKHOLDERS HAVING SHARES REGISTERED IN THE
NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE ARE
URGED TO CONTACT SUCH BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE IF THEY DESIRE TO TENDER SHARES SO REGISTERED.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES FOR SUCH
SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH THE PROCEDURE
FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS, OR WHO CANNOT DELIVER ALL REQUIRED
DOCUMENTS TO THE DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER, MAY TENDER
SUCH SHARES BY FOLLOWING THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH IN
SECTION 2.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT (AS DEFINED HEREIN) OR TO THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES
AND TELEPHONE NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE.
REQUESTS FOR ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF
TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE DIRECTED TO THE INFORMATION
AGENT OR TO BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES.
---------------------
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY & CO.
INCORPORATED
AUGUST 22, 1996
<PAGE>
TABLE OF CONTENTS
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PAGE
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Introduction....................................................................................................... 1
The Tender Offer................................................................................................... 2
1. Terms of the Offer..................................................................................... 2
2. Procedure for Tendering Shares......................................................................... 3
3. Withdrawal Rights...................................................................................... 6
4. Acceptance for Payment and Payment for Shares.......................................................... 6
5. Certain Federal Income Tax Consequences................................................................ 7
6. Price Range of the Shares; Dividends on the Shares..................................................... 8
7. Effect of the Offer on the Market for the Shares; Stock Quotation;
Exchange Act Registration; Margin Regulations........................................................ 8
8. Certain Information Concerning the Company............................................................. 9
9. Certain Information Concerning the Purchaser and Parent................................................ 13
10. Source and Amount of Funds............................................................................. 15
11. Contacts and Transactions with the Company; Background of the Offer.................................... 19
12. Purpose of the Offer; Plans for the Company; The Merger Agreement...................................... 21
13. Dividends and Distributions............................................................................ 26
14. Certain Conditions of the Offer........................................................................ 26
15. Certain Legal Matters.................................................................................. 27
16. Fees and Expenses...................................................................................... 30
17. Miscellaneous.......................................................................................... 30
Schedule I--Directors and Executive Officers of Parent and Purchaser............................................... S-1
</TABLE>
i
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
CASTECH ALUMINUM GROUP INC.:
INTRODUCTION
CALC Corporation, a Delaware corporation (the "Purchaser"), which is a
wholly-owned subsidiary of Commonwealth Aluminum Corporation, a Delaware
corporation ("Parent"), hereby offers to purchase all of the outstanding shares
of common stock, par value $0.01 per share (the "Shares"), of CasTech Aluminum
Group Inc., a Delaware corporation (the "Company"), at $20.50 per Share, net to
the seller in cash (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Purchaser pursuant to the Offer. The
Purchaser will pay all fees and expenses of Morgan Stanley & Co. Incorporated
("Morgan Stanley"), which is acting as Dealer Manager of the Offer (in such
capacity, the "Dealer Manager"), First Chicago Trust Company of New York (the
"Depositary") and D.F. King & Co., Inc. (the "Information Agent") incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER REFERRED TO HEREIN AND DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH WILL CONSTITUTE AT LEAST A MAJORITY OF THE TOTAL SHARES OUTSTANDING
ON A FULLY DILUTED BASIS AND AS WILL PERMIT THE PURCHASER TO EFFECT THE MERGER
WITHOUT THE VOTE OF ANY PERSON OTHER THAN THE PURCHASER (THE "MINIMUM
CONDITION") AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR
ACT") APPLICABLE TO THE PURCHASE OF THE SHARES PURSUANT TO THE OFFER HAVING
EXPIRED OR BEEN TERMINATED. SEE SECTION 14.
The purpose of the Offer is to acquire for cash as many outstanding Shares
as possible as a first step in acquiring the entire equity interest in the
Company. The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of August 19, 1996 (the "Merger Agreement"), among the Company, Parent
and the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company (the "Merger") and each
outstanding Share other than Shares owned by Parent, Purchaser or any other
subsidiary of Parent (collectively, the "Purchaser Companies") and Shares which
are held by stockholders exercising appraisal rights ("Dissenting Stockholders")
pursuant to Section 262 of the Delaware General Corporation Law (the "DGCL")
will be converted into and represent the right to receive $20.50 in cash or such
higher price as paid pursuant to the Offer. The Merger Agreement is more fully
described in Section 12 below.
The Offer is conditioned upon, among other things, the Minimum Condition
being satisfied. Parent and the Purchaser have agreed that they will not waive
the Minimum Condition without the prior written consent of the Company. See
Section 12. The Company has advised Parent that as of August 21, 1996 there were
12,942,443 Shares outstanding and 1,239,561 options outstanding, of which
779,981 would be exercisable prior to the Expiration Date (as defined herein).
Based on the foregoing, the Purchaser believes there are approximately
14,182,004 Shares outstanding on a fully diluted basis. Accordingly, the
Purchaser believes that the Minimum Condition would be satisfied if at least
approximately 7,091,003 Shares are validly tendered prior to the Expiration Date
(as defined herein) and not withdrawn.
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer and the conversion of Shares pursuant to the Merger are described in
Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions set forth in the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the Purchaser will accept for payment, and pay
for, all Shares validly tendered on or prior to the Expiration Date (as herein
defined) and not withdrawn as permitted by Section 3. The term "Expiration Date"
means 12:00 Midnight, New York City time, on Thursday, September 19, 1996,
unless and until the Purchaser shall have extended the period for which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date on which the Offer, as so extended by the Purchaser, shall expire.
The Purchaser has agreed in the Merger Agreement that it will not, without
the consent of the Company, (a) change or waive the Minimum Condition, (b)
reduce the number of Shares subject to the Offer, (c) reduce the Offer Price,
(d) extend the Offer if all the conditions of the Offer are satisfied or waived,
(e) change the form of consideration payable in the Offer or (f) amend, modify
or add to the conditions of the Offer in any manner adverse to the Company's
stockholders. In addition, the Purchaser has agreed, so long as the Merger
Agreement is in effect and the conditions to the Merger have not been satisfied
or waived, at the request of the Company, the Purchaser shall extend the Offer
for an aggregate period of not more than 10 business days beyond September 19,
1996.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"), the
Purchaser expressly reserves the right, in its sole discretion, at any time 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. Any such
extension will also be publicly announced by press release issued no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
right of a tendering stockholder to withdraw such stockholder's Shares. See
Section 3. Subject to the terms of the Merger Agreement and the applicable
regulations of the Commission, the Purchaser also expressly reserves the right,
in its sole discretion, at any time or from time to time, (i) to delay
acceptance for payment of or, regardless of whether such Shares were theretofore
accepted for payment, payment for any Shares or to terminate the Offer and not
accept for payment or pay for any Shares not theretofore accepted for payment,
or paid for, upon the occurrence of any of the conditions specified in Section
14 and (ii) to waive any condition or otherwise amend the Offer in any respect,
by giving oral or written notice of such delay, termination or amendment to the
Depositary and by making a public announcement thereof. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If the Purchaser
accepts any Shares for payment pursuant to the terms of the Offer, it will
accept for payment all Shares validly tendered prior to the Expiration Date and
not withdrawn and, subject to (i) above, will promptly pay for all Shares so
accepted for payment. The Purchaser confirms that its reservation of the right
to delay payment for Shares which it has accepted for payment is limited by Rule
14e-1(c) under the Securities Exchange Act of 1934, as amended, (the "Exchange
Act"), which requires that a tender offeror pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal of a
tender offer.
Any extension, delay, termination or amendment of the Offer will be followed
as promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be issued no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that any material change in the information
published, sent or given to stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to inform
stockholders of such change) and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser 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.
2
<PAGE>
The Purchaser confirms that if it makes a material change in the terms of
the Offer or the information concerning the Offer, or if it waives a material
condition of the Offer, the Purchaser will extend the Offer to the extent
required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, the Purchaser, in its sole discretion, shall decrease the percentage of
Shares being sought or increase or decrease the consideration offered to holders
of Shares, such increase or decrease shall be applicable to all holders whose
Shares are accepted for payment pursuant to the Offer and, if at the time notice
of any increase or decrease is first published, sent or given to holders of
Shares, the Offer is scheduled to expire at any time earlier than the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended until the expiration of such ten
business-day period. For 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, New York City time.
The Offer is being mailed to holders of Shares from a list provided to the
Purchaser by the Company.
2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. To tender Shares pursuant to the Offer, either (a) a properly
completed and duly executed Letter of Transmittal together with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined herein) in lieu of the Letter of Transmittal, and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) certificates for the Shares to be tendered must be
received by the Depositary at one of such addresses or (ii) Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Depositary, including an
Agent's Message if the tendering stockholder has not delivered a Letter of
Transmittal), in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth below.
The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer
Facility (as defined below) to, and received by, the Depositary and forming a
part of a book-entry confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgement from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against such participant.
BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company and the Philadelphia Depository Trust
Company (each a "Book-Entry Transfer Facility" and, together, 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 the system of any Book-Entry Transfer Facility may make delivery
of Shares by causing such Book-Entry Transfer Facility to transfer such Shares
into the Depositary's account in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer, either the Letter of Transmittal,
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any
other required documents, must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase by
the Expiration Date, or the guaranteed delivery procedures described below must
be complied with. The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY
IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
3
<PAGE>
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT THE STOCKHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution (including
most commercial banks, savings and loan associations and brokerage houses) which
is a participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (an "Eligible Institution"). Signatures on a Letter of Transmittal need
not be guaranteed (a) if the Letter of Transmittal is signed by the registered
holders (which term, for purposes of this section, includes any participant in
any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing such participant as the owner of the Shares) of Shares
tendered therewith and such registered holder has not completed the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Shares not tendered or not accepted for payment
are to be returned to a person other than the registered holder of the
certificates surrendered, then the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as described
above. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. A stockholder who desires to tender Shares pursuant to
the Offer and whose certificates for Shares are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely basis,
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares by following all of the procedures set
forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary (as provided below) prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal, are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the New York Stock Exchange
(the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
OTHER REQUIREMENTS. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares (b) a Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message) and
(c) any other documents required by the Letter of
4
<PAGE>
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares and such other documents are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT.
TENDER CONSTITUTES AN AGREEMENT. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
APPOINTMENT. By executing a Letter of Transmittal as set forth above, the
tendering stockholder irrevocably appoints designees of the Purchaser, and each
of them, as such stockholder's attorneys-in-fact and proxies in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by the Purchaser and with respect to
any and all cash dividends, distributions, rights, other Shares or other
securities issued or issuable in respect of such Shares on or after the date of
this Offer to Purchase ("Distributions"). All such proxies shall be irrevocable
and coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, the Purchaser deposits the payment
for such Shares with the Depositary. Upon the effectiveness of such appointment,
without further action, all prior powers of attorney, proxies and consents given
by such stockholder with respect to such Shares (and any associated
Distributions) will be revoked, and no subsequent powers of attorney, proxies,
consents or revocations may be given (and, if given, will not be deemed
effective). The designees of the Purchaser will, with respect to the Shares (and
any associated Distributions) for which the appointment is effective, be
empowered to exercise all voting and any other rights of such stockholder, as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Company's stockholders, by written consent in lieu of
any such meeting or otherwise. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able to
exercise full voting consent and other rights with respect to such Shares (and
any associated Distributions), including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any and all tenders determined by it not to be in proper form or
the acceptance for payment of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right
to waive any defect or irregularity in the tender of any Shares of any
particular stockholder whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares will be deemed to
have been validly made until all defects and irregularities relating thereto
have been cured or waived. None of the Purchaser, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and Instructions thereto) will be final and binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such stockholder and payment of cash to such stockholder
pursuant to the Offer may be subject to backup withholding of 31%. All
stockholders surrendering Shares pursuant to the Offer
5
<PAGE>
should complete and sign the main signature form and the Substitute Form W-9
included as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is provided in a manner satisfactory to the Purchaser and
the Depositary). Certain stockholders (including, among others, all corporations
and certain foreign individuals and entities) are exempt from backup
withholding. Exempt foreign stockholders should complete and sign the main
signature form and a Form W-8, Certificate of Foreign Status, a copy of which
may be obtained from the Depositary, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after October 20, 1996.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such 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 the names
in which the certificate(s) evidencing the Shares to be withdrawn are
registered, if different from that of the person who tendered such Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the name of the registered holder and the serial numbers shown on
such certificates must also be submitted to the Depositary and, unless such
Shares have been tendered for the account of any Eligible Institution, the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedures for
book-entry tender as set forth in Section 2, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures for such withdrawal, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
Withdrawals of tenders of Shares may not be rescinded, and any Share properly
withdrawn will thereafter be deemed not validly tendered for the purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described above in Section 2 at any time on or prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent, or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification.
If the Purchaser extends the Offer, is delayed in its acceptance for payment
of Shares, or is unable to accept for payment Shares pursuant to the Offer, for
any reason, then, without prejudice to the Purchaser's rights under this Offer,
the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 3.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment, and will pay for, Shares
validly tendered and not withdrawn as promptly as practicable after the later of
(i) the expiration or termination of the waiting period applicable to the
acquisition of Shares
6
<PAGE>
pursuant to the Offer under the HSR Act and (ii) the Expiration Date. Parent has
filed a Notification and Report Form under the HSR Act. See Section 15. In
addition, subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of or payment for Shares in
order to comply, in whole or in part, with any applicable law. See Section 14.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely Book-Entry Confirmation of the
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 2),
(ii) the Letter of Transmittal, properly completed and duly executed, with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and (iii) any other documents required by such Letter of
Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment Shares validly tendered and not withdrawn as, if and when the Purchaser
gives oral or written notice to the Depositary of its acceptance for payment of
such Shares pursuant to the Offer. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for the tendering stockholders for
purpose of receiving payments from the Purchaser and transmitting such payments
to the tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares tendered by book-entry transfer of such Shares into the Depositary's
account at a Depository Institution pursuant to the procedures, set forth in
Section 2, such Shares will be credited to an account maintained with such
Depository Institution), as soon as practicable following expiration or
termination of the Offer.
The Purchaser reserves the right to transfer or assign in whole or in part
from time to time to one or more direct or indirect wholly-owned subsidiaries of
the Parent the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Sales of Shares pursuant to the Offer and the surrender of Shares pursuant
to the Merger generally will be taxable transactions for Federal income tax
purposes and may also be taxable under applicable state, local and other tax
laws. In general, for U.S. federal income tax purposes, a stockholder whose
Shares are purchased pursuant to the Offer, or surrendered pursuant to the
Merger, will recognize gain or loss for United States federal income tax
purposes in an amount equal to the difference between the amount realized and
the stockholder's tax basis in such Shares. Generally, for stockholders who hold
the Shares as capital assets, such gain or loss will be capital gain or loss,
and will be long-term capital gain or loss if such stockholder's holding period
for such Shares exceeds one year.
7
<PAGE>
In general, payment of the proceeds from the sale of Shares is subject to
both United States backup withholding and information reporting unless the
stockholder certifies its non-U.S. status under penalties of perjury or
otherwise establishes an exemption. See Section 2. Amounts withheld under the
backup withholding rules may be credited against a stockholder's tax liability,
and a stockholder may obtain a refund of any excess amounts withheld under the
backup withholding rules by filing the appropriate claim for refund with the
United States Internal Revenue Service.
THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO STOCKHOLDERS IN SPECIAL SITUATIONS
SUCH AS STOCKHOLDERS WHO RECEIVED THEIR SHARES UPON THE EXERCISE OF EMPLOYEE
STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND STOCKHOLDERS WHO ARE NOT UNITED
STATES CITIZENS OR RESIDENTS. STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND
THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN OR
OTHER TAX LAWS.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are listed on the NYSE. The Company has not paid any dividends
since its initial public offering in October 1994. The following table sets
forth, for the calendar quarters indicated, the high and low sales prices for
the Shares on the NYSE Composite Tape based upon public sources:
<TABLE>
<CAPTION>
SALES PRICE
--------------------
<S> <C> <C>
CALENDAR YEAR HIGH LOW
- ----------------------------------------------------------------------------------------------- --------- ---------
Year ended December 31, 1994:
Fourth Quarter(1)............................................................................ $16 3/4 $12 1/4
Year ended December 31, 1995:
First Quarter................................................................................ 16 1/2 12 3/8
Second Quarter............................................................................... 17 7/8 13 1/8
Third Quarter................................................................................ 21 7/8 15
Fourth Quarter............................................................................... 17 1/2 12 3/4
Year ended December 31, 1996:
First Quarter................................................................................ 15 3/4 13
Second Quarter............................................................................... 17 1/2 14
Third Quarter (through August 21, 1996)...................................................... 20 1/4 12 7/8
</TABLE>
- ------------------------
(1) Beginning with the Company's initial public offering in October 1994.
On August 16, 1996, the last full trading day prior to the public
announcement of the terms of the Offer and the Merger, the reported closing
price on the NYSE Composite Tape was $14 7/8 per Share. On August 21, 1996, the
last full trading day prior to commencement of the Offer, the reported closing
price on the NYSE Composite Tape was $20 1/4 per Share. STOCKHOLDERS ARE URGED
TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION, EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
MARKET FOR THE SHARES. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly
and may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
STOCK QUOTATION. The Shares are listed on the NYSE. According to the NYSE's
published guidelines, the NYSE would consider delisting the Shares if, among
other things, the number of holders of at least 100
8
<PAGE>
Shares should fall below 1,200, the number of publicly held Shares (exclusive of
holdings of officers and directors of the Company and their immediate families
and other concentrated holdings of 10% or more) should fall below 600,000, or
the aggregate market value of the publicly held Shares should fall below
$5,000,000. According to the Company's Annual Report on Form 10-K for the year
ended March 31, 1996, there were 168 holders of record of Shares on May 24, 1996
and according to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, as of July 31, 1996, there were 12,942,443 Shares
outstanding.
If such exchange were to delist the Shares, the market therefor could be
adversely affected. It is possible that the Shares would be traded on other
securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or through the National
Association of Securities Dealers Automated Quotation System, Inc. ("NASDAQ") or
other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated by the Company upon
application to the Commission if the outstanding Shares are not listed on a
national securities exchange and if there are fewer than 300 holders of record
of Shares. Termination of registration of the Shares under the Exchange Act
would reduce the information required to be furnished by the Company to its
stockholders and to the Commission and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b) and the requirement of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) and the related requirement of
furnishing an annual report to stockholders, no longer applicable with respect
to the Shares. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 under the Securities Act of 1933, as amended,
may be impaired or eliminated. If registration of the Shares under the Exchange
Act were terminated, the Shares would no longer be eligible for NASDAQ reporting
or for continued inclusion on the Federal Reserve Board's list of "margin
securities". The Purchaser intends to seek to cause the Company to apply for
termination of registration of the Shares as soon as possible after consummation
of the Offer if the requirements for termination of registration are met.
MARGIN REGULATIONS. The Shares are presently "margin securities" under the
regulations of the Federal Reserve Board, which has the effect, among other
things, of allowing brokers to extend credit on the collateral of such Shares.
Depending upon factors similar to those described above regarding listing and
market quotations, the Shares might no longer constitute "margin securities" for
the purposes of the Federal Reserve Board's margin regulations in which event
the Shares would be ineligible as collateral for margin loans made by brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation domiciled at 2630 El Presidio Street,
Long Beach, California.
The Company manufactures continuous cast aluminum sheet. The Company
manufactures aluminum sheet from recycled aluminum utilizing low cost,
scrap-based mini-mill production technology. The Company also manufactures
electrical flexible conduit and prewired armored cable, which are made
principally from aluminum sheet manufactured by the Company.
The Company's Mill Products Division manufactures continuous cast aluminum
sheet in a wide variety of aluminum sheet alloys used in numerous industries,
including the building products transportation, electrical and consumer durable
end-use markets. Continuous casting eliminates several manufacturing steps
associated with conventional casting and reduces labor costs, inventory and
manufacturing time.
9
<PAGE>
The Company believes it is a leader in aluminum mini-mill process technology
based on its development of advanced scrap preparation, metal treatment and
manufacturing processes that enable it to make conventionally cast sheet in many
applications. The production of these alloys, which are used in such various
applications as food containers, truck-trailer sheet, automotive stampings,
electronic panels, air conditioning units and satellite dishes, has enabled the
Company to expand its available markets.
The Company's Electrical Products Division manufactures metallic (aluminum
and steel) and non-metallic (plastic) electrical flexible conduit and prewired
armored cable primarily for use in commercial and residential construction,
renovation and remodeling. The Electrical Products Division was the first to
receive an Underwriters Laboratories listing for two of the major innovations in
its industry, aluminum flexible conduit in 1968 and aluminum armored cable in
1988. The Company's introduction of preassembled and prepackaged products for
the commercial and Do-It-Yourself markets reflects its continued commitment to
new product innovation and market development. In addition, the Company has
developed and introduced commercial pre-fabricated wiring systems.
Set forth below is certain summary consolidated financial information for
the Company's last three fiscal years as contained in the Company's Annual
Report on Form 10-K for the year ended March 31, 1996 and 1995 and for the three
months ended June 30, 1996 and June 30, 1995 as contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and June 30,
1995, respectively. More comprehensive financial information is included in such
reports (including management's discussion and analysis of financial condition
and results of operation) and other documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by reference
to such reports and other documents and all of the financial information and
notes contained therein. Copies of such reports and other documents may be
examined at or obtained from the Commission or from the NYSE.
THE COMPANY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
---------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1996 1995
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
INCOME STATEMENT INFORMATION:
Net sales............................................ $ 400,449 $ 403,001 $ 262,793 $ 107,602 $ 109,214
Income from continuing operations before provision
for income taxes.................................... 29,630 25,645 12,255 6,780 8,780
Net income........................................... 22,674 25,647 10,705 4,136 6,836
BALANCE SHEET INFORMATION:
Total current assets................................. $ 113,823 $ 118,318 $ 91,614 $ 123,773 $ 123,611
Total assets......................................... 213,284 215,714 189,492 220,799 221,101
Total current liabilities............................ 51,524 58,821 53,363 51,762 59,692
Long-term debt, less current maturities.............. 39,500 58,518 115,697 42,750 56,263
Total stockholders' equity........................... 119,896 96,979 17,665 124,031 103,815
COMMON SHARE INFORMATION:
Earnings per common share............................ $ 1.70 $ 2.33 $ 1.22 $ 0.31 $ 0.51
Weighted average number of common and common
equivalent shares outstanding....................... 13,327 11,016 8,774 13,302 13,324
</TABLE>
10
<PAGE>
Parent has conducted due diligence reviews of the Company and has received
certain non-public information from the Company pursuant to the terms of a
confidentiality agreement dated July 26, 1996. The non-public information
provided by the Company included certain projections of the Company's future
operating performance. Set forth below is a summary of these projections. The
projections do not give effect to the Offer, the Merger or the financing
thereof.
The Company does not as a matter of course publicly disclose projections as
to future revenues or earnings. The projections set forth below (the
"Projections") were not prepared with a view to public disclosure or compliance
with the published guidelines of the Commission or the guidelines established by
the American Institute of Certified Public Accountants regarding projections and
are included in the Offer to Purchase only because such information was made
available to Parent. None of Parent, the Purchaser, the Company or any of their
financial advisors or any of their respective directors or officers assumes any
responsibility for the accuracy of the Projections. The Company's independent
auditors have not examined or compiled the Projections presented herein and,
accordingly, assume no responsibility for them. In addition, because the
estimates and assumptions, many of which are not set forth herein, underlying
the Projections are inherently subject to significant economic and competitive
uncertainties and contingencies which are difficult or impossible to predict
accurately and are beyond Parent's and the Company's control, there can be no
assurance that the Projections will be realized. Accordingly, it is expected
that there will be differences between actual and projected results, and actual
results may be materially higher or lower than those set forth below.
11
<PAGE>
THE COMPANY
PROJECTIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
INCOME STATEMENT DATA (YEAR ENDED 3/31):
Net Sales (1)................................................................ $ 450,371 $ 508,905 $ 548,349
Net Income................................................................... 24,098 28,174 30,613
BALANCE SHEET DATA (AS OF 3/31):
Total Debt................................................................... $ 29,055 $ 9,921 --
Total Stockholders' Equity................................................... 143,994 172,168 $ 202,781
OTHER INFORMATION:
Incremental Working Capital.................................................. $ 7,543 $ 8,780 $ 5,916
Depreciation................................................................. 9,000 9,000 9,000
Capital Expenditures......................................................... 9,600 10,000 10,000
</TABLE>
- ------------------------
(1) Excludes intercompany sales.
Parent has been advised that the Projections reflect the best estimates by
management of the Company as to the likely consolidated results of the Company.
The volume growth of the aluminum rolling mill is projected based on the
assumption that the Company does not enter into any acquisitions and is limited
by the production capacity of the Company's current facilities. Over the
projected period, the Company estimates that the metal margin of its aluminum
rolling mill business (the spread between unit sales price and unit raw material
cost) will remain constant. Although historically this metal margin fluctuates
over time, the projected constant metal margin represents management's best
estimate of average metal margins over the projected periods. The Company also
assumes steady conversion costs for its aluminum rolling mill business and
constant gross margin at its electric conduit business over the projected
period. The Projections assume aggregate tax rates of 38%, 40% and 40% in fiscal
years 1996, 1997 and 1998, respectively.
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources and is qualified in its entirety by reference thereto. Although Parent
has no knowledge that would indicate that any statements contained herein based
on such documents and records are untrue, Parent cannot take responsibility for
the accuracy or completeness of the information contained in such documents and
records, or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to Parent.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities, any material interests of such
persons in transactions with the Company and other matters is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference room at the
Commission's office at 450 Fifth Street, N.W., Washington, D.C., and also should
be available for inspection and copying at the following regional offices of the
Commission: Citicorp Center, 500 West Madison Street (Suite 1400), Chicago,
Illinois; 7 World Trade Center, 13th Floor, New York, New York. Copies may be
obtained, by mail, upon payment of the
12
<PAGE>
Commission's customary charges, by writing to its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material should also be available for
inspection at the NYSE, 20 Broad Street, New York, New York.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
The Purchaser is a Delaware corporation and to date has engaged in no
activities other than those incident to its formation and the commencement of
the Offer. The Purchaser is a direct wholly-owned subsidiary of Parent, also a
Delaware corporation. Purchaser and Parent are located at 1200 Meidinger Tower,
Louisville, Kentucky 40202.
Parent was organized in 1984 as a wholly-owned subsidiary of Comalco
Limited, an Australian company ("Comalco"), to acquire Martin Marietta Aluminum,
Inc. Parent became publicly owned in March 1995 as a result of an underwritten
initial public offering by Comalco of the outstanding Common Stock of Parent.
Parent owns and operates at Lewisport, Kentucky, one of the largest
multi-purpose aluminum rolling mills in North America. Parent is a leading
manufacturer of aluminum sheet for the transportation, construction and consumer
durables end-use markets.
The aluminum sheet products manufactured by Parent are generally referred to
as common alloy products. They are produced in a number of aluminum common
alloys with varying thickness (gauge) of 0.010 to 0.250 inches, width of up to
72 inches, physical properties and packaging to meet customer specifications.
Parent believes that the flexibility permitted by its multi-purpose rolling mill
is a competitive advantage, permitting Parent to target higher margin products,
to manufacture a variety of products with consistent high quality and to respond
to shifts in market demand. Substantially all of Parent's products are produced
in response to specific customer orders. The period of time from the date a
customer gives Parent its specific requirements for an order to the date of
shipment requested is generally four to eight weeks.
Parent products are sold to distributors and end-users, principally for use
in transportation equipment such as truck trailers and bodies and automotive
parts; building and construction products such as roofing, siding, windows and
gutters; beverage cans and consumer durables such as cookware and appliances.
Additional information concerning Parent is set forth in Parent's Annual
Report on Form 10-K for the year ended December 31, 1995 which information is
incorporated by reference herein and subsequent Quarterly Reports on Form 10-Q,
which reports may be obtained from the Commission in the manner set forth with
respect to information concerning the Company in Section 8. In addition, such
information should also be available for inspection at the office of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C.
13
<PAGE>
Set forth below is certain consolidated financial information of Parent:
PARENT
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1996 1995
---------- ---------- ---------- ---------- ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT INFORMATION:
Net Sales.......................................... $ 671,501 $ 496,529 $ 413,036 $ 327,216 $ 366,136
Income (loss) from operations before income
taxes............................................ 43,073 22,791 (11,536) 5,112 29,161
Net income (loss).................................. 33,787 22,091 (77,993) 4,495 21,579
BALANCE SHEET INFORMATION:
Total current assets............................... $ 227,175 $ 236,028 $ 153,287 $ 212,888 $ 240,960
Total assets....................................... 420,684 439,454 357,557 402,294 436,120
Total current liabilities.......................... 73,883 102,002 168,484 53,861 94,981
Long-term debt, less current maturities............ 33,871 -- -- 30,307 40,625
Total stockholders' equity......................... 213,063 242,690 93,824 216,785 203,878
COMMON SHARE INFORMATION:
Earnings per common share.......................... $ 3.32 $ 0.44 $ 2.12
Dividends per share................................ 0.15 0.10 0.05
Weighted average shares outstanding................ 10,191 10,196 10,190
</TABLE>
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I to
this Offer to Purchase.
Except as set forth in Sections 11 and 12, neither the Purchaser nor Parent
nor, to the best of their knowledge, any of the persons listed in Schedule I
hereto nor any associate or majority-owned subsidiary of any of the foregoing,
beneficially owns or has a right to acquire any equity securities of the
Company. Neither the Purchaser nor Parent nor, to the best of their knowledge,
any of the persons or entities referred to above, nor any director, executive
officer or subsidiary of any of the foregoing, has effected any transaction in
such equity securities during the past 60 days.
Except as set forth in Sections 11 and 12, neither the Purchaser nor Parent,
nor, to the best of their knowledge, any of the persons listed in Schedule I
hereto, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies. Except as set forth in Sections 11 and
12, there have been no contacts, negotiations or transactions since January 1,
1993 between Parent or the Purchaser, or, to the best of their knowledge, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets. Except as
described in Sections 11 and 12, neither the Purchaser nor Parent, nor, to the
best of their knowledge, any of the persons listed in Schedule I hereto, has
since January 1, 1993 had any transaction with the Company or any of its
executive officers, directors or affiliates that would require disclosure under
the rules and regulations of the Commission applicable to the Offer.
14
<PAGE>
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
all of the outstanding Shares pursuant to the Offer and the Merger and to pay
related fees and expenses will be approximately $292 million. Parent and the
Company may also be required in connection with the Offer to make principal,
interest and premium payments in respect of long-term borrowing obligations in
aggregate amounts of approximately $30 million and $48 million, respectively.
Parent intends to obtain such funds either directly or through its subsidiaries
pursuant to the loan agreement described below and to refinance a portion of the
amounts borrowed pursuant to such loan agreement.
Such funds will be furnished by Parent to the Purchaser and then, with
respect to any amounts needed to repurchase the Company's long term borrowing
obligations, to the Company in the form of capital contributions or loans.
Certain funds may be made available directly to the Company. Parent expects to
obtain such funds in the form of term and revolving credit loans (each a "Loan"
and collectively, "Loans") pursuant to a senior secured credit facility (the
"Senior Secured Credit Facilities") to be provided by National Westminster Bank
Plc (together with its affiliates, "NatWest"). Pursuant to a commitment letter,
dated August 18, 1996, between Parent and NatWest (the "Commitment Letter"),
NatWest has committed to provide an aggregate amount of up to $425 million in
Senior Secured Credit Facilities during a period ending November 29, 1996 (the
"Commitment Termination Date") on the terms and conditions set forth in the
Commitment Letter and the Term Sheet attached to the Commitment Letter (the
terms of which are summarized below) and a fee letter between Parent and
NatWest, dated August 18, 1996. NatWest may syndicate all or a portion of the
Senior Secured Facilities to other banks and financial institutions. The
Commitment Letter provides that the Offer be for not less than 51% of the
Shares, that the price per Share in the Offer not exceed $20.50, that the Offer
and the Merger be approved by the Boards of Directors of both Parent and the
Company and such approval shall not have been withdrawn or qualified in a manner
adverse to Parent, and that the Offer be conditioned upon the receipt of a
sufficient number of Shares as would enable Parent, voting without any other
stockholder of the Company, to approve and effect the Merger. NatWest may
terminate their obligations under the Commitment Letter if (i) the terms of the
Merger and Offer are materially changed or if any information submitted to
NatWest by or on behalf of Parent or the Company proves to have been materially
inaccurate or (ii) any of the fees provided for by the fee letter are not paid
when due. NatWest's obligations under the Commitment Letter are subject to the
negotiation, execution and delivery of mutually satisfactory financing
documentation.
Pursuant to the Commitment Letter, Parent has agreed to indemnify NatWest
and the other lenders participating in the Senior Secured Credit Facilities and
each director, officer, employee and affiliate thereof (each an "indemnified
person") from and against any and all losses, claims, damages, liabilities (or
actions or proceedings commenced or threatened in respect thereof) and expenses
that arise out of, result from or in any way relate to the Commitment Letter,
the Senior Secured Facilities Term Sheet or the fee letter, or in connection
with the Offer and the Merger, other transactions contemplated by the Commitment
Letter or the provision or syndication of the Senior Secured Credit Facilities;
provided that Parent will not be responsible for any losses, claims, damages,
liabilities or expenses of any indemnified person to the extent incurred by
reason of the gross negligence or wilful misconduct of such person. In addition,
Parent has agreed to reimburse NatWest for its out-of-pocket costs and expenses
incurred in connection with the syndication of the Senior Secured Credit
Facilities and the preparation, review, negotiation, execution and delivery of
the Commitment Letter, the fee letter, the definitive financing arrangements for
the Senior Secured Credit Facilities and the other documents relating to the
Offer and the Merger.
The following is a description of the terms of the Senior Secured Credit
Facilities in the Term Sheet and is qualified in its entirety by reference to
the text thereof.
Up until the Effective Time (as defined herein), the Senior Secured Credit
Facilities will consist of the following Tender Offer Facilities (collectively,
the "Tender Offer Facilities"): (a) a $100 million Senior Secured Term A Tender
Offer Facility (the "Term Loan A Tender Offer Facility"), (b) a $100 million
Senior Secured Term B Tender Offer Facility (the "Term Loan B Tender Offer
Facility") and (c) a $225 million Senior Secured Revolving Credit Facility (the
"Revolving Credit Tender Offer Facility"). At the Effective Time, the Senior
Secured Credit Facilities will consist of the following Merger Facilities
15
<PAGE>
(collectively, the "Merger Facilities"): (a) a $100 million Senior Secured Term
A Facility (the "Term Loan A Merger Facility"), (b) a $100 million Senior
Secured Term B Facility (the "Term Loan B Merger Facility") and (c) a $225
million Senior Secured Revolving Credit Facility (the "Revolving Credit Merger
Facility", and, together with the Revolving Credit Tender Offer Facility, the
"Revolving Credit Facilities"). The Loans drawn under the Merger Facilities will
be used to refinance all outstanding Loans under the Tender Offer Facilities and
to fund other costs of the Merger. $175 million and $50 million of the Revolving
Credit Tender Offer Facility will be available to Parent and the Company,
respectively. A maximum of $160 million under the Revolving Credit Merger
Facility may be drawn at the closing. Availability under the Revolving Credit
Facilities will be determined by a borrowing base.
REPRESENTATIONS AND WARRANTIES. The Term Sheet provides for representations
and warranties related to the conditions precedent to the Loans which conditions
are set forth below.
CONDITIONS. The Term Sheet provides, as a condition precedent to the Loans,
that NatWest be reasonably satisfied with the following: (a) with the terms of
the credit and security agreements, including financial covenants, and all other
legal documents (relating to the Offer and the Merger) as well as compliance
with applicable laws; (b) that the purchase price for Shares not exceed $20.50
per Share and that fees and expenses in connection with the Offer and the Merger
do not exceed $17 million; (c) that Parent will hedge an appropriate portion (to
be agreed between NatWest and Parent) of its interest rate exposure by entering
into an interest rate cap or such other hedging instrument as may be agreed; (d)
with a solvency opinion addressed to NatWest for the benefit of the Lenders
signed by the chief financial officer of Parent; (e) that there has been no
material adverse change in the business, properties, assets, operations,
conditions (financial or otherwise), or prospects of the Company; (f) (only with
respect to borrowings from and after the Effective Time) that there has been no
material adverse change in the business, properties, assets, operations,
conditions (financial or otherwise), or prospects of Parent and its subsidiaries
(including the Company) taken as a whole since December 31, 1995 (other than the
Merger); (g) that Parent has made arrangements for the purposes of securing debt
financing of approximately $100 million; (h) that the principal conditions to
the consummation of the Offer shall have been satisfied and shall not have been
waived and the Parent shall have accepted for payment pursuant to the Offer at
least a majority of the outstanding shares of the Company; and Parent has
delivered to NatWest irrevocable consents to the Merger (along with certified
resolutions of the Board of Directors and a certificate of ownership and Merger)
to ensure that the Merger will be consummated as promptly as possible after the
closing of the Offer; (i) that Parent shall have caused the Company to verify
the material accuracy of all factual statements and other information provided
by the Company and its employees to ENVIRON that are contained in the Update of
Environmental Assessment dated August 16, 1996 from ENVIRON, except for any
inaccuracies or omissions that would not result in a material adverse effect on
the business, properties, assets, operations, conditions (financial or
otherwise), or prospects of the Company; and (j) that it has received customary
legal opinions. In addition, the Term Sheet provides that the following shall be
conditions precedent to Loans under the Revolving Credit Facility: (a) accuracy
of representations and warranties; (b) absence of default and material
litigation; (c) authority, government approvals; (d) Borrowing Base -- 85% of
eligible receivables (to be agreed), 50% of finished goods and raw material
inventory and 35% of work in progress inventory (subject to customary
exclusions; the Borrowing Base may be separately determined for each operating
subsidiary); and (e) payment of fees.
AVAILABILITY. The Term Sheet provides that availability under the various
facilities will be as follows: drawings under the Tender Offer Term Loan
Facility may be made at any time from and including the closing of the Offer to
but excluding the Effective Time for the purpose of funding the purchase of the
Shares, refinancing existing indebtedness of Parent and its subsidiaries and the
Company and its subsidiaries and paying certain transaction fees and expenses.
In addition, at no time shall the aggregate principal amount of loans
outstanding under this facility exceed the Borrowing Base. This facility and the
Merger Facilities shall either be made directly to the operating companies or to
Parent with appropriate mechanisms for downstreaming the proceeds to the
operating companies. A single drawing under each of the
16
<PAGE>
Term Loan A Merger Facility and the Term Loan B Merger Facility may be made on
the Effective Time, the proceeds of which, together with the proceeds of
revolving credit loans made on the Effective Time, will be applied to refinance
all outstanding loans under the Tender Offer Facilities and to fund other costs
of the Offer and the Merger payable on the Effective Time. Drawings under the
Revolving Credit Merger Facility may be made at any time from the Effective Time
to but excluding the date occurring five years after the closing of the Offer.
In addition, at no time shall the aggregate principal amount of loans
outstanding under the Revolving Credit Facility exceed the Borrowing Base.
INTEREST AND INTEREST RATES. The Term Sheet provides that at Parent's
option, loans under the Senior Secured Credit Facility will bear interest at (i)
the Base Rate plus the Applicable Margin or (ii) the LIBOR Rate plus the
Applicable Margin for one, two, three or six month interest periods.
The Base Rate is defined as the higher of (i) the Bank prime loan rate
published by the Board of Governors of the Federal Reserve System in Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" and
(ii) the federal funds rate + 1/2 of 1%.
The Applicable Margin and Non-Utilization Fee for the Term Loan A Merger
Facility and the Revolving Credit Facility shall be determined on the basis of
the ratio of the trailing twelve month EBITDA (as defined below) for the period
ending June 30, 1996, of Parent and the Company to its Senior Debt outstanding
on the Effective Time and recalculated in the event the Term Loan B is drawn as
follows in the chart set forth below:
<TABLE>
<CAPTION>
APPLICABLE MARGIN
TERM LOAN A AND
TERM LOAN A AND REVOLVING
CREDIT FACILITY REVOLVING APPLICABLE MARGIN
CREDIT FACILITY TERM LOAN A AND REVOLVING
ASSUMING SENIOR UNSECURED CREDIT FACILITY
NOTES ASSUMING SENIOR
NON-UTILIZATION OR TERM LOAN B SUBORDINATED NOTES
FEE -------------------------- --------------------------
REVOLVING CREDIT BASE RATE LIBOR RATE BASE RATE LIBOR RATE
SENIOR DEBT TO EBITDA RATIO FACILITY MARGIN MARGIN MARGIN MARGIN
- ----------------------------------- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
LESS THAN 1.0 0.175% 0.00% 0.50% 0.00% 0.50%
>1.0 LESS THAN 2.0 0.20% 0.00% 0.75% 0.00% 0.75%
>2.0 LESS THAN 2.5 0.25% 0.00% 1.25% 0.00% 1.00%
>2.5 LESS THAN 3.0 0.25% 0.25% 1.50% 0.00% 1.25%
>3.0 LESS THAN 3.5 0.375% 0.50% 1.75% 0.25% 1.50%
>3.5 LESS THAN 4.0 0.375% 0.75% 2.00% 0.50% 1.75%
>4.0 LESS THAN 4.25 0.375% 1.00% 2.25% 0.75% 2.00%
>4.25 0.50% 1.25% 2.50% 1.00% 2.25%
</TABLE>
It shall be assumed for purposes of the Tender Offer Facilities that the
Senior Debt to EBITDA Ratio is greater than 4.25 to 1.
The Applicable Margin for the Term Loan B Facility shall be 1.75% for Base
Rate loans and 3.00% of LIBOR loans.
Interest in respect of Base Rate loans shall be payable quarterly in arrears
on the first business day of each quarter. Interest in respect of LIBOR loans
shall be payable at the end of the applicable interest period, but not less
frequently than quarterly. All interest on all LIBOR loans and fees is
calculated on the basis of the actual number of days elapsed and a 360-day year
(and in the case of Base Rate loans, a 365-day year). After and during the
continuance of any event of default, all loans and other amounts will bear
interest at 2% above the Base Rate plus the Applicable Margin.
The Term Sheet provides that a per annum non-utilization fee calculated on
the unused portion of the Revolving Credit Facility commencing on the date of
signing of the credit agreement governing the Senior Secured Credit Facilities
(the "Credit Agreement"), payable quarterly in arrears.
17
<PAGE>
MATURITY. The Tender Offer Facilities shall be repaid on the earlier of (i)
the date 90 days after the closing of the Offer and (ii) the Effective Time. The
Revolving Credit Merger Facility shall be repaid in full five years from the
closing of the Offer. The Term Loan Merger Facilities shall be repaid in the
following aggregate amounts in quarterly installments:
<TABLE>
<CAPTION>
YEAR TERM LOAN A TERM LOAN B
- ---------------------------------------------------- ---------------- ----------------
<S> <C> <C>
1 $5.0 million $1.0 million
2 10.0 1.0
3 20.0 1.0
4 30.0 1.0
5 35.0 1.0
6 -- 35.0
7 -- 60.0
---------------- ----------------
Total $100.0 $100.0
</TABLE>
MANDATORY PREPAYMENTS. The Term Sheet provides as follows: if no Term Loan
B is outstanding, mandatory prepayments will be required from (a) 100% of the
net proceeds from asset sales, with customary exceptions for reinvestment in the
business, (b) 100% of the net proceeds from issuances of debt (other than
permitted refinancings), with customary exceptions, and (c) a to-be-agreed
percentage of the net proceeds from equity issuances or capital contributions,
with customary exceptions. Mandatory prepayments shall be applied, in inverse
order to maturity, to Term Loan A and thereafter to the remaining Revolving
Credit Commitment.
Once Parent achieves (i) Total Debt (as defined below) to trailing
twelve-month EBITDA (as defined below) of less than 3:1 and trailing
twelve-month EBITDA to Total Interest Expense (as defined below) of greater than
3:1; or (ii) an investment grade rating from both S&P and Moody's, there will
be: (a) no requirement to use debt or equity proceeds to retire debt; (b) the
basket for asset sales that do not have to be applied to repayment of debt will
be increased; and (c) the restriction on future acquisitions will be relaxed. In
addition, the Term Sheet provides that if any Term Loan B is outstanding, in
addition to the prepayments required above, the following mandatory prepayment
provisions will apply: mandatory prepayments will be required additionally from
(a) 75% of Excess Cash Flow (as defined below) until such time as 50% of the
Term Loan Facilities have been repaid, and (b) 50% of Excess Cash Flow after
such time as 50% of the Term Loan Facilities have been repaid. Mandatory
prepayments shall be applied, in inverse order to maturity, first to the Term
Loans on a pro-rata basis to Term Loans A and B and thereafer to the remaining
Revolving Credit commitment. Once the Borrower achieves (i) Total Debt to
trailing twelve-month EBITDA of less than 2.5:1 and trailing twelve-month EBITDA
to Total Interest Expense of greater than 3:1; or (ii) an investment grade
rating from both S&P or Moody's, there will be no requirement to make mandatory
repayments under the Excess Cash Flow sweep. Excess Cash Flow is defined as
EBITDA less current taxes paid or payable for the period, less cash interest,
less scheduled principal payments, less capital expenditures, less the lower of
$2,400,000 and the amount of any dividends paid in the period.
COVENANTS AND EVENTS OF DEFAULT. The Term Sheet provides for typical
covenants for a transaction of this type and applicable to Parent and its
subsidiaries including, but not limited to, the following: (i) a limitation on
liens; (ii) a limitation on debt (including contingent obligations); (iii)
limitation on mergers and acquisitions; (iv) limitation on loans and
investments; (v) limitation on sale of assets or stock; (vi) limitation on
affiliate transactions; (vii) limitation on capital expenditures; (viii)
limitation on dividends and other restricted payments; and (ix) prohibition on
prepayments, purchases, redemptions or modifications of junior indebtedness. The
Term Sheet also provides that there will be financial covenants relating to (i)
minimum EBITDA; (ii) minimum senior and total interest coverage ratios; (iii)
minimum fixed charge coverage ratios; and (iv) maximum leverage ratios.
18
<PAGE>
"EBITDA" means net income plus interest, taxes, depreciation and
amortization plus extraordinary losses minus extraordinary gains.
"Fixed Charge Ratios" means EBITDA divided by Total Interest Expense plus
required amortization of Senior Debt.
"Leverage Ratio" means Total Indebtedness of the Borrower divided by EBITDA.
"Senior Interest Coverage Ratio" means EBITDA divided by Senior Interest
Expense.
"Total Interest Coverage Ratio" means EBITDA divided by Total Interest
Expense.
The Term Sheet also provides for typical events of default for transactions
of this type, including (without limitation) payments, misrepresentations,
covenant defaults, bankruptcy, ERISA, judgments, and cross defaults, subject, in
certain cases, to notice and grace provisions to be agreed. There will be a
change in control event of default (to be defined) or requirement for mandatory
prepayment in full in the event of a change of control.
GUARANTEE. The Term Sheet provides that the Senior Secured Credit
Facilities will be guaranteed on a joint and several basis by Parent and its
subsidiaries.
SECURITY. Term Loan A, Term Loan B and the Revolving Credit Facility will
be secured, on a pari passu basis, by a perfected first priority security
interest in all of the assets, tangible and intangible (including real property
interests), and the capital stock, of any current and future subsidiaries of
Parent, with such exceptions as agreed to by NatWest. The Tender Offer
Facilities will not be secured, directly or indirectly, by shares of the
Company; provided that the proceeds of any sale of shares of the Company will be
placed in escrow and applied to the prepayment of the Tender Offer Term
Facilities.
EXPENSES AND INDEMNIFICATION.
The Term Sheet also provides that the credit agreement governing the Senior
Secured Credit Facilities will include standard provisions for such matters as
increased costs, funding losses, capital adequacy, reserve adjustments,
illegality and withholding taxes.
The foregoing descriptions of the Commitment Letter and the Term Sheet are
qualified in their entirety by reference to the texts thereof, a copy of each of
which has been filed by Parent as an exhibit to the Schedule 14D-1 and may be
obtained in the manner described in Section 8.
DEBT FINANCING. In lieu of a drawdown on the Term Loan B Tender Offer
Facility or the Term Loan B Merger Facility, Parent may arrange debt financing
of approximately $100 million. The definitive terms of such debt financing have
not yet been established.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY: BACKGROUND OF THE OFFER
Parent had from time to time since its initial public offering in 1995
considered transactions, including possible acquisitions, to increase its
productive capacity. In early June of 1996, Mr. Paul Lego, Chairman of
Purchaser, met a director of the Company on an unrelated matter and each noted
the increasing importance of scale in the aluminum industry and the possibility
that some business arrangement between the Company and Parent might be mutually
beneficial. Shortly thereafter, Mr. Norman Wells, the Chief Executive Officer of
the Company, and Mark Kaminski, the Chief Executive Officer of Parent spoke by
telephone to attempt to arrange a meeting.
During late June and early July, Parent commenced, with the assistance of
its financial advisor, Morgan Stanley, a review of the Company and possible
transactions between the Company and Parent. As a result of this review, Parent
determined that it appeared that a combination of the Company and Parent could
be highly attractive and that it would be advisable to accelerate discussions
between the Company and Parent.
19
<PAGE>
In early July, Messrs. Lego and Kaminski together telephoned the director of
the Company with whom Mr. Lego had the brief discussion in June, but that
director was unavailable. They then telephoned Mr. Charles Pilliod, Chairman of
the Company, and requested a meeting prior to the Company's July 18 Annual
Meeting of Stockholders. Mr. Wells thereafter called Mr. Kaminski to schedule a
meeting on July 16. On July 16, 1996, Messrs. Lego, Kaminski, Pilliod and Wells
met near the Cincinnati airport. At that meeting Messrs. Lego and Kaminski
indicated Parent's interest in acquiring the Company in a negotiated transaction
for $18.50 per Share in cash. During the meeting Mr. Pilliod indicated that the
$18.50 per Share price suggested seemed low, but agreed to raise Parent's
proposal with the Company's Board of Directors at their meeting on July 18 and
requested that Parent submit its proposal in writing, which Parent did on July
17.
On July 19, 1996 Mr. Pilliod wrote Mr. Kaminski and indicated that the
Company's Board of Directors had concluded that Parent's proposal was not a
sufficient starting point for negotiation, but that the Company's Board of
Directors had authorized the Company's management to provide Parent with a
limited amount of focused due diligence with a view toward quickly determining
whether Parent would meaningfully improve its proposal. Mr. Pilliod's letter
also conditioned the Company's further participation on receipt of an expression
from Parent of its assurance that the Company's management and employees would
be treated fairly in any transaction. Messrs. Wells and Kaminski scheduled a due
diligence meeting that was held on July 26. Prior to that meeting the Company
and Parent executed and delivered reciprocal confidentiality and standstill
agreements. During that meeting, representatives of the Company and Parent and
their respective legal and financial advisors met and the Company provided
Parent with limited additional financial and other information, together with
the Company's ideas on how cost savings and other transaction benefits might be
achieved if the Company and Parent were combined. Also during that meeting, Mr.
Kaminski indicated that Parent wished to assure representatives of the Company
that Company executives would be treated fairly in any combination and to that
end Parent would have no objection to the Company's adoption of severance
arrangements for senior executives similar to those arrangements in place for
executives of Parent. Following this meeting, the Company provided Parent with a
summary of its operating financial forecasts.
On July 30, 1996, representatives of Parent contacted representatives of the
Company and stated that Parent was prepared to offer $20.00 per Share in cash in
a negotiated transaction and that this offer would expire at the close of
business on August 5. A representative of the Company indicated that the price
proposed was likely to be found insufficient, but no definitve response was
received by August 5, but on August 8 the financial advisor for the Company
contacted the financial advisor for Parent and suggested a further due diligence
meeting to see if a higher price could be justified.
Representatives of the Company, Parent and their respective legal and
financial advisors met on August 9 and the Company provided Parent with
additional information concerning possible cost savings opportunities and other
transaction benefits. The financial advisor to Parent then advised the financial
advisor to the Company that Parent would increase its proposed consideration per
Share to $20.50 but that no further increase was possible. After deliberation
with senior management of the Company and several members of the Board of
Directors of the Company, the Company's financial advisor indicated that the
Company would agree to consider favorably a transaction at that price so long as
it was subject only to confirmatory due diligence, was not subject to any
financing contingency, was otherwise largely unconditional and could be
reflected in a definitive agreement before the opening of the stock market on
August 19, 1996. Parent's representatives agreed to use their best efforts to
attempt to satisfy these conditions.
Beginning on August 13, 1996 Parent and its financial and legal advisors and
representatives of its financing source commenced detailed due diligence on the
Company and its subsidiary, and beginning on August 15, 1996, the negotiation of
the Merger Agreement. Due diligence was largely completed by August 16, 1996.
Parent obtained a financing commitment for the Offer and the Merger on August
18, 1996. The Merger Agreement was negotiated into the morning of August 19,
1996. The principal issues
20
<PAGE>
negotiated in connection with the Merger Agreement included the scope of the
representations and warranties, the conditions to the Purchaser's obligation to
complete the Offer, the conditions to the Purchaser's obligations to complete
the Merger, the circumstances under which a termination fee would be payable to
the Purchaser and the amount thereof.
On August 19, 1996, Parent, the Purchaser and the Company entered into the
Merger Agreement. The terms of the Merger Agreement are set forth in Section 12.
A copy of the Merger Agreement has been filed as an Exhibit to the Schedule
14D-1 filed by Parent with the Commission and is available for inspection and
copying in the manner set forth in Section 8.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE MERGER AGREEMENT
PURPOSE. The purpose of the Offer is to acquire for cash as many
outstanding Shares as possible as a first step to acquiring the entire equity
interest in the Company.
If the Purchaser acquires more than 50% of the outstanding Shares on a fully
diluted basis pursuant to the Offer, it will have the vote necessary under
Delaware law to approve the Merger. Under Delaware law, if Parent owns at least
90% of the outstanding Shares, the Merger may be effected without the vote of
the Company's stockholders. Therefore, if at least approximately 11,648,200
Shares (or such greater number as may be necessary if options are exercised) are
acquired pursuant to the Offer or otherwise, the Purchaser will be able to and
intends to effect the Merger without a meeting of holders of Shares.
Purchaser currently intends, as soon as practicable after consummation of
the Offer, to consummate the Merger and the acquisition of the entire equity
interest in the Company pursuant to the Merger Agreement.
PLANS FOR THE COMPANY. Pursuant to the Merger Agreement, following the
purchase of more than 50% of the outstanding Shares pursuant to the Offer,
Parent has the right to have persons designated by it become directors of the
Company so that the total number of such persons equals not less than a majority
of the total number of directors of the Company. In addition, in the Merger
Agreement, the Company has agreed to use its reasonable efforts to secure the
resignation of all but three directors or to increase the size of its Board of
Directors, or both to permit Parent's designees to be elected to the Company's
Board of Directors. Parent intends to exercise its rights with respect to such
designees as soon as possible after consummation of the Offer and expects to
appoint four to ten directors of the Company.
In connection with its consideration of the Offer, Purchaser has made a
preliminary review, and will continue to review, on the basis of available
information, various possible business strategies that it might consider upon
acquiring control of the Company. Such strategies are expected to allocate
production between facilities of the Company and the Parent so as to reduce
transportation costs and enhance production efficiency and also to seek to
reduce administrative and other overhead charges of the combined entities. If
Purchaser acquires Shares pursuant to the Offer, Purchaser intends to conduct a
detailed review of the Company and its assets, businesses, operations,
properties, policies, corporate structure, capitalization and the
responsibilities and qualifications of the Company's management and personnel
and consider what, if any, changes Purchaser deems desirable in light of the
circumstances which then exist, but Purchaser does not presently contemplate any
major changes in the operations of Parent or the Company.
Except as described above or elsewhere in this Offer to Purchase, Purchaser
has no present plans or proposals that would relate to or result in an
extraordinary corporate transaction involving the Company or any Subsidiaries
(such as a merger, reorganization, liquidation, relocation of any operations or
sale or other transfer of a material amount of assets), any change in the
Company's Board of Directors or management, any material change in the Company's
capitalization or dividend policy or any other material change in the Company's
corporate structure or business.
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THE MERGER AGREEMENT. The Merger Agreement provides that, promptly after
expiration of the Offer and the receipt of any required approval by the
Company's stockholders of the Merger Agreement and the satisfaction or waiver of
certain other conditions, the Company and the Purchaser will be merged. Upon
consummation of the Merger (the "Effective Time"), each then outstanding Share
not owned by any of the Purchaser Companies (other than Shares held by
Dissenting Stockholders) will be converted into the right to receive $20.50 in
cash, without interest thereon, or such greater amount which may be paid
pursuant to the Offer (the "Merger Consideration").
The Merger Agreement contains customary representations and warranties of
the Company and of the Purchaser. The representations and warranties of the
Company generally are qualified so that they are deemed accurate so long as the
inaccuracy would not have a Material Adverse Effect (as defined). Material
Adverse Effect is defined in the Merger Agreement to be a material adverse
effect on the financial condition, properties, business, results of operations
or prospects of the Company and its subsidiaries taken as a whole.
The Merger Agreement also contemplates the amendment, effective at the
Effective Time, of Article Fourth of the Company's Certificate of Incorporation
to provide that the aggregate number of shares which the Company shall have the
authority to issue is 1,000 shares of Common Stock, par value $.01 per share.
The obligations of the Company, the Purchaser and Parent to effect the
Merger are subject to the satisfaction of certain conditions set forth in the
Merger Agreement, including (i) the purchase by the Purchaser of Shares pursuant
to the Offer, (ii) the receipt of stockholder approval, if required, and any
required governmental consents or approvals and (iii) there being no injunction
or other order issued or any law enacted which prohibits the consummation of the
Merger or makes such consummation illegal.
According to its terms, the Merger Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of the Company, by the mutual consent of Parent and the Company by
action of their respective Boards of Directors. In addition, the Merger
Agreement may be terminated by either Parent or the Company if (i) the Purchaser
or any Purchaser Company shall have terminated the Offer without purchasing any
Shares pursuant thereto; provided, in the case of termination of the Merger
Agreement by Parent, such termination of the Offer does not constitute a breach
of the Merger Agreement and Parent is not in violation of the terms and
conditions of the Offer or (ii) without fault of the terminating party, the
Merger shall not have been consummated by March 31, 1997 whether or not such
date is before or after the approval by holders of Shares. The Merger Agreement
may be terminated by Parent (unless the Offer shall have been consummated and
persons designated by Parent shall constitute a majority of the members of the
Board of Directors of the Company) if (i) the Company shall have failed to
comply in any material respect with the covenants or agreements contained in the
Merger Agreement to be complied with or performed by the Company at or prior to
such date of termination and, with respect to any such failure that can be
remedied, the failure is not remedied within five business days after Purchaser
has furnished the Company with written notice of such failure, or (ii) the Board
of Directors of the Company has withdrawn or modified in a manner adverse to
Parent or the Purchaser its approval or recommendation of the Offer, the Merger
Agreement or the Merger or shall have resolved to do any of the foregoing. The
Merger Agreement may be terminated by the Company if Parent or the Purchaser (i)
shall have failed to comply in any material respect with the covenants or
agreements contained in the Merger Agreement to be complied with or performed by
Parent or the Purchaser at or prior to such date of termination and, with
respect to any such failure that can be remedied, the failure is not remedied
within five business days after the Company has furnished the Purchaser with
written notice of such failure, (ii) shall have failed to commence the Offer
within the time required or (iii) (x) if the Company is not in material breach
of any of the terms of the Merger Agreement, (y) the Board of Directors of the
Company receives an unsolicited written offer with respect to a merger,
consolidation or sale of all or substantially all of the Company's assets or an
unsolicited tender or exchange offer for the Shares is commenced, which the
Board of Directors of the Company determines in good faith
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is more favorable to the stockholders of the Company than the Offer and the
transactions contemplated by the Merger Agreement and the Board of Directors
determines, after consultation with its outside counsel that approval,
acceptance or recommendation of such transaction (an "Alternative Transaction")
is required in accordance with its fiduciary obligations under applicable law
and (z) the Company prior to such termination pays to Parent in same day funds
$7,000,000 plus an amount equal to Parent's out-of-pocket expenses, up to a
maximum of $3,000,000 including fees and expenses paid to investment bankers,
lawyers and financing sources incurred in connection with the transactions
contemplated by the Merger Agreement.
TAKEOVER PROPOSALS. The Company has agreed in the Merger Agreement that
neither it nor any of its subsidiaries nor any of the respective officers and
directors of the Company or its subsidiaries shall, and the Company shall direct
and use its best efforts to cause its employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by the Company or any of its subsidiaries) not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any proposal
or offer (including, without limitation, any proposal or offer to stockholders
of the Company) with respect to a merger, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, the Company or any of its subsidiaries (any such
proposal or offer being hereinafter referred to as an "Acquisition Proposal")
or, except as required to comply with the fiduciary duties of the Company's
Board of Directors under applicable law after consultation with outside counsel,
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal. The Company has agreed to notify Parent as promptly as
reasonably practicable if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated with the Company.
The Merger Agreement provides that if (x) (i) the Offer shall have remained
open for a minimum of at least 20 business days, (ii) after the date thereof any
corporation, partnership, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) other than Parent or the Purchaser or any of their
respective subsidiaries or affiliates (collectively, a "Person") shall have
become the beneficial owner of 15% or more of the outstanding Shares or any
Person shall have commenced, or shall have publicly announced an intention to
commence, a tender offer or exchange offer for 40% or more of the outstanding
Shares or made any other Acquisition Proposal, (iii) the Minimum Condition shall
not have been satisfied and the Offer is terminated without the purchase of any
Shares thereunder, and (iv) within six months following such termination, the
Company enters into an agreement with respect to an Acquisition Proposal with
any person or other entity other than Parent or any person or other entity
becomes the beneficial owner of 90% or more of the outstanding Shares in either
case at a price per Share of $20.50 or more, or (y) the Purchaser shall have
terminated the Merger Agreement as described in subclause (i) of the third
sentence of the second preceding paragraph at any time after any person shall
have made an Acquisition Proposal or the Company shall have taken any action
with respect to Acquisition Proposals that would be proscribed by the Merger
Agreement but for the exception therein allowing certain actions to be taken if
required by fiduciary duty or as described in subclause (ii) of the third
sentence of the second preceding paragraph and, in either such case, within six
months following such termination, the Company enters into an agreement with
respect to an Acquisition Proposal with any person other than Purchaser or any
person or other entity becomes the beneficial owner of 90% or more of the
outstanding Shares in either case at a price per Share of $20.50 or more or (z)
the Company shall terminate the Merger Agreement pursuant to subclause (iii) of
the last sentence of the second preceding paragraph, then the Company, if
requested by Parent, shall promptly, but in no event later than five days after
the date of such request (other than a termination pursuant to subclause (iii)
of the third sentence of the second preceding paragraph, in which case payment
shall be concurrent with termination) pay Parent a fee of $7,000,000 which
amount shall be payable in same day funds, plus an amount equal to Parent's
out-of-pocket expenses, up to a maximum of $3,000,000, including fees and
expenses paid to investment bankers, lawyers, and financing sources,
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incurred in connection with the transaction contemplated by the Merger
Agreement. If the Company fails to promptly pay such amount, and, in order to
obtain such payment, Parent or the Purchaser commences a suit which results in a
judgment against the Company for the fee set forth above, the Company shall pay
to Parent or the Purchaser its costs and expenses (including attorneys' fees) in
connection with such suit, together with interest on the amount of the fee at
the prime rate of Citibank N.A. on the date such payment was required to be
made.
The Merger Agreement may be amended by action taken by the Company, Parent
and the Purchaser at any time before or after approval of the Merger Agreement
by the stockholders of the Company but, after any such approval, no amendment
shall be made which decreases the Merger Consideration per Share or which
adversely affects the right of the Company's stockholders under the Merger
Agreement without the approval of such stockholders.
The Merger Agreement also provides that each holder of an outstanding option
to purchase Shares (an "Option") granted under any stock option plan of the
Company, whether or not then exercisable, shall be entitled to receive at or
after the Effective Time, an amount in cash in cancellation of such Option equal
to the excess of the Merger Consideration over the exercise price per Share of
such Option multiplied by the number of Shares previously subject to such
Option, less all applicable withholding taxes.
The Merger Agreement provides that (i) after the Effective Time, the
surviving corporation in the Merger will maintain the Company's existing
directors' and officers' liability insurance for a period of six years after the
Effective Time, provided that there shall be no obligation to pay annual
premiums in excess of 150% of the last annual premium paid prior to the date of
the Merger Agreement (the "Current Premium"), provided, however, if the existing
directors' and officers' liability insurance expires, is terminated or cancelled
during such six year period, the surviving corporation will use its best efforts
to obtain as much directors' and officers' liability insurance as can be
obtained for the remainder of such period for a premium not in excess of 150% of
the Current Premium, and (ii) that, from and after the Effective Time, Parent
will indemnify each former and present director and officer of the Company,
determined as of the Effective Time, for any claim, action, suit, proceeding or
investigation arising out of matters existing or occurring at or prior to the
Effective Time to the fullest extent permitted by applicable law.
Parent has agreed in the Merger Agreement that, during the period commencing
at the Effective Time and ending on December 31, 1997, Parent will cause the
Surviving Corporation to provide to employees of the Company and its
subsidiaries, who are employed by the Surviving Corporation or its subsidiaries
following the Effective Time ("Company Employees"), employee benefits which in
the aggregate are substantially comparable to those currently provided (other
than stock option plans, other equity-based plans and the Restated and Amended
Longevity Incentive Agreements, as amended) by the Company to such employees,
provided that employees covered by collective bargaining agreements need not be
provided such benefits.
Pursuant to the Merger Agreement, following the purchase of more than 50% of
the outstanding Shares pursuant to the Offer, Parent has the right to have
persons designated by it become directors of the Company so that the total
number of such persons equals not less than a majority of the total number of
directors of the Company.
In the Merger Agreement, the Company has agreed that it will file with the
Commission contemporaneously with the commencement of the Offer, and mail to its
stockholders, a Solicitation/Recommendation Statement on Schedule 14D-9
containing the recommendation of the Board that the Company's stockholders
accept the Offer and approve and adopt the Merger Agreement.
The Merger Agreement also contains certain other restrictions as to the
conduct of business by the Company pending the Merger, as well as
representations and warranties of each of the parties customary in transactions
of this kind.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, each stockholder of the Company
who has neither voted in favor of the Merger nor consented thereto in writing
will be entitled to an appraisal by the Delaware Court of Chancery of the
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fair value of such stockholder's Shares, exclusive of any element of value
arising from the accomplishment or expectation of the Merger, together with a
fair rate of interest, if any, to be paid. In determining such fair value, the
Court may consider all relevant factors. The value so determined could be more
or less than the consideration to be paid in the Offer and the Merger. Any
judicial determination of the fair value could be based upon considerations
other than or in addition to the market value of the Shares, including, among
other things, asset values and earning capacity.
RULE 13E-3. Rule 13e-3 under the Exchange Act, which Parent does not
believe would be applicable to the Merger, would require, among other things,
that certain financial information concerning the Company and certain
information relating to the fairness of the proposed transaction and the
consideration offered to stockholders of the Company therein, be filed with the
Commission and disclosed to stockholders of the Company prior to consummation of
the transaction.
There can be no assurance that the Merger will take place since the Merger
is subject to conditions discussed above which are beyond the control of Parent
and the Company. In the event that, for any reason, the Merger does not occur,
depending on the results of the Offer, Parent may, subject to restrictions which
may be applicable to it under the Merger Agreement as described below, consider
the desirability of acquiring additional Shares or the entire remaining equity
interest in the Company. If Parent determines to do either, any such future
transaction or transactions might be by means of a merger, reverse stock split,
open market or privately negotiated purchases, one or more additional tender
offers, exchange offers or otherwise. Such transactions might involve the
exchange of Shares for cash, securities of Parent, or some combination of cash
and securities, and may be on terms and at prices more or less favorable than
those of the Offer. Moreover, the decision to enter into such future
transactions and the forms they might take will depend on the circumstances then
existing, including the financial resources of the Company and Parent and
Parent's business, tax and accounting objectives, performance of the Shares in
the market, availability and alternative sources of funds, money market and
stock market conditions, general economic conditions and other factors.
The foregoing description of the Merger Agreement is qualified in its
entirety by reference to the text of the Merger Agreement, a copy of which has
been filed by Parent as an exhibit to the Schedule 14D-1 and may be obtained in
the manner described in Section 8. The foregoing description of the Merger
Agreement is qualified in its entirety by reference to that document.
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13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from declaring, setting aside or paying any dividends payable in cash, stock or
property with respect to the Shares. If, on or after August 22, 1996, the
Company should split, combine or otherwise change the Shares or its
capitalization, or shall disclose that it has taken any such action, then the
Purchaser, in its discretion, may make such adjustments in the Offer
consideration and other terms of the Offer as it deems appropriate to reflect
such split, combination or other change.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer and provided that the
Purchaser shall not be obligated to accept for payment any Shares until
expiration of all applicable waiting periods under the HSR Act, the Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the Commission, including Rule 14e-1 (c) promulgated under
the Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
or may delay the acceptance for payment of or payment for, any tendered Shares,
or may, in its sole discretion, terminate or amend the Offer as to any Shares
not then paid for if a majority of the total Shares outstanding on a fully
diluted basis and as will permit the Purchaser to effect the Merger without the
vote of any person other than the Purchaser shall not have been properly and
validly tendered pursuant to the Offer and not withdrawn prior to the Expiration
Date, or, if on or after August 19, 1996, and at or before the time of payment
for any such Shares (whether or not any of such Shares have theretofore been
accepted for payment), any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of, or
limitation on trading in securities on the NYSE or in the over-the-counter
market (other than a shortening of trading hours or any coordinated trading
halt triggered solely as a result of a specified increase or decrease in a
market index), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) a commencement
of a war or armed hostilities involving the United States and continuing for
at least three business days, or (iv) any material limitation (whether or
not mandatory) by any governmental or regulatory authority, agency,
commission or other domestic entity ("Governmental Entity"), on the
extension of credit by banks or other lending institutions and continuing
for at least three business days;
(b) the Company shall have breached or failed to perform in any material
respect its obligations, covenants or agreements under the Merger Agreement
and, with respect to any such failure that can be remedied, the failure is
not remedied within five business days after Parent has furnished the
Company written notice of such failure, or any representation or warranty of
the Company set forth in the Merger Agreement shall have been inaccurate or
incomplete in any material respect when made or thereafter shall become
inaccurate or incomplete in any material respect;
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action")
before any court of competent jurisdiction or other Governmental Entity by
any Governmental Entity: (i) challenging the acquisition by Parent or the
Purchaser of Shares or seeking to restrain or prohibit the consummation of
the transactions contemplated by the Offer or the Merger; (ii) seeking to
prohibit, or impose any material limitations on Parent's or the Purchaser's
ownership or operation of all or a material portion of their or the
Company's business or assets, or to compel Parent or the Purchaser to
dispose of or hold separate all or a material portion of Parent's or the
Purchaser's or the Company's business or assets; (iii) seeking to make the
acceptance for payment of, purchase of, or payment for, some or all of the
Shares illegal or rendering Parent or the Purchaser unable to, or
restricting or prohibiting, the ability of Parent or Purchaser to accept for
payment, purchase or pay for some or all of the Shares; or (iv) seeking to
impose material limitations on the ability of Parent or the Purchaser
effectively to acquire or hold or to exercise full rights of
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ownership of the Shares including, without limitation, the right to vote the
Shares purchased by them on an equal basis with all other Shares on all
matters properly presented to the stockholders of the Company;
(d) any statute, rule, regulation, order or injunction shall be enacted,
promulgated, entered, enforced or deemed to or become applicable to the
Offer or the Merger that results in any of the consequences referred to in
clauses (i) through (iv) of paragraph (c) above;
(e) any person, entity or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to a
tender offer or exchange offer for some portion or all of the Shares or a
merger, consolidation or other business combination with or involving the
Company;
(f) there shall be a Material Adverse Effect;
(g) the Board of Directors of the Company shall have withdrawn or
amended, or modified in a manner adverse to the Parent or Purchaser, its
recommendation of the Offer or the Merger, or shall have approved or
recommended any other Acquisition Proposal, or shall have resolved to do any
of the foregoing;
(h) the Merger Agreement shall have been terminated by the Company or
Parent or Purchaser in accordance with its terms or Parent or Purchaser
shall have reached an agreement or understanding in writing with the Company
providing for termination or amendment of the Offer or delay in payment for
the Shares;
which in the reasonable judgment of Parent and Purchaser, in any such case,
makes it inadvisable to proceed with the Offer and/or with such acceptance
for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such conditions or may be waived by Parent or the
Purchaser, by express and specific action to that effect, in whole or in part at
any time and from time to time in its sole discretion, except as otherwise
provided in the Merger Agreement. The failure of Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
15. CERTAIN LEGAL MATTERS
GENERAL. Except as otherwise disclosed herein, based upon an examination of
publicly available filings with respect to the Company, Parent and the Purchaser
are not aware of any licenses or other regulatory permits which appear to be
material to the business of the Company and which might be adversely affected by
the acquisition of Shares by the Purchaser pursuant to the Offer or of any
approval or other action by any governmental, administrative or regulatory
agency or authority which would be required for the acquisition or ownership of
Shares by the Purchaser pursuant to the Offer. Should any such approval or other
action be required, it is currently contemplated that such approval or action
would be sought or taken. There can be no assurance that any such approval or
action, if needed, would be obtained or, if obtained, that it will be obtained
without substantial conditions or that adverse consequences might not result to
the Company's or Parent's business or that certain parts of the Company's or
Parent's business might not have to be disposed of in the event that such
approvals were not obtained or such other actions were not taken, any of which
could cause the Purchaser to elect to terminate the Offer without the purchase
of the Shares thereunder. The Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to certain conditions. See Section 14.
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ANTITRUST COMPLIANCE. Under the HSR Act and the rules that have been
promulgated thereunder by the FTC, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by the Purchaser is subject to these
requirements. See Section 4 of this Offer to Purchase as to the effect of the
HSR Act on the timing of the Purchaser's obligation to accept Shares for
payment.
Pursuant to the HSR Act, Parent filed a Notification and Report Form with
respect to the acquisition of Shares pursuant to the Offer with the Antitrust
Division and the FTC on August 22, 1996. Under the provisions of the HSR Act
applicable to the purchase of Shares pursuant to the Offer, such purchases may
not be made until the expiration of a 15-calendar day waiting period following
the filing by Parent. Accordingly, the waiting period under the HSR Act will
expire at 11:59 p.m., New York City time, on September 6, 1996, unless early
termination of the waiting period is granted or Parent receives a request for
additional information or documentary material prior thereto. Pursuant to the
HSR Act, Parent has requested early termination of the waiting period applicable
to the Offer. There can be no assurances given, however, that the 15-day HSR Act
waiting period will be terminated early. If either the FTC or the Antitrust
Division were to request additional information or documentary material from
Parent, the waiting period would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Thereafter, the waiting period could be extended only by court
order. If the acquisition of Shares is delayed pursuant to a request by the FTC
or the Antitrust Division for additional information or documentary material
pursuant to the HSR Act, the purchase of and payment for Shares will be deferred
until 10 days after the request is substantially complied with unless the
waiting period is sooner terminated by the FTC or the Antitrust Division. See
Section 4. Only one extension of such waiting period pursuant to a request for
additional information is authorized by the rules promulgated under the HSR Act,
except by court order. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law. See
Section 3. Although the Company is required to file certain information and
documentary material with the Antitrust Division and the FTC in connection with
the Offer, neither the Company's failure to make such filings nor a request from
the Antitrust Division or the FTC for additional information or documentary
material made to the Company will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the Purchaser's
purchase of Shares, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or seeking divestiture of Shares acquired by the Purchaser or the
divestiture of substantial assets of Parent, the Company or any of their
respective subsidiaries. Private parties may also bring legal action under the
antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
its subsidiaries and the Company and its subsidiaries are involved, Parent and
the Purchaser believe that the Offer will not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if a challenge is made, what the result
will be. See Section 14 of this Offer to Purchase for certain conditions to the
Offer that could become applicable in the event of such a challenge.
FEDERAL RESERVE BOARD REGULATIONS. Regulations G, T, U and X (the "Margin
Regulations") promulgated by the Federal Reserve Board place restrictions on the
amount of credit that may be extended for the purpose of purchasing margin stock
(including the Shares) if such credit is secured directly or indirectly by
margin stock. Parent and the Purchaser believe that the financing of the
acquisition of the Shares will be in compliance with the Margin Regulations.
STATE TAKEOVER LAWS. A number of states have adopted laws and regulations
applicable to offers to acquire securities of corporations which are
incorporated in such states and/or which have substantial
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assets, stockholders, principal executive offices or principal places of
business therein. In EDGAR v. MITE Corporation, the Supreme Court of the United
States held that the Illinois Business Takeover Statute, which made the takeover
of certain corporations more difficult, imposed a substantial burden on
interstate commerce and was therefore unconstitutional. In CTS CORPORATION v.
DYNAMICS CORPORATION OF AMERICA, the Supreme Court held that as a matter of
corporate law, and in particular, those laws concerning corporate governance, a
state may constitutionally disqualify an acquiror of "Control Shares" (ones
representing ownership in excess of certain voting power thresholds e.g. 20%, 33
l/3% or 50%) of a corporation incorporated in its state and meeting certain
other jurisdictional requirements from exercising voting power with respect to
those shares without the approval of a majority of the disinterested
stockholders.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined as any
beneficial owner of 15% or more of the outstanding voting stock of the
corporation) unless, among other things, the corporation's board of directors
has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." The Company's Board of Directors has approved the Merger Agreement
and the Purchaser's acquisition of Shares pursuant to the Offer and therefore,
Section 203 of DGCL is inapplicable to the Merger.
Section 1707.041 of the Ohio Revised Code ("Section 041") provides that no
control bid for any securities of a subject company shall be made pursuant to a
tender offer until the offeror files with the Ohio Division of Securities (the
"Division") the information prescribed in division (A)(2) of Section 041. That
information is generally included in Parent's Offer to Purchase. A subject
company means an issuer that (A) owns or controls assets within Ohio that have a
fair market value of at least one million dollars or satisfies certain other
criteria and (B) either (i) more than ten percent of its beneficial or record
equity security holders are resident in Ohio, (ii) more than ten percent of its
equity securities are owned beneficially or of record by residents in Ohio or
(iii) more than one thousand of its beneficial or record equity security holders
are resident in Ohio. Parent and Purchaser are unable to determine if the
Company satisfies the criteria in (B) above to be a subject company, or if
Section 041 is constitutional as applied to a Delaware corporation such as the
Company, but Parent and Purchaser have determined to make the filing
contemplated by Section 041 and will make such filing on August 22, 1996. Within
three calendar days of the date of filing by Parent and the Purchaser, the
Division may by order summarily suspend continuation of the control bid if the
Division determines that all the information has not been provided by the
offeror or the control bid materials provided to offerees do not provide full
information to offerees of all material information concerning the control bid,
which suspension shall remain in effect until a hearing held by the Division
within ten calendar days of the date on which the suspension is imposed.
Based on information supplied by the Company, the Purchaser does not believe
that any other state takeover statutes purport to apply to the Offer and the
Merger. The Purchaser has not complied with any other state takeover laws.
Should any government official or third party seek to apply any state takeover
law to the Offer, the Purchaser will take such action as then appears desirable
and currently anticipates that it will contest the validity of such statute in
appropriate court proceedings.
If it is asserted that one or more state takeover laws applies to the Offer
and it is not determined by an appropriate court that such act or acts do not
apply or are invalid as applied to the Offer, the Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment any Shares tendered. See Section 14.
29
<PAGE>
16. FEES AND EXPENSES
Morgan Stanley is acting as Dealer Manager in connection with the Offer and
has provided certain financial advisory services to the Purchaser in connection
therewith. The Purchaser has agreed to pay Morgan Stanley as compensation for
its services as Dealer Manager and as financial advisors in connection with the
Offer as follows: (1) an "advisory fee" of between $300,000 and $500,000 in the
aggregate, which is payable if no acquisition has been consummated, (2) a
"commencement fee" of $750,000, which is currently payable and (3) a
"transaction fee" of approximately $2.9 million, payable if Parent acquires
beneficial ownership of more than 50% of the outstanding Shares, against which
the "commencement fee" and the "advisory fee", if previously paid, will be
credited.
The Purchaser has agreed to reimburse Morgan Stanley for its reasonable
out-of-pocket expenses, including the fees and expenses of its counsel, in
connection with the Offer, and has agreed to indemnify Morgan Stanley against
certain liabilities and expenses in connection with the Offer, including
liabilities under the federal securities laws. From time to time, Morgan Stanley
has provided and continues to provide investment banking and financial advisory
services to Parent as underwriters and financial advisors. In the ordinary
course of Morgan Stanley's trading and brokerage activities, Morgan Stanley or
its affiliates may at any time hold long or short positions, may trade or
otherwise effect transactions, for its own account or for the account of
customers, in equity securities or senior loans of Parent or the Company.
The Purchaser has also retained D.F. King & Co. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interviews and may
request brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners of Shares. The Information Agent will
receive $7,500 for such services, plus reimbursement of out-of-pocket expenses,
and the Purchaser will indemnify the Information Agent against certain
liabilities and expenses in connection with the Offer, including liabilities
under the federal securities laws.
The Purchaser will pay the Depositary reasonable and customary compensation
for its services in connection with the Offer, plus reimbursement for
out-of-pocket expenses, and will indemnify the Depositary against certain
liabilities and expenses in connection therewith, including liabilities under
the federal securities laws. Brokers, dealers, commercial banks and trust
companies will be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
When the securities or blue sky laws of a jurisdiction require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed made on behalf
of the Purchaser by the Dealer Manager or one or more registered brokers or
dealers which are licensed under the laws of such jurisdiction.
Neither the Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction.
The Purchaser and Parent have filed with the Commission a Statement on
Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer, and may file amendments thereto. Such Statement and any
30
<PAGE>
amendments thereto, including exhibits, may be examined and copies may be
obtained from the principal office of the Commission in Washington, D.C. and the
NYSE in the manner set forth in Section 8.
No person has been authorized to give any information or make any
representation on behalf of Parent or the Purchaser not contained in this Offer
to Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
CALC CORPORATION
August 22, 1996
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
The following sets forth the name, business address, present principal
occupation and material positions and occupations within the past five years of
each director and executive officer of Parent. Each person listed below is of
United States citizenship (except for Mr. MacDonald who is a British citizen)
and, unless otherwise specified, has his principal business address at the
offices of the Parent, 1200 Meidinger Tower, Louisville, Kentucky.
PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD
NAME AND BUSINESS ADDRESS DURING PAST FIVE YEARS, AND BUSINESS ADDRESS THEREOF
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mark V. Kaminski........................................ Director, President and Chief Executive Officer of
Parent since 1991. Director, President and Chief
Executive Officer of Purchaser since August 1996.
Paul E. Lego............................................ Chairman of the Board of Parent, Director since 1995;
Chairman and Chief Executive Officer of Westinghouse
Electric Corporation, 1990-93.
Catherine G. Burke...................................... Director of Parent since 1995; Faculty of the School of
Public Administration at the University of Southern
California Los Angeles, CA since 1973.
John E. Merow........................................... Director of Parent since 1995; Director of Purchaser
since August 1996; Partner of Sullivan & Cromwell since
1965; Chairman of Sullivan & Cromwell, 125 Broad Street,
New York, NY, 1987-94.
Victor Torasso.......................................... Director of Parent since 1995; Management Consultant to
aluminum industry since 1990.
Donald L. Marsh, Jr..................................... Vice President Finance, Chief Financial Officer and
Secretary of Parent since March 1996; Senior Vice
President Development, Castle Energy Corporation,
1995-96; Chief Financial Officer, Castle Energy
Corporation, One Radnor Corporate Center, Suite 250,
Radnor, PA, 1993-95; President, Earned Interest Inc., 20
Leigh Street, Clinton, NJ, 1986-93; Vice President
Finance, Chief Financial Officer and Secretary of
Purchaser since August 1996.
Scott T. Davis ......................................... Vice President Operations of Parent since 1994;
1372 State Road 1957 Production Planning Manager of Parent, 1992-94; Casting
P.O. Box 480 Manager, 1989-92.
Lewisport, KY 42351
Roderick Macdonald...................................... Vice President Human Resources of Parent since July
1994; Production Planning Manager of Parent, 1992-94;
Operations Manager of Casting of Parent, 1989-92.
James K. O'Donnell...................................... Vice President Engineering and Technology of Parent
since 1992; Manager of Engineering Planning of Parent,
1985-92.
Daniel L. Smith......................................... Vice President Information Technology of Parent since
1995; Partner/Director Organization Resource Group, 7903
Elm Ave., Suite 124, Rancho Cucamonga, CA, 1989-95.
William G. Toler........................................ Vice President Materials of Parent since February 1996;
Acting Chief Financial Officer of Parent, 1995; Manager
of Business Analysis of Parent, 1991-95.
John J. Wasz............................................ Vice President Marketing and Sales of Parent since
December 1993; Distribution Marketing Manager of Parent,
1991-93.
</TABLE>
S-1
<PAGE>
The following sets forth the name, business address, present principal
occupation and material positions and occupations within the past five years of
each director and executive officer of the Purchaser. Each person listed below
is of United States citizenship and, unless otherwise specified, has his
principal business address at the offices of the Purchaser, 1200 Meidinger
Tower, Louisville, Kentucky.
PURCHASER
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD
NAME AND BUSINESS ADDRESS DURING PAST FIVE YEARS, AND BUSINESS ADDRESS THEREOF
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mark V. Kaminski........................................ Director, President and Chief Executive Officer of
Purchaser since August 1996; Director, President and
Chief Executive Officer of Parent since 1991.
John E. Merow........................................... Director of Purchaser since August 1996; Director of
Parent since 1995; Partner of Sullivan & Cromwell since
1965; Chairman of Sullivan & Cromwell, 125 Broad Street,
New York, NY, 1987-94.
Donald L. Marsh, Jr..................................... Vice President Finance, Chief Financial Officer and
Secretary of Purchaser since August 1996. Vice President
Finance, Chief Financial Officer and Secretary of Parent
since March 1996; Senior Vice President, Castle Energy
Corporation, 1995-96; Chief Financial Officer, Castle
Energy Corporation, One Radnor Corporate Center, Suite
250, Radnor, PA, 1993-95; President, Earned Interest
Inc., 20 Leigh Street, Clinton, NJ, 1986-93.
Gregory A. Hann......................................... Controller and Assistant Secretary of Purchaser since
August 1996. Controller of Parent since 1991.
</TABLE>
S-2
<PAGE>
The Letter of Transmittal, certificates for the Shares and any other
required documents should be sent by each stockholder of the Company or his
broker-dealer, commercial bank, trust company or other nominee to the Depositary
as follows:
THE DEPOSITARY IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
First Chicago Trust Company (For Eligible Institutions First Chicago Trust Company
of Only) of
New York (201) 222-4760 New York
Tenders & Exchanges or Tenders & Exchanges
Suite 4660-CTA (201) 222-4721 Suite 4680-CTA
P.O. Box 2569 Confirm Receipt of Notice of 14 Wall Street,
Jersey City, NJ 07303-2569 Guaranteed Delivery 8th Floor
(201) 222-4707 New York, NY 10005
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(800) 848-3410 (Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY & CO.
INCORPORATED
1585 Broadway
New York, New York 10036
(212) 761-7897
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
PURSUANT TO THE OFFER TO PURCHASE DATED AUGUST 22, 1996
BY
CALC CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
COMMONWEALTH ALUMINUM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, SEPTEMBER 19, 1996, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660--CTA Suite 4680--CTA
P.O. Box 2569 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 New York, NY 10005
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at a Book-Entry Transfer Facility, as
defined in and pursuant to the procedures set forth in Section 2 of the Offer to
Purchase. Stockholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and other stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for Shares
are not immediately available or who cannot comply with the procedure for
book-entry transfer on a timely basis, or who cannot deliver all required
documents to the Depositary prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase)
<PAGE>
may tender their Shares in accordance with the guaranteed delivery procedure set
forth in Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
Name(s) and Address(es) of Registered Owner(s)
(Please fill in if blank, exactly as name(s) appear(s) Share Tendered
on certificate(s)) (Attach additional list if necessary)
<S> <C> <C> <C>
Total Number
of Shares
Represented Number
Certificate by of Shares
Number(s)(1) Certificate(s)(1) Tendered(2)
Total Shares
(1)Need not be completed by Book-Entry Stockholders.
(2)Unless otherwise indicated, it will be assumed that all Shares described above are being
tendered. See Instruction 4.
</TABLE>
2
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT
ARE PARTICIPANTS IN THE SYSTEM OF ANY BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution __________________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depositary Trust Company
/ / Philadelphia Depositary Trust Company
Account Number _________________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s) _________________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
If delivered by book-entry transfer, check box:
/ / The Depositary Trust Company
/ / Philadelphia Depositary Trust Company
Account Number _________________________________________________________________
Transaction Code Number ____________________________________________________
3
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to CALC Corporation, a Delaware corporation
(the "Purchaser"), which is a wholly-owned subsidiary of Commonwealth Aluminum
Corporation, a Delaware corporation ("Parent"), the above-described shares of
common stock, par value $0.01 per share (the "Shares"), of CasTech Aluminum
Group Inc., a Delaware corporation (the "Company"), pursuant to the Purchaser's
Offer to Purchase dated August 22, 1996 (the "Offer to Purchase") all of the
outstanding Shares at a price of $20.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Offer to Purchase, constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, from time to time, in whole or in part, to one or more of its
affiliates, the right to purchase the Shares tendered herewith.
Upon the terms and conditions of the Offer, subject to, and effective upon,
acceptance for payment of, and payment for, the Shares tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser, all right, title and
interest in and to all of the Shares that are being tendered hereby and any and
all cash dividends, distributions, rights, other Shares or other securities
issued or issuable in respect of such Shares on or after August 22, 1996
(collectively, "Distributions"), and appoints First Chicago Trust Company of New
York (the "Depositary") the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any Distributions) with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to the full extent of such stockholder's rights with
respect to such Shares (and any Distributions) (a) to deliver such Share
Certificates (as defined herein) (and any Distributions) or transfer ownership
of such Shares (and any Distributions) on the account books maintained by a
Book-Entry Transfer Facility, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser,
(b) to present such Shares (and any Distributions) for transfer on the books of
the Company and (c) to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distributions), all in accordance
with the terms and the conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of the Purchaser,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to the full extent of such stockholder's rights
with respect to the Shares tendered hereby which have been accepted for payment
and with respect to any Distributions. The designees of the Purchaser will, with
respect to the Shares (and any associated Distributions) for which the
appointment is effective, be empowered to exercise all voting and any other
rights of such stockholder, as they, in their sole discretion, may deem proper
at any annual, special or adjourned meeting of the Company's stockholders, by
written consent in lieu of any such meeting or otherwise. This proxy and power
of attorney shall be irrevocable and coupled with an interest in the tendered
Shares. Such appointment is effective when, and only to the extent that, the
Purchaser deposits the payment for such Shares with the Depositary. Upon the
effectiveness of such appointment, without further action, all prior powers of
attorney, proxies and consents given by the undersigned with respect to such
Shares (and any associated Distributions) will be revoked, and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective). The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser must
be able to exercise full voting rights with respect to such Shares (and any
associated Distributions), including voting at any meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares (and any
Distributions) tendered hereby and, when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment,
4
<PAGE>
and transfer of the Shares (and any Distributions) tendered hereby. In addition,
the undersigned shall promptly remit and transfer to the Depositary for the
account of the Purchaser any and all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer; and,
pending such remittance or appropriate assurance thereof, the Purchaser shall be
entitled to all rights and privileges as owner of any such Distributions and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by the Purchaser in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned and any obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that the valid tender of Shares pursuant to one
of the procedures described in Section 2 of the Offer to Purchase will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
owner(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered owner(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or issue any certificates for Shares not tendered or accepted
for payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. The
undersigned recognizes that Purchaser has no obligation pursuant to the Special
Payment Instructions to transfer any Shares from the name of the registered
owner thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
5
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if certificate(s) To be completed ONLY if certificate(s)
for Shares not tendered or not accepted for Shares not tendered or not accepted
for payment and/or the check for the for payment and/or the check for the
purchase price of Shares accepted for purchase price of Shares purchased are
payment are to be issued in the name of to be sent to someone other than the
someone other than the undersigned. undersigned, or to the undersigned at
an address other than that shown above.
Issue: / / Check Issue: / / Check
/ / Certificate(s) to: / / Certificate(s) to:
Name: Name:
(Please (Please Print)
Print) Address:
Address:
(Include Zip Code)
(Include Zip
Code)
(Tax Identification or Social
Security No.)
</TABLE>
6
<PAGE>
IMPORTANT
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
Signature(s) of Holder(s)
Dated: , 1996
(Must be signed by registered owner(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 owner(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 5.)
Name(s)
(Please Print)
Capacity (Full Title)
Address
(Including Zip Code)
(Area Code and Telephone No.) (Tax
Identification or Social Security No.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
Name
(Please Type or Print)
Address
(Include Zip Code)
Name of Firm
Dated: , 1996
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered owners (which term, for purposes of this
document, includes any participant in any of the Book-Entry Transfer Facilities'
systems whose name appears on a security position listing such participant as
the owner of the Shares) of Shares tendered herewith and such registered owner
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5 of this Letter of Transmittal.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This Letter of Transmittal is to be used either if certificates
are to be forwarded herewith or if tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in Section 2 of the Offer
to Purchase. Certificates for all physically tendered Shares ("Share
Certificates"), or confirmation of any book-entry transfer into the Depositary's
account at one of the Book-Entry Transfer Facilities of Shares tendered by
book-entry transfer, as well as this Letter of Transmittal properly completed
and duly executed 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 herein on or prior to the
Expiration Date (as defined in the Offer to Purchase).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver all other required documents to the Depositary on or prior to
the Expiration Date or who cannot comply with the procedures for book-entry
transfer on a timely basis may nevertheless tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Purchaser must be
received by the Depositary prior to the Expiration Date; and (iii) Share
Certificates or confirmation of any book-entry transfer into the Depositary's
account at a Depository Institution of Shares tendered by book-entry transfer,
as well as a Letter of Transmittal, properly completed and duly executed with
any required signature guarantees, (or in the case of a book-entry transfer, an
Agent's Message) and all other documents required by this Letter of Transmittal,
must be received by the Depositary within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
IF SHARE CERTIFICATES ARE FORWARDED SEPARATELY TO THE DEPOSITARY, A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL MUST ACCOMPANY EACH SUCH
DELIVERY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT SUCH CERTIFICATES AND DOCUMENTS BE SENT BY REGISTERED
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
8
<PAGE>
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new certificate(s) for the remainder
of the Shares that were evidenced by your old certificate(s) will be sent to the
registered owner, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. All
Shares represented by certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered owners of the Shares
tendered hereby, the signature must correspond with the names as written on the
face of the certificates without alteration, enlargement or any other change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued in
the name of, a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner of the certificates(s) listed, the certificate(s) must be
endorsed or accompanied by the appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or holders appear on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or (in
the circumstances permitted hereby) if certificates for Shares not tendered or
accepted for payment are to be registered in the name of, any person other than
the registered owner, 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 owner or
such person) payable on account of the transfer to such person will be deducted
from the purchase price if satisfactory evidence of the payment of such taxes,
or exemption therefrom, is not submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be mailed to
a person other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses set forth below or
9
<PAGE>
from your broker, dealer, commercial bank or trust company. Additional copies of
the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and other tender offer materials may be obtained from the Information
Agent.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the stockholder's social security or federal employer identification number, on
Substitute Form W-9 below. Failure to provide the information on the form may
subject the tendering stockholder to 31% federal income tax withholding on the
payment of the purchase price. The box in Part 3 of the form may be checked if
the tendering stockholder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future. If the box in Part 3 is
checked and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price thereafter
until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (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.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is his or her social security number. If a
stockholder fails to provide a TIN to the Depositary, such stockholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that 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 additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder or payee. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares or of
the last transferee appearing on the transfers attached to, or endorsed on, the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(See Instruction 9)
10
<PAGE>
<TABLE>
<S> <C> <C> <C>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY SIGNING Social security number
AND DATING BELOW OR
Employer identification
number
PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued to
DEPARTMENT OF me); and
THE TREASURY (2) I am not subject to backup withholding because (i) I am exempt
INTERNAL REVENUE from backup withholding, (ii) I have not been notified by the Internal
SERVICE 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 2 above if you have been notified by the IRS
that you are subject to backup withholding because of
PAYER'S REQUEST FOR under-reporting interest or dividends on your tax
TAXPAYER return. However, if after being notified by the IRS that
IDENTIFICATION you were subject to backup withholding you received
NUMBER (TIN)
another notification from the IRS stating that you are
no longer subject to backup withholding, do not cross
out item (2).
SIGNATURE DATE PART 3
NAME (Please Print) AWAITING
TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (i) 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 (ii) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number within 60 days, 31% of all reportable payments made to
me thereafter will be withheld until I provide a number to the Depositary.
<TABLE>
<S> <C>
Signature Date
Name (Please Print)
</TABLE>
11
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(800) 848-3410 (Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
MORGANSTANLEY & CO.
INCORPORATED
1585 Broadway
New York, New York 10036
(212) 761-7897
12
<PAGE>
Exhibit (a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
AT
$20.50 NET PER SHARE
BY
CALC CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
COMMONWEALTH ALUMINUM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, SEPTEMBER 19, 1996 UNLESS THE OFFER IS EXTENDED.
August 22, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by CALC Corporation, a Delaware corporation (the
"Purchaser"), a wholly-owned subsidiary of Commonwealth Aluminum Corporation, a
Delaware corporation ("Parent"), to act as Dealer Manager in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of CasTech Aluminum Group Inc., a Delaware
corporation (the "Company"), at $20.50 per share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Purchaser's Offer
to Purchase dated August 22, 1996 and the related Letter of Transmittal (which
together constitute the "Offer"). Please furnish copies of the enclosed
materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
Enclosed herewith are the following documents:
1. Offer to Purchase dated August 22, 1996;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. The Letter to Stockholders of the Company from the Chairman and Chief
Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to First Chicago Trust Company of New York, the
Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH WILL CONSTITUTE AT LEAST A MAJORITY OF
<PAGE>
THE TOTAL SHARES OUTSTANDING ON A FULLY DILUTED BASIS AND AS WILL PERMIT THE
PURCHASER TO EFFECT THE MERGER WITHOUT THE VOTE OF ANY PERSON OTHER THAN THE
PURCHASER AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE
TO THE PURCHASE OF THE SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN
TERMINATED.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, SEPTEMBER 19, 1996 UNLESS THE OFFER IS EXTENDED.
The Board of Directors of the Company has unanimously approved the Offer and
the Merger and determined that the terms of the Offer and the Merger are fair
to, and in the best interests of, the Company and its stockholders and
unanimously recommends that the Company's stockholders accept the Offer and
tender their Shares.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of August 19, 1996 (the "Merger Agreement"), among the Company, Parent and
the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company and each outstanding Share
other than Shares owned by Parent, the Purchaser or any other subsidiary of
Parent and Shares which are held by stockholders exercising appraisal rights
pursuant to Section 262 of the Delaware General Corporation Law will be
converted into and represent the right to receive $20.50 in cash. The Merger
Agreement is more fully described in the Offer to Purchase.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely Book-Entry Confirmation (as defined in
the Offer to Purchase) of the book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase) pursuant to the procedures set forth in Section 2 of the
Offer to Purchase), (ii) the Letter of Transmittal, properly completed and duly
executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase))
and (iii) any other documents required by such Letter of Transmittal. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent as disclosed in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed
upon request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your clients.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of the enclosed Offer to Purchase. Requests for
additional copies of the enclosed materials may be directed to the Information
Agent.
Very truly yours,
MORGAN STANLEY & CO.
INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEALER MANAGER, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR
MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT
CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
AT
$20.50 NET PER SHARE
BY
CALC CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
COMMONWEALTH ALUMINUM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, SEPTEMBER 19, 1996, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 22,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by CALC Corporation, a
Delaware corporation (the "Purchaser"), which is a wholly-owned subsidiary of
Commonwealth Aluminum Corporation, a Delaware corporation ("Parent"), to
purchase for cash all outstanding shares of common stock, par value $0.01 per
share (the "Shares"), of CasTech Aluminum Group Inc., a Delaware corporation
(the "Company"), upon the terms and subject to the conditions set forth in the
Offer. Also enclosed is the Letter to Stockholders of the Company from the
President and Chief Executive Officer of the Company accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer price is $20.50 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions of the
Offer.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously approved the Offer
and the Merger (as defined below) and determined that the terms of the
Offer and the Merger are fair to, and in the best interests of, the
Company and its stockholders and unanimously recommends that the
Company's stockholders accept the Offer and tender their Shares.
<PAGE>
4. The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of August 19, 1996 (the "Merger Agreement"), among the Company,
Parent and the Purchaser, pursuant to which, after the completion of the
Offer, the Purchaser will be merged with and into the Company (the
"Merger") and each outstanding Share other than Shares owned by Parent,
Purchaser or any other subsidiary of Parent and Shares which are held by
stockholders exercising appraisal rights pursuant to Section 262 of the
Delaware General Corporation Law will be converted into and represent the
right to receive $20.50 in cash. The Merger Agreement is more fully
described in Section 12 of the Offer to Purchase.
5. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, SEPTEMBER 19, 1996, UNLESS THE OFFER IS EXTENDED BY
THE PURCHASER (THE "EXPIRATION DATE").
6. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares that would represent a majority of all outstanding
Shares on a fully diluted basis and as will permit the Purchaser to
effect the Merger without the vote of any person other than Purchaser and
(2) any waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations thereunder applicable to the
purchase of Shares pursuant to the Offer having expired or been
terminated.
7. Any stock transfer taxes applicable to a sale of Shares to the Purchaser
will be borne by the Purchaser, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the Expiration Date.
Payment for Shares accepted for payment pursuant to the Offer will be in all
cases be made only after timely receipt by First Chicago Trust Company of New
York (the "Depositary"), of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such Shares,
(b) a Letter of Transmittal, properly completed and duly executed, with any
required signature guarantees, or, in the case of a book-entry transfer effected
pursuant to the procedure set forth in Section 2 of the Offer to Purchase, an
Agent's Message, and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities or blue sky laws require
the Offer to made by a licensed broker or dealer, the Offer will be deemed made
on behalf of the Purchaser by Morgan Stanley & Co. Incorporated, the Dealer
Manager for the Offer, or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction. An envelope in which to return
your instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise indicated in such instruction
form. Please forward your instructions to us as soon as possible to allow us
ample time to tender Shares on your behalf prior to the expiration of the Offer.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase
of CALC Corporation dated August 22, 1996 (the "Offer to Purchase"), and the
related Letter of Transmittal relating to shares of common stock, par value
$0.01 per share (the "Shares"), of CasTech Aluminum Group Inc., a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase and related Letter of Transmittal.
SIGN HERE
NUMBER OF SHARES TO BE TENDERED:*
________________ SHARES
- ------------------------------------------------
<TABLE>
<S> <C>
DAYTIME AREA CODE ------------------------------------------------
AND TEL. NO. SIGNATURE(S)
TAXPAYER IDENTIFICATION ------------------------------------------------
NO. OR SOCIAL
SECURITY NO.
DATED: , 1996 ------------------------------------------------
(PLEASE PRINT NAME(S) AND ADDRESS(ES))
</TABLE>
- ---------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
<PAGE>
Exhibit (a)(5)
================================================================================
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated August
22, 1996, and the related Letter of Transmittal and any amendments or
supplements thereto and is being made to all holders of Shares. The Offer is not
being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed to be made on
behalf of the Purchaser by the Dealer Manager or one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
CasTech Aluminum Group Inc.
at
$20.50 Net Per Share
by
CALC Corporation
a wholly owned subsidiary of
Commonwealth Aluminum Corporation
CALC Corporation, a Delaware corporation (the "Purchaser"), which is a
wholly owned subsidiary of Commonwealth Aluminum Corporation, a Delaware
corporation ("Parent"), is offering to purchase all of the outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of CasTech Aluminum
Group Inc., a Delaware corporation (the "Company"), at $20.50 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated August 22, 1996, and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Tendering stockholders will not be
obligated to pay brokerage fees or commissions or, subject to Instruction 6 of
<PAGE>
the Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. The purpose of the Offer is to acquire for cash
as many outstanding Shares as possible as a first step in acquiring the entire
equity interest in the Company. Following the consummation of the Offer, the
Purchaser intends to effect the merger described below.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, SEPTEMBER 19, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered prior to the expiration of the Offer and not withdrawn a number of
Shares which will constitute at least a majority of the total Shares outstanding
on a fully diluted basis, and as will permit the Purchaser to effect the Merger
(as defined below) without the vote of any person other than the Purchaser, and
(ii) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the regulations thereunder applicable to the purchase
of the Shares pursuant to the Offer having expired or been terminated. See
Section 14 of the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of August 19, 1996, among the Company, Parent and
the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company (the "Merger"). On the
effective date of the Merger, each outstanding Share other than Shares owned by
Parent, the Purchaser or any other subsidiary of Parent and Shares which are
held by stockholders exercising appraisal rights pursuant to Section 262 of the
Delaware General Corporation Law will be converted into and represent the right
to receive $20.50 in cash. The Merger Agreement is more fully described in
Section 12 of the Offer to Purchase.
The Board of Directors of the Company has unanimously approved the Offer
and the Merger and determined that the terms of the Offer and the Merger are
fair to, and in the best interests of, the Company and its stockholders and
unanimously recommends that the Company's stockholders accept the Offer and
tender their Shares.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Purchaser gives oral or written notice to First Chicago Trust Company of New
York (the "Depositary") of its acceptance for payment of such Shares pursuant to
the Offer. Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
<PAGE>
act as agent for the tendering stockholders for the purpose of receiving
payments from the Purchaser and transmitting such payments to the tendering
stockholders. Under no circumstances will interest on the purchase price for
Shares be paid, regardless of any delay in making such payment.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares or timely 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 (each a "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 2 of the Offer to
Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message (as defined in Section 2 of
the Offer to Purchase)) and (iii) any other documents required by such Letter of
Transmittal.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission, the Purchaser expressly
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. Any such extension will also
be publicly announced by press release issued no later than 9:00 A.M., New York
City time, on the next business day after the previously scheduled expiration
date of the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
expiration of the Offer and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after October
20, 1996.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any such 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 the names in which the certificate(s) evidencing the Shares to be withdrawn
are registered, if different from that of the person who tendered such Shares.
If certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the name of the registered holder and the serial numbers shown on
such certificates must also be submitted to the Depositary and, unless such
Shares have been tendered for the account of any Eligible Institution (as
defined in Section 2 of the Offer to Purchase), the signature on the notice of
<PAGE>
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures for such withdrawal, in which case a notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph. Withdrawals of
tenders of Shares may not be rescinded, and any Shares properly withdrawn will
thereafter be deemed not validly tendered for the purposes of the Offer.
However, withdrawn Shares may be retendered by again following one of the
procedures described above in Section 2 of the Offer to Purchase at any time on
or prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase).
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the Letter of Transmittal and, if
required, other relevant materials, will be mailed by the Purchaser to record
holders of Shares and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the 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.
The Offer to Purchase and Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth below. Requests for additional copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in its
sole discretion, which determination shall be final and binding.
The Information Agent for the Offer is:
<PAGE>
D. F. King & Co., Inc.
77 Water Street
New York, NY 10005
(800) 848-3410 (Toll Free)
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7897
August 22, 1996
================================================================================
<PAGE>
Exhibit (a)(6)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
CASTECH ALUMINUM GROUP INC.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto may be used to accept the Offer (as
defined below) if certificates for shares of common stock, par value $0.01 per
share (the "Shares"), of CasTech Aluminum Group Inc., a Delaware corporation
(the "Company"), are not immediately available, or if the procedure for
book-entry transfer cannot be complied with on a timely basis, or all required
documents cannot be delivered to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). This form may be delivered by
hand to the Depositary or transmitted by telegram, facsimile transmission or
mail to the Depositary and must include a guarantee by an Eligible Institution
(as defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer
to Purchase.
THE DEPOSITARY:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION BY HAND OR OVERNIGHT COURIER:
(FOR ELIGIBLE INSTITUTIONS
ONLY):
First Chicago Trust Company (201) 222-4720 First Chicago Trust Company
of or of
New York (201) 222-4721 New York
Tenders & Exchanges Confirm by Telephone: Tenders & Exchanges
Suite 4660-CTA (201) 222-4707 Suite 4680-CTA
P.O. Box 2569 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 New York, NY 10005
</TABLE>
------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES 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 thereto, 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 CALC Corporation, a Delaware corporation
(the "Purchaser"), which is a wholly-owned subsidiary of Commonwealth Aluminum
Corporation, a Delaware corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 22, 1996 (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 set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
Certificate Nos. -------------------------------------------
(if available): -------------------------------------------
- ------------------------------------------- Please Print
- ------------------------------------------- Address(es):
(CHECK ONE BOX IF SHARES -------------------------------------------
WILL BE TENDERED BY BOOK-ENTRY TRANSFER) Zip Code
/ / The Depository Trust Company Daytime Area Code
/ / Philadelphia Depository Trust Company and Tel. No.:
Account Number: Signature(s):
Dated: -------------------------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), and any other required documents, within three trading days after the
date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm: Authorized Signature
Address: Name:
Zip Code Please Print
Title:
Area Code and Tel. No.: Dated:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
Exhibit (a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
- ----------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
</TABLE>
- ----------------------------------------------------------
<TABLE>
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individuals(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
5. Sole proprietorship account The owner(3)
6. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(4)
</TABLE>
- ----------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
</TABLE>
- ----------------------------------------------------------
<TABLE>
<C> <S> <C>
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership The partnership
10. Association, club or other The organization
tax-exempt organization
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local
government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
- ----------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) Penalty For Failure To Furnish Taxpayer Identification Number. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Civil Penalty For False Information With Respect To Withholding. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty For Falsifying Information. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit (a)(8)
FOR IMMEDIATE RELEASE:
Monday, August 19, 1996
COMMONWEALTH ALUMINUM CORPORATION TO ACQUIRE
CASTECH ALUMINUM GROUP INC. FOR $20.50 IN CASH
New York, N.Y. (August 19, 1996) -- Commonwealth Aluminum
Corporation ("Commonwealth")(Nasdaq/NM:CALC) and Castech Aluminum Group Inc.
("CasTech") (NYSE:CTA) today jointly announced that they have entered into an
agreement that provides for Commonwealth to acquire all of the outstanding
shares of CasTech for $20.50 per share in cash. The acquisition will create the
largest independent aluminum rolling operation in the United States. The
combined entity will have operations located in Louisville and Lewisport,
Kentucky, Akron, Bedford and Uhrichsville, Ohio, and Carson, Long Beach and
Torrance, California, and will have annual shipments in excess of 900 million
pounds of aluminum sheet and over 475 million feet of electrical wiring
products. Commonwealth, a low cost producer of common alloy sheet through the
traditional direct chill casting technology, will acquire the leading
manufacturer of continuous cast aluminum sheet. Commonwealth President and Chief
Executive Officer, Mark V. Kaminski, said, "CasTech is one of the technological
leaders in continuous casting. Its patents and proprietary know-how put the
combined entity in a unique position to create opportunities for international
growth."
Commonwealth will commence a cash tender offer for all shares
of CasTech common stock within five business days at a price of $20.50 a
share, the companies said. The offer will be conditioned on, among other
things, at least a majority of the fully diluted shares of CasTech common
stock being validly tendered. The merger agreement contemplates that
shares not purchased in the tender offer will receive $20.50 per share in a
subsequent merger. Commonwealth has obtained a financing commitment for
the acquisition from National Westminster Bank, Plc; the tender will not be
contingent on financing.
Kaminski said, "This transaction positions Commonwealth to
better and more efficiently serve our customers and to reduce our
production costs and earnings volatility. The acquisition of CasTech is
expected to be accretive to Commonwealth's earnings in the first full year
of combined operations and promises to provide significant
<PAGE> 2
value to our shareholders and expanded opportunities for the employees of
both CasTech and Commonwealth. Above all, this combination will provide
Commonwealth with a unique opportunity to accelerate and expand its growth
in new aluminum markets. Furthermore, the acquisition of CasTech's ALFLEX
Division provides additional growth opportunities in the flexible conduit,
cable and electrical products markets."
CasTech's President, Norman E. Wells, Jr., stated, "I am
extremely proud of CasTech's accomplishments over the past several years.
The combination of these two groups will make Commonwealth a technological
leader in the aluminum industry -- well positioned for strong future
growth."
Commonwealth, a leading manufacturer of aluminum sheet in the
transportation, construction and consumer durables end-user markets, is
headquartered in Kentucky, posted sales of $672 million in 1995 and employs
approximately 1,100 people.
CasTech and its subsidiaries are the nation's leading
manufacturer of continuous cast aluminum sheet. The Company manufactures
aluminum sheet from recycled aluminum utilizing low cost, scrap-based mini-
mill production technology. The Company is also a leading manufacturer of
electrical flexible conduit and prewired armored cable, which are made
principally from aluminum sheet manufactured by the Company. CasTech
posted sales of $418 million in calendar year 1995, has 825 employees and
is domiciled in California.
Commonwealth is being advised by Morgan Stanley & Co.
Incorporated, who will also act as dealer manager on this transaction.
CasTech is being advised by Merrill Lynch & Co.
For further information contact Henry E. Ford, Manager of
Investor Relations for Commonwealth at 502-295-5372.
<PAGE>
Exhibit (b)(1)
August 18, 1996
The Board of Directors
Commonwealth Aluminum Corporation
120 Meidinger Tower
Louisville
Kentucky 40202
Attention: Mark V. Kaminski & Donald L. Marsh, Jr.
Ladies and Gentlemen:
You have advised National Westminster Bank Plc ("NatWest") and NatWest
Capital Markets Limited ("NWCM", and together with NatWest and their respective
affiliates, the "NATWEST ENTITIES") that Commonwealth Aluminum Corporation, a
Delaware corporation (the "BORROWER"), purposes to make a tender offer, either
directly or through a special purpose vehicle (the "TENDER OFFER") for not less
than 51% of the issued and outstanding shares of common stock (the "TARGET
SHARES") of CasTech Aluminum Group, Inc. (the "TARGET") and thereafter merge, or
cause such special purpose vehicle to merge, into the Target (the "MERGER")
pursuant to an agreement and plan of merger (the "MERGER AGREEMENT"), to be
entered into by the Borrower and the Target (the company surviving such merger,
"NEW CALC"). The Tender Offer and the Merger are herein referred to as the
"ACQUISITION". The Acquisition will be approved by the board of directors of
each of the Borrower and the Target and such approval shall not have been
withdrawn or qualified in a manner adverse to the Borrower. The price at which
the Target Shares are to be acquired by the Borrower, or its special purpose
vehicle, will not exceed $20.50 per share. The Tender Offer will be conditioned
upon the receipt of a sufficient number of the Target Shares that would enable
the Borrower, voting without any of the other shareholders of the Target, to
approve and effect the Merger.
We understand that total funds and commitments of up to $425,000,000 are
required to finance the consummation of the Acquisition, including the
refinancing of existing indebtedness of the Borrower and its subsidiaries in an
amount approximating $45,500,000, refinancing indebtedness of the Target and its
subsidiaries of approximately $35,500,000 and payment of fees, commissions and
expenses payable in connection therewith as well as to provide financing for
working capital and other general corporate purposes of the Borrower and its
subsidiaries. You have requested that senior secured credit facilities of
$425,000,000 (the "Senior Secured Facilities") be
<PAGE>
2
made available to the Borrower as part of such transaction. No external
financing will be required for the foregoing other than the "Senior Secured
Facilities.
NatWest is pleased to offer to commit to provide the entire amount of the
Senior Secured Facilities described in the Senior Secured Facilities Term Sheet
annexed hereto as Exhibit A (the "SENIOR SECURED FACILITIES TERM SHEET") on the
terms and conditions set forth herein or therein and on the terms and conditions
set forth in the letter dated as of the date hereof addressed by NatWest and
NWCM to you providing, among other things, for certain fees and other
consideration ("the FEE LETTER").
The NatWest Entities reserve the right to syndicate, directly or indirectly
through one or more of its affiliates all, or a portion of, the Senior Secured
Facilities to a group of banks and/or other financial institutions acceptable to
the NatWest Entities (including NatWest, the "SENIOR SECURED LENDERS").
The NatWest Entities have reviewed certain historical and projected
financial information relating to the Target provided to the NatWest Entities by
you and your advisors, Morgan Stanley. NatWest may terminate its obligation
under this letter to provide the Senior Secured Facilities: (i) if the terms of
the proposed transaction as described in the first paragraph hereof are
materially changed or if any information submitted to any of the NatWest
Entities by or on behalf of the Borrower or the Target proves to have been
materially inaccurate; or (ii) if any of the fees provided for by the Fee Letter
are not paid when due. In addition, NatWest's obligations under this letter are
subject to the negotiation, execution and delivery of mutually satisfactory
financing documentation.
By acceptance of the letter, the Borrower hereby agrees to indemnify and
hold harmless, each of the NatWest Entities and the other Senior Secured Lenders
and each director, officer, employee and affiliate thereof (each, an
"INDEMNIFIED PERSON") from and against any and all losses, claims, damages,
liabilities (or actions or other proceedings commenced or threatened in respect
thereof) and expenses that arise out of, result from or in any way relate to
this letter, the Senior Secured Facilities Term Sheet or the Fee Letter, or in
connection with the Acquisition or other transactions contemplated hereby or the
provision or syndication of the Senior Secured Facilities, and to reimburse each
indemnified person, upon its demand, for any reasonable legal or other expenses
incurred in connection with investigating, defending or participating in any
such loss, claim, damage, liability or action or other proceeding (whether or
not such indemnified person is a party to any action or proceeding out of which
any such expenses arise), other than any of the foregoing claimed by any
indemnified person to the extent incurred by reason of the gross negligence or
willful misconduct of such person. No NatWest Entity and no other Senior
Secured Lender shall be responsible or liable to the Borrower, the Target or any
other person for any consequential damages that may be alleged as a result of
this letter. In addition, the Borrower hereby agrees to reimburse the NatWest
Entities, from time to time, upon demand from the NatWest Entities for their
respective out-of-pocket costs and expenses (including, without limitation,
legal fees and expenses, appraisal
<PAGE>
3
fees and printing, reproduction, document delivery, communication and publicity
costs) incurred in connection with the syndication of the Senior Secured
Facilities and the preparation, review, negotiation, execution and delivery of
this letter, the Fee Letter, the definitive financing agreements for the Senior
Secured Facilities and the other documents relating to the Acquisition.
Your obligations under this paragraph shall survive any termination of
this letter and shall be effective regardless of whether the definitive
financing agreements are executed. The foregoing provisions of this paragraph
shall be in addition to any rights that the NatWest Entities or any other
indemnified person may have at common law or otherwise.
You agree that, so long as this commitment from NatWest is in effect, you
will not accept or solicit any offer or commitment from, or execute any
agreement with, any other potential source of the financing for the Acquisition
without NatWest's prior written consent.
You acknowledge that one or more NatWest Entities may be providing debt
financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you or your affiliates or the
Target may have conflicting interests. No NatWest Entity will use confidential
information obtained from you by virtue of the transactions contemplated by this
letter or its other relationships with you in connection with the performance of
services by such NatWest Entity for other companies, and no NatWest Entity will
furnish any such information to such other companies. You acknowledge that the
NatWest Entities have no obligation to use, in connection with the transactions
contemplated by this letter, or to furnish to you or any of your affiliates or
the Target, confidential information obtained from other companies.
This letter is delivered to you upon the condition that, prior to your
acceptance of this offer, neither the existence of this letter, the Senior
Secured Facilities Term Sheet or the Fee Letter nor any of their contents shall
be disclosed by you except: (i) as may be compelled to be disclosed in a
judicial or administrative proceeding or as otherwise required by law or (ii) on
a confidential and "need to know" basis, to your directors, officers, employees,
advisors. If you make or permit any such disclosure in violation of this
paragraph, you shall be deemed, at the NatWest Entities option, to have accepted
and agreed to this letter and the Fee Letter and be obligated to the NatWest
Entities as provided herein or therein.
The NatWest Entities shall have the right to review and approve all
public announcements and filings relating to the Acquisition that refer to the
NatWest Entities, the other Senior Secured Lenders or the terms of the Senior
Secured Facilities before they are made (such approval not to be unreasonably
withheld). As part of its due diligence prior to closing, the NatWest Entities
shall have a right of access to all facilities owned by the Borrower, Target and
their respective subsidiaries.
<PAGE>
4
The NatWest Entities offer set forth in this letter will terminate at 6:00
p.m. (New York City time) on August 19, 1996 unless you accept this letter and
the Fee Letter at or prior to that time by signing and returning to NatWest
counterparts of this letter and the Fee Letter. NatWest's commitment under this
letter, if accepted by you, will in any event, terminate at 5:00 p.m. (New York
City time) on November 29, 1996 if the initial funding of the Senior Secured
Facilities shall not have occurred on or prior to such date.
This letter and the Fee Letter may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement, and this letter, the Senior Secured
Facilities Term Sheet and the Fee Letter may not be assigned by you without the
prior written consent of the NatWest Entities and may not be amended or any
provision hereof or thereof waived or modified except by an instrument in
writing signed by each of the parties hereto. No person or entity (including,
without limitation, the Target and its affiliates) other than the parties hereto
shall have any rights under or be entitled to rely upon this letter, the Senior
Secured Facilities Term Sheet or the Fee Letter. This letter, the Senior
Secured Facilities Term Sheet and the Fee Letter shall be governed by and
construed in accordance with the internal laws of the State of New York.
<PAGE>
5
We look forward to working with you to complete this transaction.
Very truly yours,
NATIONAL WESTMINSTER BANK PLC
By:________________________
Title:
ACCEPTED AND AGREED:
COMMONWEALTH ALUMINUM CORPORATION
By:___________________________
Title:
<PAGE>
EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS
$425,000,000 SENIOR SECURED CREDIT FACILITIES
Capitalized terms used herein and not defined herein have the meanings
set forth in the letter (the "COMMITMENT LETTER") to which this Summary of Terms
and Conditions is annexed.
BORROWER: Commonwealth Aluminum Corporation ("CALC") and
designated subsidiaries of CALC as agreed.
ARRANGER: National Westminster Bank Plc ("NATWEST").
ADMINISTRATIVE AGENT: NatWest.
LENDERS: Such institutions deemed acceptable by NatWest and the
Borrower.
PURPOSE: To provide part of the financing required to consummate
the Acquisition, to refinance certain existing
indebtedness of the Borrower and its subsidiaries and
Target and its subsidiaries and to pay related fees,
commissions and expenses, and to finance the ongoing
working capital requirements and other general
corporate purposes of the Borrower and its
subsidiaries.
MERGER DATE: The date on which the Merger is effective.
TENDER OFFER
CLOSING: The date of the closing of the Tender Offer.
TENDER OFFER
<PAGE>
FACILITIES: $425,000,000 of Senior Credit Facilities (collectively,
the "TENDER OFFER FACILITIES"), to consist of:
A. $100,000,000 Senior Secured Term A Tender Offer
Facility: "TERM LOAN A TENDER OFFER FACILITY"
B. $100,000,000 Senior Secured Term B Tender Offer
Facility: "TERM LOAN B TENDER OFFER FACILITY"
C. $225,000,000 Senior Secured Revolving Credit
Facility: "REVOLVING CREDIT TENDER OFFER
FACILITY"
$175,000,000 of the Revolving Credit Tender Offer
Facility will be available to the Borrower and
$50,000,000 of the Revolving Credit Tender Offer
Facility will be available to the Target. The
Revolving Credit Tender Offer Facility will include a
sublimit (to be agreed) for letters of credit.
Availability under the Revolving Credit Facility will
be determined by a borrowing base (see below).
MERGER FACILITIES: $425,000,000 of Senior Credit Facilities, to consist
of:
A. $100,000,000 Senior Secured Term A Facility:
"TERM LOAN A MERGER FACILITY" (each of the Term
Loan A Tender Offer Facility and the Term Loan A
Merger Facility a "TERM LOAN A FACILITY").
B. $100,000,000 Senior Secured Term B Facility:
"TERM LOAN B MERGER FACILITY" (each of the Term
Loan B Tender Offer Facility and the Term
2
<PAGE>
Loan B Merger Facility, a "TERM LOAN B FACILITY").
C. $225,000,000 Senior Secured Revolving Credit
Facility: "REVOLVING CREDIT MERGER FACILITY"
(each of the Revolving Credit Merger Facility and
the Revolving Credit Tender Offer Facility, a
"REVOLVING CREDIT FACILITY").
The Revolving Credit Merger Facility will include a
sublimit (to be agreed) for letters of credit. A
maximum of $160,000,000 to be drawn at closing.
Availability under the Revolving Credit Facility will
be determined by a borrowing base (see below).
AVAILABILITY: TENDER OFFER TERM LOAN FACILITY: Drawings may be made
at any time from and including the Tender Offer Closing
to but excluding the Merger Date for the purpose of
funding the purchase of the shares of Target,
refinancing existing indebtedness of the Borrower and
its subsidiaries and Target and its subsidiaries and
paying certain transaction fees and expenses, but no
later than November 29, 1996.
TENDER OFFER REVOLVING CREDIT FACILITY: Drawings may
be made at any time from and including the Tender Offer
Closing to but excluding the Merger Date but no later
than November 29, 1996. In addition, at no time shall
the aggregate principal amount of loans outstanding
under this Facility exceed the Borrowing Base referred
to below. This facility shall either be made directly
to the operating companies or to the Borrower with
appropriate mechanisms for
3
<PAGE>
downstreaming the proceeds to the operating companies.
TERM LOAN MERGER FACILITIES: A single drawing under
each of the Term Loan A Merger Facility and the Term
Loan B Merger Facility may be made on the Merger Date,
the proceeds of which, together with the proceeds of
revolving credit loans made on the Merger Date, will be
applied to refinance all outstanding loans under the
Tender Offer Facilities and to fund other costs of the
Acquisition payable on the Merger Date.
REVOLVING CREDIT MERGER FACILITY: Drawings may be made
at any time from the Merger Date to but excluding the
date occurring five years after the Tender Offer
Closing. In addition, at no time shall the aggregate
principal amount of loans outstanding under this
Facility exceed the Borrowing Base referred to below.
This facility shall either be made directly to the
operating companies or to the Borrower with appropriate
mechanisms for downstreaming the proceeds to the
operating companies.
INTEREST RATES: At the Borrower's option, loans will bear interest at:
(1) Base Rate + Applicable Margin; or
(2) LIBOR Rate + Applicable Margin for 1, 2, 3, or 6
month interest periods.
The Base Rate is defined as the higher of (i) the Bank
prime loan rate published by the Board of Governors of
the Federal Reserve System in Federal Reserve
Statistical Release H.15(519)
4
<PAGE>
entitled "Selected Interest Rates" and (ii) the federal
funds rate + 1/2 of 1%.
The Applicable Margin and
Non-Utilization Fee for the Term Loan A Facility and
the Revolving Credit Facility shall be determined on
the basis of the ratio of the trailing twelve month
EBITDA, for the period ending 6/30/96, of the Borrower
to its Senior Debt outstanding on the Merger Date and
recalculated in the event Term Loan B is drawn:
<TABLE>
<CAPTION>
APPLICABLE MARGIN APPLICABLE MARGIN
Term Loan A and Revolving Term Loan A and Revolving
Credit Facility Credit Facility
Assuming Senior Unsecured Assuming Senior
NON-UTILIZATION FEE Notes or Term Loan B Subordinated Notes
Senior Debt to Revolving Credit BASE RATE LIBOR BASE RATE LIBOR RATE
EBITDA Ratio Facility MARGIN RATE MARGIN MARGIN MARGIN
<S> <C> <C> <C> <C> <C>
Less than 1 0.175% 0.00% 0.50% 0.00% 0.50%
Greater than 1.0 Less than 2.0 0.20% 0.00% 0.75% 0.00% 0.75%
Greater than 2.0 Less than 2.5 0.25% 0.00% 1.25% 0.00% 1.00%
Greater than 2.5 Less than 3.0 0.25% 0.25% 1.50% 0.00% 1.25%
Greater than 3.0 Less than 3.5 0.375% 0.50% 1.75% 0.25% 1.50%
Greater than 3.5 Less than 4.0 0.375% 0.75% 2.00% 0.50% 1.75%
Greater than 4.0 Less than 4.25 0.375% 1.00% 2.25% 0.75% 2.00%
Greater than 4.25 0.50% 1.25% 2.50% 1.00% 2.25%
</TABLE>
It shall be assumed for purposes of the Tender
Offer Facilities that the Senior Debt to EBITDA
Ratio is greater than 4.25 to 1.
5
<PAGE>
The Applicable Margin for the Term Loan B Facility
shall equal:
BASE RATE MARGIN LIBOR RATE MARGIN
Term Loan B Facility: 1.75% 3.00%
The credit agreement governing the Facilities (the
"CREDIT AGREEMENT") will include standard protective
provisions for such matters as increased costs, funding
losses, capital adequacy, reserve adjustments,
illegality and withholding taxes.
Interest in respect of Base Rate loans shall be payable
quarterly in arrears on the first business day of each
quarter. Interest in respect of LIBOR loans shall be
payable at the end of the applicable interest period,
but not less frequently than quarterly. All interest
on all LIBOR loans and fees is calculated on the basis
of the actual number of days elapsed and a 360-day year
(and in the case of Base Rate loans, a 365-day year).
After and during the continuance of any event of
default, all loans and other amounts will bear interest
at 2% above the base rate plus the applicable margin.
L/C FEE: A percentage rate equal to the applicable margin under
Term Loan A applied on the average daily outstanding
face amount of L/C's from the date of issuance to date
of termination, payable quarterly in arrears on the
first day of each calendar quarter, at expiration, and
thereafter, on demand. Each L/C shall expire no later
than the earlier of (a) twelve months after its date of
issuance and (b) the fifth business day prior to
maturity of the Revolving
6
<PAGE>
Credit Facility. Drawings under any L/C shall be
reimbursed by the Borrower on the same business day.
Customary issuance fees are to be paid to the
L/C issuer.
LIBOR BREAKAGE FEE: The Borrower shall reimburse the Lenders for all
losses, expenses and liabilities including, but not
limited to, those incurred in connection with the
redeployment of funds upon payment of any LIBOR loan on
any day other than the last day of the interest period
applicable thereto.
NONUTILIZATION FEE: A per annum fee calculated on the unused portion of the
Revolving Credit Facility commencing on the date of
signing of the Credit Agreement, payable quarterly in
arrears.
MATURITY: The Tender Offer Facilities shall be repaid on the
earlier of (i) the date 90 days after the Tender Offer
Closing and (ii) the Merger Date. The Revolving Credit
Merger Facility shall be repaid in full, five years
from the Tender Offering Closing. The Term Loan Merger
Facilities shall be repaid in the following aggregate
amounts in quarterly installments ($ in millions):
YEAR TERM LOAN A TERM LOAN B
---- ------------ -----------
1 $ 5.0 million $ 1.0 million
2 10.0 1.0
3 20.0 1.0
4 30.0 1.0
5 35.0 1.0
6 ------ 30.0
7 65.0
------
TOTAL $100.0 $100.0
AGENT'S
ADMINISTRATIVE FEE: $60,000 per annum payable for the account of NatWest.
7
<PAGE>
MANDATORY PREPAYMENTS: (1) If no Term Loan B is outstanding, mandatory
prepayments will be required from (a) 100% of the net
proceeds from asset sales, with customary exceptions
for reinvestment in the business, (b) 100% of the net
proceeds from issuances of debt (other than permitted
refinancings), with customary exceptions, and (c) a to-
be-agreed percentage of the net proceeds from equity
issuances or capital contributions, with customary
exceptions. Mandatory prepayments shall be applied,
in inverse order to maturity, to Term Loan A and
thereafter to the remaining Revolving Credit Commitment.
Once the Borrower achieves, (i) Total Debt to TTM
EBITDA of less than 3:1 and TTM EBITDA to Total
Interest Expense of greater than 3:1; or (ii) an
investment grade rating from both S&P or Moodys, there
will be: (a) no requirement to use debt or equity
proceeds to retire debt; (b) the basket for asset sales
that do not have to be applied to repayment of debt
will be increased; and (c) the restriction on future
acquisitions will be relaxed.
(2) If any Term Loan B is outstanding, in addition to
the prepayments required above, the following mandatory
prepayment provisions will apply:
Mandatory prepayments will be required additionally
from (a) 75% of Excess Cash Flow (defined below) until
such time as 50% of the Term Loan Facilities have been
repaid, and (b) 50% of Excess Cash Flow after such time
as 50% of the Term Loan Facilities have been repaid.
8
<PAGE>
Mandatory prepayments shall be applied, in inverse
order to maturity, first to the Term Loans on a pro-
rata basis to Term Loans A and B and thereafter to the
remaining Revolving Credit commitment.
Once the Borrower achieves, (i) Total Debt to TTM
EBITDA of less than 2.5:1 and TTM EBITDA to Total
Interest Expense of greater than 3:1; or (ii) an
investment grade rating from both S&P or Moodys, there
will be no requirement to make mandatory repayments
under the Excess Cash Flow sweep.
Excess Cash Flow is defined as EBITDA less current
taxes paid or payable for the period, less cash
interest, less scheduled principal payments, less
capital expenditures, less the lower of $2,400,000 and
the amount of any dividends paid in the period.
VOLUNTARY PREPAYMENTS: Permitted in whole or in part, without premium or
penalty (other than breakage costs). Voluntary
Prepayments will be applied first to scheduled payments
due within one year and then pro-rata to remaining
scheduled Term Loan payments. LIBOR loans may only be
prepaid on the last day of the interest period.
GUARANTEES: The Facilities will be guaranteed, on a joint and
several basis by a holding company, if any, and the
Borrower's subsidiaries.
SECURITY: Term Loan A, Term Loan B and the Revolving Credit
Facility will be secured, on a pari passu basis, by a
perfected first priority security interest in all of
the assets, tangible and intangible (including real
property interests), and the capital stock of any
current and future subsidiaries, with
9
<PAGE>
such exceptions as agreed to by NatWest. The Tender
Offer Facilities will not be secured, directly or
indirectly, by shares of the Target; provided that the
proceeds of any sale of shares of the Target will be
placed in escrow and applied to the prepayment of the
Tender Offer Term Facilities.
DOCUMENTATION: The Facilities will be subject to the negotiation,
execution and delivery of a definitive Credit
Agreement, security agreements and other support
documentation satisfactory to the Administrative Agent.
Such Credit Agreement will contain representations and
warranties, conditions precedent, covenants, events of
default and other provisions appropriate for
transactions of this type.
CONDITIONS PRECEDENT
AND REPRESENTATIONS
AND WARRANTIES: The Administrative Agent will need to be reasonably
satisfied:
a) with the terms of the credit and security
agreements, including financial covenants, and all
other legal documents (relating to the
Acquisition) as well as compliance with applicable
laws;
b) that the purchase price of the shares of Target
does not exceed $20.50 per share and that the fees
and expenses in connection with the Acquisition do
not exceed $17 million;
c) that the Borrower will hedge an appropriate
portion (to be agreed between NatWest and the
Borrower) of its interest rate exposure by
entering into an interest rate cap
10
<PAGE>
or such other hedging instrument as may be agreed;
d) with a solvency opinion addressed to the
Administrative Agent for the benefit of the
Lenders signed by the CFO of CALC;
e) that there has been no material adverse change in
the business, properties, assets, operations,
conditions (financial or otherwise), or prospects
of the Target;
f) (only with respect to borrowings from and after
the Merger Date) that there has been no material
adverse change in the business, properties,
assets, operations, conditions (financial or
otherwise), or prospects of CALC and its
subsidiaries (including the Target) taken as a
whole since December 31, 1995 (other than the
Merger);
g) that the Borrower has retained a placement agent
for the purpose of placing a debt issue under
rule 144a of The Securities Act of 1933 (as
amended);
h) that the principal conditions to the consummation
of the Tender Offer shall have been satisfied and
shall not have been waived and the Borrower shall
have accepted for payment pursuant to the Tender
Offer at least a majority of the outstanding
shares of the Target; and the Borrower has
delivered to the Administrative Agent irrevocable
consents to the Merger (along with certified
resolutions
11
<PAGE>
of the Board of Directors and a certificate of
ownership and merger) to ensure that the Merger
will be consummated as promptly as possible after
the closing of the Tender Offer;
i) that the Borrower shall have caused the Target to
verify the material accuracy of all factual
statements and other information provided by the
Target and its employees to ENVIRON that are
contained in the Update of Environmental
Assessment dated August 16, 1996 from ENVIRON,
except for any inaccuracies or omissions that
would not result in a material adverse effect on
the business, properties, assets, operations,
conditions (financial or otherwise), or prospects
of the Target; and
j) that it has received customary legal opinions.
ONGOING CONDITIONS PRECEDENT TO REVOLVING CREDIT
BORROWINGS:
i) accuracy of representations and warranties;
ii) absence of default and material litigation;
iii) authority, government approvals;
iv) Borrowing Base -- 85% of eligible receivables (to
be agreed), 50% of finished goods and raw material
inventory and 35% of work in progress inventory
(subject to customary exclusions; the Borrowing
Base may be separately determined for each
operating subsidiary); and
12
<PAGE>
v) payment of fees.
All costs and expenses relating to the satisfaction of
the above pre-conditions will be for the account of the
Borrower.
COVENANTS: Typical covenants for a transaction of this type and
applicable to the Borrower and its subsidiaries
including, but not limited to:
- limitation on liens,
- limitation on debt (including contingent
obligations),
- limitation on mergers and acquisitions,
- limitation on loans and investments,
- limitation on sale of assets or stock,
- limitation on affiliate transactions,
- limitation on capital expenditures,
- limitation on dividends and other restricted
payments,
- prohibition on prepayments, purchases, redemptions
or modifications of junior indebtedness.
Financial Covenants will include:
- minimum EBITDA,
- minimum Senior and Total Interest Coverage Ratios,
- minimum Fixed Charge Coverage Ratios,
- maximum Leverage Ratios.
Definitions:
EBITDA -- Net income plus interest, taxes, depreciation
and amortization plus extraordinary losses minus
extraordinary gains.
Senior Interest Coverage Ratio -- EBITDA divided by
Senior Interest Expense.
Total Interest Coverage Ratio -- EBITDA divided by
Total Interest Expense.
Fixed Charge Ratios -- EBITDA divided by Total Interest
Expense plus required amortization of Senior Debt.
Leverage Ratio -- Total Indebtedness of the Borrower
divided by EBITDA.
NatWest will determine the levels of Financial
Covenants prior to closing.
13
<PAGE>
EVENTS OF DEFAULT: Typical for transactions of this type, including
(without limitation) payments, misrepresentations,
covenant defaults, bankruptcy, ERISA, judgments, and
cross defaults, subject, in certain cases, to notice
and grace provisions to be agreed. There will be a
change in control event of default (to be defined) or
requirement for mandatory prepayment in full in the
event of a change of control.
VOTING RIGHTS: Lenders holding 51% or more of the commitments (subject
to certain unanimous or class voting rights).
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender may assign all or a portion of its loans
and commitments under the Facilities subject to consent
of the Administrative Agent and (in the case of
Commitments) the Borrower (not to be unreasonably
withheld) or sell participations therein, to another
person or persons. Assignments will be in an amount
not less than $5.0 million or all of the Lender's
interest and will be subject to an assignment fee of
$3,500 payable to the Administrative Agent.
Participants will have no voting rights other than
those customarily available in participations, such as
changes to principal, rate, fees and term, and
indemnity rights limited to those available to the
assigning lender.
EXPENSES: The expenses of the Administrative Agent relating to
the arrangement and syndication of the transaction,
including but not limited to reasonable attorney's
fees, will be for the account of the Borrower whether
or not the transaction closes.
GOVERNING LAW: New York.
14
<PAGE>
<PAGE> 1
Exhibit (c)(1)
Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of August 19, 1996, among CASTECH ALUMINUM GROUP
INC., a Delaware corporation (the "Company"), COMMONWEALTH ALUMINUM
CORPORATION, a Delaware corporation ("Purchaser"), and CALC CORPORATION, a
Delaware corporation and a wholly-owned subsidiary of Purchaser ("Merger
Sub"), the Company and Merger Sub sometimes being hereinafter collectively
referred to as the "Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the Company
each have determined that it is in the best interests of their respective
shareholders for Purchaser to acquire the Company upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company, Purchaser and Merger Sub desire to make
certain representations, warranties, covenants and agreements in connection
with this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein the
parties hereto hereby agree as follows:
ARTICLE I
The Tender Offer
1.1. Tender Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Article IX hereof and none of the
events set forth in Annex A hereto shall have occurred or be existing,
within five business days of the date hereof, Merger Sub will commence a
tender offer (the "Offer") for all of the outstanding common stock, par
value $0.01 per share (the "Shares"), of the Company at a price of $20.50
per Share in cash, net to the seller. The obligation of Merger Sub to
accept for payment and pay for Shares tendered pursuant to the Offer shall
be subject only to the satisfaction or waiver of the conditions to the
Offer set forth in Annex A hereto. Without the prior written consent of
the Company, Merger Sub shall not (i) change or waive the Minimum Condition
(as defined in Annex A), (ii) reduce the number of
<PAGE> 2
Shares subject to the Offer, (iii) reduce the price per Share to be paid
pursuant to the Offer, (iv) extend the Offer if all of the conditions to
the Offer are satisfied or waived, (v) change the form of consideration
payable in the Offer, or (vi) amend, modify, or add to the conditions of
the Offer in any manner adverse to the holders of Shares. So long as this
Agreement is in effect and the conditions to the Offer have not been
satisfied or waived, at the request of the Company, Merger Sub shall extend
the Offer for an aggregate period of not more than 10 business days beyond
the originally scheduled expiration date of the Offer. Subject to the
terms and conditions of the Offer, Purchaser will promptly pay for all
Shares tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration of the Offer. The Company's Board of
Directors shall recommend acceptance of the Offer to its stockholders in a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9") to be filed with the Securities and Exchange Commission (the "SEC")
upon commencement of the Offer; provided, however, that if the Company's
Board of Directors determines consistent with its fiduciary duties to amend
or withdraw its recommendation, such amendment or withdrawal shall not
constitute a breach of this Agreement.
(b) Purchaser agrees, as to the Offer to Purchase and related
Letter of Transmittal (which together constitute the "Offer Documents") and
the Company agrees, as to the Schedule 14D-9, that such documents shall, in
all material respects, comply with the requirements of the Exchange Act and
the rules and regulations thereunder and other applicable laws. The
Company and its counsel, as to the Offer Documents, and Merger Sub and its
counsel, as to the Schedule 14D-9, shall be given an opportunity to review
such documents prior to their being filed with the SEC.
(c) In connection with the Offer, the Company will cause its
Transfer Agent to furnish promptly to Merger Sub a list, as of a recent
date, of the record holders of Shares and their addresses, as well as
mailing labels containing the names and addresses of all record holders of
Shares and lists of security positions of Shares held in stock deposito-
ries. The Company will furnish Merger Sub with such additional information
(including, but not limited to, updated lists of holders of Shares and
their addresses, mailing labels and lists of security positions) and such
other assistance as Purchaser or Merger Sub or their agents may reasonably
request in communicating the Offer to the record and beneficial holders of
Shares. All such information shall be held subject to the letter
agreement, dated July 26, 1996 (the "Confidentiality Agreement"),
<PAGE> 3
between Purchaser and the Company relating to confidential information.
ARTICLE II
The Merger; Closing; Effective Time
2.1. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 2.3) Merger Sub
shall be merged with and into the Company and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger"). The Company
shall be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Delaware, and the separate corporate
existence of the Company with all its rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger, except as
set forth in Section 3.1. The Merger shall have the effects specified in
the Delaware General Corporation Law (the "DGCL").
2.2. Closing. The closing of the Merger (the "Closing") shall
take place (i) at the offices of Sullivan & Cromwell, 125 Broad Street,
New York, New York at 10:00 A.M. on the first business day on which the
last to be fulfilled or waived of the conditions set forth in Article VIII
hereof shall be fulfilled or waived in accordance with this Agreement or
(ii) at such other place and time and/or on such other date as the Company
and Purchaser may agree.
2.3. Effective Time. As soon as practicable following the
Closing, and provided that this Agreement has not been terminated or
abandoned pursuant to Article IX hereof, the Company and the Purchaser will
cause a Certificate of Merger (the "Delaware Certificate of Merger") to be
executed and filed with the Secretary of State of Delaware as provided in
Section 251 of the DGCL. The Merger shall become effective on the date on
which the Delaware Certificate of Merger has been duly filed with the
Secretary of State of Delaware, and such time is hereinafter referred to as
the "Effective Time."
<PAGE> 4
ARTICLE III
Certificate of Incorporation and By-Laws
of the Surviving Corporation
3.1. The Certificate of Incorporation. The Restated
Certificate of Incorporation of the Company (the "Certificate") in effect
at the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation, until duly amended in accordance with the terms
thereof, and the DGCL, except that Article Fourth of the Company's
Certificate shall be amended to read in its entirety as follows:
"The aggregate number of shares which the Corporation shall
have the authority to issue is 1,000 shares of Common Stock, par
value $0.01 per share."
3.2. The By-Laws. The By-Laws of Merger Sub in effect at the
Effective Time shall be the By-Laws of the Surviving Corporation, until
duly amended in accordance with the terms thereof and the DGCL.
ARTICLE IV
Officers and Directors
of the Surviving Corporation
4.1. Officers and Directors. The directors of Merger Sub and
the officers of the Company at the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws.
4.2. Actions by Directors. Following the election or
appointment of Purchaser's designees pursuant to Section 4.3 hereof, and
prior to the Effective Time, the approval of a majority of the directors of
the Company then in office who were not designated by Purchaser shall be
required to authorize (and such authorization shall constitute the
authorization of the Board of Directors of the Company and no other action
on the part of the Company, including any action by any other director of
the Company, shall be required to authorize) any termination of this
Agreement by the Company, any amendment of this Agreement requiring action
by the Board of Directors of the Company,
<PAGE> 5
any extension of time for the performance of any of the obligations or
other acts of Purchaser or Merger Sub, any waiver of compliance with any of
the agreements or conditions contained herein for the benefit of the
Company or any other rights of the Company hereunder, and any amendment or
withdrawal by the Board of Directors of its recommendation of the Merger
pursuant to Section 7.3 hereof.
4.3. Boards of Directors; Committees. (a) If requested by
Purchaser, the Company will, subject to compliance with applicable law and
immediately following the purchase by Merger Sub of more than 50 percent of
the outstanding Shares pursuant to the Offer, take all actions necessary to
cause persons designated by Purchaser to become directors of the Company so
that the total number of such persons equals that number of directors,
rounded up to the next whole number, which represents the product of
(x) the total number of directors on the Board of Directors multiplied by
(y) the percentage that the number of Shares so purchased plus any Shares
beneficially owned by Purchaser or its affiliates on the date hereof bears
to the number of Shares outstanding at the time of such purchase; provided,
however, that in no event shall Purchaser be entitled to designate a
majority of the Board of Directors unless it is the beneficial owner of
Shares entitling it to exercise at least a majority of the voting power of
the Company's outstanding shares entitled to vote generally in the election
of directors. In furtherance thereof, the Company will use its reasonable
best efforts to secure the resignation of all but three directors, or will
increase the size of the Board, or both, as is necessary to permit
Purchaser's designees to be elected to the Company's Board of Directors;
provided, however, that prior to the Effective Time, the Company's Board of
Directors shall always have at least three members who are neither officers
of Purchaser nor designees, shareholders or affiliates of Purchaser
("Purchaser Insiders"). At such time, the Company, if so requested, will
use its reasonable efforts to cause persons designated by Purchaser to
constitute the same percentage of each committee of such board, each board
of directors of each subsidiary of the Company and each committee of each
such board (in each case to the extent of the Company's ability to elect
such persons). The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Securities Exchange
Act of 1934 (the "Exchange Act") and Rule 14f-1 thereunder. The Company
shall promptly take all actions required in order to fulfill its obliga-
tions under this Section 4.3 and shall include in the Schedule 14D-9 such
information as is required under such Section and Schedule. The Purchaser
will supply to the Company in writing and be solely respon-
<PAGE> 6
sible for any information with respect to the Purchaser and its
subsidiaries (collectively, the "Purchaser Companies") and the nominees,
directors and affiliates thereof required by Section 14(f) and Rule 14f-1
to be included in the Schedule 14D-9.
ARTICLE V
Conversion or Cancellation of Shares in the Merger
5.1. Conversion or Cancellation of Shares. The manner of
converting or canceling shares of the Company and Merger Sub in the Merger
shall be as follows:
(a) At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by
Purchaser, Merger Sub or any other subsidiary of Purchaser (collectively,
the "Purchaser Companies") or Shares which are held by stockholders
("Dissenting Stockholders") exercising appraisal rights pursuant to
Section 262 of the DGCL) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive, without interest, an amount in cash equal to $20.50 or such
greater amount which may be paid pursuant to the Offer (the "Merger
Consideration"). All such Shares, by virtue of the Merger and without any
action on the part of the holders thereof, shall no longer be outstanding
and shall be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall thereafter cease
to have any rights with respect to such Shares, except the right to receive
the Merger Consideration for such Shares upon the surrender of such
certificate in accordance with Section 5.2 or the right, if any, to receive
payment from the Surviving Corporation of the "fair value" of such Shares
as determined in accordance with Section 262 of the DGCL.
(b) At the Effective Time, each Share issued and outstanding
at the Effective Time and owned by any of the Purchaser Companies, and each
Share issued and held in the Company's treasury at the Effective Time,
shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, shall be canceled and retired
without payment of any consideration therefor and shall cease to exist.
(c) At the Effective Time, each share of Common Stock, par
value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall,
<PAGE> 7
by virtue of the Merger and without any action on the part of Merger Sub or
the holders of such shares, be converted into one Share.
5.2. Payment for Shares. Purchaser shall make available or
cause to be made available to the paying agent appointed by Purchaser with
the Company's prior approval (the "Paying Agent") amounts sufficient in the
aggregate to provide all funds necessary for the Paying Agent to make
payments pursuant to Section 5.1(a) hereof to holders of Shares issued and
outstanding immediately prior to the Effective Time. Promptly after the
Effective Time, the Purchaser shall instruct the Paying Agent to mail to
each person who was, at the Effective Time, a holder of record (other than
any of the Purchaser Companies) of issued and outstanding Shares a form
(mutually agreed to by Purchaser and the Company) of letter of transmittal
and instructions for use in effecting the surrender of the certificates
which, immediately prior to the Effective Time, represented any of such
Shares in exchange for payment therefor. Upon surrender to the Paying
Agent of such certificates, together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, the
Surviving Corporation shall promptly cause to be paid to the persons
entitled thereto a check in the amount to which such persons are entitled,
after giving effect to any required tax withholdings. No interest will be
paid or will accrue on the amount payable upon the surrender of any such
certificate. If payment is to be made to a person other than the
registered holder of the certificate surrendered, it shall be a condition
of such payment that the certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
certificate surrendered or establish to the satisfaction of the Surviving
Corporation or the Paying Agent that such tax has been paid or is not
applicable. One hundred and eighty days following the Effective Time, the
Surviving Corporation shall be entitled to cause the Paying Agent to
deliver to it any funds (including any interest received with respect
thereto) made available to the Paying Agent which have not been disbursed
to holders of certificates formerly representing Shares outstanding on the
Effective Time, and thereafter such holders shall be entitled to look to
the Surviving Corporation only as general creditors thereof with respect to
the cash payable upon due surrender of their certificates. Notwithstanding
the foregoing, neither the Paying Agent nor any party hereto shall be
liable to any holder of certificates formerly representing Shares for any
amount paid to a public official
<PAGE> 8
pursuant to any applicable abandoned property, escheat or similar law. The
Surviving Corporation shall pay all charges and expenses, including those
of the Paying Agent, in connection with the exchange of cash for Shares and
Purchaser shall reimburse the Surviving Corporation for such charges and
expenses.
5.3. Dissenters' Rights. If any Dissenting Stockholder shall
be entitled to be paid the "fair value" of his or her Shares, as provided
in Section 262 of the DGCL, the Company shall give Purchaser notice thereof
and Purchaser shall have the right to participate in all negotiations and
proceedings with respect to any such demands. Neither the Company nor the
Surviving Corporation shall, except with the prior written consent of
Purchaser, voluntarily make any payment with respect to, or settle or offer
to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right
to dissent, the Shares held by such Dissenting Stockholder shall thereupon
be treated as though such Shares had been converted into the Merger
Consideration pursuant to Section 5.1.
5.4. Transfer of Shares After the Effective Time. No
transfers of Shares shall be made on the stock transfer books of the
Surviving Corporation at or after the Effective Time.
ARTICLE VI
Representations and Warranties
6.1. Representations and Warranties of the Company. Except as
set forth in the corresponding sections of the disclosure letter, dated the
date hereof, delivered by the Company to Purchaser (the "Disclosure
Letter"), the Company hereby represents and warrants to Purchaser and
Merger Sub that:
(a) Corporate Organization and Qualification. Each of the
Company and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction
of incorporation and is in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification, except for such
failure to so qualify or be in such good standing, which, when taken
together with all other such failures, would not have a Material Adverse
Effect. Each of the Company and its subsidiaries has the requisite
corporate
<PAGE> 9
power and authority to carry on its respective businesses as they are now
being conducted except where the failure to have such power and authority
would not have a Material Adverse Effect. The Company has made available
to Purchaser a complete and correct copy of the Company's Certificate and
By-Laws, each as amended to date. The Company's Certificate and By-Laws so
delivered are in full force and effect.
(b) Authorized Capital. The authorized capital stock of the
Company consists of 25,000,000 Shares, of which 12,942,443 Shares were
outstanding on July 31, 1996. All of the outstanding Shares have been duly
authorized and are validly issued, fully paid and nonassessable. The
Company has no Shares reserved for issuance, except that, as of March 31,
1996, there were 1,450,000 Shares reserved for issuance pursuant to the
Stock Option Plan and, as of the date hereof, 100,000 Shares reserved for
issuance pursuant to the Non-Employee Directors Stock Plan (together, the
"Stock Plans") and, as of August 19, 1996, there were not more than
1,300,000 Shares subject to issuance under the Stock Option Plan. Each of
the outstanding shares of capital stock of each of the Company's
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and owned, either directly or indirectly, by the Company free
and clear of all liens, pledges, security interests, claims or other
encumbrances. Except as set forth above, there are no shares of capital
stock of the Company authorized, issued or outstanding and except as set
forth above, there are no preemptive rights nor any outstanding subscrip-
tions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company or any of its
subsidiaries. After the Effective Time the Surviving Corporation will have
no obligation to issue, transfer or sell any Shares or common stock of the
Surviving Corporation pursuant to any Company Benefit Plan (as defined in
Section 6.1(h)).
(c) Corporate Authority. Subject only to approval of this
Agreement by the holders of a majority of the outstanding Shares, the
Company has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement is
a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity.
<PAGE> 10
(d) Governmental Filings; No Violations. (i) Other than the
filings provided for in Section 2.3 and as required under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and the
Securities Exchange Act of 1934 (the "Exchange Act") (the "Regulatory
Filings"), no notices, reports or other filings are required to be made by
the Company with, nor are any consents, registrations, approvals, permits
or authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, commission or other entity,
domestic or foreign ("Governmental Entity"), in connection with the
execution and delivery of this Agreement by the Company and the consumma-
tion by the Company of the transactions contemplated hereby, the failure to
make or obtain any or all of which would have a Material Adverse Effect.
(ii) The execution and delivery of this Agreement by the
Company does not, and the consummation by the Company of the transactions
contemplated by this Agreement will not, constitute or result in (i) a
breach or violation of, or a default under, the Certificate or By-Laws of
the Company or the comparable governing instruments of any of its
subsidiaries, (ii) a breach or violation of, a default under or the
triggering of any payment or other material obligations pursuant to, any of
the Company's existing Company Benefit Plans or any grant or award made
under any of the foregoing, (iii) a breach or violation of, or a default
under, the acceleration of or the creation of a lien, pledge, security
interest or other encumbrance on assets (with or without the giving of
notice or the lapse of time) pursuant to, any provision of any agreement,
lease, license, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Company or any of its subsidiaries or any
law, rule, ordinance or regulation or judgment, decree, order, award or
governmental or non-governmental permit or license to which the Company or
any of its subsidiaries is subject or (iv) any change in the rights or
obligations of any party under any of the Contracts, except, in the case of
clauses (iii) or (iv) above, for such breaches, violations, defaults,
accelerations or changes that, alone or in the aggregate, would not have a
Material Adverse Effect. The Disclosure Letter sets forth, to the
Knowledge of the Company, a list of any consents required under any
material Contracts to be obtained prior to consummation of the transactions
contemplated by this Agreement (whether or not subject to the exception set
forth with respect to clause (iii) above). The Company will use its
reasonable best efforts promptly to obtain the consents referred to in the
Disclosure Letter.
<PAGE> 11
(e) Company Reports; Financial Statements. The Company has
made available to Purchaser each document filed by it since March 31, 1996
with the Securities and Exchange Commission under the Securities Act or the
Exchange Act, including, without limitation, (i) the Company's Annual
Report on Form 10-K for the year ended March 31, 1996, and (ii) the
Company's Quarterly Report on Form 10-Q for the period ended June 30, 1996,
each in the form (including exhibits and any amendments thereto) filed with
SEC (collectively, the "Company Reports"). As of their respective dates,
each of the Company Reports did not, and each Company Report filed with the
SEC subsequent to the date hereof will not, contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, provided, that the
Company makes no representation with respect to information supplied by the
Purchaser Companies for use in Company Reports after the date hereof. Each
of the consolidated balance sheets included in or incorporated by reference
into the Company Reports (including the related notes and schedules) fairly
presents the consolidated financial position of the Company and its
subsidiaries as of its date and each of the consolidated statements of
income and of changes in financial position included in or incorporated by
reference into the Company Reports (including any related notes and
schedules) fairly presents the results of operations, retained earnings and
changes in financial position, as the case may be, of the Company and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not
be material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein. Other than the Company Reports,
the Company has not filed any other definitive reports or statements with
the SEC since March 31, 1996.
(f) Absence of Certain Changes. Except as disclosed in the
Company Reports filed with the SEC prior to the date hereof, since
March 31, 1996, the Company and its subsidiaries have conducted their
respective businesses only in, and have not engaged in any material
transaction other than according to, the ordinary and usual course of such
businesses and there has not been (i) any Material Adverse Effect or any
development or combination of developments of which the Company has
Knowledge which would result in a Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend or other distribution
with respect to the capital stock of the Company; or (iii) any
<PAGE> 12
change by the Company in accounting principles, practices or methods.
Since March 31, 1996, except as provided for herein or as disclosed in the
Company Reports filed with the SEC prior to the date hereof and other than
in the ordinary course, there has not been any increase in the compensation
payable or which could become payable by the Company and its subsidiaries
to their officers or key employees, or any amendment of any Company Benefit
Plans.
(g) Litigation and Liabilities. Except as disclosed in the
Company Reports filed with the SEC prior to the date hereof, there are no
(i) civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its subsidiaries or (ii)
obligations or liabilities, or any facts or circumstances of which the
Company has Knowledge that could reasonably be expected to result in any
claims against or obligations or liabilities of the Company or any of its
subsidiaries, that, alone or in the aggregate, would have a Material
Adverse Effect.
(h) Employee Benefits. The Disclosure Letter discloses each
written employee benefit plan, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") other than
immaterial plans, and each other compensation or employee benefit plan,
program, policy, practice or arrangement providing cash or non-cash
compensation, including each retirement, bonus, welfare, severance,
relocation, salary continuation for sickness or other disability, vacation
or educational plan, program, practice, policy or arrangement and each
employment agreement, which the Company or its Subsidiaries maintain or
contribute to on behalf of their employees, former employees, directors or
former directors other than immaterial plans, policies, practices,
arrangements or agreements ("Company Benefit Plans"). Each Company Benefit
Plan has been maintained in all material respects in accordance with its
terms and with applicable provisions of ERISA, the Code and any other
applicable laws and collective bargaining agreements, including all
applicable reporting and disclosure requirements except for any failures to
so maintain which alone or in the aggregate would not have a Material
Adverse Effect, no events have occurred with respect to the Company Benefit
Plans which alone or in the aggregate would have a Material Adverse Effect,
and the withdrawal liability with respect to any "multiemployer plan"
(within the meaning of Section 3(37) of ERISA) contributed to by the
Company, its Subsidiaries and any entities which are considered one
employer with the Company or any of its Subsidiaries under Section 4001(b)
of ERISA or
<PAGE> 13
Sections 414(b) or (c) of the Code, determined as if a "complete
withdrawal" had occurred as of the date hereof, would not have a Material
Adverse Effect.
(i) Brokers and Finders. Neither the Company nor any of its
officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders, fees
in connection with the transactions contemplated herein, except that the
Company has employed Merrill Lynch & Co. as its financial advisors, the
compensation arrangements with which have been disclosed in writing to
Purchaser prior to the date hereof.
(j) Takeover Statutes. The Board of Directors of the Company
has taken all necessary action to approve the transactions contemplated by
this Agreement such that the restrictions on transactions with "interested
stockholders" set forth in Section 203 of the DGCL shall not apply to such
transactions. To the Company's knowledge, no other "fair price",
"moratorium", "control share acquisition" or other similar antitakeover
statute or regulation (each a "Takeover Statute") is applicable to the
Company, the Shares, the Offer, the Merger or the transactions contemplated
thereby or hereby.
(k) Environmental Matters. Except as disclosed in the Company
Reports filed with the SEC prior to the date hereof and except for such
matters that, alone or in the aggregate, would not have a Material Adverse
Effect, and to the Company's Knowledge (i) the Company and its subsidiaries
are in compliance with all applicable Environmental Laws; (ii) no Hazardous
Substances (as hereinafter defined) have been treated, stored, or disposed
of at, on, or under the properties presently or formerly owned or operated
by the Company or its subsidiaries (including, without limitation, soil,
groundwater or surface water on, under or adjacent to the properties, and
buildings thereon) (the "Properties"), other than such treatment, storage
or disposal which would not require remediation under currently applicable
Environmental Law, and the Properties have not been used as a sanitary
landfill, dump or hazardous waste disposal site (provided, however, that
with respect to Properties formerly owned or operated by the Company, the
representations set forth in this Section 6.1(k)(ii) are limited to the
period prior to the disposition of such Properties by the Company or one of
its subsidiaries); (iii) neither the Company nor any of its subsidiaries
has received any notices, demand letters or requests for information from
any Governmental Entity or any third party that the Company may be in
violation of, or liable under, any Environmental Law and none of the
Company, its subsidiaries or the Properties are
<PAGE> 14
subject to any court order, administrative order or decree arising under
any Environmental Law and (iv) no Hazardous Substance has been disposed of,
transferred, released or transported from any of the Properties during the
time such Property was owned or operated by the Company or one of its
subsidiaries, other than as permitted under and as would not reasonably be
expected to result in liability under, applicable Environmental Law.
"Environmental Law" means (i) any Federal, state, foreign or
local law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, common law, order, judgment, decree,
injunction, requirement or agreement with any Governmental Entity, relating
(x) to the protection, preservation or restoration of the environment,
(including, without limitation, air, surface water, groundwater, surface
land, subsurface land, or any other natural resource), or to human health
or (y) to the exposure to, or the use, presence, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances, in each case as
amended and as now in effect. "Hazardous Substance" means any substance
presently listed, defined, designated or classified as hazardous, toxic,
radioactive or otherwise regulated, under any Environmental Law.
6.2. Representations and Warranties of Purchaser and Merger
Sub. Except as set forth in the corresponding sections of the disclosure
letter, dated the date hereof delivered by the Purchaser to the Company
(the "Purchaser Disclosure Letter"), Purchaser and Merger Sub represent and
warrant to the Company that:
(a) Corporate Organization and Qualification. Each of
Purchaser and Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation and is in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification except for such
failure to so qualify or to be in such good standing, which, when taken
together with all other such failures, would not have a material adverse
effect on the financial condition, properties, business or results of
operations of Purchaser and its subsidiaries, taken as a whole.
(b) Corporate Authority. Purchaser and Merger Sub each has
the requisite corporate power and authority and has taken all corporate
action necessary in order to execute and deliver this Agreement and to
consummate the transac-
<PAGE> 15
tions contemplated hereby. This Agreement is a valid and binding agreement
of Purchaser and Merger Sub enforceable against Purchaser and Merger Sub in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity.
(c) Governmental Filings; No Violations; Ownership of Shares.
(i) Other than the Regulatory Filings, no notices, reports or other filings
are required to be made by Purchaser and Merger Sub with, nor are any
consents, registrations, approvals, permits or authorizations required to
be obtained by Purchaser and Merger Sub from, any Governmental Entity in
connection with the execution and delivery of this Agreement by Purchaser
and Merger Sub and the consummation of the transactions contemplated hereby
by Purchaser and Merger Sub, the failure to make or obtain any or all of
which could prevent, materially delay or materially burden the transactions
contemplated by this Agreement.
(ii) The execution and delivery of this Agreement by Purchaser
and Merger Sub do not, and the consummation of the transactions
contemplated hereby by Purchaser and Merger Sub will not, constitute or
result in (i) a breach or violation of, or a default under, the Certificate
of Incorporation or By-Laws of Purchaser or Merger Sub or (ii) a breach or
violation of, a default under, the acceleration of or the creation of a
lien, pledge, security interest or other encumbrance on assets (with or
without the giving of notice or the lapse of time) pursuant to, any
provision of any Contract of Purchaser or Merger Sub or any law, ordinance,
rule or regulation or judgment, decree, order, award or governmental or
non-governmental permit or license to which Purchaser or Merger Sub is
subject, except, in the case of clause (ii) above, for such breaches,
violations, defaults or accelerations that, alone or in the aggregate,
could not prevent or materially delay the transactions contemplated by this
Agreement.
(iii) Purchaser does not, as of the date hereof, beneficially
own any Shares.
(d) Funds. Purchaser has received a written commitment (the
"Commitment") from a financial institution to provide an aggregate of up to
$425,000,000 in connection with the Offer and the Merger, a copy of which
has previously been delivered to the Company, subject to the execution of
definitive financing agreements and the fulfillment of conditions
thereunder. As of the date
<PAGE> 16
hereof, Purchaser knows of no facts or circumstances that are likely to
result in the conditions precedent referred to in such written commitments
not being satisfied.
ARTICLE VII
Covenants
7.1. Interim Operations of the Company. The Company covenants
and agrees that, prior to the Effective Time (unless Purchaser shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement):
(a) the business of the Company and its subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent
consistent therewith, each of the Company and its subsidiaries shall
use its reasonable best efforts to preserve its business organization
intact and maintain satisfactory relations with customers, suppliers,
employees and business associates, in each case in all material
respects;
(b) the Company shall not (i) sell, pledge, dispose of or
encumber or agree to sell or pledge any stock owned by it in any of
its subsidiaries; (ii) amend its Certificate or By-Laws; (iii) split,
combine or reclassify the outstanding Shares; or (iv) declare, set
aside or pay any dividend payable in cash, stock or property with
respect to the Shares;
(c) neither the Company nor any of its subsidiaries shall
(i) issue, sell, pledge, dispose of or encumber any additional shares
of, or securities convertible or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any
shares of its capital stock other than, in the case of the Company,
Shares issuable pursuant to options outstanding on the date hereof
under the Stock Plans; (ii) transfer, lease, license, guarantee,
sell, mortgage, pledge, dispose of or encumber any assets or incur or
modify any indebtedness or other liability other than in the ordinary
and usual course of business; (iii) acquire directly or indirectly by
redemption or otherwise any shares of the capital stock of the
Company (iv) increase its obligations under its existing credit
agreement which would cause such aggregate borrowings to exceed
$40,000,000 or amend or modify such credit agreement; or
(v) authorize capital expenditures in excess of the Company's fiscal
1997 capital budget as provided prior to the date hereof to
<PAGE> 17
Purchaser or make any acquisition of, or investment in, assets or
stock of any other person or entity.
(d) except as described in the Disclosure Letter, neither the
Company nor any of its subsidiaries shall (i) except as required by
applicable law, grant any severance or termination pay to, or enter
into any employment or severance agreement with any Director, officer
or other employee of the Company or such subsidiaries; (ii)
establish, adopt, enter into, make any new grants or awards (or
accelerate the vesting, or increase the value of any benefit) under
or amend, any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
employee stock ownership, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any Directors, officers or other
employees; or (iii) increase the compensation of any Director,
officer or other Employee or pay any benefit thereto not required by
any existing plan;
Notwithstanding the foregoing, it is expressly acknowledged
that the Company has adopted or will adopt the change in control
severance agreements (the "Severance Agreements"), and amendments to
the Restated and Amended Longevity Incentive Agreements (the
"Longevity Agreement Amendments"), in each case for the individuals
set forth in the Disclosure Letter as the recipients of such
agreements, a change in control severance plan (the "Severance Plan")
and an amendment to the 1996 Non-Employee Directors Stock Plan, each
in the forms attached to the Disclosure Letter, and that prior to the
Effective Time the Company shall be permitted to implement such
agreements, plan and amendments.
(e) except as described in the Disclosure Letter, neither the
Company nor any of its subsidiaries shall settle or compromise any
material claims or litigation or, except in the ordinary and usual
course of business, modify, amend or terminate any of its material
Contracts or waive, release or assign any material rights or claims;
(f) neither the Company nor any subsidiary shall make any tax
election or permit any insurance policy naming it as a beneficiary or
a loss payable payee to be canceled or terminated without notice to
Purchaser, except in the ordinary and usual course of business; and
<PAGE> 18
(g) neither the Company nor any of its subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
7.2. Acquisition Proposals. The Company agrees that neither
the Company nor any of its subsidiaries nor any of the respective officers
and directors of the Company or its subsidiaries shall, and the Company
shall direct and use its best efforts to cause its employees, agents and
representatives (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its subsidiaries)
not to, initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal or offer (including, without
limitation, any proposal or offer to stockholders of the Company) with
respect to a merger, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, the Company or any of its subsidiaries (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or,
except as required to comply with the fiduciary duties of the Company's
Board of Directors under applicable law after consultation with outside
counsel, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating
to an Acquisition Proposal, or otherwise facilitate any effort or attempt
to make or implement an Acquisition Proposal. The Company will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of
the foregoing. The Company will take the necessary steps to inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 7.2. The Company will as promptly
as reasonably practicable notify Purchaser if any such inquiries or
proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated with the
Company.
7.3. Meetings of the Company's Stockholders. If required
following consummation of the Offer, the Company will take, consistent with
applicable law and its Certificate and By-Laws, all action necessary to
convene a meeting of holders of Shares as promptly as practicable to
consider and vote upon the approval of this Agreement and the Merger.
Subject to fiduciary requirements of applicable law, the Board of Directors
of the Company shall recommend such approval and the Company shall take all
lawful action to solicit such approval. If the Board of Directors
determines after consultation with outside counsel that an
<PAGE> 19
amendment or withdrawal of its recommendation is required in accordance
with its fiduciary duties under applicable law, the Board of Directors may
so amend or withdraw its recommendation and such withdrawal or
recommendation shall not constitute a breach of this Agreement. At any
such meeting of the Company all of the Shares then owned by the Purchaser
Companies will be voted in favor of this Agreement. The Company's proxy or
information statement with respect to such meeting of shareholders (the
"Proxy Statement"), at the date thereof and at the date of such meeting,
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing shall not apply
to the extent that any such untrue statement of a material fact or omission
to state a material fact was made by the Company in reliance upon and in
conformity with written information concerning the Purchaser Companies and
nominees, directors and affiliates of such Purchaser Companies furnished to
the Company by Purchaser specifically for use in the Proxy Statement. The
Proxy Statement shall not be filed, and no amendment or supplement to the
Proxy Statement will be made by the Company, without consultation with
Purchaser and its counsel. None of the written information concerning the
Purchaser Companies and the nominees, directors and affiliates thereof
furnished to the Company by Purchaser specifically for use in the Proxy
Statement, at the date thereof and at the date of the stockholders'
meeting, will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
7.4. Filings; Other Action. Subject to the terms and
conditions herein provided, the Company and Purchaser shall: (a) promptly
make their respective filings and thereafter make any other required
submissions under the HSR Act with respect to the Offer and the Merger; and
(b) use their reasonable best efforts to promptly take, or cause to be
taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement and including, without limitation, in the case of Purchaser
obtaining the financing contemplated by the Commitment or otherwise, as
soon as practicable. The Company shall cooperate with Purchaser to assist
in obtaining such financing and shall take such action in connection
therewith as Purchaser may reasonably request.
<PAGE> 20
7.5. Access. Upon reasonable notice, the Company shall (and
shall cause each of its subsidiaries to) afford Purchaser's officers,
employees, counsel, accountants and other authorized representatives
("Representatives") access, during normal business hours throughout the
period prior to the Effective Time, to its properties, books, Contracts and
records and, during such period, the Company shall (and shall cause each of
its subsidiaries to) furnish promptly to Purchaser all information
concerning its business, properties and personnel as Purchaser or its
Representatives may reasonably request, provided that no investigation
pursuant to this Section 7.5 shall affect or be deemed to modify any
representation or warranty made by the Company and provided, further, that
the foregoing shall not require the Company to permit any inspection, or to
disclose any information, which in the reasonable judgment of the Company
would result in the disclosure of any trade secrets of third parties or
violate any obligation of the Company with respect to confidentiality if
the Company shall have used reasonable efforts to obtain the consent of
such third party to such inspection or disclosure. All requests for
information made pursuant to this Section shall be directed to an executive
officer of the Company or such person as may be designated by any such
officer. All information obtained by Purchaser and its Representatives
pursuant to this Section 7.5 shall be treated as "Information" for all
purposes of the Confidentiality Agreement.
7.6. Notification of Certain Matters. The Company shall give
prompt notice to Purchaser of: (a) any notice of, or other communication
relating to, any material environmental matter, a default or event that,
with notice or lapse of time or both, would become a default, received by
the Company or any of its subsidiaries subsequent to the date of this
Agreement and prior to the Effective Time, under any Contract material to
the financial condition, properties, businesses or results of operations of
the Company and its subsidiaries taken as a whole to which the Company or
any of its subsidiaries is a party or is subject; and (b) any Material
Adverse Effect. Each of the Company and Purchaser shall give prompt notice
to the other party of any notice or other communication from any third
party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
7.7. Publicity. The initial press release shall be a joint
press release and thereafter the Company and Purchaser shall consult with
each other prior to issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and prior
to
<PAGE> 21
making any filings with any Governmental Entity or with any national
securities exchange with respect thereto.
7.8. Benefits. (a) Stock Options. Prior to the Effective
Time, the Company shall use its best efforts to obtain any necessary
consents from optionees, and will amend the Stock Plans, to provide that at
the Effective Time each stock option outstanding pursuant to the Stock
Plans ("Option"), whether or not then exercisable, shall be canceled and
only entitle the holder thereof to receive an amount in cash equal to the
excess of the Merger Consideration over the exercise price per Share of
such Option multiplied by the number of Shares previously subject to such
Option, less all applicable withholding taxes.
(b) Employee Benefits. (i) Purchaser shall, during the period
commencing at the Effective Time and ending on December 31, 1997, cause the
Surviving Corporation to provide to employees of the Company and its
subsidiaries, who are employed by the Surviving Corporation or its
subsidiaries following the Effective Time ("Company Employees"), employee
benefits which in the aggregate are substantially comparable to those
currently provided (other than stock option plans, other equity-based plans
and the Restated and Amended Longevity Incentive Agreements, as amended) by
the Company to such employees, provided that employees covered by
collective bargaining agreements need not be provided such benefits;
provided, further that if during such period the Purchaser implements any
widespread decrease in benefits (or increase in costs to participants)
under compensation plans applicable generally to its employees and the
employees of its subsidiaries (other than the Surviving Corporation), the
Surviving Corporation and its subsidiaries may be required by the Purchaser
to adjust the benefits (or the costs thereof) provided to their employees.
Purchaser will, and will cause the Surviving Corporation to, honor pursuant
to their terms all Company Benefit Plans in existence on the date hereof
and set forth in the Disclosure Letter or adopted prior to the Effective
Time as set forth in the Disclosure Letter, including the Severance Agree-
ments, Severance Plan and Longevity Agreement Amendments. The Company
shall prior to the Effective Time amend the Stock Plans to provide that the
Stock Plans shall terminate as of the Effective Time and to state that no
Company Employee or Director shall have the right to receive grants of
Options or exercise Options following the Effective Time.
(ii) In the event that Company Employees are or become
eligible to participate in any plans maintained by the Purchaser or its
Subsidiaries ("Purchaser Benefit
<PAGE> 22
Plans"), Purchaser or its subsidiaries shall grant such employees credit
for purposes of eligibility and vesting only, for all service credited for
such purposes under comparable Company Benefit Plans, other than with
respect to new Purchaser Benefit Plans which do not grant past service
credit to Purchaser's employees generally.
(iii) Any pre-existing condition exclusion under any Purchaser
Benefit Plan providing medical or dental benefits shall be waived for any
Company Employee who, immediately prior to commencing participation in such
Purchaser Benefit Plan, was participating in a Company Benefit Plan
providing medical or dental benefits and had satisfied any pre-existing
condition provision under such Company Benefit Plan. Any expenses that
were taken into account under a Company Benefit Plan providing medical or
dental benefits in which the Company Employee participated immediately
prior to commencing participation in a Purchaser Benefit Plan providing
medical or dental benefits shall be taken into account to the same extent
under such Purchaser Benefit Plan, in accordance with the terms of such
Purchaser Benefit Plan, for purposes of satisfying applicable deductible,
coinsurance and maximum out-of-pocket provisions and life-time benefit
limits.
Section 7.9. Indemnification; Directors' and Officers'
Insurance. (a) From and after the Effective Time, Purchaser agrees that it
will indemnify and hold harmless each present and former director and
officer of the Company, determined as of the Effective Time (the "Indemn-
ified Parties"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of matters existing or occurring at or prior
to the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent that the Company would have been
permitted under Delaware law and its Certificate of Incorporation or By-
Laws in effect on the date hereof to indemnify such person (and Purchaser
shall also advance expenses as incurred to the fullest extent permitted
under applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification); Purchaser
shall cause the Surviving Corporation (and its successors) not to amend its
Certificate of Incorporation or Bylaws concerning the indemnification and
exoneration of the Company's present and
<PAGE> 23
former directors and officers in any respect that adversely affects any
rights of such directors and officers.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of Section 7.9, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Purchaser
thereof. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time),
(i) Purchaser or the Surviving Corporation shall have the right to assume
the defense thereof and Purchaser shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if Purchaser or the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Parties
advises that there are issues which raise conflicts of interest between
Purchaser or the Surviving Corporation and the Indemnified Parties, the
Indemnified Parties may retain counsel satisfactory to them, and Purchaser
or the Surviving Corporation shall pay all reasonable fees and expenses of
such counsel for the Indemnified Parties promptly as statements therefor
are received; provided, however, that Purchaser shall be obligated pursuant
to this paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction unless the use of one counsel for
such Indemnified Parties would present such counsel with a conflict of
interest (ii) the Indemnified Parties will cooperate in the defense of any
such matter and (iii) Purchaser shall not be liable for any settlement
effected without its prior written consent which consent shall not be
unreasonably withheld; and provided further that Purchaser shall not have
any obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination
shall have become final, that the indemnification of such Indemnified Party
in the manner contemplated hereby is prohibited by applicable law.
(c) The Purchaser shall cause the Surviving Corporation to
maintain the Company's existing officers' and directors' liability
insurance ("D&O Insurance") for a period of six years after the Effective
Time so long as the annual premium therefor is not in excess of 150% of the
last annual premium paid prior to the date hereof (the "Current Premium");
provided, however, if the existing D&O Insurance expires, is terminated or
canceled during such six year period, the Surviving Corporation will use
its best efforts to obtain as much D&O Insurance as can be obtained for the
remainder of such period for a premium not in excess (on an annualized
basis) of 150% of the Current Premium.
<PAGE> 24
7.10. Takeover Statute. If any "fair price", "moratorium",
"control share acquisition" or other form of antitakeover statute or
regulation is or shall become applicable to the transactions contemplated
hereby, the Company and the members of the Board of Directors of the
Company shall grant such approvals and take such actions as are necessary
so that the transactions contemplated hereby may be consummated as promptly
as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby.
ARTICLE VIII
Conditions to the Merger
8.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction or waiver, where permissible, prior to the
Effective Time, of the following conditions:
(a) Stockholder Approval. If approval of the Merger by the
holders of Shares is required by applicable law, the Merger shall have been
approved by the requisite vote of such holders, and
(b) No Injunctions; Laws. No injunction or other order shall
have been issued or any law enacted which prohibits the consummation of the
Merger or makes such consummation illegal; provided, however, that prior to
invoking this provision, each party shall use its reasonable best efforts
to have any such injunction lifted.
(c) Governmental and Regulatory Consents. The waiting period
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated and all consents, approvals and authorizations
required to be obtained prior to the Effective Time by the Company from any
Governmental Entity in connection with the execution and delivery of this
Agreement by the Company and the consummation of the transactions
contemplated hereby by the Company, Purchaser and Merger Sub shall have
been made or obtained (as the case may be);
8.2. Conditions to Obligations of Purchaser and Merger Sub to
Effect the Merger. The obligation of Purchaser and Merger Sub to effect
the Merger shall be further subject to the satisfaction or waiver, on or
prior to the Effective Time of the condition that Merger Sub shall
<PAGE> 25
have accepted for payment and paid for the Shares tendered pursuant to the
Offer; provided, that this condition shall be deemed satisfied if the
Merger Sub's failure to accept for payment and pay for such shares breaches
this Agreement or violates the terms and conditions of the Offer.
ARTICLE IX
Termination
9.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval by holders of Shares, by the
mutual consent of Purchaser and the Company, by action of their respective
Boards of Directors.
9.2. Termination by either Purchaser or the Company. This
Agreement may be terminated and the Merger may be abandoned by action of
the Board of Directors of either Purchaser or the Company if (i) Merger
Sub, or any Purchaser Company, shall have terminated the Offer without
purchasing any Shares pursuant thereto; provided, in the case of
termination of this Agreement by Purchaser, such termination of the Offer
does not constitute a breach of this Agreement and is not in violation of
the terms and conditions of the Offer or (ii) without fault of the
terminating party, the Merger shall not have been consummated by March 31,
1997 whether or not such date is before or after the approval by holders of
Shares.
9.3. Termination by Purchaser. Unless the Offer shall have
been consummated and persons designated by Purchaser shall constitute at
least a majority of the members of the Board of Directors of the Company,
this Agreement may be terminated and the Merger may be abandoned prior to
the Effective Time, before or after the approval by holders of Shares, by
action of the Board of Directors of Purchaser, if (x) the Company shall
have failed to comply in any material respect with the covenants or
agreements contained in this Agreement to be complied with or performed by
the Company at or prior to such date of termination and, with respect to
any such failure that can be remedied, the failure is not remedied within
five business days after Purchaser has furnished the Company with written
notice of such failure, or (y) the Board of Directors of the Company shall
have withdrawn or modified in a manner adverse to Purchaser or Merger Sub
its approval or recommendation of the Offer, this Agreement or the Merger
or shall have resolved to do any of the foregoing.
<PAGE> 26
9.4. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned prior to the Effective Time,
before or after the approval by holders of Shares by action of the Board of
Directors of the Company, (x) if Purchaser or Merger Sub (or another
Purchaser Company) (i) shall have failed to comply in any material respect
with the covenants or agreements contained in this Agreement to be complied
with or performed by Purchaser or Merger Sub at or prior to such date of
termination and, with respect to any such failure that can be remedied, the
failure is not remedied within five business days after the Company has
furnished Purchaser with written notice of such failure or (ii) shall have
failed to commence the Offer within the time required in Section 1.1 or (y)
if (i) the Company is not in material breach of any of the terms of this
Agreement, (ii) the Board of Directors of the Company receives an
unsolicited written offer with respect to a merger, consolidation or sale
of all or substantially all of the Company's assets or an unsolicited
tender or exchange offer for the Shares is commenced, which the Board of
Directors of the Company determines in good faith is more favorable to the
stockholders of the Company than the Offer and the transactions
contemplated hereby and the Board of Directors determines, after
consultation with its outside counsel that approval, acceptance or
recommendation of such transaction (an "Alternative Transaction") is
required in accordance with its fiduciary obligations under applicable law
and (iii) the Company prior to such termination pays to Purchaser in
immediately available funds all fees required to be paid pursuant to
Section 9.5.
9.5. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and abandonment of the Merger
pursuant to this Article IX, no party hereto (or any of its directors,
officers or representatives) shall have any liability or further obligation
to any other party to this Agreement, except as provided in Section 9.5(b)
below and Section 10.2 and except that nothing herein will relieve any
party from liability for any breach of this Agreement.
(b) If (x) (i) the Offer shall have remained open for a minimum
of at least 20 business days, (ii) after the date hereof any corporation,
partnership, person, other entity or group (as defined in Section 13(d)(3)
of the Exchange Act) other than Purchaser or Merger Sub or any of their
respective subsidiaries or affiliates (collectively, a "Person") shall have
become the beneficial owner of 15% or more of the outstanding Shares or any
Person shall have commenced, or shall have publicly announced an intention
to commence, a tender offer or exchange offer for 40% or more
<PAGE> 27
of the outstanding Shares or made any other Acquisition Proposal, (iii) the
Minimum Condition (as defined in Annex A) shall not have been satisfied and
the Offer is terminated without the purchase of any Shares thereunder and
(iv) within six months following such termination, the Company enters into
an agreement with respect to an Acquisition Proposal with any person or
other entity other than Purchaser or any person or other entity becomes the
beneficial owner of 90% or more of the outstanding Shares in either case at
a price per Share of $20.50 or more, or (y) Purchaser shall have terminated
this Agreement pursuant to Section 9.3(x) at any time after any person
shall have made an Acquisition Proposal or the Company shall have taken any
action that would be proscribed by Section 7.2 but for the exception
therein allowing certain actions to be taken if required by fiduciary duty
or Section 9.3(y) and, in either such case, within six months following
such termination, the Company enters into an agreement with respect to an
Acquisition Proposal with any person other than Purchaser or any person or
other entity becomes the beneficial owner of 90% or more of the outstanding
Shares in either case at a price per Share of $20.50 or more, or (z) the
Company shall have terminated this Agreement pursuant to Section 9.4(y),
then the Company, if requested by Purchaser, shall promptly, but in no
event later than five business days after the date of such request (other
than a termination pursuant to Section 9.4(y), in which case payment shall
be concurrent with termination), pay Purchaser a fee of $7,000,000, which
amount shall be payable in same day funds, plus an amount equal to
Purchaser's out-of-pocket expenses, up to a maximum of $3,000,000,
including fees and expenses paid to investment bankers, lawyers and
financing sources, incurred in connection with the transaction contemplated
by this Agreement. The Company acknowledges that the agreements contained
in this Section 9.5(b) are an integral part of the transactions
contemplated in this Agreement, and that, without these agreements, Pur-
chaser and Merger Sub would not enter into this Agreement; accordingly, if
the Company fails to promptly pay the amount due pursuant to this Section
9.5(b), and, in order to obtain such payment, Purchaser or Merger Sub
commences a suit which results in a judgment against the Company for the
fee set forth in this paragraph (b), the Company shall pay to Purchaser or
Merger Sub its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest on the amount of the fee at the
prime rate of Citibank N.A. on the date such payment was required to be
made.
<PAGE> 28
ARTICLE X
Miscellaneous and General
10.1. Payment of Expenses. Except as otherwise set forth in
Section 9.5, whether or not the Merger shall be consummated, each party
hereto shall pay its own expenses incident to preparing for, entering into
and carrying out this Agreement and the consummation of the Merger.
10.2. Survival. The agreements of the Company, Purchaser and
Merger Sub contained in Sections 5.2 (but only to the extent that such
Section expressly relates to actions to be taken after the Effective Time),
5.3, 5.4, 7.8, 7.9, 7.10 and 10.1 shall survive the consummation of the
Merger. The agreements of the Company, Purchaser and Merger Sub contained
in Sections 7.5, 9.5 and 10.1 shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants
in this Agreement shall not survive the consummation of the Merger or the
termination of this Agreement.
10.3. Modification or Amendment. Subject to the applicable
provisions of the DGCL, at any time prior to the Effective Time, the
parties hereto may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective
parties.
10.4. Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the Merger are for the sole benefit of
such party and may be waived by such party in whole or in part to the
extent permitted by applicable law.
10.5. Counterparts. For the convenience of the parties
hereto, this Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
10.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
10.7. Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in
writing and delivered personally or sent by registered or certified mail,
postage prepaid, if to Purchaser or Merger Sub, addressed to Purchaser or
Merger Sub, as the case may be, at 1200 Meidinger Tower, Louisville,
Kentucky 40202, Attention: President (with a
<PAGE> 29
copy to Joseph B. Frumkin, Esq., Sullivan & Cromwell, 125 Broad Street, New
York, New York 10004); and if to the Company, addressed to the Company at
2630 El Presidio Street, Long Beach, California 90810, Attention:
President (with a copy to Charles Nathan, Esq., Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, New York 10004) or to
such other persons or addresses as may be designated in writing by the
party to receive such notice.
10.8. Entire Agreement, etc. This Agreement (including the
Disclosure Letter and any exhibits or Annexes hereto) (a) constitutes the
entire agreement, and supersedes all other prior agreements,
understandings, representations and warranties both written and oral, among
the parties, with respect to the subject matter hereof, and (b) shall not
be assignable by operation of law or otherwise and is not intended to
create any obligations to, or rights in respect of, any persons other than
the parties hereto; provided, however, that Purchaser may designate, by
written notice to the Company, another wholly-owned direct or indirect
subsidiary to be a Constituent Corporation in lieu of Merger Sub, in the
event of which, all references herein to Merger Sub shall be deemed
references to such other subsidiary except that all representations and
warranties made herein with respect to Merger Sub as of the date of this
Agreement shall be deemed representations and warranties made with respect
to such other subsidiary as of the date of such designation.
10.9. Definition of "Subsidiary". When a reference is made in
this Agreement to a subsidiary of a party, the word "subsidiary" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the
terms thereof ordinary voting power to elect at least a majority of the
board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its subsidiaries, or by
such party and one or more of its subsidiaries.
10.10. Definition of "Knowledge". For purposes of this
Agreement "Knowledge" of the Company shall mean the actual knowledge,
without any duty or obligation to make any independent investigation, of
Norman E. Wells, Jr. and Terry D. Smith and, with respect to Section 6.1(k)
shall mean the knowledge of Waheed Kahn.
10.11. Definition of "Material Adverse Effect". For purposes
of this Agreement, "Material Adverse Effect" shall mean any material
adverse effect on the financial
<PAGE> 30
condition, properties, businesses, results of operations or prospects of
the Company and its subsidiaries taken as a whole.
10.12. Obligation of Purchaser. Whenever this Agreement
requires Merger Sub to take any action, such requirement shall be deemed to
include an undertaking on the part of Purchaser to cause Merger Sub to take
such action.
10.13. Captions. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first hereinabove written.
CASTECH ALUMINUM GROUP INC.
By /s/ Norman E. Wells, Jr.
Name: Norman E. Wells, Jr.
Title: President & Chief Executive Officer
COMMONWEALTH ALUMINUM CORPORATION
By /s/ Mark V. Kaminski
Name: Mark V. Kaminski
Title: President & Chief Executive Officer
CALC CORPORATION
By /s/ Mark V. Kaminski
Name: Mark V. Kaminski
Title: President & Chief Executive Officer
<PAGE> 31
Annex A
Certain Conditions of the Offer. Notwithstanding any other
provision of the Offer and provided that Merger Sub shall not be obligated
to accept for payment any Shares until expiration of all applicable waiting
periods under the HSR Act, Merger Sub shall not be required to accept for
payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) promulgated under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for, or
may delay the acceptance for payment of or payment for, any tendered
Shares, or may, in its sole discretion, terminate or amend the Offer as to
any Shares not then paid for if a majority of the total Shares outstanding
on a fully diluted basis and as will permit Merger Sub to effect the Merger
without the vote of any person other than Merger Sub shall not have been
properly and validly tendered pursuant to the Offer and not withdrawn prior
to the expiration of the Offer (the "Minimum Condition"), or, if on or
after August 19, 1996, and at or before the time of payment for any of such
Shares (whether or not any of such Shares have theretofore been accepted
for payment), any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of,
or limitation on trading in securities on the NYSE or in the over-
the-counter market (other than a shortening of trading hours or any
coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) a commencement of a war or armed
hostilities involving the United States and continuing for at least
three business days, or (iv) any material limitation (whether or not
mandatory) by any governmental or regulatory authority, agency,
commission or other domestic entity ("Governmental Entity"), on the
extension of credit by banks or other lending institutions and
continuing for at least three business days;
(b) the Company shall have breached or failed to perform in
any material respect its obligations, covenants or agreements under
the Merger Agreement and, with respect to any such failure that can
be remedied, the failure is not remedied within five business days
after Purchaser has furnished the Company written
<PAGE> 2
notice of such failure, or any representation or warranty of the
Company set forth in the Merger Agreement shall have been inaccurate
or incomplete in any material respect when made or thereafter shall
become inaccurate or incomplete in any material respect;
(c) there shall be instituted or pending any action,
litigation, proceeding, investigation or other application
(hereinafter, an "Action") before any court of competent jurisdiction
or other Governmental Entity by any Governmental Entity: (i) chal-
lenging the acquisition by Purchaser or Merger Sub of Shares or
seeking to restrain or prohibit the consummation of the transactions
contemplated by the Offer or the Merger; (ii) seeking to prohibit, or
impose any material limitations on Purchaser's or Merger Sub's
ownership or operation of all or a material portion of their or the
Company's business or assets, or to compel Purchaser or Merger Sub to
dispose of or hold separate all or a material portion of Purchaser's
or Merger Sub's or the Company's business or assets; (iii) seeking to
make the acceptance for payment of, purchase of, or payment for, some
or all of the Shares illegal or rendering Purchaser or Merger Sub
unable to, or restricting or prohibiting, the ability of Purchaser or
Merger Sub to accept for payment, purchase or pay for some or all of
the Shares; or (iv) seeking to impose material limitations on the
ability of Purchaser or Merger Sub effectively to acquire or hold or
to exercise full rights of ownership of the Shares including, without
limitation, the right to vote the Shares purchased by them on an
equal basis with all other Shares on all matters properly presented
to the stockholders of the Company;
(d) any statute, rule, regulation, order or injunction shall
be enacted, promulgated, entered, enforced or deemed to or become ap-
plicable to the Offer or the Merger that results in any of the
consequences referred to in clauses (i) through (iv) of paragraph (c)
above;
(e) any person, entity or group shall have entered into a
definitive agreement or an
<PAGE> 3
agreement in principle with the Company with respect to a tender
offer or exchange offer for some portion or all of the Shares or a
merger, consolidation or other business combination with or involving
the Company;
(f) there shall be a Material Adverse Effect;
(g) the Board of Directors of the Company shall have
withdrawn or amended, or modified in a manner adverse to the
Purchaser or Merger Sub, its recommendation of the Offer or the
Merger, or shall have approved or recommended any other Acquisition
Proposal, or shall have resolved to do any of the foregoing;
(h) the Merger Agreement shall have been terminated by the
Company or Purchaser or Merger Sub in accordance with its terms or
Purchaser or Merger Sub shall have reached an agreement or
understanding in writing with the Company providing for termination
or amendment of the Offer or delay in payment for the Shares;
which, in the reasonable judgment of Purchaser and Merger Sub, in any such
case, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser
and Merger Sub and may be asserted by Purchaser or Merger Sub regardless of
the circumstances giving rise to such condition or may be waived by
Purchaser or Merger Sub, by express and specific action to that effect, in
whole or in part at any time and from time to time in its sole discretion,
except as otherwise provided in the Merger Agreement. The failure of
Purchaser or Merger Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
<PAGE>
Exhibit (c)(2)
July 26, 1996
Mr. Mark V. Kaminski
President and Chief Executive Officer
Commonwealth Aluminum Corporation
Meidinger Tower
Suite 1200
462 South 4th Avenue
Louisville, KY 40202-3474
Re: NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT
Dear Mr. Kaminski:
In connection with a possible negotiated transaction between Commonwealth
Aluminum Corporation ("Commonwealth") and CasTech Aluminum Group Inc. (the
"Company") with respect to an acquisition by Commonwealth of the Company (a
"Transaction"), Commonwealth and the Company are entering into this Non-
Disclosure and Confidentiality Agreement (this "Agreement"). In consideration
of each of Commonwealth and the Company furnishing to the other information to
assist in the consideration of a possible Transaction, each of Commonwealth and
the Company agrees as follows:
1. As used herein "Information" means all oral or written information
with respect to the party providing the information or on whose behalf
the information is provided (the "Providing Party") furnished to the
other (the "Recipient") and any analyses or other materials based on
such information prepared by the Recipient, its affiliates, directors,
officers, employees, advisors or agents. The term "Information" does
not include any information which (i) at the time of disclosure or
thereafter is generally available to and known by the public (other
than as a result of a disclosure directly or indirectly by the
Recipient or its Representatives (as defined below), (ii) was or is
independently acquired or developed by the Recipient without the
violation by (a) the Recipient of any of the provisions of this
Agreement or (b) any other person or entity of substantially similar
<PAGE>
2
confidentiality provisions, (iii) was in the Recipient's possession
prior to its being furnished to the Recipient by or on behalf of the
Providing Party pursuant hereto, provided that the source of such
information was not known by the Recipient to be subject to any
confidentiality agreement with the Providing Party or any other party
with respect to such information or (iv) becomes available to the
Recipient on a non-confidential basis from a source other than the
Providing Party provided that the source of such information was not
known by the Recipient to be subject to any confidentiality agreement
with the Providing Party or any other party with respect to such
information.
2. Each Recipient agrees to use the Information solely for the purpose of
evaluating a possible Transaction between Commonwealth and the
Company, and until Commonwealth and the Company have completed a
Transaction pursuant to a definitive agreement (a "Transaction
Agreement"), such information will be kept confidential by the
Recipient and its advisors, agents and affiliates, including financing
sources, except that the Recipient may disclose the Information, or
portions thereof, (i) to those of its directors, officers, employees
and representatives of its advisors, agents and affiliates, including
financing sources (the persons to whom such disclosure is permissible
being collectively called "Representatives"), who need to know such
information for the purpose of evaluating a possible Transaction (it
being agreed by each Recipient that, prior to such disclosure to any
Representative, such Representative will be informed of the
confidential nature of the Information and will be directed by the
Recipient to treat such information confidentially), (ii) as consented
to in writing by the Providing Party and (iii) subject to the terms of
this Agreement, as required by applicable law or regulation. Each
Recipient agrees to be responsible for any breach of this Agreement by
its Representatives. In the event that a Recipient or any of its
Representatives become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative
demand or similar process or otherwise) to disclose any of the
Information, such Recipient shall provide the Providing Party with
prompt prior written notice of such requirement so that the Providing
Party may seek a protective order or other appropriate remedy and/or
waive compliance, in whole or in part, with the terms of this
Agreement. In the event that such protective order or other remedy is
not obtained, or the Providing Party waives compliance, in whole or in
part, with the provisions hereof, such Recipient agrees to furnish
only that portion of the Information which the Recipient is advised by
counsel is legally required and to take efforts directed by the
Providing Party and otherwise to exercise best efforts
<PAGE>
3
to obtain assurance that confidential treatment will be accorded to
the Information provided. In the event such disclosure is made, a
description of the nature of such disclosure shall promptly be
delivered by the Recipient to the Providing Party.
3. Unless otherwise required by law or regulation or consented to in
writing by the Providing Party, no Recipient or its Representatives
will, without the prior written consent of the Providing Party,
disclose to any person either the fact that discussions or
negotiations are taking place concerning a possible Transaction, or
any or the terms, conditions or other facts with respect to any
possible Transaction Agreement, including the status thereof and the
fact that the Information has been made available to such Recipient.
In the event such disclosure is made, a description of the nature of
such disclosure shall promptly be delivered by such Recipient to the
Providing Party.
4. Until the earliest of (i) the consummation of a Transaction pursuant
to a Transaction Agreement, (ii) the acquisition of the Providing
Party by a third party, or (iii) two years from the date of this
Agreement, the Recipient agrees not to initiate or maintain contact
(except for those contacts made in the ordinary course of business)
with any officer, director or employee of the Providing Party
regarding the business, operations, prospects or finances of the
Providing Party, or regarding the employment of any such individual,
except with the express written permission of the Providing Party;
PROVIDED, HOWEVER, that (a) employing or maintaining contact with any
such person who contacts the Recipient on his or her own initiative
without any direct or indirect solicitation by or encouragement from
the Recipient, and (b) general solicitations of employment by the
Recipient not specifically directed towards employees of the Providing
Party, shall not be deemed to violate this Agreement. Unless
otherwise agreed to by the Providing Party in writing, all (i)
communications regarding any possible Transaction Agreement, (ii)
requests for additional information, (iii) request for facility tours
or management meetings, and (iv) discussions or questions regarding
procedures, will be submitted or directed to the President of the
Providing Party.
5. Each Recipient agrees that, without the prior written consent of the
Providing Party, for a period of two years from the date hereof, the
Recipient and its affiliates will not (and will not assist, provide or
arrange financing to or for others or encourage others to), directly
or indirectly, acting alone or as part of a group, (i) propose to the
Providing Party, any of the Providing Party's security holders or any
other person any merger,
<PAGE>
4
acquisition of a substantial portion of the Providing Party's business
or assets, an acquisition of any of the Providing Party's securities
or any other transaction involving any of the Providing Party's
securities, in any such case involving the Recipient and the Providing
Party or the Providing Party and any third party, (ii) acquire by
purchase or otherwise, or agree, propose or offer to acquire any of
the securities of the Providing Party or any interest therein,
(iii) otherwise seek to influence or control, in any manner whatsoever
(including proxy solicitation or otherwise), the management or
policies of the Providing Party, (iv) enter into discussions,
negotiations, arrangements or understandings with or otherwise
facilitate, assist or encourage the efforts of, any third party with
respect to any of the foregoing, (v) make any public proposal,
statement or inquiry, or publicly disclose any intention, plan or
arrangement, whether written or oral, inconsistent with the foregoing,
or (vi) request the Providing Party or any of its Representatives,
directly or indirectly to amend, waive or terminate any of the
foregoing provisions; PROVIDED, HOWEVER, that from the date hereof
until September 1, 1996, Commonwealth may make non-public proposals to
the board of directors of the Company. (As used herein, the term
"affiliate" shall have the meaning set forth in Rule 12b-2 of the
Securities Act of 1934.) Notwithstanding the foregoing, any employee
benefit, pension or similar plan of the Recipient's may own, acquire
or transfer securities of the Providing Party in the ordinary course
of business, solely for investment, and provided that the person
making decisions in respect of such securities is not in possession of
Information and is not aware of discussions regarding a possible
transaction.
The provisions of the preceding paragraph shall terminate upon
Commonwealth and the Company entering into a final definitive
Transaction Agreement with respect to a Transaction. In addition,
notwithstanding anything to the contrary contained in this Agreement,
the provisions of clauses (i), (v) and (vi) of the preceding paragraph
shall terminate in the event that any third party initiates an
unsolicited tender or exchange offer for, or otherwise makes an
unsolicited proposal to acquire, the common stock or other equity
interests of the Providing Party and, in response thereto, the
Providing Party determines to solicit offers or proposals from other
bidders to acquire the Providing Party.
6. In addition, each Recipient hereby acknowledges that such Recipient is
aware, and that such Recipient will advise its Representatives who
receive the Information, that the United States securities laws
prohibit any person who has material, non-public information
concerning the matters which are the subject of the Agreement from
purchasing or selling debt or equity
<PAGE>
5
securities of the Providing Party (and option, warrants and rights
relating thereto) and from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
7. Each Recipient agrees that the Providing Party has not granted the
Recipient any license, copyright, or similar right with respect to any
of the Information or any other information provided to the Recipient
by the Providing Party.
8. If either of Commonwealth or the Company determines that it does not
wish to consummate a Transaction, such party will promptly advise the
other party of its decision. If a Transaction is not consummated,
each Recipient will continue to be bound by the provisions of this
Agreement and if the Providing Party so requests the Recipient will
promptly return to the Providing Party all copies of the Information
in its possession or in the possession of its Representatives, and the
Recipient will use its best efforts to destroy such portions of all
copies of any analyses, compilations, studies or other documents
prepared by the Recipient or for its use containing or reflecting any
Information.
9. Each Recipient understands and acknowledges that the Providing Party
and its Representatives have not made and will not make any
representation or warranty, express or implied, as to the accuracy or
completeness of the Information, and none of the Providing Party or
any of its officers, directors, employees, stockholders, owners,
affiliates or agents will have any liability to the Recipient or any
other person resulting from its use of the Information. Only those
representations or warranties that are made in a definitive
Transaction Agreement when, as, and if it is executed, and subject to
such limitations and restrictions as may be specified in such
Transaction Agreement, will have any legal effect.
10. Each of Commonwealth and the Company also understands and agrees that
no contract or agreement providing for a Transaction shall be deemed
to exist between Commonwealth and the Company unless and until a
definitive Transaction Agreement has been executed and delivered, and
Commonwealth and the Company hereby waive, in advance, any claims
(including, without limitation, breach of contract) in connection with
a Transaction, unless and until Commonwealth and the Company shall
have entered into a definitive Transaction Agreement. Commonwealth
and the Company also agree that unless and until a definitive
Transaction Agreement between such parties with respect to a
Transaction has been
<PAGE>
6
executed and delivered, Commonwealth and the Company will have no
legal obligation of any kind whatsoever with respect to any such
Transaction by virtue of this Agreement or any other written or
verbal expression with respect to such Transaction except, in the case
of this Agreement, for the matters specifically agreed to herein. For
purposes of this paragraph, the term "definitive Transaction
Agreement" does not include an executed letter of intent or any other
preliminary written agreement, nor does it include any written or
verbal acceptance of an offer or bid by the Company.
11. It is understood and agreed that the non-breaching party would be
irreparably harmed by a violation of this Agreement and shall be
entitled to equitable relief, including injunction and specific
performance, in the event of any breach of the provision of this
Agreement, in addition to all other remedies available to the non-
breaching party at law or in equity; PROVIDED, HOWEVER, that nothing
in the foregoing shall preclude the party allegedly in breach from
asserting any defenses available to it at law or in equity other than
the defense that money damages would constitute an adequate remedy.
Each of Commonwealth and the Company also hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of
the courts of the State of Ohio and of the United States of America
located in the city of Akron, Ohio for any actions, suits or
proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby (and each of Commonwealth and the
Company agrees not to commence any action, suit or proceeding relating
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its
address set forth above shall be effective service of process of any
action, suit or proceeding brought against such party in any such
court. Each of Commonwealth and the Company hereby irrevocably and
unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in the courts of the State of Ohio
or the United States of America located in the city of Akron, Ohio,
and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
12. It is further understood and agreed that no failure or delay by either
party in exercising any right, power or privilege hereunder will
operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
<PAGE>
7
13. Any assignment of this Agreement by either party hereto without the
prior written consent of the other party shall be void.
14. If any one or more of the provisions of this Agreement shall be held
by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remaining provisions of this Agreement shall not be affected thereby
and this Agreement will be construed and enforced as if such invalid,
illegal or unenforceable provisions had not been included herein.
15. This Agreement contains the entire agreement between Commonwealth and
the Company with respect to the Information, and no provision in this
Agreement can be waived or amended except by written consent of
Commonwealth and the Company, which consent shall specifically refer
to the paragraph and provision and explicitly make such waiver or
amendment.
16. This Agreement shall be governed and construed in accordance with the
laws of the State of Ohio without regard to any applicable principals
of conflicts of law.
17. This Agreement may be executed in counterparts.
Very truly yours,
CASTECH ALUMINUM GROUP INC.
By:
---------------------
Title:
---------------------
RECEIVED AND CONSENTED TO:
COMMONWEALTH ALUMINUM CORPORATION
By:
-----------------------------
Title: President aud CEO
---------------------------
Date: July 26, 1996
----------------------------
