<PAGE>
________________________________________________________________________________
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
------------------------
GIANT CEMENT HOLDING, INC.
(NAME OF SUBJECT COMPANY)
------------------------
CP ACQUISITION, INC.
CEMENTOS PORTLAND, S.A.
(BIDDERS)
------------------------
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
374450104
(CUSIP NUMBER OF COMMON STOCK)
------------------------
MANUEL DE MELGAR Y OLIVER
DIRECTOR GENERAL CORPORATIVO
CEMENTOS PORTLAND, S.A.
JOSE ABASCAL, 59
28003 MADRID, SPAIN
011-34-91-396-0100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPIES TO:
<TABLE>
<S> <C>
ANDREW C. CULBERT, ESQ. ELLEN J. ODONER, ESQ.
MASTERMAN, CULBERT & TULLY LLP WEIL, GOTSHAL & MANGES LLP
ONE LEWIS WHARF 767 FIFTH AVENUE
BOSTON, MASSACHUSETTS 02110 NEW YORK, NEW YORK 10153
</TABLE>
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
================================================================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------
<S> <C>
$294,238,422 $58,848
================================================================================
</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only. The
amount assumes the purchase of 9,491,562 shares of common stock, $0.01 par
value (the 'SHARES'), of Giant Cement Holding, Inc., at a price per Share of
$31.00 in cash. Such aggregate number of Shares represents all the Shares
outstanding on a fully-diluted basis as of November 2, 1999. The amount of
the filing fee, calculated in accordance with Regulation 240.0-11 of the
Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of
the value of the transaction.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
________________________________________________________________________________
<PAGE>
_____________________
CUSIP NO. 374450104
_____________________
<TABLE>
<S> <C> <C>
___________________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CP Acquisition, Inc.
___________________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
(b) [ ]
___________________________________________________________________________________________
3 SEC USE ONLY
___________________________________________________________________________________________
4 SOURCES OF FUNDS (See Instructions)
AF
___________________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO [ ]
ITEMS 2(E) OR 2(F)
N/A
___________________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
___________________________________________________________________________________________
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
___________________________________________________________________________________________
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES CERTAIN SHARES [ ]
(See Instructions)
N/A
___________________________________________________________________________________________
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
N/A
___________________________________________________________________________________________
10 TYPE OF REPORTING PERSON (See Instructions)
CO
___________________________________________________________________________________________
</TABLE>
2
<PAGE>
_____________________
CUSIP NO. 374450104
_____________________
<TABLE>
<C> <S> <C>
___________________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cementos Portland, S.A.
___________________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [x]
(b) [ ]
___________________________________________________________________________________________
3 SEC USE ONLY
___________________________________________________________________________________________
4 SOURCES OF FUNDS (See Instructions)
BK, WC
___________________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO [ ]
ITEMS 2(E) OR 2(F)
N/A
___________________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kingdom of Spain
___________________________________________________________________________________________
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
___________________________________________________________________________________________
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES CERTAIN SHARES [ ]
(See Instructions)
N/A
___________________________________________________________________________________________
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
N/A
___________________________________________________________________________________________
10 TYPE OF REPORTING PERSON (See Instructions)
CO
___________________________________________________________________________________________
</TABLE>
3
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 ('THIS STATEMENT') is filed
by CP Acquisition, Inc., a Delaware corporation (the 'PURCHASER') and Cementos
Portland, S.A., a public company (sociedad anonima) organized under the laws of
the Kingdom of Spain (the 'PARENT'), relating to the offer by Purchaser to
purchase all shares of common stock, $0.01 par value (the 'SHARES'), of Giant
Cement Holding, Inc., a Delaware corporation (the 'COMPANY'), at $31.00 per
Share, net to the Seller in cash, on the terms and subject to the conditions
contained in the Offer to Purchase, dated November 10, 1999 (the 'OFFER TO
PURCHASE'), and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively (which collectively
constitute the 'OFFER').
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Giant Cement Holding, Inc., a
Delaware corporation. The address of the Company's principal executive offices
is 320-D Midland Parkway, Summerville, SC 29485.
(b) The information set forth on the cover page and under 'Introduction' in
the Offer to Purchase 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) This Statement is filed by Purchaser and Parent. The
information set forth on the cover page, under 'Introduction', in Section 9 and
in Schedule I of the Offer to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, none of Purchaser, Parent, any person
directly or indirectly controlling Parent and described in Section 9 of the
Offer to Purchase, nor, to Purchaser's and Parent's knowledge, any of the
persons listed in Schedule I to the Offer to Purchase, (i) has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) has been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) None.
(b) The information set forth in the 'Introduction' and in Sections 9, 10
and 11 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 under 'Introduction' and in Section 12 of
the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS
(a)-(e) The information set forth in the 'Introduction' and in Sections 9,
10 and 11 of the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 of the Offer to Purchase is
incorporated herein by reference.
4
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a)-(b) The information set forth in the 'Introduction' and in Sections 9,
10 and 11 of the Offer to Purchase is incorporated herein by reference.
ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES
The information set forth in the 'Introduction' and in Sections 9, 10 and
11 of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in Sections 11, 12 and 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.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference.
(b)-(d) The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Offer to Purchase, dated November 10, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated November 10, 1999.
(a)(8) Text of Press Release, dated November 4, 1999.
(b)(1) Commitment Letter, dated November 8, 1999, from Banco Santander
Central Hispano.
(b)(2) Commitment Letter, dated November 8, 1999, from The Chase Manhattan
Bank.
(b)(3) Commitment Letter, dated November 8, 1999, from Banco Bilbao
Vizcaya.
(c)(1) Agreement and Plan of Merger, dated as of November 4, 1999, among
Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, executed as of September 21, 1999,
between the Company and Parent.
(d) None.
(e) Not applicable.
(f) None.
5
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 10, 1999
CP ACQUISITION, INC.
By: /s/ MANUEL DE MELGAR Y OLIVER
.................................
NAME: MANUEL DE MELGAR Y OLIVER
TITLE: VICE PRESIDENT
CEMENTOS PORTLAND, S.A.
By: /s/ MANUEL DE MELGAR Y OLIVER
...................................
NAME: MANUEL DE MELGAR Y OLIVER
TITLE: DIRECTOR GENERAL CORPORATIVO
(MANAGING DIRECTOR)
6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE NO.
- ------- --------
<S> <C> <C>
(a)(1) Offer to Purchase, dated November 10, 1999..................
(a)(2) Letter of Transmittal.......................................
(a)(3) Notice of Guaranteed Delivery...............................
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees..............................
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.................
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.............................
(a)(7) Form of Summary Advertisement dated November 10, 1999.......
(a)(8) Text of Press Release, dated November 4, 1999...............
(b)(1) Commitment Letter, dated November 8, 1999, from Banco
Santander Central Hispano.................................
(b)(2) Commitment Letter, dated November 8, 1999, from The Chase
Manhattan Bank............................................
(b)(3) Commitment Letter, dated November 8, 1999, from Banco Bilbao
Vizcaya...................................................
(c)(1) Agreement and Plan of Merger, dated as of November 4, 1999,
among Parent, Purchaser and the Company...................
(c)(2) Confidentiality Agreement, executed as of September 21,
1999, between the Company and Parent......................
</TABLE>
7
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
AT
$31.00 NET PER SHARE
BY
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
CEMENTOS PORTLAND, S.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 9, 1999 UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF NOVEMBER 4, 1999 (THE 'MERGER AGREEMENT'), AMONG CEMENTOS PORTLAND, S.A.
('PARENT'), CP ACQUISITION, INC. ('PURCHASER') AND GIANT CEMENT HOLDING, INC.
(THE 'COMPANY'). THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE COMPANY'S STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF
THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES OF THE COMPANY WHICH CONSTITUTES AT LEAST A MAJORITY OF THE
THEN OUTSTANDING SHARES ON A FULLY-DILUTED BASIS. PARENT AND PURCHASER DO NOT
CURRENTLY OWN ANY SHARES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE THE INTRODUCTION AND
SECTIONS 1, 14 AND 15.
IMPORTANT
Any stockholder desiring to tender all or any portion of his Shares should
either (a) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it, together with the certificate(s) representing tendered Shares and
any other required documents, to the Depositary or tender such Shares pursuant
to the procedures for book-entry transfer described in Section 3 or (b) request
his broker, dealer, commercial bank, trust company or other nominee to effect
the transaction for him. A stockholder whose Shares are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
he desires to tender such Shares.
A stockholder who desires to tender his Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the other procedures on a timely basis may tender such Shares by following the
procedures for guaranteed delivery described in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
indicated on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
------------------------
The Dealer Manager for the Offer is:
SCHRODER & CO. INC.
November 10, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
INTRODUCTION..................................................... 1
THE TENDER OFFER................................................. 2
1. Terms of the Offer; Expiration Date......................... 2
2. Acceptance for Payment and Payment.......................... 3
3. Procedures for Accepting the Offer and Tendering Shares..... 4
4. Withdrawal Rights........................................... 6
5. Certain U.S. Federal Income Tax Consequences................ 7
6. Price Range of the Shares; Dividends........................ 7
7. Effect of the Offer on the Market for the Shares; Stock
Exchange Listings; Exchange Act Registration; Margin
Regulations............................................... 8
8. Certain Information Concerning the Company.................. 9
9. Certain Information Concerning Purchaser, Parent and Certain
Entities Directly or Indirectly Controlling Parent........ 12
10. Background of the Offer; Contacts with the Company.......... 15
11. Purpose of the Offer and the Merger; Plans for the Company;
the Merger Agreement and Other Agreements; Other
Matters................................................... 17
12. Source and Amount of Funds.................................. 26
13. Dividends and Distributions................................. 26
14. Certain Conditions of the Offer............................. 27
15. Certain Legal Matters; Required Regulatory Approvals........ 28
16. Certain Fees and Expenses................................... 30
17. Miscellaneous............................................... 31
SCHEDULE I Directors and Executive Officers of Purchaser, Parent
and Certain Entities which Directly or Indirectly Control
Parent......................................................... 32
</TABLE>
i
<PAGE>
To: All Holders of Shares of Common Stock
of Giant Cement Holding, Inc.:
INTRODUCTION
CP Acquisition, Inc., a Delaware corporation ('PURCHASER'), and a
wholly-owned subsidiary of Cementos Portland, S.A., a public company organized
under the laws of the Kingdom of Spain ('PARENT'), hereby offers to purchase all
shares of common stock, par value $0.01 per share (the 'SHARES'), of Giant
Cement Holding, Inc., a Delaware corporation (the 'COMPANY'), at a price of
$31.00 per Share (the 'SHARE PRICE'), net to the seller in cash and without
interest thereon, upon the terms and subject to the conditions contained in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the 'OFFER').
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 4, 1999 (the 'MERGER AGREEMENT'), among Parent, Purchaser and the
Company. The Merger Agreement provides, among other things, for the commencement
of the Offer by Purchaser and further provides that, subject to the satisfaction
or waiver of certain conditions, Purchaser will be merged with the Company (the
'MERGER'), with the surviving corporation becoming a wholly-owned subsidiary of
Parent (the 'SURVIVING CORPORATION'). In the Merger, each outstanding Share
(other than Shares held by the Company as treasury stock and Shares owned by
stockholders who have properly exercised their appraisal rights under Delaware
law) will be converted at the effective time of the Merger (the 'EFFECTIVE
TIME') into the right to receive the Share Price, in cash, without interest and
less any required withholding taxes (the 'MERGER CONSIDERATION').
THE BOARD OF DIRECTORS OF THE COMPANY (THE 'BOARD') UNANIMOUSLY HAS
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE COMPANY'S STOCKHOLDERS (THE 'STOCKHOLDERS'), HAS APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF
THEIR SHARES PURSUANT TO THE OFFER.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the Company's financial
advisor (the 'COMPANY FINANCIAL ADVISOR'), has delivered to the Company its
written opinion, dated the date of the Merger Agreement, that as of the date
thereof, the cash consideration to be received by the Stockholders pursuant to
the Offer and the Merger is fair from a financial point of view to the
Stockholders other than Purchaser and its affiliates. A copy of the opinion of
the Company Financial Advisor is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the 'SCHEDULE 14D-9')
filed with the Securities and Exchange Commission (the 'COMMISSION') in
connection with the Offer, a copy of which is being furnished to Stockholders
concurrently with this Offer to Purchase.
The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn prior to the Expiration Date (as defined in
Section 1 below) that number of Shares (the 'MINIMUM NUMBER OF SHARES') which
would represent at least a majority of the Shares outstanding on a fully-diluted
basis (the 'MINIMUM CONDITION'). The Offer is also subject to certain other
conditions. See Sections 1, 14 and 15.
The Company has represented and warranted to Parent and Purchaser that, as
of November 2, 1999, 8,731,562 Shares were issued and outstanding and an
aggregate of 760,000 Shares were reserved for issuance upon exercise of
outstanding options under the Company's 1994 Employee Stock Option Plan and 1994
Director Stock Option Plan for Non-Employee Directors (collectively, the 'OPTION
PLANS'). Based on this information, Purchaser believes that the Minimum
Condition will be satisfied if Shares representing a minimum of 4,745,782 Shares
are validly tendered and not withdrawn prior to the Expiration Date. Parent and
Purchaser do not currently own any Shares.
The Schedule 14D-9 indicates that, to the best of the Company's knowledge,
all of the Company's executive officers and directors who own Shares currently
intend to tender all of their Shares pursuant to the Offer.
The consummation of the Merger is subject to the satisfaction or waiver of
a number of conditions, including, if required, the approval of the Merger by
the requisite vote or consent of the holders of Shares. Under the Delaware
General Corporation Law (the 'DGCL'), the stockholder vote necessary
1
<PAGE>
to approve the Merger will be the affirmative vote of at least a majority of the
outstanding Shares. If, however, Purchaser acquires at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, Purchaser would be able
to effect the Merger pursuant to the 'short-form' merger provisions of
Section 253 of the DGCL, without prior notice to, or any action by, any other
Stockholder. In such event, Purchaser intends to effect the Merger as promptly
as practicable following the purchase of Shares in the Offer. See Section 11.
The Company has represented in the Merger Agreement that it does not have
any stockholder rights plan or 'poison pill.' The Company also has represented
in the Merger Agreement that the approval by the Company's Board of the Merger
and the Merger Agreement is sufficient to render inapplicable to the Merger, the
Merger Agreement and the transactions contemplated thereby the provisions of
Section 203 of the DGCL or any antitakeover provision in the Company's
certificate of incorporation and bylaws. See Section 15.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
Tendering Stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. Purchaser will pay all charges and expenses of Schroder &
Co. Inc., as Dealer Manager (in such capacity, the 'DEALER MANAGER'),
ChaseMellon Shareholder Services, L.L.C., as Depositary (the 'DEPOSITARY'), and
Innisfree M&A Incorporated, as Information Agent (the 'INFORMATION AGENT'),
incurred in connection with the Offer. See Section 16.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended as
required or permitted by the Merger Agreement, the terms and conditions of any
such extension or amendment), the Purchaser will accept for payment and thereby
purchase all Shares validly tendered and not withdrawn in accordance with the
procedures described in Section 4 on or prior to the Expiration Date (as
hereinafter defined). The term 'EXPIRATION DATE' means 12:00 midnight, New York
City time, on December 9, 1999, unless and until the Purchaser, in accordance
with the Merger Agreement, shall have extended the period of time for which the
Offer is open, in which event the term 'Expiration Date' shall mean the time and
date at which the Offer, as so extended by the Purchaser, shall expire. In the
Merger Agreement, Parent and Purchaser have agreed that if the Minimum Condition
or the conditions with respect to the HSR Act or with respect to there being no
action or proceeding by a governmental entity are not satisfied or waived on the
scheduled or any extended Expiration Date, Purchaser must extend the Offer in
five business day increments until any such conditions are satisfied or waived
or the Merger Agreement is terminated in accordance with its terms, provided,
however, that Purchaser is not required to extend the Offer beyond January 31,
2000. In addition, Purchaser may extend the Offer on one or more occasions for
an aggregate period of not more than five business days if the Minimum Condition
has been satisfied but less than 90% of the then outstanding Shares have been
validly tendered and not properly withdrawn.
Any such extension will be followed as promptly as practicable by public
announcement thereof, to be made no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which Purchaser may choose to make any public
announcement, subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Securities Exchange Act of 1934, as amended (the 'EXCHANGE ACT'),
which require that material changes be promptly disseminated to holders of
Shares), Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a release to the
Dow Jones News Service.
If, in accordance with the Merger Agreement, Purchaser makes a material
change in the terms of the Offer or waives a material condition to the Offer,
Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer, other than a change in
price or a change in percentage of securities
2
<PAGE>
sought or a change in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality, of the changes. With respect to a
change in price or, subject to certain limitations, a change in the percentage
of securities sought or a change in any dealer's soliciting fee, a minimum ten
business day period from the date of such change is generally required to allow
for adequate dissemination to stockholders. Accordingly, if prior to the
Expiration Date, Purchaser (with the approval of the Company as required by the
Merger Agreement) decreases the number of Shares being sought, or increases or
decreases the consideration offered pursuant to the Offer, and if the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from the date that notice of such increase or decrease is first
published, sent or given to holders of Shares, the Offer will be extended at
least 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 a federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time.
In the Merger Agreement, the Company has agreed to furnish Purchaser with
the Company's stockholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal and, if required, other relevant materials will be
mailed to record holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended in
accordance with the Merger Agreement, the terms and conditions of the Offer as
so extended or amended), Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered and not withdrawn (as permitted by
Section 4) prior to the Expiration Date, promptly after the Expiration Date, if
the conditions to the Offer described in Section 14 have each been satisfied or
waived, including without limitation the expiration or termination of the
waiting periods applicable to the acquisition of Shares pursuant to the Offer
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
'HSR ACT'). In addition, subject to applicable rules of the Commission,
Purchaser expressly reserves the right to delay acceptance for payment of, or
payment for, Shares pending receipt of any regulatory or governmental approvals
specified in Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) share certificates for
such Shares ('SHARE CERTIFICATES') or confirmation (a 'BOOK-ENTRY CONFIRMATION')
of the book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the 'BOOK-ENTRY TRANSFER FACILITY'), pursuant to the
procedures described in Section 3, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer, and (iii) any other documents required by the Letter
of Transmittal.
The term 'AGENT'S MESSAGE' means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of the Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against such participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance of such Shares for payment pursuant to the Offer. In all cases, upon
the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering Stockholders
for the purpose of receiving payment from Purchaser and transmitting payment to
validly tendering Stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID BY PURCHASER BY REASON OF ANY DELAY IN MAKING
SUCH PAYMENT.
3
<PAGE>
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering Stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures described in Section 3,
such Shares will be credited to an account maintained within the Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration
offered to holders of Shares pursuant to the Offer, such increased consideration
will be paid to all holders of Shares that are purchased pursuant to the Offer,
whether or not such Shares were tendered prior to such increase in
consideration.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of Purchaser's subsidiaries or affiliates the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering Stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to
be validly tendered pursuant to the Offer, (i) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses specified
on the back cover of this Offer to Purchase on or prior to the Expiration Date
and either Share Certificates representing tendered Shares must be received by
the Depositary, or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case on or prior to the Expiration Date, or
(ii) the guaranteed delivery procedures described below must be complied with.
The method of delivery of Share Certificates and the Letter of Transmittal
and all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the election and sole risk of the tendering
Stockholder. The 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, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's account
at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents must, in any case, be transmitted to and received
by the Depositary at one of its addresses specified on the back cover of this
Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure described below must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
'ELIGIBLE INSTITUTION'), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who
4
<PAGE>
has not completed either the box labeled 'Special Payment Instructions' or the
box labeled 'Special Delivery Instructions' on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. See Instruction 1 of the Letter
of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the Share Certificates,
with the signatures on the Share Certificates or stock powers guaranteed by an
Eligible Institution as provided in the Letter of Transmittal. See Instructions
1 and 5 of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a Stockholder desires to tender Shares pursuant to
the Offer and such Stockholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares may nevertheless be tendered
if all of the following guaranteed delivery procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation)
representing all tendered Shares, in proper form for transfer together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary, within three
Nasdaq National Market trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form contained in such Notice of Guaranteed
Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time, and will depend upon when Share Certificates or Book-Entry Confirmations
of such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Backup Federal Tax Withholding. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain Stockholders pursuant to the Offer. To prevent backup federal income
tax withholding on payments made to certain Stockholders with respect to the
purchase price of Shares purchased pursuant to the Offer, each such Stockholders
must provide the Depositary with his correct taxpayer identification number and
certify, under penalty of perjury, that he is not subject to backup federal
income tax withholding by completing the Substitute Form W-9 included in the
Letter of Transmittal. See Instruction 10 of the Letter of Transmittal.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
Stockholder irrevocably appoints Purchaser and any Purchaser designee, and each
of them, as such Stockholder's attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such Stockholder's rights with respect to the Shares tendered by such
Stockholder and accepted for payment by Purchaser and with respect to any and
all other Shares and other securities or rights issued or issuable in respect of
such Shares on or after the date of this Offer to Purchase. All such powers of
attorney and proxies shall be considered irrevocable and coupled with an
interest in the
5
<PAGE>
tendered Shares. Such appointment will be effective when, and only to the extent
that, Purchaser accepts such Shares for payment. Upon payment by Purchaser for
the Shares, all powers of attorney and proxies given by such stockholder with
respect to such Shares and such other securities or rights prior to such payment
will be revoked, without further action, and no subsequent powers of attorney
and proxies may be given by such Stockholder (and, if given, will not be deemed
effective). The designees of Purchaser will, with respect to the Shares for
which such appointment is effective, be empowered to exercise all voting and
other rights of such Stockholder as they in their sole discretion may deem
proper at any annual or special meeting of the Stockholders, or any adjournment
or postponement of such meeting. Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the payment
for such Shares, Purchaser or its designee must be able to exercise full voting,
consent and other rights with respect to such Shares and other securities,
including voting at any meeting of the Stockholders.
Determination of Validity. All questions as to the form of documents and
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by Purchaser, in its discretion, whose
determination shall be final and binding on all parties. Purchaser reserves the
right to reject any or all tenders determined by it not to be in proper form or
the acceptance of or payment for which may, in the opinion of Purchaser's
counsel, be unlawful. Purchaser also reserves the right (subject to the
provisions of the Merger Agreement) to waive any of the conditions of the Offer
or any defect or irregularity in any tender of Shares of any particular
Stockholder whether or not similar defects or irregularities are waived in the
case of other Stockholders.
Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender of Shares will be deemed to have been validly made until
all defects and irregularities with respect to such tender have been cured or
waived. None of Purchaser, Parent or any of their affiliates or assigns, if any,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give any notification of any defects or irregularities
in tenders or incur any liability for failure to give any such notification.
Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering Stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn at any time after January 9, 2000.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares and such Shares may
not be withdrawn except to the extent that the tendering Stockholder is entitled
to and duly exercises withdrawal rights as described in this Section 4. Any such
delay will be by an extension of the Offer to the extent required by law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses specified on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the Shares
as set forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering Stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of the
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer described in Section 3, the notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective
6
<PAGE>
if delivered to the Depositary by any method of delivery described in the first
sentence of this paragraph. Withdrawals of Shares may not be rescinded. Any
Shares properly withdrawn will be deemed not validly tendered for purposes of
the Offer, but may be retendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its discretion, whose
determination shall be final and binding. None of Purchaser, Parent or any of
their affiliates or assigns, if any, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The following is a general
summary of certain U.S. federal income tax consequences of the Offer and the
Merger relevant to a beneficial holder of Shares whose Shares are tendered and
accepted for payment pursuant to the Offer or whose Shares are converted to cash
in the Merger (a 'HOLDER'). The discussion is based on the Internal Revenue Code
of 1986, as amended (the 'CODE'), regulations issued thereunder, judicial
decisions and administrative rulings, all of which are subject to change,
possibly with retroactive effect. The following does not address the U.S.
federal income tax consequences to all categories of Holders that may be subject
to special rules (e.g., holders who acquired their Shares pursuant to the
exercise of employee stock options or other compensation arrangements with the
Company, foreign holders, insurance companies, tax-exempt organizations, dealers
in securities and persons who have acquired the Shares as part of a straddle,
hedge, conversion transaction or other integrated investment), nor does it
address the federal income tax consequences to persons who do not hold the
Shares as 'capital assets' within the meaning of Section 1221 of the Code
(generally, property held for investment). Holders should consult their own tax
advisors regarding the U.S. federal, state, local and foreign income and other
tax consequences of the Offer and the Merger.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and may also be a
taxable transaction under applicable state, local and foreign income and other
tax laws. In general, a Holder who sells Shares pursuant to the Offer or has
Shares converted into the right to receive cash pursuant to the Merger will
recognize gain or loss for federal income tax purposes equal to the difference,
if any, between the amount of cash received and the Holder's adjusted tax basis
in the Shares sold pursuant to the Offer or converted into the right to receive
cash pursuant to the Merger. Gain or loss will be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single transaction)
tendered pursuant to the Offer or converted into the right to receive cash
pursuant to the Merger. Such gain or loss will be long-term capital gain or loss
if the Holder has held the Shares for more than one (1) year at the time of the
consummation of the Offer or the Merger. Capital gains recognized by an
individual investor (or an estate or certain trusts) upon a disposition of a
Share that has been held for more than one year generally will be subject to a
maximum tax rate of 20% or, in the case of a Share that has been held for one
year or less, will be subject to tax at ordinary income rates. Certain
limitations apply to the use of capital losses.
Holders who receive cash pursuant to the exercise of appraisal rights with
respect to their Shares generally will be subject to the same treatment as that
described above for Holders who receive cash for Shares pursuant to the Offer
and Merger.
6. PRICE RANGE OF THE SHARES; DIVIDENDS. According to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 (the 'COMPANY'S
1998 ANNUAL REPORT'), the Shares are traded on the Nasdaq National Market
('NASDAQ') under the symbol 'GCHI.' The following table presents, for the
periods indicated, the high and low sale prices for the Shares as reported by
Bloomberg L.P.:
7
<PAGE>
<TABLE>
<CAPTION>
SHARES
----------------------
HIGH LOW
---- ---
<S> <C> <C>
1997
Third Quarter............................................... $24 5/8 $18 1/8
Fourth Quarter.............................................. 25 3/4 22
1998
First Quarter............................................... 30 18 1/2
Second Quarter.............................................. 29 1/2 21 1/4
Third Quarter............................................... 31 3/4 17 7/8
Fourth Quarter.............................................. 25 17 3/4
1999
First Quarter............................................... 25 1/8 16 5/8
Second Quarter.............................................. 24 17 1/8
Third Quarter............................................... 26 3/8 21 3/8
Fourth Quarter (through November 9, 1999)................... 31 1/4 17 3/8
</TABLE>
On November 3, 1999, the last full day of trading prior to the announcement
of the Merger, the last reported sales price on Nasdaq for the Shares was
$20 9/16 per Share. On November 9, 1999, the last full day of trading prior to
the commencement of the Offer, the last reported sales price on Nasdaq for the
Shares was $30 17/32 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
According to the Company's 1998 Annual Report, the Company did not declare
or pay any cash dividends with respect to the Shares during any of the periods
indicated in the table. In such report, the Company stated its expectation that
earnings would be retained in the future and that no cash dividends would be
paid to its Stockholders for the foreseeable future. Under the terms of the
Merger Agreement, the Company is not permitted to declare or pay dividends with
respect to the Shares without the prior written consent of Parent, and Parent
does not intend to consent to any such declaration or payment.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE
LISTINGS; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Effect of the Offer on the Market for the Shares. The purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and could adversely affect the liquidity and market value of the
remaining Shares held by the public. The purchase of Shares pursuant to the
Offer can also be expected to reduce the number of holders of Shares.
Nasdaq Quotation. The Shares are traded through Nasdaq. Depending upon the
number of Shares purchased pursuant to the Offer, the Shares may no longer meet
the requirements of Nasdaq for continued inclusion on Nasdaq. Nasdaq requires
that an issuer either (i) have at least 750,000 publicly held shares (exclusive
of holdings of officers, directors or any other person who is the beneficial
owner of more than 10% of the total Shares outstanding), held by at least 400
shareholders, with a market value of at least $5,000,000, net tangible assets
(total assets (excluding goodwill) minus total liabilities) of at least $4
million and have a minimum bid price of $1 per share or (ii) have at least
1,100,000 publicly held shares, held by at least 400 shareholders, with a market
value of at least $15,000,000, have a minimum bid price of $5 per share and have
either (A) a market capitalization of at least $50,000,000 or (B) total assets
and revenues each of at least $50,000,000. If Nasdaq were to cease to publish
quotations for the Shares, it is possible that the Shares would qualify for
listing on the Nasdaq SmallCap Market or that they would continue to trade in
the over-the-counter market and that price or other quotations would be reported
by other sources. The extent of the public market for such Shares and the
availability of such quotations would depend, however, upon such factors as 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 as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in the
Shares becoming eligible for deregistration under the Exchange Act. Registration
of the Shares may be terminated upon application
8
<PAGE>
by the Company to the Commission if the Shares are not listed on a 'national
securities exchange' and there are fewer than 300 record holders of Shares.
Termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
its Stockholders and the Commission and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b) and the requirements of furnishing a proxy statement in connection
with stockholders' meetings pursuant to Section 14(a), no longer applicable to
the Company. If the Shares are no longer registered under the Exchange Act, the
requirements of Rule 13e-3 under the Exchange Act with respect to 'going
private' transactions would no longer be applicable to the Company. Furthermore,
the ability of 'affiliates' of the Company and persons holding 'restricted
securities' of the Company to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated. If, as a result of the purchase of Shares pursuant to the Offer or
the Merger, the Company is no longer required to maintain registration of the
Shares under the Exchange Act, the Purchaser intends to cause the Company to
apply for termination of such registration. See Section 11.
Margin Regulations. The Shares are currently 'margin securities' under the
regulations of the Board of Governors of the Federal Reserve System (the
'FEDERAL RESERVE BOARD'), which have the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying or trading in securities ('PURPOSE LOANS'). Depending upon
factors such as the number of record holders of the Shares and the number and
market value of publicly held Shares, following the purchase of Shares pursuant
to the Offer, the Shares might no longer constitute 'margin securities' for
purposes of the Federal Reserve Board's margin regulations and, therefore, could
no longer be used as collateral for Purpose Loans made by brokers. In addition,
if registration of the Shares under the Exchange Act is terminated, the Shares
will no longer constitute 'margin securities.'
8. CERTAIN INFORMATION CONCERNING THE COMPANY. According to the Company's
1998 Annual Report, the Company is a Delaware corporation with its principal
executive offices located at 320-D Midland Parkway, Summerville, S.C. 29485 and
its telephone number is (803) 851-9898.
According to the Company's 1998 Annual Report, the Company, through its
subsidiaries, Keystone Cement Company in Pennsylvania and Giant Cement Company
in South Carolina, manufactures and sells a complete line of portland and
masonry cements used in residential, commercial and infrastructure construction
applications. The Company is the 15th largest producer of cement in the United
States. Its two cement manufacturing facilities are fully integrated, from
limestone mining through cement production, and serve the growing South-Atlantic
and Middle-Atlantic regions of the United States. Its subsidiary, Giant Resource
Recovery is a pioneer in the development of innovative, environmentally sound
methods for the reuse of waste materials in the manufacturing of cement. Today,
the Company is one of the largest users of waste-derived fuels in the cement
industry.
According to the Company's 1998 Annual Report, the Company acquired Solite
Corporation and certain of its subsidiaries ('SOLITE') on April 30, 1998.
Solite, a vertically integrated company based in Richmond, Virginia, expanded
the Company's product lines in both construction products and resource recovery.
The Company acquired Solite in exchange for 325,000 shares of the Company's
Shares. The Solite transaction included three lightweight aggregate
manufacturing facilities with their associated resource recovery operations,
five concrete block plants, and a waste treatment and blending facility. The
terms of the transaction included the assumption of approximately $19.9 million
of Solite's long-term debt, in addition to other liabilities. As a result of the
Solite acquisition, the Company became the largest lightweight aggregate
supplier on the East Coast and the largest provider of resource recovery fuel
burning services nationwide, as well as the fourth largest cement producer in
its East Coast markets.
Selected Financial Information. Presented below is certain consolidated
financial information with respect to the Company, excerpted or derived from the
Company's 1998 Annual Report and its Quarterly Reports on Form 10-Q for the
quarters ended September 30, 1999 and September 30, 1998, each as filed with the
Commission pursuant to the Exchange Act.
More comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and other documents
and all of the financial information (including any related notes)
9
<PAGE>
contained therein. Such reports, documents and financial information may be
inspected and copies may be obtained from the Commission in the manner described
below.
GIANT CEMENT HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA
<S> <C> <C> <C> <C> <C>
Revenues:
Product sales............................. $101,448 $ 93,248 $128,774 $100,988 $ 96,186
Resource recovery services................ 24,835 15,847 25,335 15,900 14,012
-------- -------- -------- -------- --------
Total revenues.................. 126,283 109,095 154,109 116,888 110,198
Costs and expenses:
Cost of sales and services................ 94,011 81,177 114,711 81,756 77,818
Selling, general and administrative....... 12,025 9,766 14,016 7,523 7,841
Acquisition related expenses.............. -- -- -- 1,200 --
-------- -------- -------- -------- --------
Operating income..................... 20,247 18,152 25,382 26,409 24,539
Other income (expense):
Interest expense.......................... (2,055) (1,375) (1,970) (966) (1,141)
Other, net................................ 771 2,074 2,053 (1,031) 298
-------- -------- -------- -------- --------
Income before income taxes........... 18,963 18,851 25,465 24,412 23,696
Provision for income taxes................ 6,450 6,383 8,646 8,327 8,275
-------- -------- -------- -------- --------
Net income................................ $ 12,513 $ 12,468 $ 16,819 $ 16,085 $ 15,421
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Earnings per common share:
Basic................................ $ 1.41 $ 1.34 $ 1.81 $ 1.70 $ 1.57
Diluted.............................. $ 1.38 $ 1.32 $ 1.77 $ 1.69 $ 1.57
Weighted average common shares
outstanding:
Basic................................ 8,894 9,306 9,277 9,459 9,833
Diluted.............................. 9,079 9,447 9,514 9,542 9,833
(table continued)on next page
</TABLE>
10
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Assets:
Current assets:
Cash and cash equivalents............ $ 5,224 $ 4,873 $ 6,623 $ 12,674 $ 10,432
Accounts receivable, less allowances
of $1,980 in 1998, $1,325 in 1997
and $1,123 in 1996................. 28,245 27,347 23,772 14,927 14,897
Inventories.......................... 28,189 22,352 24,729 19,238 17,656
Deferred income taxes................ 4,751 1,536 4,428 1,286 --
Other current assets................. 959 2,162 3,254 2,366 2,071
-------- -------- -------- -------- --------
Total current assets............ 67,368 58,270 62,806 50,491 45,056
Property, plant and equipment, net........ 123,556 98,389 98,366 75,631 70,418
Permits, net.............................. 12,763 9,006 8,695 1,977 --
Deferred charges and other assets......... 10,465 5,227 5,315 501 3,142
-------- -------- -------- -------- --------
Total assets.................... $214,152 $170,892 $175,182 $128,600 $118,616
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Liabilities:
Current liabilities:
Accounts payable..................... $ 11,845 $ 13,391 $ 15,464 $ 11,567 $ 10,437
Accrued expenses..................... 9,013 9,482 7,660 8,258 6,843
Current maturities of long-term
debt............................... 5,115 3,315 3,331 888 1,070
-------- -------- -------- -------- --------
Total current liabilities....... 25,973 26,188 26,455 20,713 18,350
Long-term debt, net of current
maturities.............................. 62,312 29,372 29,272 9,661 10,681
Accrued pension and postretirement
benefits................................ 8,248 6,156 6,081 2,907 6,332
Deferred income taxes..................... 13,973 11,095 11,080 7,674 6,125
-------- -------- -------- -------- --------
Total liabilities............... 110,506 72,811 72,888 40,955 41,488
-------- -------- -------- -------- --------
Shareholders' Equity:
Preferred stock, $.01 par value; 2.0
million shares authorized, none
issued.................................. -- -- -- -- --
Common stock, $.01 par value; 20.0 million
shares authorized, 10.0 million shares
issued.................................. 100 100 100 100 100
Capital in excess of par value............ 45,067 44,027 45,076 41,317 41,022
Retained earnings......................... 87,452 70,588 74,939 58,120 42,035
-------- -------- -------- -------- --------
132,619 114,715 120,115 99,537 83,157
Less: Treasury stock, at cost; 1,843
shares at September 30, 1999, 784 shares
at September 30, 1998, 809 shares in
1998, 675 shares in 1997, 336 shares in
1996.................................... 28,251 15,989 17,099 11,247 4,491
Accumulated other comprehensive
income:
Minimum pension liability............ 722 645 722 645 1,538
-------- -------- -------- -------- --------
Total shareholders' equity...... 103,646 98,081 102,294 87,645 77,128
-------- -------- -------- -------- --------
Total liabilities and
shareholders' equity.......... $214,152 $170,892 $175,182 $128,600 $118,616
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
Other Financial Information. During the course of the discussions between
Parent and the Company that led to the execution of the Merger Agreement, the
Company provided Parent with certain information about the Company and its
financial performance which is not publicly available. This information included
a six year forecast showing sales growing from $172.0 million for the year
11
<PAGE>
ending December 31, 1999 to $265.3 million for the year ending December 31,
2004, a 54.2% increase over the period, and operating income growing from $33.0
million for the year ending December 31, 1999 to $67.2 million for the year
ending December 31, 2004, an increase of 104% over the period.
The information in the preceding paragraph was prepared by the Company
solely for internal use and not for publication or with a view to complying with
the published guidelines of the Commission regarding projections or with the
guidelines established by the American Institute of Certified Public Accountants
and is included in this Offer to Purchase only because it was furnished to
Parent. The foregoing information is 'forward-looking' and inherently subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Company, including industry performance, general business and
economic conditions, changing competition, adverse changes in applicable laws,
regulations or rules governing environmental, tax or accounting matters and
other matters. The Company has advised Parent that although the Company believes
the assumptions used in preparing this information were reasonable when made,
such assumptions are inherently subject to significant uncertainties and
contingencies which are impossible to predict and beyond the Company's control.
Accordingly, there can be no assurance, and no representation or warranty is
made, that actual results will not vary materially from those reflected in the
forecasts described above. The inclusion of this information should not be
regarded as an indication that Parent, Purchaser, the Company or anyone who
received this information considered it a reliable prediction of future events,
and this information should not be relied on as such. None of Parent, Purchaser,
the Company nor their respective financial advisors assumes any responsibility
for the validity, reasonableness, accuracy or completeness of the projections,
and the Company has made no representation to Parent or Purchaser regarding the
forecasts described above. The forecasts have not been adjusted to reflect the
effects of the Offer and the Merger.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements 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, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such information also should be obtainable by mail, upon payment of
the Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a website on the internet at http://www.sec.gov that contains reports,
proxy statements and other information relating to the Company which have been
filed via the Commission's EDGAR System.
9. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT AND CERTAIN ENTITIES
DIRECTLY OR INDIRECTLY CONTROLLING PARENT. Purchaser was incorporated on
November 3, 1999 under the laws of the State of Delaware for the purpose of
acquiring the Company. Purchaser is a wholly-owned subsidiary of Parent. The
principal executive offices of Purchaser are located at c/o The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19081. Purchaser has
not, and is not expected to, engage in any business other than in connection
with its organization, the Offer and the Merger.
Parent is a public company (sociedad anonima) organized under the laws of
the Kingdom of Spain. Parent produces and markets cement, ready-mix concrete,
crushed stone and other building materials. Parent's shares are listed on the
Madrid Stock Exchange. The principal executive offices of Parent are located at
Jose Abascal, 59, 28003, Madrid, Spain, and its telephone number is
011-34-91-396-0100.
Portland Valderrivas, S.A. ('PV') is a public company (sociedad anonima)
organized under the laws of the Kingdom of Spain. PV is Parent's principal
stockholder, owning 57.5% of Parent's voting equity securities. PV is a holding
company. In addition to its investment in Parent, PV owns interests in real
estate and financial services. PV's shares are listed on the Madrid Stock
Exchange. The principal executive offices of PV are located at Jose Abascal, 59,
28003, Madrid, Spain and its telephone number is 011-34-91-396-0100.
12
<PAGE>
Fomento de Construcciones y Contratas, S.A. ('FCC') is a public company
(sociedad anonima) organized under the laws of the Kingdom of Spain. FCC is PV's
principal stockholder, owning approximately 48% of PV's voting equity
securities. FCC designs and constructs bridges, roadways and highways, and
develops properties including municipal and commercial buildings. Through its
subsidiaries FCC also engages in urban and industrial waste treatment and
disposal, cement production, urban environmental services, security control
systems, marine works, passenger transport and engineering services. FCC's
shares are listed on the Madrid Stock Exchange. The principal executive offices
of FCC are located at Federico Salmon, 13, 28016, Madrid, Spain and its
telephone number is 011-34-91-359-5400.
B1998 S.L. ('B1998') is a private holding company organized under the laws
of the Kingdom of Spain. B1998 is FCC's principal stockholder, owning 57% of
FCC's voting equity securities. B1998 is 51% owned by the Koplowitz family and
49% owned by Vivendi, S.A. ('Vivendi'). The principal executive offices of B1998
are located at Torre Picaso, Plaza de Pablo Ruiz Picaso 28020, Madrid, Spain.
Vivendi is a company (societe anonyme) organized under the laws of France.
Through its subsidiaries and affiliates, Vivendi engages in a variety of
businesses, including water, energy, waste management, construction and
telecommunications. Vivendi's shares are listed on the Paris Stock Exchange. Its
principal executive offices are located at 42, Avenue de Friedland, 75380 Paris
Cedex 08 France, and its telephone number is 011-33-17-171-1000.
The name, business address, principal occupation or employment, five year
employment history and citizenship of each director and executive officer of
Purchaser, Parent, PV, FCC, B1998 and Vivendi are listed in Schedule I hereto.
Presented below is certain selected consolidated financial information with
respect to Parent and its subsidiaries derived from Parent's consolidated
financial statements for the three years ended December 31, 1998 and for the six
months ended June 30, 1999 and 1998 (the 'PARENT FINANCIAL STATEMENTS'). Parent
has historically published its financial statements in Spanish pesetas and in
conformity with accounting principles generally accepted in the Kingdom of Spain
('SPANISH GAAP'), which, as described below, differ in certain significant
respects from accounting principles generally accepted in the United States
('U.S. GAAP').
13
<PAGE>
CEMENTOS PORTLAND, S.A.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED
JUNE 30, DECEMBER 31,
----------------- ---------------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
(PESETAS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales................................. 36,171 22,692 50,735 41,135 37,506
Operating profit.......................... 14,890 8,940 14,378 10,483 8,857
Profit before tax and minority interest... 11,734 5,785 17,005 10,605 8,409
Net profit after tax and minority
interest................................ 8,419 4,264 12,847 6,959 6,049
BALANCE SHEET DATA
Assets:
Start-up expenses......................... 59 51 45 74 127
Net intangible assets..................... 653 546 651 574 570
Net tangible fixed assets................. 62,195 49,188 61,807 46,722 43,205
Long-term financial investments........... 17,536 12,793 14,538 11,946 11,105
Goodwill in consolidation................. 28,839 1,901 29,073 2,061 1,938
Deferred charges.......................... 298 97 279 125 227
Treasury stock............................ -- -- -- -- 1,842
Current assets............................ 33,969 23,765 29,262 20,833 16,834
------- ------- ------- ------- -------
TOTAL ASSETS......................... 143,549 88,341 135,655 82,335 75,848
------- ------- ------- ------- -------
------- ------- ------- ------- -------
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity...................... 82,648 69,229 75,641 66,448 61,678
Minority interests........................ 2,501 1,658 2,440 1,597 1,422
Deferred revenues......................... 967 317 732 263 291
Provisions for third-party liabilities.... 1,317 1,108 1,165 1,061 933
Long-term liabilities..................... 32,273 1,543 38,097 1,594 2,145
Current liabilities....................... 23,843 14,486 17,580 11,372 9,379
------- ------- ------- ------- -------
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES........................ 143,549 88,341 135,655 82,335 75,848
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
Neither Purchaser nor Parent is subject to the informational filing
requirements of the Exchange Act. Accordingly, Parent does not reconcile its
consolidated financial information to U.S. GAAP.
The following paragraphs summarize the areas in which differences between
Spanish GAAP and U.S. GAAP could be significant to Parent's result of operations
and financial condition. Parent has not prepared financial statements in
accordance with U.S. GAAP and, accordingly, cannot offer any assurances that the
differences described below would, in fact, be the accounting principles
creating the greatest differences between financial statements of Parent
prepared under U.S. GAAP and under Spanish GAAP. In addition, Parent cannot
estimate the net effect that applying U.S. GAAP would have on its results of
operations or financial position, or any component thereof, in any of the
presentations of financial information above. However, the effect of such
differences may be, individually or in the aggregate, material, and in
particular, it may be that the total shareholders' equity prepared on the basis
of U.S. GAAP would be materially different due to these differences.
Tangible fixed assets. Spanish GAAP permits the restatement of the cost and
accumulated depreciation of tangible fixed assets to reflect inflation in those
years when the government enacts laws permitting such restatement. Such
restatements were most recently permitted in 1983 and 1996. All tangible fixed
assets acquired since year-end 1996 are earned on a historical basis. Under U.S.
GAAP the cost and accumulated depreciation of tangible fixed assets must be
carried on a historical cost basis. The effect of eliminating such restatements
for U.S. GAAP, when compared with Spanish GAAP, would be to decrease the related
annual depreciation charges, resulting in an increase in net income and a
decrease in shareholders' equity.
Goodwill. Under Spanish GAAP, goodwill is capitalized and amortized in the
income statement systematically over a period not exceeding 10 years (20 years
for annual accounts prepared since
14
<PAGE>
December 31, 1998). For Spanish GAAP purposes, negative goodwill (excess fair
value of acquired net assets over cost) arising from the first consolidation is
recorded as an increase in reserves. The differences arising subsequent to the
first consolidation are recorded as 'Negative Consolidation Difference' and
shown as a liability in the consolidated balance sheet. Under U.S. GAAP,
negative goodwill is amortized to income systematically over the period
estimated to be benefited.
Extraordinary income and expenses. Parent has recorded certain income and
expenses as extraordinary in the income statement. Under U.S. GAAP, these income
and expenses items would not have been classified as extraordinary items but
rather included in the determination of operating results.
Shareholdings in a controlling company. Under Spanish GAAP, shares of the
controlling company owned by group companies are recorded at cost under the
'Treasury stock' caption on the asset side of the consolidated balance sheets.
Under U.S. GAAP the cost of such amounts would be reflected as a reduction to
shareholders' equity.
Accounting for leases. Under U.S. GAAP leases are treated as capital leases
(the leased asset is capitalized and a liability is recognized for the lease
obligation) meeting one or more of the following criteria: (i) the lease term is
equal to 75%, or more of the estimated economic life of the leased property;
(ii) the present value of the minimum lease payments equals or exceeds 90% of
the fair value of the leased property; (iii) there is a bargain purchase option
held by the lessee; or (iv) the owner transfers to the lessee. If none of the
above criteria are met, the lease is treated as an operating lease (lease
payments are expensed, generally as incurred). Under Spanish GAAP, operating
leases cannot be capitalised; lease installments paid are charged to expenses.
Foreign currency translation. Under Spanish GAAP, unrealized gains which
result from exchange rate variations in relation to foreign currency
denomination balances are deferred and recognised as income when the transaction
is realised. Under U.S. GAAP these exchange differences are recognized as
income.
Additional disclosures. U.S. GAAP could require additional disclosures in
the financial statements of the Company.
Except as set forth elsewhere in this Offer to Purchase: (i) neither Parent
nor Purchaser, nor, to the best knowledge of Parent or Purchaser, PV, FCC,
B1998, Vivendi, or any of the persons listed in Schedule I hereto or any
majority-owned subsidiary of Parent beneficially owns or has a right to acquire
any Shares or any other equity securities of the Company; (ii) neither Parent
nor Purchaser, nor, to the knowledge of Parent or Purchaser, PV, FCC, B1998,
Vivendi, or any of the persons or entities referred to in clause (i) above has
effected any transaction in the Shares or any other equity securities of the
Company during the past 60 days; (iii) neither Parent nor Purchaser, nor, to the
knowledge of Parent or Purchaser, PV, FCC, B1998, Vivendi, or 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, the transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations; (iv) during the three years preceding the date of this Offer to
Purchase, there have been no transactions which would require reporting under
the rules and regulations of the Commission between any of Parent or Purchaser
or any of Parent's subsidiaries or, to the best knowledge of Parent or
Purchaser, PV, FCC, B1998, Vivendi, or any of the persons listed in Schedule I
hereto, on the one hand, and the Company or any of its executive officers,
directors or affiliates, on the other hand; and (v) except as disclosed in
Section 10, during the three years preceding the date of this Offer to Purchase,
there have been no contracts, negotiations or transactions between either of
Parent or Purchaser or any of Parent's subsidiaries or, to the best knowledge of
Parent or Purchaser, PV, FCC, B1998, Vivendi, or any of the persons listed in
Schedule I hereto, on the one hand, and the Company or its subsidiaries or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets of the
Company.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. In early 1999,
prior to its retention by the Company, the Company Financial Advisor made a
presentation to Parent regarding the U.S. cement industry and identified the
Company, among others, as a potential acquisition candidate for Parent.
15
<PAGE>
Parent was not interested in pursuing an acquisition of the Company at that
time. On June 24, 1999, Parent read a news article quoting the Company's Chief
Financial Officer as follows: '[a]n acquisition at the appropriate price would
benefit all shareholders, and we certainly wouldn't stand in the way of that.'
Shortly thereafter, Parent engaged Schroder & Co. Inc. and J. Henry Schroder,
S.V., S.A. (collectively, 'PARENT'S FINANCIAL ADVISOR') as its financial advisor
in connection with a possible acquisition of the Company.
On or about July 27, 1999, Parent received a phone call from the Company
Financial Advisor indicating that the Company was interested in exploring
opportunities for a business combination at a premium to the then current market
price of the Shares. On or about August 2, 1999, Parent's Financial Advisor
telephoned the Company Financial Advisor to indicate that Parent had an interest
in exploring a possible business combination with the Company but that it could
not proceed until early September.
In August 1999, the Company Financial Advisor orally provided summary
projected financial information about the Company to Parent's Financial Advisor
and requested an initial indication of interest from Parent.
On September 8, 1999, Parent's Financial Advisor, on behalf of Parent,
orally submitted an initial indication of interest to the Company. Parent's
Financial Advisor did not convey a specific price, but acknowledged that Parent
was aware the Company was seeking a substantial premium to the then current
market price of the Shares.
On September 21, 1999, Parent entered into a confidentiality and standstill
agreement with the Company (the 'CONFIDENTIALITY AGREEMENT').
On October 1, 1999, representatives of Parent and Parent's Financial
Advisor attended a management presentation by the Company's senior management
and conducted an initial visit to the Company's data room. During October,
representatives of Parent visited the data room several additional times,
conducted plant visits and had discussions with the Company's senior management
about various due diligence matters.
On October 21, 1999, Parent submitted an initial non-binding proposal to
acquire the Company at a price of $33 per Share, which Parent indicated was
based on the information it had received to date and subject to the following
conditions: negotiation of a satisfactory merger agreement, satisfactory
completion of financing arrangements, satisfactory completion of due diligence
(including discussions with the Company's senior management about revising their
employment agreements) and the approval of Parent's board of directors, which
was expected to meet within approximately the next ten days. The Company
Financial Advisor indicated Parent's proposal was competitive in value, but
conveyed the Company's concern with the conditions to the proposal, including
the fact that Parent had not completed its financing arrangements. On October
22, 1999, Parent furnished to the Company a mark-up of the Company's proposed
form of merger agreement.
On October 25, 1999, Parent and Parent's counsel, Masterman, Culbert &
Tully LLP and Weil, Gotshal & Manges LLP, began a series of discussions with the
Company and its counsel, Proskauer Rose LLP, to negotiate the terms and
conditions of the Merger Agreement other than price.
On October 27, 1999, a representative of Parent had a conversation with a
representative of the Company regarding Parent's desire for management
continuity and the fact that, based on informal discussions with members of
Parent's board, it appeared unlikely that Parent's board would approve an offer
of $33 per Share, although it might approve an offer of $32 or $31 per Share or
less. The representatives of Parent and the Company also discussed the status of
Parent's financing commitments and the timing of Parent's board meeting. The
Company indicated an interest in continuing to pursue a transaction with Parent,
but requested a firm indication of price and updates on the Parent board
approval process.
On or about October 29, 1999, Parent furnished the Company with a letter
from one of Parent's lending institutions reiterating its interest in providing
financing for Parent's acquisition of the Company on terms to be negotiated.
16
<PAGE>
On October 30 and 31, 1999, the Company Financial Advisor conveyed to
Parent's Financial Advisor the Company's preliminary third quarter results,
which the Company indicated had been adversely affected by the recent hurricane
and tropical storms.
On November 1, 1999, representatives of Parent and the Company met to
discuss various aspects of the transaction. Parent's representatives emphasized
Parent's desire to ensure management continuity and requested that the Company's
senior management clarify that they would not consider certain consequences of
the change of control of the Company resulting from Parent's acquisition of the
Shares to constitute 'good reason' to terminate their employment and change in
control agreements with the Company. The executives may not terminate these
agreements and receive severance and other benefits as a result of a change of
control without 'good reason' prior to the first anniversary of the change of
control.) Also in this discussion, Parent's representatives indicated they
believed that Parent would be willing to offer $28 to $29 per Share.
Representatives of the Company responded that they believed the Company's board
would not accept an offer unless it was more than $30 per Share and indicated
that the Company had received an offer from another bidder that was competitive
in value and did not have any timing or financing conditions.
On or about November 2, 1999, the Company Financial Advisor had a
conversation with one of Parent's lending institutions to confirm the
availability of Parent's financing.
On November 2, 1999, after several discussions among their representatives,
Parent and the Company reached agreement on a price of $31 per Share subject to
final board approvals and the execution of a mutually satisfactory Merger
Agreement. Parent also conditioned its agreement on the execution of clarifying
amendments to senior management's agreements.
On November 3, 1999, Parent and Parent's counsel completed negotiating with
the Company and the Company's counsel the terms and conditions of the Merger
Agreement and the clarifying amendments to senior management's employment
agreements.
On November 4, 1999, the clarifying amendments were executed by the Company
and senior management.
The Merger Agreement was approved by the Boards of Directors of Parent and
the Company, executed and publicly announced in the U.S. prior to the opening of
trading on Nasdaq on November 4, 1999.
On November 10, 1999, Purchaser commenced the Offer.
11. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT AND OTHER AGREEMENTS; OTHER MATTERS. The purpose of the Offer and the
Merger is to enable Purchaser to acquire control of, and the entire equity
interest in, the Company. The Offer is intended to increase the likelihood that
the Merger will be effected promptly. The purpose of the Merger is to acquire
all outstanding Shares not acquired pursuant to the Offer or otherwise.
Parent intends, as soon as possible after consummation of the Offer and in
accordance with the Merger Agreement, to obtain representation on the Company's
Board of Directors proportionate to its then Share ownership.
Parent believes that the acquisition of the Company will enable it to
establish critical mass in the important North American market, where it is
expected that increased public spending on highways and infrastructure, as
promoted by the Transportation and Equity Act for the 21st Century (TEA 21),
should help keep cement demand above installed production capacity during the
next four or five years, particularly in the Company's regional markets. In
addition, the transaction will enable Parent to diversify its business from its
heavy emphasis on Spain and to consolidate its presence on the Atlantic coast,
where Parent already operates a plant in Maine through its 50% participation in
CDN-USA, Inc. Furthermore, Parent expects to capitalize on the Company's
experience in using waste materials as fuel to reduce costs in the cement
manufacturing process.
Except as noted in this Offer to Purchase, Purchaser and Parent have no
present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, reorganization, liquidation, or sale or transfer
of assets, involving the Company or any of its subsidiaries or any other
material changes in the Company's capitalization, dividend policy, corporate
structure or business.
17
<PAGE>
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement
and is qualified in its entirety by reference to the full text of the Merger
Agreement filed with the Commission as an exhibit to the Schedule 14D-1 and
incorporated herein by reference. The Merger Agreement may be examined, and
copies obtained, as described in Section 8 above.
General. The Merger Agreement provides for the commencement of the Offer,
upon the terms and subject to the conditions contained therein, and further
provides for the consummation of the Merger following the satisfaction or
waiver, if permitted by applicable law, of the conditions contained in the
Merger Agreement.
In the Merger Agreement, the Company consented to the Offer and represented
that its Board of Directors has unanimously (i) determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, are fair to and in the best interests of the Stockholders,
(ii) approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, in accordance with the DGCL, and
(iii) resolved (subject to the provision described in the second paragraph of
'Other Proposals' below) to recommend that the Stockholders accept the Offer and
adopt the Merger Agreement and the Merger. The Company also represented that its
Board of Directors had received the written opinion of the Company Financial
Advisor, dated the date of the Merger Agreement, that as of the date thereof,
the cash consideration to be received by the Stockholders pursuant to the Offer
and Merger is fair from a financial point of view to the Stockholders other than
Purchaser and its affiliates.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL,
Purchaser will be merged with the Company at the Effective Time. Following the
Merger, the separate corporate existences of Purchaser and the Company will
cease and the Surviving Corporation will succeed to and assume all the rights
and obligations of Purchaser and the Company in accordance with the DGCL.
At the Effective Time, each Share outstanding immediately prior to the
Effective Time (other than those held by the Company as treasury stock or owned
by Parent or any of its subsidiaries immediately prior to the Effective Time,
all of which will be cancelled, and dissenting Shares, if any) will, by virtue
of the Merger, be converted into the right to receive the Merger Consideration,
payable to the holder thereof upon surrender of the certificates representing
such Shares.
Subject to the terms and conditions in the Merger Agreement, (a) if
approval of the Stockholders is required under the DGCL, a Certificate of Merger
shall be duly filed with the Secretary of State of the State of Delaware as soon
as practicable after obtaining such Stockholder approval, or (b) if such
Stockholder approval is not required to be obtained in order to consummate the
Merger, a Certificate of Ownership and Merger shall be duly filed with the
Secretary of State of the State of Delaware as soon as practicable after the
expiration of the Offer. If a Stockholder vote is required in connection with
the Merger, Parent has agreed to cause all Shares owned by Parent, Purchaser and
their affiliates to be voted in favor of the Merger. If Purchaser and/or Parent
and its affiliates are the owners of at least 90% of the outstanding shares of
each class of stock following the Offer or otherwise, the Merger will be
consummated without a meeting or vote of Stockholders in accordance with the
'short-form' merger provisions of Section 253 of the DGCL.
Stock Option Plans. The Merger Agreement provides that at, or immediately
prior to the Effective Time, each option to purchase Shares outstanding under
the Option Plans, whether or not vested or exercisable, will be canceled, and
the Company shall pay each holder of any such option an amount in cash equal to
(i) the product of (A) the excess, if any, of the Share Price over the
applicable exercise price of such option and (B) the number of Shares each
holder could have purchased (assuming full vesting of all options) had such
holder exercised such option in full immediately prior to the Effective Time
(which amount shall be subject to any applicable withholding tax).
Prior to the first purchase of Shares pursuant to the Offer, the Company
has agreed to take any actions necessary under the Option Plans to effect the
transactions contemplated by the Merger Agreement.
18
<PAGE>
Employee Benefits. Following consummation of the Offer, Parent will, and
will cause the Surviving Corporation to, honor, fulfill and discharge in
accordance with their terms (i) all existing employment, severance, consulting,
change of control and indemnification agreements and other bonus and
compensation arrangements between the Company or any of its subsidiaries and any
current or former officer, director or employee thereof as disclosed to Parent
in writing in the Merger Agreement and (ii) with respect to all employees,
officers and directors of the Company, all legal and contractual obligations for
benefits or other amounts earned or accrued through the Effective Time under
employee benefit plans, programs, policies and arrangements of the Company and
its subsidiaries disclosed in writing in the Merger Agreement. From the
Effective Time through December 31, 2000, Parent has also agreed to provide, or
cause the Surviving Corporation to provide, to current and former employees of
the Company compensation and benefits which are at least comparable in the
aggregate to the compensation and Benefit Plans (as defined) currently in place
for such employees excluding any equity plans; provided, however, that with
respect to employees who are subject to collective bargaining, all compensation
and benefits shall be provided in accordance with the applicable collective
bargaining agreements. The Merger Agreement does not restrict Parent from
exercising the right to terminate the employment of any employee at any time or,
subject to certain exceptions, to modify any other terms or conditions of such
employee's employment.
Board Representation; Amendments and Waivers. The Merger Agreement provides
that upon Purchaser's acceptance for payment pursuant to the Offer of a number
of Shares that satisfies the Minimum Condition, Parent shall be entitled,
subject to Section 14(f) of the Exchange Act, to designate the number of
directors, rounded up to the nearest whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors and (ii) the percentage that the number of Shares
beneficially owned by Parent bears to the total number of Shares outstanding on
a fully diluted basis, and the Company shall take all action necessary to cause
Parent's designees to be elected or appointed to the Company's Board of
Directors, including, without limitation, increasing the number of directors,
and seeking and accepting resignations of incumbent directors. At such time, the
Company will also use its best efforts to cause individuals designated by Parent
to constitute the number of members, rounded up to the nearest whole number, on
(i) each committee of the Board of Directors of the Company and (ii) each board
of directors of each subsidiary of the Company (and each committee thereof) that
represents the same percentage as such individuals represent on the Board of
Directors of the Company. Notwithstanding the foregoing, Parent and the Company
will use their best efforts to ensure that at least two members of the Company's
Board of Directors as of the date of the Merger Agreement who are not officers
or affiliates of the Company ('INDEPENDENT DIRECTORS') will remain members of
the Company's Board of Directors until the Effective Time.
Any provision of the Merger Agreement may be amended or waived prior to the
Effective Time if, but only if, such amendment or waiver is in writing and
signed, in the case of any amendment, by the Company, Purchaser and Parent or,
in the case of a waiver, by the party against whom the waiver is to be
effective. However, if Stockholder approval of the Merger Agreement and the
Merger is required following consummation of the Offer, following such approval,
no amendment or waiver will be made that by law requires the further approval of
the Stockholders without such Stockholder approval. In addition, from and after
the time Parent's designees constitute a majority of the Company's Board of
Directors until the Effective Time, the approval of a majority of the
Independent Directors shall be required to authorize any amendment of the Merger
Agreement, any termination of the Merger Agreement by the Company, any extension
of time for performance of any obligation or action under the Merger Agreement
by Parent or Purchaser and any waiver of any conditions contained in the Merger
Agreement for the Company's benefit (including, with respect to the Offer, any
waiver of the Minimum Condition, any change in the form of or decrease in the
consideration per Share, any decrease in the number of Shares sought or the
imposition of any additional conditions) or any of the Company's rights under
the Merger Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties to the Merger Agreement,
including, without limitation, (i) representations and warranties by the Company
as to corporate existence and power, authority relative to the Merger Agreement
and the transactions contemplated thereby, governmental consents
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and approvals, non-contravention, capitalization, public filings, financial
statements, information supplied, absence of certain changes or undisclosed
material liabilities, litigation, taxes, employee benefit and labor matters,
compliance with applicable laws, finders' fees, environmental matters,
antitakeover statutes, intellectual property, the Year 2000 issue, properties
and defaults under contracts, and (ii) representations and warranties by Parent
(with respect to itself and Purchaser) as to corporate existence and power,
authority relative to the Merger Agreement and the transactions contemplated
thereby, governmental consents and approvals, non-contravention, information
supplied, finders' fees and financing arrangements.
Conduct of Business Until the Merger. The Merger Agreement provides that,
the Company will, and will cause its subsidiaries to, carry on their respective
business in the ordinary course consistent with past practices and use all
reasonable best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
current officers and employees. The Merger Agreement further provides that,
without limiting the generality of the foregoing the Company will not do, and
will not permit any of its subsidiaries to do, any of the following:
(i) increase the compensation (or benefits) payable to or to become
payable to any director or employee, except for increases in salary or
wages of employees in the ordinary course of business and consistent with
past practice; (ii) grant any severance or termination pay (other than
pursuant to the severance policy or practice of the Company or its
subsidiaries disclosed to Parent in the Merger Agreement) to, or enter into
or amend in any material respect any employment or severance agreement
with, any employee; (iii) establish, adopt, enter into or amend in any
material respect any collective bargaining agreement or any benefit plan;
or (iv) take any action to accelerate any rights or benefits, or make any
determinations under any collective bargaining agreement or benefit plan;
declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property),
outstanding shares of capital stock, except for dividends by a wholly owned
subsidiary of the Company to the Company or another wholly owned subsidiary
of the Company;
redeem, purchase or otherwise acquire, or offer or propose to redeem,
purchase or otherwise acquire, any outstanding shares of capital stock of,
or other equity interests in, or any securities that are convertible into
or exchangeable for any shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights or any kind to
acquire any shares of capital stock of, or other equity interests in, the
Company or any of its subsidiaries (other than (i) any such acquisition by
the Company or any of its wholly owned subsidiaries directly from and
wholly owned subsidiary of the Company in exchange for capital
contributions or loans to such subsidiary, or (ii) any purchase, forfeiture
or retirement of Shares or Options occurring pursuant to the terms (as in
effect on the date of the Merger Agreement) of any existing benefit plan of
the Company or any of its subsidiaries, in a manner otherwise consistent
with the terms of the Merger Agreement;
effect any reorganization or recapitalization; or split, combine or
reclassify any of the capital stock of, or other equity interests in, the
Company or any of its subsidiaries or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of such capital stock or such equity interests;
offer, sell, issue or grant, or authorize or propose the offering,
sale, issuance or grant of, any shares of capital stock of, or other equity
interests in, any securities convertible into or exchangeable for (or
accelerate any right to convert or exchange securities for) any shares of
capital stock of, or other equity interest in, or any options, warrants or
rights of any kind to acquire any shares of capital stock of, or other
equity interests in, or any voting Company debt or other voting securities
of, the Company or any of its subsidiaries, or any 'phantom' stock,
'phantom' stock rights, SARs or stock-based performance units;
acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or in any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire any
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assets of any other person (other than the purchase of assets from
suppliers or vendors in the ordinary course of business and consistent with
past practice);
sell, lease, exchange or otherwise dispose of, or grant any lien with
respect to any of the properties or assets of the Company or any of its
subsidiaries that are, individually or in the aggregate, material to the
business of the Company and its subsidiaries, except for dispositions of
excess or obsolete assets and sales of inventories in the ordinary course
of business and consistent with past practice;
propose or adopt any amendments to its certificate of incorporation
or bylaws or other organizational documents;
effect any change in any accounting methods, principles or practices
in effect as of December 31, 1998 affecting the reported consolidated
assets, liabilities or results of operations of the Company, except as may
required by a change in generally accepted accounting principles;
issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any such indebtedness or debt securities of another person, enter
into any 'keep well' or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the
economic effect of any of the foregoing, or make any loans, advances or
capital contributions to, or investments in, any person, other than to or
in the Company or any direct or indirect wholly owned subsidiary of the
Company; provided, however, that the Company's right to borrow pursuant to
its revolving credit agreement in the ordinary course of business shall not
be limited by these provisions;
pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved against
in the most recent consolidated financial statements (or the notes thereto)
of the Company included in the Company's documents filed with the
Commission or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice;
make any tax election except in a manner consistent with past
practice, change any method of accounting for tax purposes, or settle or
compromise any material tax liability;
make or agree to make any new capital expenditures which individually
are in excess of $500,000 or which in the aggregate are in excess of
$2,000,000; or
agree in writing or otherwise to take any of the foregoing actions.
Other Proposals. The Merger Agreement provides that, until the Effective
Time or the termination of the Merger Agreement in accordance with its terms,
the Company and its subsidiaries will not, and the Company and its subsidiaries
shall direct their respective officers, directors and representatives not to,
directly or indirectly, initiate, solicit, or knowingly encourage (including by
way of furnishing non-public information or assistance) or take any other action
to facilitate any inquiries or the making or submission of any Acquisition
Proposal (as defined below) or enter into or maintain or continue discussions or
negotiate with any person or group in furtherance of such inquiries or to obtain
or induce any person or group to make or submit an Acquisition Proposal or agree
to or endorse any Acquisition Proposal or assist or participate in, facilitate
or knowingly encourage, any effort or attempt by any other person or group to do
or seek any of the foregoing or authorize any of its officers, directors or
representatives to take any such action provided, however, that nothing
prohibits the Board of Directors of the Company from furnishing information to,
or entering into discussions or negotiations with, any person or entity that has
made an unsolicited written Acquisition Proposal if, and only to the extent that
(A) the acceptance for payment of Shares pursuant to the Offer shall not have
occurred, (B) the Board of Directors of the Company, based on advice of
independent legal counsel (who may be the Company's regularly engaged
independent legal counsel), determines in good faith that failure to take such
action would result in a breach of the fiduciary duty under applicable law, and
(C) prior to taking such action, the Company (x) provides reasonable notice to
Parent to the effect that it intends to take such action and (y) receives from
such person an executed confidentiality agreement in reasonably customary form
and in any event containing terms at least as stringent as those contained in
the confidentiality
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agreement between Parent and the Company. Prior to providing any information to
or entering into discussions or negotiations with any person in connection with
an Acquisition Proposal or any inquiry that could lead to an Acquisition
Proposal by such Person, the Company shall promptly advise Parent of any request
for information or the submission or receipt of any Acquisition Proposal, or any
inquiry with respect to or which could lead to any Acquisition Proposal, the
material terms and conditions of such request, Acquisition Proposal or inquiry,
and the identity of the person making any such request, Acquisition Proposal or
inquiry and its response or responses thereto. The Company must keep Parent
fully informed of the status and details (including amendments or proposed
amendments) of any such request, Acquisition Proposal or inquiry and must
promptly give Parent a copy of any information delivered to such person which
has not previously been delivered by the Company to Parent or Purchaser. The
Merger Agreement further provides that the Company will, and will cause its
subsidiaries and the officers, directors, employees and other agents and
advisors of the Company and its subsidiaries to, immediately cease and cause to
be terminated any discussions or negotiations, that have taken place prior to
the date of the Merger Agreement with any parties with respect to any of the
foregoing. For purposes of the Merger Agreement, 'ACQUISITION PROPOSAL' means
any inquiry, offer or proposal regarding any of the following (other than the
Transactions contemplated by the Merger Agreement) involving the Company:
(i) any merger, consolidation, share exchange, recapitalization, liquidation,
dissolution, business combination or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 20% or more
of the consolidated assets of the Company and its subsidiaries, taken as a
whole; (iii) any tender offer (including a self tender offer) or exchange offer
that, if consummated, would result in any person or group beneficially owning
more than 20% of the outstanding shares of any class of equity securities of the
Company or its subsidiaries or the filing of a registration statement under the
Securities Act of 1933, as amended (the 'SECURITIES ACT') in connection
therewith; (iv) any acquisition of 20% of more of the outstanding shares of
capital stock of the Company or the filing of a registration statement under the
Securities Act, in connection therewith or any other acquisition or disposition
the consummation of which would prevent or materially diminish the benefits to
Parent of the Merger; or (v) any public announcement by the Company or any third
party of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
The Merger Agreement also provides that neither the Board of Directors of
the Company nor any committee thereof may (i) withdraw or modify, or fail to
make, or propose to withdraw or modify, in each case in a manner adverse to
Parent, its approval or recommendation of the Merger Agreement, the Offer or the
Merger (ii) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal, or (iii) cause the Company to accept such Acquisition
Proposal and/or enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Acquisition
Proposal; provided, however, that prior to the earlier to occur of acceptance
for payment of Shares pursuant to the Offer or adoption of the Merger Agreement
by the requisite vote of the Stockholders, the Board of Directors of the Company
may terminate the Merger Agreement if, and only to the extent that (A) such
Acquisition Proposal is a Superior Proposal, (B) the Board of Directors of the
Company, based on the advice of independent legal counsel (who may be the
Company's regularly engaged independent counsel), determines in good faith that
the failure to do so would result in a breach of the fiduciary duty of the Board
of Directors of the Company to the stockholders of the Company under applicable
law; (C) the Company complies with its obligations described under 'Fees and
Expenses' below, (D) the Company is not in breach of its obligations described
in this and the preceding paragraph and (E) the Company shall have afforded
Parent an opportunity to match the Superior Proposal within three business days
after receipt of notice from the Company.
For purposes of the Merger Agreement 'SUPERIOR PROPOSAL' means any proposal
made by a third party to acquire, directly or indirectly, including pursuant to
a tender offer, exchange offer, merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or other similar
transaction, for at least 75% of the then outstanding Shares, or all or
substantially all of the consolidated assets of the Company, which the Board of
Directors of the Company determines in good faith (based on the advice of a
financial advisor of nationally recognized reputation) to be more favorable to
the Company's stockholders (taking into account relevant legal, financial and
regulatory
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considerations and other aspects of such proposal and the third party making
such proposal and the conditions and prospects for completion of such proposal)
than the Offer and the Merger.
Notwithstanding the foregoing, the Merger Agreement does not prohibit the
Company nor the Board of Directors of the Company from taking and disclosing to
the Stockholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Stockholders if the Board of
Directors of the Company, based on the advice of independent legal counsel (who
may be the Company's regularly engaged independent counsel), determines in good
faith that the failure to take such action would result in a breach of the
fiduciary duty of the Board of Directors to the Stockholders under applicable
law; provided that neither the Board of Directors of the Company nor any
committee thereof shall withdraw or modify, or shall propose to withdraw or
modify, the approval or recommendation of the Board of Directors of the Company
of the Offer or the Merger or shall approve or recommend, or shall publicly
propose to approve or recommend, an Acquisition Proposal unless the Company and
the Board of Directors have complied in all material respects with the
provisions described above.
Conditions of the Merger. The obligations of the Company, Parent and
Purchaser to consummate the Merger are subject to the satisfaction (or waiver by
the party for whose benefit the applicable condition exists) of the following
conditions: (a) if required by the DGCL, the Merger Agreement shall have been
approved and adopted by the affirmative vote of the stockholders of the Company
by the requisite vote in accordance with such law; (b) no temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that each of
the parties shall have used its reasonable best efforts to prevent the entry of
any such injunction or other order and to appeal, subject to the other terms of
the Merger Agreement as promptly as possible any injunction or other order that
may be entered; and (c) Purchaser shall have purchased Shares pursuant to the
Offer.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the Effective Time, whether before or after approval of the
Merger Agreement by the Stockholders:
By mutual consent of the parties;
By any party if any court of competent jurisdiction or other
Governmental Entity shall have issued a final, non-appealable order, decree
or ruling or taken any other final non-appealable action restraining,
enjoining or otherwise prohibiting the consummation of the Offer or the
Merger;
By Parent or Purchaser if Purchaser terminates the Offer without
purchasing any Shares, or has not accepted Shares in the Offer prior to
January 31, 2000, in each case because any of the conditions to the Offer
described in Section 14 hereof have not been met;
By the Company, if the Company is not in a material breach of the
Merger Agreement and Purchaser either terminates the Offer without
purchasing any Shares or has not accepted Shares in the Offer prior to
January 31, 2000;
By the Company if prior to Purchaser's acceptance of Shares in the
Offer, the Company notifies Parent that it intends to enter into an
agreement with respect to a Superior Proposal and Parent does not within
three business days make an offer that the Company's Board of Directors
determines in good faith, based on the advice of its financial advisors is
at least as favorable to the Stockholders as the Superior Proposal;
By Parent or Purchaser if prior to Purchaser's purchase of Shares in
the Offer, the Company has breached its representations and warranties and
the condition giving rise to the breach, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect on the Company or
the Company has failed to perform its covenants under the Merger Agreement
and the failure is reasonably likely to have a Material Adverse Effect on
the Company or on consummation of the Offer (and the breach is not cured
within the cure period provided);
By Parent or Purchaser if prior to Purchaser's purchase of Shares in
the Offer, the Company's Board of Directors either (x) withdraws, modifies,
amends or changes its recommendation of the
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Offer and the Merger in a manner adverse to Parent or Purchaser or
(y) approves, or recommends that the Stockholders of the Company accept,
another Acquisition Proposal; or
By the Company if prior to Purchaser's purchase of Shares in the
Offer, Parent has materially breached its representations or warranties or
failed to comply with its material covenants and the effect of the breach
is to materially adversely affect or delay consummation of the Offer (and
the breach is not cured within the cure period provided).
In the event the Merger Agreement is terminated by either the Company or
Parent, the Merger Agreement will become void and have no effect, and there will
be no liability or obligation on the part of Parent, Purchaser or the Company
except with respect to certain specified provisions (including the provisions
described below under 'Fees and Expenses' and in the Confidentiality Agreement
described below) and except to the extent that such termination results from the
willful breach by a party to the Merger Agreement.
Fees and Expenses. The Company has agreed to pay to Parent a termination
fee equal to $10 million (inclusive of expenses) if:
either party terminates the Merger Agreement (i) because the Minimum
Condition to the Offer was not achieved, (ii) Parent and Purchaser are not
in a material breach of the Merger Agreement and (iii) prior to termination
of the Merger Agreement, a third party has acquired beneficial ownership of
at least a majority of the Shares or of the assets of the Company;
either party terminates the Merger Agreement (i) because the Minimum
Condition to the Offer was not achieved, (ii) Parent and Purchaser are not
in a material breach of the Merger Agreement, (iii) prior to the
termination of the Merger Agreement, a third party announces an intention
to acquire at least a majority of the Shares or of the assets of the
Company and (iv) within 12 months of the termination of the Merger
Agreement, either that particular Acquisition Proposal or any other
Acquisition Proposal, which is also for at least a majority of the Shares
or of the assets of the Company, is consummated at a price per Share higher
than the price per Share that was offered by Purchaser or for aggregate
consideration (including the retention of any equity by the Company's
stockholders) that exceeds the aggregate consideration of the Offer and the
Merger;
Parent terminates the Merger Agreement because the Company's Board of
Directors either (i) withdrew or modified its recommendation of the Offer
and the Merger in a manner adverse to Parent or Purchaser or
(ii) approved, or recommended that the stockholders of the Company accept,
another acquisition proposal; or
the Company terminates the Merger Agreement in order to enter into
another agreement with respect to a Superior Proposal after complying with
all the procedures required therefor under the Merger Agreement (including
affording Parent an opportunity to match the Superior Proposal within three
business days after receipt of notice from the Company).
Such termination fee must be paid concurrently with the termination of the
Merger Agreement except in the circumstances described in the second bullet
paragraph above, in which event the fee must be paid concurrently with
consummation of the Acquisition Proposal.
The Company has agreed to reimburse Parent for its actual reasonable
documented expenses up to $1 million if Parent terminates the Merger Agreement
because (i) one or more representations or warranties of the Company are not
true, (ii) such breach is not willful, (iii) the condition giving rise to the
breach, individually or in the aggregate, is reasonably likely to have a
material adverse effect on the Company and (iv) the breach is not cured prior to
the earlier of 15 days following notice of such breach and two business days
prior to the date on which the Offer expires.
Except as described above, the Merger Agreement provides that each party
will pay its own fees and expenses incurred in connection with the Merger
Agreement and the transactions contemplated thereby.
Indemnification and Insurance. In the Merger Agreement Purchaser agreed
that all rights to indemnification for acts or omissions occurring at or prior
to the Effective Time existing as of November 4, 1999 in favor of the current or
former directors or officers, employees and agents of the
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Company and its subsidiaries as provided in their respective certificates of
incorporation, bylaws or agreements disclosed in the Company's reports filed
with the Commission or filed as exhibits thereto as in effect on November 4,
1999 will survive the Merger and continue in full force and effect in accordance
with their terms for a period of six years from the Effective Time.
The Merger Agreement also provides that Parent will cause to be maintained
for a period of six years from the Effective Time the Company's current
directors' and officers' insurance and indemnification policy and fiduciary
liability policy (although Parent may substitute therefor policies or financial
guarantees with the same carriers or other reputable and financially sound
carriers of at least the same coverage amounts containing terms and conditions
no less advantageous than the terms of such existing insurance coverage) with
respect to facts or circumstances occurring at or prior to the Effective Time;
provided, however, that in no event will Parent be required to expend in any one
year an amount in excess of 300% of the annual premiums paid by the Company as
of November 4, 1999 for such insurance; and provided, further that, if the
annual premiums of such insurance coverage exceed such amount, Parent will be
obligated to use its reasonable best efforts to obtain a substantially similar
policy for a cost not exceeding such amount.
CONFIDENTIALITY AGREEMENT
The following is a summary of the material terms of the Confidentiality
Agreement and is qualified in its entirety by reference to the full text of the
Confidentiality Agreement filed with the Commission as an exhibit to the
Schedule 14D-1 and incorporated herein by reference. The Confidentiality
Agreement may be examined, and copies obtained, as set forth in Section 8 of
this Offer to Purchase.
Pursuant to the Confidentiality Agreement, Parent agreed to provide, among
other things, for the confidential treatment of discussions with the Company
regarding a possible transaction and the exchange of certain confidential
information concerning the Company. Parent further agreed that for a period of
one year from the date the Confidentiality Agreement was entered into by Parent,
Parent would not, without the prior written approval of the Company's Board of
Directors, (a) acquire, offer to acquire or agree to acquire, directly or
indirectly, any voting securities or assets of the Company, (b) make or
participate, directly or indirectly, in any solicitation of proxies to vote, or
seek to advise or influence any person with respect to the voting of, any voting
securities of the Company, (c) make any public announcement with respect to, or
submit a proposal for, or offer of, any extraordinary transaction involving the
Company or any of its securities or assets, (d) form, join or in any way
participate in a 'group' (within the meaning of Section 13(d)(3) of the Exchange
Act) in connection with the foregoing, (e) seek or propose to control or
influence the management or policies of the Company or (f) request the Company
or its representatives to amend or waive any of the foregoing.
OTHER MATTERS
Statutory Requirements. In general, under the DGCL, a merger of two
Delaware corporations requires the adoption of a resolution by the Board of
Directors of each of the corporations desiring to merge approving an agreement
of merger containing provisions with respect to certain statutorily specified
areas and the approval of such agreement of merger by the stockholders of each
corporation by the affirmative vote of the holders of a majority of all of the
outstanding shares of stock entitled to vote on such matter. Assuming that the
number of Shares outstanding on a fully-diluted basis does not increase from the
number outstanding on November 2, 1999 and that the Minimum Condition is
satisfied, upon consummation of the Offer Purchaser would own sufficient Shares
to enable it to satisfy the stockholder approval requirement to approve the
Merger. Purchaser intends to seek to consummate the Merger with the Company as
promptly as practicable after consummation of the Offer.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company would
have certain rights under Section 262 of the DGCL to dissent and demand
appraisal of, and payment in cash of the fair value of, their Shares. Such
rights, if the statutory procedures were complied with, could lead to a judicial
determination of the fair value (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial
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determination of the fair value of Shares could be based upon considerations
other than, or in addition to, the price paid in the Offer and the market value
of the Shares, including asset values and the investment value of the Shares.
The value so determined could be more or less than the purchase price per Share
pursuant to the Offer or the consideration per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL
DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE
PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DGCL.
'Going Private' Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain 'going private' transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. However,
Rule 13e-3 would be inapplicable if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination or (ii) the
Merger or other business combination is consummated within one year after the
purchase of the Shares pursuant to the Offer and the amount paid per Share in
the Merger or other business combination is at least equal to the amount paid
per Share in the Offer. If applicable, Rule 13e-3 requires, among other things,
that certain financial information concerning the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the Commission and disclosed to stockholders prior to
the consummation of the transaction.
12. SOURCE AND AMOUNT OF FUNDS. The Offer and the Merger are not subject to
any financing condition. The total amount of funds required by Purchaser and
Parent to consummate the Offer and the Merger and to pay related fees and
expenses is estimated to be approximately $306.6 million. Parent intends to
obtain the funds from the proceeds of the three bank facilities described below
(together with existing cash resources) and to provide the funds to Purchaser by
way of capital contributions and/or loans.
On November 8, 1999 Parent entered into separate binding commitment letters
with Banco Santander Central Hispano ('BSCH'), The Chase Manhattan Bank
('Chase') and Banco Bilbao Vizcaya ('BBV'). Pursuant to these commitment
letters, each of BSCH, Chase and BBV has agreed to provide Parent a $100 million
unsecured loan to finance the Offer and the Merger for aggregate proceeds of
$300 million. Each of the loans will be denominated in dollars or pesetas, at
Parent's choice, and will bear interest at Euribor or Libor plus a spread of
between 25 and 75 basis points. The loans will mature on May 6, 2000 and will
contain customary terms and conditions. Parent presently expects to refinance
these facilities with long-term debt, although no such arrangements have been
made.
13. DIVIDENDS AND DISTRIBUTIONS. In the Merger Agreement, the Company has
agreed not to declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property), outstanding
shares of capital stock, except for dividends by a wholly owned subsidiary of
the Company to the Company or another wholly owned subsidiary of the Company;
or, subject to certain exceptions, to redeem, purchase or otherwise acquire or
offer, sell, issue or grant, any additional Shares (other than issuances of
Shares pursuant to the exercise of options under the Option Plans), or any
shares of any other class of capital stock, or any securities convertible into
or exchangeable for, or rights, warrants or options, of any kind, to acquire,
any capital stock.
If, on or after the date of the Merger Agreement, the Company declares or
pays any dividend on the Shares or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the Shares that is payable or
distributable to Stockholders of record on a date prior to the transfer into the
name of Purchaser or its nominees or transferees on the Company's stock transfer
records of the Shares purchased pursuant to the Offer, and if Shares are
purchased in the Offer, then, without prejudice to Purchaser's rights under
Section 14, (i) the purchase price per Share payable by Purchaser pursuant to
the Offer shall be reduced by the amount of any such cash dividend or cash
distribution and (ii) any such non-cash dividend, distribution, issuance,
proceeds or right to be received by the tendering Stockholders shall (a) be
received and held by the tendering Stockholders for the account of Purchaser and
will be required to be promptly remitted and transferred
26
<PAGE>
by each tendering Stockholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer or (b) at the direction of
Purchaser, be exercised for the benefit of Purchaser, in which case the proceeds
of such exercise will promptly be remitted to Purchaser. Pending such remittance
and subject to applicable law, Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution, issuance,
proceeds or right and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by Purchaser in its
sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer or the Merger Agreement, Purchaser shall not be required to accept for
payment, or subject to Rule 14e-1(c) of the Exchange Act, pay for and may delay
the acceptance for payment of, or subject to Rule 14e-1(c) of the Exchange Act,
the payment for, any Shares not theretofore accepted for payment or paid for,
and Purchaser may terminate or amend the Offer if (i) at the Expiration Date,
the Minimum Condition has not been satisfied or (ii) at any time on or after
November 4, 1999 and prior to the acceptance for payment of Shares or the
payment therefor, any of the following conditions has occurred and continues to
occur:
(a) any representation and warranty of the Company in the Merger
Agreement (after reading out any materiality and dollar qualifications)
shall not be true and correct as of such time, except where the failure to
be so true and correct is not individually or in the aggregate reasonably
likely to have a Material Adverse Effect on the Company (other than to the
extent any such representation and warranty expressly relates to an earlier
date, in which case such representation and warranty shall not be true and
correct as of such date, except where the failure to be so true and correct
is not individually or in the aggregate reasonably likely to have a
Material Adverse Effect on the Company) and which breach shall not have
been cured prior to the earlier of (i) 15 days following notice of such
breach and (ii) two business days prior to the date on which the Offer
expires;
(b) the Company shall not have performed and complied with each
covenant or agreement contained in the Merger Agreement and required to be
performed or complied with by it, except where the failure to so perform or
comply is not reasonably likely to have a Material Adverse Effect on the
Company or materially and adversely affect the consummation of the Offer,
and which breach shall not have been cured prior to the earlier of (i) 15
days following notice of such breach and (ii) two business days prior to
the date on which the Offer expires;
(c) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on Nasdaq
or the Madrid Stock Exchange (excluding any coordinated trading halt
triggered as a result of a specified decrease in a market index) related to
market conditions, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the
Kingdom of Spain by any Governmental Entity, (iii) any material mandatory
limitation by any Governmental Entity on the extension of credit by banks
or other lending institutions, (iv) a commencement of a war, armed
hostilities or other national or international calamity directly or
indirectly involving the United States or the Kingdom of Spain, or (v) a
drop of more than 33.33% in the Dow Jones Industrial Average Index,
measured against the value of such index on November 4, 1999;
(d) any applicable waiting period under the HSR Act shall not have
expired or been terminated or there shall be pending before or threatened
by any Governmental Entity any suit, action, investigation or proceeding,
(i) challenging the acquisition by Parent or Purchaser of any Shares,
seeking to make illegal, materially delay, make materially more costly or
otherwise directly or indirectly restrain or prohibit the making or
consummation of the Offer and the Merger or seeking to obtain from the
Company, Parent or Purchaser any damages that are material in relation to
the Company and its subsidiaries, taken as whole, (ii) seeking to prohibit
Parent or any of its subsidiaries or affiliates from effectively
controlling in any material respect the business or operations of the
Company or its subsidiaries, (iii) requiring divestiture by Purchaser or
any of its affiliates of any Shares or current business or material assets
or (iv) which otherwise is reasonably likely to have Material Adverse
Effect on the Company or Parent;
27
<PAGE>
(e) there shall be any judgment, order or injunction (including with
respect to competition or antitrust matters) enacted, entered, promulgated
or issued with respect to (i) Parent, the Company or any of their
respective subsidiaries or affiliates or (ii) the Offer or the Merger by
any Governmental Entity or court, that has resulted or is reasonably likely
to result, directly or indirectly, in any of the consequences referred to
in clauses (i) though (iv) of paragraph (d) above;
(f) since November 4, 1999, there shall have occurred any events,
changes, effects or developments that, individually or in the aggregate,
have had or are reasonably likely to have, a Material Adverse Effect on the
Company;
(g) the Board of Directors of the Company or any committee thereof
shall have (i) withdrawn, or modified, amended or changed (including by
amendment of the Schedule 14D-9), or publicly announced an intention to do
so, in a manner adverse to Parent or Purchaser, its approval or
recommendation of the Offer, the Merger, or the Merger Agreement,
(ii) approved or recommended to the Stockholders or publicly announced an
intention to do so, an Acquisition Proposal or any other acquisition of
Shares other than the Offer and the Merger or (iii) adopted any resolution
to effect any of the foregoing; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The Merger Agreement defines 'Material Adverse Effect' as any change or
effect that is (after giving effect to any appropriate reserves for such matter
on the financial statements included in the Company's forms, reports and
documents filed with the Commission prior to November 4, 1999) materially
adverse to the business, results of operations, assets, liabilities or financial
condition of the Company and its subsidiaries, taken as a whole, or any event,
matter, condition or effect which precludes the Company from materially
performing its material obligations under the Merger Agreement or the
consummation of the transactions contemplated therein; provided, however, that
in determining whether there has been a Material Adverse Effect, any adverse
effect directly attributable to the following shall be disregarded: (i) general
economic or business conditions; (ii) general industry conditions; (iii) the
taking of any action permitted or required by the Merger Agreement; (iv) the
announcement or pendency of the Offer or the Merger; (v) the breach of Parent or
Purchaser of the Merger Agreement; and (vi) a decline in the Company's stock
price. The Merger Agreement defines 'Governmental Entity' as any Federal, state
or local government or any court, administrative or regulatory agency or
commission or other domestic governmental authority in the United States or the
Kingdom of Spain.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to any such condition and, subject to the terms of the Merger
Agreement, may be waived by Parent and Purchaser in whole or in part at any time
and from time to time in their sole discretion. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as
described in Section 14 or this Section 15, based on information provided by the
Company, none of the Company, Purchaser or Parent is aware of any license or
regulatory permit that appears to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
acquisition of Shares by Parent or Purchaser pursuant to the Offer, the Merger
or otherwise, or any approval or other action by any governmental,
administrative or regulatory agency or authority, domestic or foreign, that
would be required prior to the acquisition of Shares by Purchaser pursuant to
the Offer, the Merger or otherwise. Should any such approval or other action be
required, Purchaser and Parent presently contemplate that such approval or other
action will be sought, except as described below under 'State Antitakeover
Statutes.' While, except as otherwise described in this Offer to Purchase,
Purchaser does not presently intend to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the
28
<PAGE>
Company's business or that certain parts of the Company's business might not
have to be disposed of, or other substantial conditions complied with, in the
event that such approvals were not obtained or such other actions were not taken
or in order to obtain any such approval or other action. If certain types of
adverse action are taken with respect to the matters discussed below, Purchaser
could decline to accept for payment, or pay for, any Shares tendered. See
Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
Federal Reserve Board Regulations. Regulations G, U and X (the 'MARGIN
REGULATIONS') of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. The financing of the Offer
will not be directly or indirectly secured by the Shares or other securities
which constitute margin stock. Accordingly, all financing of the Offer will be
in full compliance with the Margin Regulations.
State Antitakeover Statutes. Section 203 of the DGCL, in general, prohibits
a Delaware corporation, such as the Company, from engaging in a 'Business
Combination' (defined as a variety of transactions, including mergers) with an
'Interested Stockholder' (defined generally as a person that is the beneficial
owner of 15% or more of the outstanding voting stock of the subject corporation)
for a period of three years following the date that such person became an
Interested Stockholder unless, prior to the date such person became an
Interested Stockholder, the board of directors of the corporation approved
either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder. In the Merger Agreement the
Company has represented that, by virtue of the approval of the Company's Board
of Directors, the provisions of Section 203 of the DGCL are not applicable to
the Merger, the Merger Agreement or any of the transactions contemplated by the
Merger Agreement.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
officers or principal places of business in such states. In Edgar v. MITE Corp.,
the Supreme Court of the United States (the 'SUPREME COURT') invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made certain corporate acquisitions more
difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana may, as a matter of corporate law
and, in particular, with respect to those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the State and were incorporated there.
Parent and Purchaser do not believe that the antitakeover laws and
regulations of any state other than the State of Delaware will by their terms
apply to the Offer, and, except as described above with respect to Section 203
of the DGCL, neither Parent nor Purchaser has attempted to comply with any state
antitakeover statute or regulations. Purchaser reserves the right to challenge
the applicability or validity of any state law purportedly applicable to the
Offer and nothing in this Offer to Purchase or any action taken in connection
with the Offer is intended as a waiver of such right. If it is asserted that any
state antitakeover statute is applicable to the Offer and an appropriate court
does not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and Purchaser might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer or may be
delayed in consummating the Offer. In such case, Purchaser may not be obligated
to accept for payment, or pay for, any Shares tendered pursuant to the Offer.
See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the 'ANTITRUST DIVISION') and the Federal Trade
Commission (the 'FTC') and certain waiting period requirements have been
satisfied.
29
<PAGE>
Parent and the Company expect to file their Notification and Report Forms
with respect to the Offer under the HSR Act as soon as practicable after the
date hereof. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m., New York City time, on the fifteenth day after filing,
unless early termination of the waiting period is granted. However, the
Antitrust Division or the FTC may extend the waiting period by requesting
additional information or documentary material from Parent or the Company. If
such a request is made, such waiting period will expire at 11:59 p.m., New York
City time, on the tenth day after substantial compliance by Parent with such
request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Therefore, any waiting
period may be extended only with the consent of Parent. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. The relevant
governmental agency may also seek to prevent the consummation of the transaction
as discussed below. Purchaser will not accept for payment Shares tendered
pursuant to the Offer unless and until the waiting period requirements imposed
by the HSR Act with respect to the Offer have been satisfied. See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the Antitrust Laws of transactions such as Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after Purchaser's
acquisition 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 otherwise seeking divestiture of Shares acquired by Purchaser or
divestiture of substantial assets of Parent or its subsidiaries. Private
parties, as well as state governments, may also bring legal action under the
Antitrust Laws under certain circumstances. Based upon an examination of
information provided by the Company relating to the businesses in which Parent
and the Company are engaged, Parent and Purchaser believe that the acquisition
of Shares by Purchaser will not violate the Antitrust Laws. Nevertheless, there
can be no assurance that a challenge the Offer or other acquisition of Shares by
Purchaser on antitrust grounds will not be made or, if such a challenge is made,
of the result. See Section 14 for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
As used in this Offer to Purchase, 'Antitrust Laws' mean and include the
Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal
Trade Commission Act, as amended, and all other federal and state statutes,
rules, regulations, orders, decrees, administrative and judicial doctrines, and
other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade.
16. CERTAIN FEES AND EXPENSES. Schroder & Co. Inc. is acting as Dealer
Manager in connection with the Offer and together with J. Henry Schroder, S.V.,
S.A., its affiliate in Spain, is acting also as financial advisor to Parent in
connection with the proposed acquisition of the Company. Parent has agreed to
pay Parent's Financial Advisor for its services a cash fee equal to $3 million
payable at the closing of any transaction whereby Parent or one or more of
Parent's affiliates acquires control of a material interest in the Company. In
addition, Parent has agreed to indemnify Parent's Financial Advisor against
certain liabilities and expenses in connection with the proposed acquisition,
including liabilities under the federal securities laws. Parent's Financial
Advisor and its affiliates have from time to time rendered, and continue to
render, various investment banking services to Parent and its affiliates for
which they are paid customary fees. In the ordinary course of its business,
Parent's Financial Advisor and its affiliates may actively trade in the Shares
for their own account and for the account of their customers and, accordingly,
may at any time hold a long or short position in the Shares.
Innisfree M&A Incorporated has been retained by Purchaser as information
agent (the 'INFORMATION AGENT') in connection with the Offer. The Information
Agent may contact holders of Shares by mail, telephone, telex, telegraph and
personal interview and may request brokers, dealers and other nominee
stockholders to forward material relating to the Offer to beneficial owners. The
Information Agent will receive customary compensation for its services in
connection with the Offer,
30
<PAGE>
will be reimbursed for its reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses, including liabilities
under the federal securities laws.
In addition, ChaseMellon Shareholder Services, L.L.C. has been retained as
the Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive customary
compensation for its services in connection with the Offer, will be reimbursed
for its reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
Except as described above, Purchaser will not pay any fees or commissions
to any broker, dealer or other person (other than the Information Agent and the
Dealer Manager) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies and other nominees will, upon
request, be reimbursed by Purchaser for customary clerical and mailing expenses
incurred by them in forwarding materials 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 residing in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
However, Purchaser may, in its discretion, take such action as it may deem
necessary to make the Offer in any jurisdiction and extend the Offer to holders
of Shares in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of Purchaser by the Dealer Manager or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
Purchaser has filed with the Commission the Schedule 14D-1, together with
exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, furnishing certain additional information with respect to the
Offer, and may file amendments thereto. Such Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
office of the Commission in the same manner as described in Section 8 with
respect to information concerning the Company.
No person has been authorized to give any information or to make any
representation on behalf of Purchaser not contained in this Offer to Purchase or
in the Letter of Transmittal and, if given or made, any such information or
representation must not be relied upon as having been authorized. Neither the
delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of Purchaser or the Company since the date as of which information
is furnished or the date of this Offer to Purchase.
CEMENTOS PORTLAND, S.A.
CP ACQUISITION, INC.
November 10, 1999
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER, PARENT AND CERTAIN
ENTITIES WHICH DIRECTLY OR INDIRECTLY CONTROL PARENT
A. Directors and Executive Officers of Purchaser
Listed below are the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five
years of each director and executive officer of Purchaser. Except for Mr.
Culbert, the business address of each such person is Jose Abascal, 59, 28003,
Madrid, Spain and such person is a citizen of the Kingdom of Spain. Mr.
Culbert's business address is Masterman, Culbert & Tully LLP, One Lewis Wharf,
Boston, MA 02110 and he is a U.S. citizen.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Rafael Martinez-Ynzenga................. President; Chairman of Parent; Chairman and CEO of
PV
Manuel de Melgar y Oliver............... Vice President; Managing Director of Parent
Andrew C. Culbert....................... Secretary; partner in the law firm of Masterman,
Culbert & Tully LLP
</TABLE>
B. Directors and Executive Officers of Parent
Listed below are the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five
years of each director and executive officer of Parent. Except as otherwise
indicated, the business address of each such person is Jose Abascal, 59,
28003, Madrid, Spain, and such person is a citizen of the Kingdom of Spain.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Rafael Martinez-Ynzenga................. Chairman and CEO
Jose Maria Marco Garmendia ............. Vice-Chairman
Estella No. 6
31002, Pamplona, Spain
Jose Ignacio Taberna Ruiz .............. Secretary
Estella No. 6
31002, Pamplona, Spain
Concepcion Sierra Ordonez .............. Director
Plaza Arguelles No. 7
28008, Madrid, Spain
Gonzalo Anes Alvarez-Castrillon ........ Director; President of the Royal Academy of
Recoletos No. 5 History
28001, Madrid, Spain
Martin Aresti Zamora ................... Director
Estella No. 6
31002, Pamplona, Spain
Rafael Cabello de Alba y Gracia ........ Director
Zurbano No. 44
28010, Madrid, Spain
Antonio Caretti Gutierrez .............. Director representing Iberdrola Diversificacion,
Serrano No. 41 S.A.; Managing Director for the Services and
28001, Madrid, Spain Telecommunications Division of Iberdrola
Diversificacion, S.A.
Juan Castells Masana ................... Director; Secretary of FCC
Federico Salmon No. 13
28016, Madrid, Spain
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Fernando Ferreras Fernandez............. Director representing Compania Auxiliar de Agencia
y Mediacion, S.A.; Chief Financial Officer
Juan Maria Fuentes Dutor ............... Director
Estella No. 6
31002, Pamplona, Spain
Jose Maria Iturrioz Echamendi .......... Director representing Cartera Navarra, S.A.; CEO
Estella No. 6 of Industrias del Caucho, S.A.
31002, Pamplona, Spain
Juan Antonio Losada Gomez .............. Director; Entrepreneur
Velazquez No. 3
28001, Madrid, Spain
Jose Ignacio Martinez -- Ynzenga........ Director representing PV; Chief Technical Officer
Ignacio Real de Asua Arteche ........... Director representing Iberdrola, S.A.; Secretary
Gardoquin No. 8 of Cementos Lemona, S.A.
48008, Bilbao, Spain
</TABLE>
C. DIRECTORS AND EXECUTIVE OFFICERS OF PV
Set forth below are the name, present principal occupation or employment
and material occupations, positions, offices or employments for the past five
years of each director and executive officer of PV. Except as otherwise
indicated, the business address of each such person is Jose Abascal, 59,
28003, Madrid, Spain and such person is a citizen of the Kingdom of Spain.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Rafael Martinez-Ynzenga................. Chairman and CEO
Guillermo Visedo Navarro ............... Vice-Chairman; Chairman of FCC
FCC Torre Picasso, 42nd Floor
28020, Madrid, Spain
Vicente Ynzenga Martinez-Daban.......... Secretary
Alicia de Alcocer Koplowitz ............ Director representing EAC, Inversiones
FCC Federico Salmon Corporativas, S.L.
No. 13, 28016, Madrid, Spain
Jean-Claude Douvry ..................... Director; CEO of SADE
74 Rue Pauline
Borghese 92200
Neuilly Sur Seine, France
Henri Proglio .......................... Director representing Vivendi; Senior Executive
42 Avenue de Friedland, Vice President of Vivendi
75008, Paris, France
Bertrand Gontard ....................... Director; CEO of Sarp Industries
Zone Portuaire, 427, route du Hazay,
78520 Limay, France
Gonzalo Hinojosa Fernandez de Angulo ... Director; CEO of Cortefiel, S.A.
Cortefiel, S.A.
Avda. del Llano Castellano No. 51,
28034, Madrid, Spain
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Gustave Kuch ........................... Director; CEO of CGEA
CGEA 169 Avenue Georges Clemenceau,
Parce des Fontaines
92735, Nanterre, France
Serge Michel ........................... Director; CEO of SOFICOT
103 Boulevard Haussmann
75008, Paris, France
Antonio Perez Colmenero ................ Director; Vice President -- Human Resources
FCC Federico Salmon No. 13,
28016, Madrid, Spain
Rafael Montes Sanchez .................. Director; Vice President; CEO of FCC Medio
FCC Torre Picasso 42nd Floor Ambiente, S.A.; CEO of FCC Agua y Entorno Urbano,
28020, Madrid, Spain S.A.
Philippe Beaute ........................ Director representing Societe Parisienne
59 Bis Avenue Hoch D'Investissement et de Gestion, S.A.
75008, Paris, France
Jean Francoise Dubos ................... Director; Secretary of Vivendi
42 Avenue de Friedland,
75008, Paris, France
Feliciano Fuster Jaume ................. Director
Juan Maragall No. 16,
07006, Palma de Mallorca, Spain
</TABLE>
D. DIRECTORS AND EXECUTIVE OFFICERS OF FCC
The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of FCC. Except as
otherwise indicated, the business address of each such person is Federico
Salmon, 13, 28016, Madrid, Spain, and such person is a citizen of the Kingdom
of Spain.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Guillermo Visedo Navarro ............... Chairman
Torre Picasso, 42nd Floor,
28020, Madrid, Spain
Rafael Montes Sanchez .................. Vice Chairman; CEO of FCC Medio Ambiente, S.A.;
Torre Picasso, 42nd Floor CEO of FCC Agua y Entorno Urbano, S.A.
28020, Madrid, Spain
Henri Proglio .......................... Vice Chairman; Director representing Vivendi;
42 Avenue de Friedland, Senior Executive Vice President of Vivendi
75008, Paris, France
Esther Koplowitz Romero de Juseu ....... Director representing B1998, S.L.
Torre Picasso, 42nd Floor,
28020, Madrid, Spain
Jean Marie Messier ..................... Director; Chairman and CEO of Vivendi; formerly
42 Avenue de Friedland, General Manager of Vivendi
75008, Paris, France
Camille Cabana ......................... Director
35 Rue de Malar,
Paris, France
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Francisco Mas-Sarda Casanelles ......... Director
Balmes, 36
Barcelona, Spain
Esther Alcocer Koplowitz................ Director representing EAC Inversiones
Corporativas, S.L.
Emilio Cebamanos Jarreta ............... Director
Avenida del General Peron, 36,
Madrid, Spain
Regis Mesnier .......................... Director
Avenida de los Madronos 54-B,
28043 Madrid, Espana
Gerard Ries ............................ Director representing Vivendi, S.A.
241 Rue du Faubourg Saint Honore
75008 Paris, France
Guillaume Hannezo ...................... Director
84 Avenue du Roule
92220 Neuilly/Seine, France
Daniel Caille .......................... Director
35 Rue Croix Bosset,
92310 Sevres, France
Felipe-Bernabe Garcia Perez............. Director
Eric Licoys ............................ Director; Chairman and CEO of HAVAS and General
31 rue de Colisse Manager of Vivendi; formerly Chairman of Fonds
75008, Paris, France Partenaires Gestion and General Manager of HAVAS
Jean Francois Dubos .................... Director; Secretary of Vivendi
42 Avenue de Friedland,
75008, Paris, France
</TABLE>
E. DIRECTORS AND EXECUTIVE OFFICERS OF B1998
The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of B1998. Except as
otherwise indicated, the business address of each such person is Torre Picaso,
Plaza de Pablo Ruiz Picaso, 28020, Madrid, Spain, and such person is a citizen
of the Kingdom of Spain.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Esther Koplowitz Romero de Juseu ....... Director; Vice President of FCC
Torre Picasso, 42nd Floor,
28020, Madrid, Spain
Jean Marie Messier ..................... Director; Chairman and CEO of Vivendi; formerly
42 Avenue de Friedland, General Manager of Vivendi
75008, Paris, France
Esther Alcocer Koplowitz................ Director
Henri Proglio .......................... Director representing Vivendi; Senior Executive
42 Avenue de Friedland, Vice President of Vivendi
75008, Paris, France
Rafael Montes Sanchez .................. Director; Vice President of FCC; CEO of FCC Medio
Torre Picasso, 42nd Floor, Ambiente, S.A.; CEO of FCC Agua y Entorno Urbano,
28020, Madrid, Spain S.A.
</TABLE>
35
<PAGE>
F. DIRECTORS AND EXECUTIVE OFFICERS OF VIVENDI
The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Vivendi. Unless
otherwise indicated, the business address of each such person is 42 Avenue de
Friedland, 75380, Paris, France, and such person is a citizen of France.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Bernard Arnault ........................ Chairman and CEO of LVMH
LVMH
30, avenue Hoche
75008 Paris
France
Eric Licoys ............................ Chairman and CEO of HAVAS and General Manager of
HAVAS Vivendi; formerly Chairman of Fonds Partenaires
31, rue de Colisse Gestion and General Manager of HAVAS
75008 Paris
France
Philippe L. Germond .................... CEO of Cegetel and Senior Executive Vice President
Cegetel of Vivendi; formerly General Manager of
1, Place Carpeaux Hewlett-Packard Europe and CEO of SFR
92 Paris La Defense
France
Simon Murray ........................... Executive at Simon Murray and Associates (UK)
Simon Murray and Ltd., Chairman of Gens (HK) Ltd., Director of
Associates (U.K.) Ltd. Tommy Hilfiger, Director of Usinor Sacilor and
Princes House Director of Hutchison Waampta Hong Kong; formerly
38 Jermyn Street Chairman of Deutsche Bank Asia
England
Esther Koplowitz ....................... Vice President of FCC
F.C.C. -- Madrid -- Spain
Plaza Pablo Ruiz Picasso
28020 Madrid
Spain
Serge Tchuruk .......................... Chairman and CEO of Alcatel; formerly Chairman and
Alcatel CEO of Total S.A.
64, rue de la Boetie
75008 Paris
France
Ambroise Roux .......................... Executive of Pinault-Printemps-Redoute and Vice
Pinault-Printemps-Redoute President of Vivendi; formerly Director of
8 bis, rue Margueritte Compagnie Generale des Eaux
75017 Paris
France
Philippe Foriel-Destezet ............... Co-Chairman of Addeco, Chairman of Ecco SA, and
Nescofin Chairman of Nescofin
43 Rutlandgate
S.W. 71 ED London
England
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Jacques Friedman ....................... Chairman of the Supervisory Board of AXA; formerly
AXA Chairman of UAP
9, Place Vendome
75001 Paris
France
Henri Lachmann ......................... Chairman and CEO of Schneider S.A. and Schneider
Schneider S.A. Electric S.A.; formerly Chairman and CEO of the
64/70 Avenue Jean-Baptiste Clement Strafor Facom Group
92646 Boulogne Billancourt
France
Jacques Calvet ......................... Retired; formerly Chairman and CEO of PSA-Peugeot-
7, rue de Tilsitt Citroen
75017 Paris
France
Marc Vienot ............................ Chairman of Paris-Europlace, Honorary Chairman and
Paris Europlace Director of Societe Generale and Director of Rhone
39, rue Cambon Poulenc; formerly Chairman and CEO of Societe
75039 Paris Cedex 1er Generale, Director of Alcatel-Alsthom, Director of
France Havas
Rene Thomas ............................ Honorary Chairman of Banque Nationale de Paris
Banque Nationale de Paris
16, boulevard des Italiens
75009, Paris
France
Jean-Louis Beffa ....................... Chairman and CEO of Compagnie Saint-Gobain;
Compagnie de Saint-Gobain formerly Vice-Chairman of Compagnie des Eaux
'Les Miroirs'
92096 La Defense Cedex
France
Jean-Marie Messier ..................... Chairman and CEO of Vivendi; formerly General
Vivendi Manager of Vivendi
42, Avenue de Friedland
75009 Paris
France
Henri Proglio .......................... Senior Executive Vice President of Vivendi
Vivendi
42, Avenue de Friedland
75009 Paris
France
Stephanie Richard ...................... Chairman and CEO of CGIS, Managing Director of
CGIS (Vivendi Group) Compagnie Immobiliere Phenix and Chairman of CGIS
8, rue du general Foy
75008, Paris
France
Antoine Zacharias ...................... Chairman and CEO of Societe Generale
Societe Generale d'Entreprises d'Entreprises; formerly Chairman of Ecco SA
1, cours Ferdinance de Lesseps
95851, Rueil Malmaison
France
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- --------------------------------------------------
<S> <C>
Guy Dejouany ........................... President of Honor of Vivendi; formerly President
Vivendi-Compagnie Generale des Eaux of Compagnie Generale des Eaux
52, Rue d'Anjou
75008, Paris
France
Michel Avenas .......................... Vice-President of Purchaser; formerly Assistant to
the Chairman of Compagnie Generale des Eaux
Denis Gasquet .......................... President and CEO of Purchaser; CEO of CGEA
Michel Gourvennec ...................... Vice President of Purchaser; President and CEO of
Montenay International
Executive Officers
Michel Avenas .......................... Vice-President of Purchaser; formerly Assistant to
the Chairman of Compagnie Generale des Eaux
Christian Farman ....................... Chief Financial Officer of Purchaser; Vice
President and Chief Financial Officer of Vivendi
North America
Denis Gasquet .......................... President and CEO of Purchaser; CEO of CGEA
Pascal Gauthier ........................ Vice President of Purchaser; Deputy Vice President
of CGEA
Michel Gourvennec ...................... Vice President of Purchaser; President and CEO of
Montenay International
Axel de Saent Quantien ................. Secretary of Purchaser; Vice President of Finance
and Chief Financial Officer of Montenay
International Corp.
</TABLE>
38
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses listed below:
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
ChaseMellon Shareholder Reorganization Department ChaseMellon Shareholder
Services, L.L.C. 85 Challenger Road Services, L.L.C.
Reorganization Department Mail Drop -- Reorg Reorganization Department
P.O. Box 3301 Ridgefield Park, NJ 07660 120 Broadway
South Hackensack, NJ 07606 13th Floor
New York, NY 10271
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile By
Telephone:
(201) 296-4860
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers call collect: (212) 750-5833
CALL TOLL-FREE: (888) 750-5834
THE DEALER MANAGER FOR THE OFFER IS:
SCHRODER & CO. INC.
Equitable Center
787 Seventh Avenue
New York, New York 10019
In New York City call: (212) 492-6000
CALL TOLL-FREE: (877) 350-4796
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 10, 1999
OF
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
CEMENTOS PORTLAND, S.A.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON DECEMBER 9, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
ChaseMellon Shareholder Services, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
ChaseMellon Shareholder Reorganization Department ChaseMellon Shareholder
Services, L.L.C. 85 Challenger Road Services, L.L.C.
Reorganization Department Mail Drop -- Reorg Reorganization Department
P.O. Box 3301 Ridgefield Park, NJ 07660 120 Broadway
South Hackensack, 13th Floor
NJ 07606 New York, NY 10271
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile By Telephone:
(201) 296-4860
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SPECIFIED ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS SPECIFIED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Giant Cement
Holding, Inc. if certificates for Shares (as such term is defined below) are to
be forwarded herewith or, unless an Agent's Message (as defined in
Instruction 2 below) is utilized, if delivery of Shares is to be made by
book-entry transfer to an account maintained by the Depositary at the Book-Entry
Transfer Facility (as defined in and pursuant to the procedures described in the
Offer to Purchase). Stockholders who deliver Shares by book-entry transfer are
referred to herein as 'Book-Entry Stockholders' and other stockholders who
deliver shares are referred to herein as 'Certificate Stockholders.'
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures described in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: ............................................
Account Number: .............. Transaction Code Number: .............
[ ] CHECK HERE IF 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): ...........................................
Window Ticket No. (if any): ...............................................
Date of Execution of Notice of Guaranteed Delivery: .......................
Name of Institution which Guaranteed Delivery: ............................
If delivered by Book-Entry Transfer, check box: [ ]
Name of Tendering Institution: .............................................
Account Number: .............. Transaction Code Number: ..............
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by Share certificates delivered to the Depositary are being tendered
hereby. See Instruction 4.
- -------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE INSTRUCTIONS CONTAINED IN THIS
LETTER OF TRANSMITTAL CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to CP Acquisition, Inc., a Delaware
corporation ('PURCHASER') and a wholly-owned subsidiary of Cementos Portland,
S.A., a public company (sociedad anonima) organized under the laws of the
Kingdom of Spain ('PARENT'), the above-described shares of common stock, par
value $0.01 per share (the 'SHARES'), of Giant Cement Holding, Inc., a Delaware
corporation (the 'Company'), pursuant to Purchaser's offer to purchase all
Shares at a price of $31.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions contained in the Offer to
Purchase, dated November 10, 1999, and in this Letter of Transmittal (which,
together with any amendments or supplements thereto or hereto, collectively
constitute the 'OFFER'). The undersigned understands that Purchaser reserves the
right to transfer or assign, in whole at any time, or in part from time to time,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, but any such transfer or assignment
will not relieve 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. Receipt of the
Offer is hereby acknowledged.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of November 4, 1999 (the 'MERGER AGREEMENT'), among Parent, Purchaser and the
Company.
<PAGE>
Upon the terms and subject to the 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, Purchaser all right,
title and interest in and to, and any and all claims in respect of or arising or
having arisen as a result of the undersigned's status as a holder of, all the
Shares that are being tendered hereby (and any and all non-cash dividends,
distributions, rights, other Shares or other securities issued or issuable in
respect thereof on or after November 10, 1999 (collectively, 'DISTRIBUTIONS')
and irrevocably constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares (and
all Distributions), with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (i)
deliver certificates for such Shares (and any and all Distributions), or
transfer ownership of such Shares (and any and all Distributions) on the account
books maintained by the Book-Entry Transfer Facility, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Purchaser, (ii) present such Shares (and any and all Distributions)
for transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares (and any
and all Distributions), all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Manuel de Melgar y Oliver and Andrew C. Culbert in their respective
capacities as officers of Purchaser, and any individual who shall thereafter
succeed to any such office of Purchaser, and each of them, the attorneys-in-fact
and proxies of the undersigned, each with full power of substitution, to vote at
any annual or special meeting of the Company's stockholders or any adjournment
or postponement thereof or otherwise in such manner as each such attorney-in-
fact and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, all of the Shares (and any and all Distributions) tendered hereby and
accepted for payment by Purchaser. This appointment will be effective if and
when, and only to the extent that, Purchaser accepts such Shares for payment
pursuant to the Offer. This power of attorney and proxy are irrevocable and are
granted in consideration of the acceptance for payment of such Shares in
accordance with the terms of the Offer. Such acceptance for payment shall,
without further action, revoke any prior powers of attorney and proxies granted
by the undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if given,
will not be deemed effective). Purchaser reserves the right to require that, in
order for Shares or other securities to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Shares, Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
(and any and all Distributions), including voting at any meeting of the
Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned owns the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the 'EXCHANGE ACT'), that the
tender of the tendered Shares complies with Rule 14e-4 under the Exchange Act,
and that when the same are accepted for payment by Purchaser, Purchaser will
acquire good, marketable and unencumbered title thereto and to all
Distributions, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is
<PAGE>
extended or amended, the terms or conditions of any such extension or
amendment). Without limiting the foregoing, if the price to be paid in the Offer
is amended in accordance with the terms of the Merger Agreement, the price to be
paid to the undersigned will be the amended price notwithstanding the fact that
a different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances described in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.
Unless otherwise indicated herein in the box entitled 'Special Payment
Instructions,' please issue the check for the purchase price of all Shares
purchased and/or return any certificates for Shares not tendered or accepted for
payment in the name(s) of the registered holder(s) appearing above under
'Description of Shares Tendered.' Similarly, unless otherwise indicated under
'Special Delivery Instructions,' please mail the check for the purchase price of
all Shares purchased and/or return any certificates for Shares not tendered or
not accepted for payment (and any accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing above under 'Description of
Shares Tendered.' In the event that the boxes entitled 'Special Payment
Instructions' and 'Special Delivery Instructions' are both completed, please
issue the check for the purchase price of all Shares purchased and/or return any
certificates evidencing Shares not tendered or not accepted for payment (and any
accompanying documents, as appropriate) in the name(s) of, and deliver such
check and/or return any such certificates (and any accompanying documents, as
appropriate) to, the person(s) so indicated. Unless otherwise indicated herein
in the box entitled 'Special Payment Instructions,' please credit any Shares
tendered herewith by book-entry transfer that are not accepted for payment by
crediting the account at the Book-Entry Transfer Facility designated above. The
undersigned recognizes that Purchaser has no obligation, pursuant to the
'Special Payment Instructions,' to transfer any Shares from the name of the
registered holder thereof if Purchaser does not accept for payment any of the
Shares so tendered.
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, DESTROYED OR STOLEN CERTIFICATES:
- -------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in the name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned
or if Shares tendered hereby and delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.
Issue check and/or Share certificate(s) to:
Name: ...................................................................
(PLEASE PRINT)
Address: ................................................................
(INCLUDE ZIP CODE)
.........................................................................
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit Shares delivered by book-entry transfer and not purchased to the
Book-Entry Transfer Facility account.
.........................................................................
(ACCOUNT NUMBER)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown under
'Description of Shares Tendered.'
Mail check and/or Share certificates to:
Name: ...................................................................
(PLEASE PRINT)
Address: ................................................................
(INCLUDE ZIP CODE)
.........................................................................
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT -- SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
.........................................................................
.........................................................................
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: ................................................................. , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s): .......................................................................
................................................................................
(PLEASE PRINT)
Name of Firm: ..................................................................
Capacity (full title): .........................................................
(SEE INSTRUCTION 5)
Address: .......................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ................................................
Taxpayer Identification or
Social Security Number: ........................................................
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ..........................................................
Name(s): .......................................................................
................................................................................
(PLEASE PRINT)
Title: .........................................................................
Name of Firm: ..................................................................
Address: .......................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ................................................
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facility's systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has (have) completed either
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 a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an 'Eligible Institution'). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of the
Company either if Share certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made by book-entry
transfer pursuant to the procedures described herein and in Section 3 of the
Offer to Purchase. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees or an
Agent's Message (in connection with book-entry transfer) and any other required
documents, must be received by the Depositary at one of its addresses described
herein prior to the Expiration Date and either (i) certificates representing
tendered Shares must be received by the Depositary at one of such addresses
prior to the Expiration Date or (ii) Shares must be delivered pursuant to the
procedures for book-entry transfer described herein and in Section 3 of the
Offer to Purchase and a Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Date or (b) the tendering stockholder must
comply with the guaranteed delivery procedures described herein and in Section 3
of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-entry
transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure described herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (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
Purchaser, must be received by the Depositary, as provided below, on or 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
tendered Shares), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
documents required by this Letter of Transmittal must be 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 Nasdaq National
Market is open for business.
The term 'AGENT'S MESSAGE' means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING THE SHARES, THIS LETTER
OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. THE 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, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
<PAGE>
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under 'Description of
Shares Tendered' is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled 'Number of
Shares Tendered.' In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held 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 Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share 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 holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution as described in Instruction 1 hereto.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares accepted for payment is to be issued in the name of, and/or
Share certificates for Shares not accepted for payment or not tendered are to be
issued in the name of and/or returned to, a person other than the signer of this
Letter of Transmittal or if a check is to be sent, and/or such certificates are
to be returned, to 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. Any stockholder(s) delivering Shares
by book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder(s)
may designate in the box entitled 'Special Payment Instructions.' If no such
instructions are given,
<PAGE>
any such Shares not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated above as the account from which such
Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address and phone number specified at
the end of this Letter of Transmittal.
9. WAIVER OF CONDITIONS. Subject to the Merger Agreement, Purchaser
reserves the absolute right in its sole discretion to waive, at any time or from
time to time, any of the specified conditions of the Offer, in whole or in part,
in the case of any Shares tendered.
10. BACKUP WITHHOLDING. UNDER THE FEDERAL INCOME TAX LAWS, THE DEPOSITARY
WILL BE REQUIRED TO WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS MADE TO CERTAIN
STOCKHOLDERS PURSUANT TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING ON PAYMENTS MADE TO CERTAIN STOCKHOLDERS WITH RESPECT TO THE
PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER
MUST PROVIDE THE DEPOSITARY WITH HIS CORRECT TAXPAYER IDENTIFICATION NUMBER
('TIN') AND CERTIFY, UNDER PENALTY OF PERJURY, THAT HE IS NOT SUBJECT TO BACKUP
FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN
THE LETTER OF TRANSMITTAL.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held 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.
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% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, most corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate 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 the
enclosed 'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has (have) been lost, destroyed or stolen, the stockholder
should check the box immediately preceding the special payment/special delivery
instructions, indicating the number of Shares lost and promptly notify the
transfer agent for the Shares, Registrar and Transfer Company, attention:
Investor Relations at 1-800-368-5948. The stockholder will then be instructed
Registrar and Transfer Company as to the steps that must be taken in order to
replace the Share certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost, destroyed
or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under the federal income tax laws, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If a tendering
stockholder is subject to backup withholding, such stockholder must cross out
item (2) of Part 2 (the
<PAGE>
Certification box) on the Substitute Form W-9. If the Depositary is not provided
with the correct TIN, the 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.
Certain stockholders (including, among others, most 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 statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. Exempt stockholders, other than
foreign individuals, should furnish their TIN, write 'Exempt' on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
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. Backup withholding is not an additional
income tax. Rather, the amount of the backup withholding can be credited against
the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding of federal income tax on payments made to
certain stockholders with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form contained herein certifying that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN).
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. 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. 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, such
stockholder should write 'Applied For' in the space provided for in the TIN in
Part 1, and sign and date the Substitute Form W-9. If 'Applied For' is written
in Part 1 and the Depositary is not provided with a TIN within sixty (60) days,
the Depositary will withhold 31% on all payments of the purchase price until a
TIN is provided to the Depositary.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND (If awaiting TIN
DEPARTMENT OF THE TREASURY DATING BELOW. write 'Applied For')
INTERNAL REVENUE SERVICE OR
PAYOR'S REQUEST FOR Employer Identification Number
TAXPAYER IDENTIFICATION Employer Indentification Number
NUMBER ('TIN') (If awaiting TIN
write 'Applied For')
- ---------------------------------------------------------------------------------------------------------------------
PART 2 -- CERTIFICATE -- 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 for me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not
been notified by the Internal Revenue Service (the 'IRS') that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding.
Certification Instructions -- You must cross out item (2) above if you have been notified by the IRS that you are
currently subject to backup withholding because of under-reporting interest or dividends on your tax returns.
However, if after being notified by the IRS that you are subject to backup withholding, you receive another
notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).
(Also see instructions in the enclosed Guidelines).
- ---------------------------------------------------------------------------------------------------------------------
SIGNATURE ......................... DATE ........................ , 1999 PART 3 -- Awaiting TIN
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE 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 (1) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Officer or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number to the Depositary by the time of
payment, 31% of all reportable payments made to me thereafter will be withheld,
but that such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
Signature .................................... Date .......................
- --------------------------------------------------------------------------------
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent at its address and telephone number specified
below:
THE INFORMATION AGENT FOR THE OFFER IS:
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers call collect: (212) 750-5833
CALL TOLL FREE: (888) 750-5834
THE DEALER MANAGER FOR THE OFFER IS:
SCHRODER & CO. INC.
Equitable Center
787 Seventh Avenue
New York, New York 10019
In New York City call: (212) 492-6000
CALL TOLL FREE: (877) 350-4796
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
TO
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
CEMENTOS PORTLAND, S.A.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON DECEMBER 9, 1999, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or a form substantially equivalent to
it, must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, par value $0.01 per share (the 'Shares'),
of Giant Cement Holding, Inc., a Delaware corporation (the 'Company') are not
immediately available, if the procedure for book-entry transfer cannot be
completed prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase), or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date. This form may be delivered by hand,
transmitted by facsimile transmission or mailed to the Depositary. See Section 3
of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
ChaseMellon Shareholder Reorganization Department ChaseMellon Shareholder
Services, L.L.C. 85 Challenger Road Services, L.L.C.
Reorganization Department Mail Drop -- Reorg Reorganization Department
P.O. Box 3301 Ridgefield Park, NJ 07660 120 Broadway
South Hackensack, 13th Floor
NJ 07606 New York, NY 10271
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile By Telephone:
(201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SPECIFIED ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS SPECIFIED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an 'Eligible Institution'
under the instructions to such Letter of Transmittal, such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CP Acquisition, Inc., a Delaware
corporation ('Purchaser'), and a wholly-owned subsidiary of Cementos Portland,
S.A., a public company (sociedad anonima) organized under the laws of the
Kingdom of Spain ('Parent'), upon the terms and subject to the conditions
contained in Purchaser's Offer to Purchase, dated November 10, 1999 (the 'Offer
to Purchase'), and the related Letter of Transmittal (which, together with any
amendments and supplements thereto, constitute the 'Offer'), receipt of which is
hereby acknowledged, the number of shares indicated below of common stock, par
value $0.01 per share (the 'Shares'), of Giant Cement Holding, Inc., a Delaware
corporation (the 'Company'), pursuant to the guaranteed delivery procedures
described in Section 3 of the Offer to Purchase.
Number of Shares: ........................................................
Certificate Nos. (if available):
.........................................................................
.........................................................................
Check box if Shares will be tendered by book-entry transfer:
Account Number: ..........................................................
Dated: ............................................................ , 1999
Name(s) of Record Holder(s): .............................................
.........................................................................
.........................................................................
PLEASE PRINT
Address(es): .............................................................
.........................................................................
.........................................................................
ZIP CODE
Area Code and Tel. No.:
.........................................................................
.........................................................................
Signature(s): ............................................................
.........................................................................
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
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, guarantees to deliver to the Depositary
either certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, in each case with delivery
of a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message, and any
other documents required by the Letter of Transmittal, within three Nasdaq
National Market trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the same time period stated
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: ............................................
PLEASE PRINT
.................................................. Title: ...........................................
ZIP CODE
Area Code & Tel. No: .............................. Date: ...................................... , 1999
</TABLE>
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
SCHRODER & CO. INC.
EQUITABLE CENTER
787 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
AT
$31.00 NET PER SHARE
BY
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
CEMENTOS PORTLAND, S.A.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 9, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
November 10, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by CP Acquisition, Inc., a Delaware corporation
('PURCHASER'), and a wholly-owned subsidiary of Cementos Portland, S.A., a
public company (sociedad anonima) organized under the laws of the Kingdom of
Spain ('PARENT'), to act as Dealer Manager in connection with Purchaser's offer
to purchase all shares of common stock, par value $0.01 per share (the
'SHARES'), of Giant Cement Holding, Inc., a Delaware corporation (the
'COMPANY'), at a price of $31.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions contained in the Offer to
Purchase, dated November 10, 1999 (the 'OFFER TO PURCHASE'), and in the related
Letter of Transmittal (which, together with any amendments and supplements
thereto, constitute the 'OFFER') enclosed herewith. Please furnish copies of the
enclosed materials to those of your clients for whose accounts you hold Shares
registered in your name or in the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares which constitutes at least a
majority of the then outstanding Shares on a fully-diluted basis. The Offer is
also subject to the other conditions contained in the Offer to Purchase. See the
Introduction and Sections 1, 14 and 15 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated November 10, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, by the Expiration Date;
<PAGE>
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to ChaseMellon Shareholder Services,
L.L.C. (the 'DEPOSITARY').
Upon the terms and subject to the conditions of the Offer, Purchaser will
accept for payment and pay for Shares which are validly tendered prior to the
Expiration Date and not theretofore properly withdrawn when, as and if Purchaser
gives oral or written notice to the Depositary of Purchaser's acceptance of such
Shares for payment pursuant to the Offer. Payment for Shares purchased pursuant
to the Offer will in all cases be made only after timely receipt by the
Depositary of (i) certificates for such Shares, or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, pursuant to the procedures described in Section 2 of
the Offer to Purchase, (ii) a properly completed and duly executed Letter of
Transmittal (or a properly completed and manually signed facsimile thereof) or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer and (iii) all other documents required by the Letter of
Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) for soliciting tenders of Shares pursuant to the
Offer. Purchaser will, however, upon request, reimburse brokers, dealers,
commercial banks and trust companies for customary mailing and handling costs
incurred by them in forwarding the enclosed materials to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON DECEMBER 9, 1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer of Shares, and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions contained in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
described in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent at the address and telephone number indicated on the back
cover of the Offer to Purchase.
Very truly yours,
SCHRODER & CO. INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF PURCHASER, PARENT, THE COMPANY, THE INFORMATION AGENT, THE DEPOSITARY,
OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON
TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
AT
$31.00 NET PER SHARE
BY
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
CEMENTOS PORTLAND, S.A.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 9, 1999 UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
November 10, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November
10, 1999 (the 'OFFER TO PURCHASE'), and the related Letter of Transmittal
(which, together with any amendments and supplements thereto, collectively
constitute the 'OFFER') in connection with the offer by CP Acquisition, Inc., a
Delaware corporation ('PURCHASER') and a wholly-owned subsidiary of Cementos
Portland, S.A., a public company (sociedad anonima) organized under the laws of
the Kingdom of Spain ('PARENT'), to purchase for cash all shares of common
stock, par value $0.01 per share (the 'SHARES'), of Giant Cement Holding, Inc.,
a Delaware corporation (the 'COMPANY'), at a purchase price of $31.00 per Share
net to you in cash (the 'SHARE PRICE'). WE ARE THE HOLDER OF RECORD OF SHARES
HELD 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 ENCLOSED LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions contained in the Offer.
Your attention is invited to the following:
1. The offer price is $31.00 per Share net to you in cash, without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously approved the
Merger Agreement (as defined in the Offer to Purchase) and the transactions
contemplated thereby, including the Offer and the Merger (each as defined
in the Offer to Purchase), and has unanimously determined that the Offer
and the Merger are fair to, and in the best interests of, the Company's
stockholders and unanimously recommends that the stockholders accept the
Offer and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on December 9, 1999, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not properly withdrawn prior to the Expiration Date
(as defined in the Offer to Purchase) that number of Shares which
constitutes at least a majority of the then outstanding Shares on a
fully-diluted basis. The Offer is also subject to the other conditions
contained in the Offer to Purchase. See the Introduction and Sections 1, 14
and 15 of the Offer to Purchase.
<PAGE>
6. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form attached to
this letter. An envelope to return your instructions to us is enclosed. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the attachment to this letter. Your instructions should
be forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates for, or of Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to, such Shares,
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)),
and any other documents required by the Letter of Transmittal. Accordingly,
payment might not be made to all tendering stockholders at the same time, and
will depend upon when Share certificates or Book-Entry Confirmations of such
Shares are received into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase).
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE
ALL SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
AT
$31.00 NET PER SHARE IN CASH
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 10, 1999 and the related Letter of Transmittal
in connection with the Offer by CP Acquisition, Inc., a Delaware corporation and
a wholly-owned subsidiary of Cementos Portland, S.A., a public company (sociedad
anonima) organized under the laws of the Kingdom of Spain, to purchase for cash
all shares of common stock, par value $0.01 per share (the 'SHARES') of Giant
Cement Holding, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions contained in the
Offer.
Number of Shares to Be Tendered*
<TABLE>
<S> <C>
..................................... Shares
Dated: .............................. , 1999 .............................................
.............................................
SIGNATURE(S)
.............................................
.............................................
PRINT NAME(S)
.............................................
.............................................
ADDRESS(ES)
.............................................
AREA CODE AND TELEPHONE NUMBER
.............................................
TAX ID OR SOCIAL SECURITY NUMBER
</TABLE>
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR. -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payor.
<TABLE>
<CAPTION>
- ------------------------------------------------------
Give the
For this type of account: SOCIAL
SECURITY
number of --
- ------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship account The owner(4)
<CAPTION>
- ------------------------------------------------------
Give the
For this type of account: EMPLOYER
IDENTIFICATION
number of --
- ------------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. 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 minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
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), an individual
retirement plan or a custodial account under Section 403(b)(7).
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 NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING
Payment 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 renewed is not paid in
money.
Payments made by certain foreign organizations.
Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payor's trade or business and you have not provided your
correct taxpayer identification number to the payor.
Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
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.
Payments made to a nominee.
EXEMPT PAYEE DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. 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, 604lA(a),
6045 and 6050A.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payors
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payors must be given the numbers whether or not recipients are
required to file tax returns. Payors must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payor. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payor, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDER. -- 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>
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
November 10, 1999 (the "Offer to Purchase"), and the related Letter of
Transmittal, and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf
of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction or any
administrative or judicial action pursuant thereto.
NOTICE OF OFFER TO PURCHASE
ALL SHARES OF COMMON STOCK
OF
GIANT CEMENT HOLDING, INC.
AT
$31.00 NET PER SHARE IN CASH
BY
CP ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
CEMENTOS PORTLAND, S.A.
CP Acquisition, Inc., a Delaware corporation ("Purchaser") and a
wholly-owned subsidiary of Cementos Portland, S.A., a public company organized
under the laws of the Kingdom of Spain ("Parent"), hereby offers to purchase all
shares of common stock, par value $0.01 per share (the "Shares") of Giant Cement
Holding, Inc., a Delaware corporation (the "Company"), at a price of $31.00 per
Share (the "Share Price"), net to the seller in cash and without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer").
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MID-NIGHT, NEW YORK CITY
TIME, ON TUESDAY, DECEMBER 9, 1999, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
BELOW) THAT NUMBER OF SHARES (COLLECTIVELY, THE "MINIMUM NUMBER OF SHARES")
WHICH REPRESENT A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY-DILUTED
BASIS.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of November 4, 1999, among the Company, Parent and
Purchaser. The purpose of the Offer is to acquire control of the Company. Parent
and Purchaser do not currently own any Shares.
The Board of Directors of the Company unanimously has determined that the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, are fair to, and in the best interests of, the Company's
stockholders (the "Stockholders"), has approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, and
recommends that the Stockholders accept the Offer and tender all of their Shares
pursuant thereto.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when Purchaser gives oral or written notice to ChaseMellon Shareholder
Services, L.L.C., as Depositary (the "Depositary"), of Purchaser's acceptance of
such Shares for payment pursuant to the Offer. In all cases, upon the terms and
subject to the conditions of the Offer, payment for Shares purchased pursuant to
the Offer will be made by deposit
<PAGE>
of the purchase price therefor with the Depositary, which will act as agent for
tendering Stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering Stockholders.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Shares or timely confirmation of the book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility"), pursuant to the procedures described in the
Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer and (iii) any other documents required by the Letter of
Transmittal.
If, prior to the Expiration Date, Purchaser shall increase the
consideration offered to Stockholders pursuant to the Offer, such increased
consideration will be paid to all holders of Shares that are purchased pursuant
to the Offer, whether or not such Shares were tendered prior to such increase in
consideration. Under no circumstances will interest on the purchase price for
Shares be paid by Purchaser by reason of any delay in making such payment.
The term "Expiration Date" means 12:00 midnight, New York City time, on
December 9, 1999, unless and until Purchaser, in accordance with the Merger
Agreement, shall have exercised its right to extend the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the time
and date at which the Offer, as so extended by Purchaser, shall expire. Any such
extension will be followed by a public announcement thereof by 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 Shares. Without limiting the
manner in which Purchaser may choose to make any public announcement, Purchaser
currently intends to make announcements by issuing a press release to the Dow
Jones News Service.
Except as otherwise provided below or as provided by applicable law,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn at any time after January 9, 2000.
To be effective, a written, telegraphic or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
specified on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution (as defined in the Offer to Purchase),
the signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer described in the Offer to Purchase, any notice of withdrawal
must also 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.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in the Offer to
Purchase.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination shall be final and binding.
2
<PAGE>
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 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 agreed to provide Purchaser with the Company's stockholder
lists and security position listings for the purpose of disseminating the Offer
to Stockholders. The Offer to Purchase, the related Letter of Transmittal and
other materials will be mailed to record holders of Shares and will be furnished
to brokers, dealers, banks and similar persons whose names, or the names of
whose nominees, appear on the stockholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer documents may be directed
to the Information Agent, at the address and telephone number specified below,
and copies will be furnished promptly at Purchaser's expense. Purchaser will not
pay any fees or commissions to any broker or dealer or other person other than
the Depositary and the Information Agent for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
------------------------
INNISFREE
------------------------
M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers call collect: (212) 750-5833
Call Toll-Free: (888) 750-5834
The Dealer Manager for the Offer is:
[logo]
SCHRODER & CO. INC.
Equitable Center
787 Seventh Avenue
New York, New York 10019
Banks and Brokers call collect in New York City call: (212) 492-6000
Call Toll-Free: (877) 350-4796
3
<PAGE>
Exhibit (a)(8)
English language translation of press release issued by Parent on
November 4, 1999
"Cementos Portland, S.A. to launch a public tender offer for
100% of the outstanding shares of Giant Cement Holding, Inc. (USA)"
Cementos Portland, S.A. announced this afternoon that it has entered into an
agreement with Giant Cement Holding, Inc. to launch a public tender offer for
100% of the outstanding shares of the latter at a cash price of $31 per share.
Assuming that all shareholders tender their shares, the aggregate purchase price
will be approximately $281 million (44,614 million pesetas). With this
acquisition, it is expected that the Cementos Portland group will exceed 100,000
million pesetas in sales and reach operating cash flow of approximately 40,000
million pesetas in the year 2000, which implies multiplying both amounts by 2.5
times in the last three years. After the acquisition, the group's aggregate
cement production capacity will reach 9.6 million metric tons.
Giant is a North American company with two cement plants, one in South Carolina
and the other in Pennsylvania, which have an installed cement production
capacity of 1.4 million metric tons combined, making it the fourth largest
cement producer of the East Coast. In September 1999, Giant expanded its market
potential with the acquisition of a new cement terminal in Virginia with
potential cement capacity of 450,000 metric tons, through which Giant will be
able to import and export cement. Moreover, Giant is the principal supplier of
lightweight aggregates on the East Coast and has three plants with an aggregate
installed capacity of approximately 550,000 metric tons. In addition, Giant
operates five concrete block plants (with installed capacity of approximately 18
million units) which serve the South-Atlantic and Middle-Atlantic regions of the
United States.
Giant is one of the industry's pioneers in the development of the use of waste
materials as fuel in the manufacturing process of cement and lightweight
aggregates. Giant has permits to burn waste fuels in its South Carolina and
Pennsylvania cement plants and in its three lightweight aggregate plants.
Today, Giant is the largest user of waste-derived fuel in the U.S. cement
industry, which allows the company to be one of the lowest-cost producers. To
guarantee adequate fuel supply, Giant operates two waste treatment plants with
an aggregate capacity of approximately 130 million liters, located in South
Carolina (about 80 kilometers from the cement plant) and in Alabama. These two
plants serve the entire eastern region of the U.S. (to the Mississippi River).
<PAGE>
In the twelve months ended June 30, 1999, Giant had revenues of $172.4 million
(25,723 million pesetas), operating profit of $29.1 million (4,347 million
pesetas) and net profit after taxes of $18.0 million (2,681 million pesetas).
Cementos Portland considers that this transaction will enable it to establish
critical mass in the important North American market, where it is expected that
increased public spending on highways and infrastructure, as promoted by the
Transportation and Equity Act for the 21st Century (TEA 21), should help keep
cement demand above installed production capacity during the next four or five
years, particularly in Giant's regional markets. In addition, the transaction
will enable Cementos Portland to diversify its business from its heavy emphasis
on Spain and to consolidate its presence on the Atlantic coast, where Cementos
Portland already operates a plant in Maine through its 65% participation in
CDN-USA, Inc. Furthermore, Cementos Portland expects to capitalize on Giant's
experience in using waste materials as fuel to reduce costs in the cement
manufacturing process. The aforementioned benefits, in combination with the
excellent expected evolution of Giant, will contribute to create long-term value
for Cementos Portland's shareholders and to increase earnings per share.
Cementos Portland will finance the acquisition with its existing lines of credit
and available bank loans.
Giant's Board of Directors has unanimously approved the tender offer and has
recommended acceptance by Giant's shareholders. The tender offer is conditioned
upon, among other things, there being tendered and not withdrawn prior to the
expiration date of the offer at least a majority of the outstanding Giant shares
and upon the expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Schroders has advised Cementos Portland in
this transaction.
Madrid, November 4, 1999
2
<PAGE>
Exhibit (b)(1)
Banco
SANTANDER CENTRAL HISPANO
- -------------------------------------------------------------------------------
CEMENTOS PORTLAND, S.A.
Jose Abascal, 59
28003 MADRID
Madrid, November 8th, 1999
Dear Sirs,
After the conversations held with you, we hereby confirm our irrevocable
undertaking to furnish you with a credit facility to enable you to purchase the
U.S. Company Giant Cement Holding, Inc. on the following terms and conditions:
Lender: Cementos Portland, S.A.
Amount of the loan: U.S. Dollars 100 million or its exchange value in pesetas.
Currency: Multi-currency (dollars or pesetas) at the choice of Cementos
Portland, S.A., at the appropriate time.
Term: The loan will have a term of 180 days reckoned as from the date of this
letter.
Interest: Euribor or Libor (according to the foreign exchange) plus a spread of
between 0,25% and 0,75%.
Guarantees: No collateral guarantees are given.
The other terms and conditions of the agreement are those customary in our Bank
for a financing facility of this kind.
If you accept the conditions set out herein, we should appreciate it if you
would return one of its copies to us in proof of your consent.
Yours truly,
BANCO SANTANDER CENTRAL HISPANO, S.A.
/s/ Tomas Gonzales Pena /s/ Jose Antonio Aguirre Fernandez
- -------------------------------------- ------------------------------------
Tomas Gonzalez Pena Jose Antonio Aguirre Fernandez
Accepted an agreed:
CEMENTOS PORTLAND, S.A.
/s/ Rafael Martinez Ynzenga
- -------------------------------------- -------------------------------------
<PAGE>
Exhibit (b)(2)
CHASE
The Chase Manhattan Bank
Paseo de la Castellana, S1
28046 MADRID
Telf: 91 349 28 00
Fax: 91 349 73 23
Mr. Fernando Ferreras
Chief Financial Officer
CEMENTOS PORTLAND, S.A.
Jose Abascal 59
28003 Madrid
Madrid, November 8th, 1999
Dear Sirs,
After the conversations held with you, we hereby confirm our irrevocable
undertaking to furnish you with a credit facility to enable you to purchase the
U.S. company Giant Cement Holding, Inc., on the following terms and conditions:
1. Lender: Cementos Portland, S.A.
2. Amount of the Loan: US Dollars 100 million or its exchange value in pesetas.
3. Currency: Multi-currency (dollars or pesetas) at the choice of Cementos
Portland, S.A., at the appropriate time.
4. Term: The loan will have a term of 180 days reckoned as from the date of
this letter. Loan may be repaid throughout the granting of a long term
facility.
5. Interest: Euribor or Libor (according to the foreign exchange) plus a spread
of between 0,25% and 0,75%.
6. Guarantees: No collateral guaranties are given.
7. The other terms and conditions of the agreement are those customarily
proposed by Chase for financing of this kind.
If you accept the conditions set out herein, we should appreciate it if you
would return one of its copies to us in proof of your consent.
Yours truly,
/s/ [ILLEGIBLE]
- ---------------------------
The Chase Manhattan Bank
Accepted and agreed:
/s/ Rafael Martinez Ynzenga
- ---------------------------
Cementos Portland, S.A.
<PAGE>
Exhibit (b)(3)
BBV
BANCO BILBAO VIZCAYA
Madrid, November 8th 1999
CEMENTOS PORTLAND, S.A.
Jose Abascal, 29
28003 MADRID
Dear Sirs:
After the conversations held with you, we hereby confirm our irrevocable
undertaking to furnish you with a credit facility to enable you to purchase the
U.S. company Giant Cement Holding, Inc., on the following terms and conditions:
1. Lender: Cementos Portland, S.A.
2. Amount of the loan: US Dollars 100 million or its exchange value in Pesetas.
3. Currency: Multi-currency (US Dollars or Pesetas) at the choice of Cementos
Portland, S.A., at the appropriate time.
4. Term: The loan will have a term of 180 days reckoned as from the date of
this letter.
BBV is willing to open the relevant conversations with Cementos
Portland, S.A., in order to consider the possibility of refinancing this
loan as a term loan facility.
5. Interest rate: Euribor or Libor (according to the currency selected) plus a
spread to be determined, with a minimum of 0,25% p.a. and a maximum of
0.75% p.a.
6. Guarantees: No collateral guaranties are given.
<PAGE>
BBV
BANCO BILBAO VIZCAYA
08 de noviembre de 1999
7. The remaining terms and conditions of the agreement are those customary for
financings of this kind, under Banco Bilbao Vizcaya, S.A. standards.
If you accept the conditions set out herein, we should appreciate if you would
return a copy of this letter duly signed as a proof of your consent.
Yours truly,
BANCO BILBAO VIZCAYA, S.A.
By: s/Jesus Maria Ugarte s/Eduardo Pellicer
- ------------------------ -----------------------
Jesus Maria Ugarte Eduardo Pellicer
Accepted and Agreed:
CEMENTOS PORTLAND, S.A.
By: s/Rafael Martinez Ynzenga
------------------------------
2
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
CEMENTOS PORTLAND, S.A.,
CP ACQUISITION, INC.
AND
GIANT CEMENT HOLDING, INC.
Dated as of November 4, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I
THE OFFER......................................................................2
SECTION 1.1 THE OFFER.......................................................2
SECTION 1.2 COMPANY ACTIONS.................................................3
SECTION 1.3 SHAREHOLDER LISTS...............................................4
SECTION 1.4 DIRECTORS; SECTION 14(f)........................................5
ARTICLE II
THE MERGER.....................................................................6
SECTION 2.1 THE MERGER......................................................6
SECTION 2.2 EFFECTIVE TIME..................................................6
SECTION 2.3 EFFECTS OF THE MERGER...........................................6
SECTION 2.4 CERTIFICATE OF INCORPORATION AND BY-LAWS........................7
SECTION 2.5 DIRECTORS AND OFFICERS..........................................7
SECTION 2.6 CONVERSION OF SECURITIES........................................7
SECTION 2.7 DISSENTING SHARES...............................................8
SECTION 2.8 SURRENDER OF SHARES.............................................8
SECTION 2.9 NO FURTHER TRANSFER OR OWNERSHIP RIGHTS........................10
SECTION 2.10 TREATMENT OF OPTIONS...........................................10
SECTION 2.11 LOST CERTIFICATES..............................................10
SECTION 2.12 CLOSING........................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY ................................11
SECTION 3.1 ORGANIZATION AND QUALIFICATION.................................11
SECTION 3.2 CAPITALIZATION.................................................12
SECTION 3.3 AUTHORITY RELATIVE TO THIS AGREEMENT...........................12
SECTION 3.4 ABSENCE OF CERTAIN CHANGES.....................................13
SECTION 3.5 SEC REPORTS....................................................13
SECTION 3.6 PROXY STATEMENT................................................14
SECTION 3.7 CONSENTS AND APPROVALS; NO VIOLATION...........................14
SECTION 3.8 BROKERAGE FEES AND COMMISSIONS.................................15
SECTION 3.9 SCHEDULE 14D-9; OFFER DOCUMENTS................................15
SECTION 3.10 LITIGATION.....................................................16
SECTION 3.11 ERISA COMPLIANCE...............................................16
</TABLE>
i
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<TABLE>
<S> <C>
SECTION 3.12 TAXES..........................................................18
SECTION 3.13 COMPLIANCE WITH APPLICABLE LAWS................................19
SECTION 3.14 ENVIRONMENTAL MATTERS..........................................20
SECTION 3.15 CONTRACTS......................................................21
SECTION 3.16 LABOR MATTERS..................................................21
SECTION 3.17 TITLE TO PROPERTIES............................................22
SECTION 3.18 UNDISCLOSED LIABILITIES........................................22
SECTION 3.19 OPINION OF COMPANY FINANCIAL ADVISOR...........................22
SECTION 3.20 INSURANCE......................................................23
SECTION 3.21 STATE TAKEOVER STATUTES........................................23
SECTION 3.22 YEAR 2000......................................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER.......................................................24
SECTION 4.1 ORGANIZATION AND QUALIFICATION.................................24
SECTION 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT...........................24
SECTION 4.3 PROXY STATEMENT................................................24
SECTION 4.4 CONSENTS AND APPROVALS; NO VIOLATION...........................25
SECTION 4.5 FINANCING......................................................25
SECTION 4.6 BROKERAGE FEES AND COMMISSIONS.................................25
SECTION 4.7 SCHEDULE 14D-1; OFFER DOCUMENTS................................25
SECTION 4.8 LITIGATION.....................................................26
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER........................................26
SECTION 5.1 CONDUCT OF BUSINESS OF THE COMPANY PENDING THE MERGER..........26
SECTION 5.2 PROHIBITED ACTIONS BY THE COMPANY..............................26
ARTICLE VI
COVENANTS.....................................................................29
SECTION 6.1 NO SOLICITATION................................................29
SECTION 6.2 ACCESS TO INFORMATION..........................................31
SECTION 6.3 REASONABLE BEST EFFORTS........................................32
SECTION 6.4 INDEMNIFICATION OF DIRECTORS AND OFFICERS......................32
SECTION 6.5 EVENT NOTICES AND OTHER ACTIONS................................33
SECTION 6.6 EMPLOYMENT ARRANGEMENTS; EMPLOYEE PLANS AND BENEFITS...........34
SECTION 6.7 MEETING OF THE COMPANY'S STOCKHOLDERS..........................35
SECTION 6.8 PROXY STATEMENT................................................35
SECTION 6.9 PUBLIC ANNOUNCEMENTS...........................................36
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER .....................................36
SECTION 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.....36
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER ...............................................36
SECTION 8.1 TERMINATION....................................................36
SECTION 8.2 EFFECT OF TERMINATION..........................................38
SECTION 8.3 TERMINATION FEE................................................38
SECTION 8.4 AMENDMENT......................................................40
SECTION 8.5 EXTENSION; WAIVER..............................................40
ARTICLE IX
MISCELLANEOUS.................................................................40
SECTION 9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................40
SECTION 9.2 ENTIRE AGREEMENT; ASSIGNMENT...................................40
SECTION 9.3 ENFORCEMENT OF THE AGREEMENT...................................41
SECTION 9.4 SEVERABILITY...................................................41
SECTION 9.5 NOTICES........................................................41
SECTION 9.6 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE..........42
SECTION 9.7 GOVERNING LAW; CONSENT TO JURISDICTION.........................42
SECTION 9.8 DESCRIPTIVE HEADINGS...........................................43
SECTION 9.9 PARTIES IN INTEREST............................................43
SECTION 9.10 COUNTERPARTS...................................................43
SECTION 9.11 CERTAIN DEFINITIONS............................................43
SECTION 9.12 INTERPRETATION.................................................46
ANNEX A
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
November 4, 1999 among Cementos Portland, S.A., a corporation organized under
the laws of the Kingdom of Spain ("Parent"), CP Acquisition, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Purchaser"), and Giant
Cement Holding, Inc., a Delaware corporation (the "Company").
Background
WHEREAS, the Board of Directors of the Company has determined that it
is fair to, advisable and in the best interests of the Company and the
stockholders of the Company to enter into and consummate this Agreement with
Purchaser, providing for the merger of Purchaser with and into the Company with
the Company as the surviving corporation (the "Merger"), in accordance with the
Delaware General Corporation Law (the "DGCL") and the other transactions
contemplated hereby, upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of Parent and Purchaser have approved
the Merger of Purchaser with and into the Company and such other transactions in
accordance with the DGCL upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company and Purchaser have agreed that, upon the terms
and subject to the conditions contained herein, Purchaser shall commence an
offer (as amended or supplemented in accordance with this Agreement, the
"Offer") to purchase for cash all of the issued and outstanding shares of common
stock, par value $.01 per share (referred to herein as either the "Shares" or
"Company Common Stock"), of the Company at a price per share of $31.00, net to
the seller in cash (the "Share Price");
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for each share in the Offer and the Merger is fair to
the holders of such shares and has resolved to recommend that the holders of
such shares tender their shares pursuant to the Offer and approve and adopt this
Agreement and the Merger upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
intending to be legally bound hereby, Parent, Purchaser and the Company hereby
agree as follows:
1
<PAGE>
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Subject to the provisions of this Agreement, and provided that
this Agreement shall not have been terminated in accordance with Section 8.1 and
so long as none of the events or circumstances set forth in Annex A hereto shall
have occurred and be continuing, not later than the fifth business day after the
date of public announcement of the execution of this Agreement, Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), and Parent shall cause Purchaser to
commence, the Offer at the Share Price. The obligation of Purchaser to
consummate the Offer, to accept for payment and to pay for any Shares tendered
pursuant to the Offer shall be subject only to those conditions set forth in
Annex A and the other conditions to the Offer set forth in this Agreement.
Purchaser expressly reserves the right, in its sole discretion, to waive any
such condition; provided that, without the prior written consent of the Company,
Parent or Purchaser shall not waive the Minimum Condition (as defined in Annex
A). The initial expiration date of the Offer shall be the 20th business day
following the commencement of the Offer (determined using Rule 14d-2(a) under
the Exchange Act).
(b) Purchaser expressly reserves the right, in its sole discretion, to
modify and make changes to the terms and conditions of the Offer; provided that
without the prior written consent of the Company, no modification or change may
be made which (i) decreases the consideration payable in the Offer, (ii) changes
the form of consideration payable in the Offer (other than by adding
consideration), (iii) changes the Minimum Condition, (iv) decreases the maximum
number of Shares sought pursuant to the Offer, (v) changes the conditions to the
Offer in a manner adverse to the stockholders of the Company, (vi) imposes
additional conditions to the Offer (other than in respect of any consideration
which is payable in addition to the Share Price), (vii) changes any other terms
of the Offer in a manner adverse to the stockholders of the Company, or (viii)
except as provided in the next sentence, extends the Offer. Notwithstanding the
foregoing, Purchaser may (but shall not be required under this Agreement or
otherwise to), without the prior written consent of the Company, (A) extend the
Offer on one or more occasions for such period as may be determined by Purchaser
in its sole discretion (each such extension period not to exceed 10 business
days at a time), if at the then scheduled expiration date of the Offer any of
the conditions to Purchaser's obligations to accept for payment and pay for
Shares shall not be satisfied or waived, (B) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or the staff thereof applicable to the
Offer, and(C) extend the Offer on one or more occasions for an aggregate period
of not more than five business days if the Minimum Condition has been satisfied
but less than 90% of then outstanding Shares have been validly tendered and not
properly withdrawn. Without limiting the right of Purchaser to extend the Offer
pursuant to the immediately preceding sentence, in the event the Minimum
Condition shall not have been satisfied or that the condition set forth in
paragraph (d) of Annex A with respect to
2
<PAGE>
the HSR Act (as defined herein) or with respect to an action or proceeding by a
Governmental Entity that shall not have been satisfied or waived at the
scheduled or any extended expiration date of the Offer, at the request of the
Company, Purchaser shall, and Parent shall cause Purchaser to, extend the
expiration date of the Offer, in five business day increments, until the
earliest to occur of (x) the satisfaction or waiver of the Minimum Condition or
such other condition, (y) the termination of this Agreement in accordance with
its terms and (z) January 31, 2000. It is agreed that the conditions to the
Offer set forth on Annex A are for the benefit of Purchaser and may be asserted
by Purchaser or, except with respect to the Minimum Condition as set forth in
Section 1.1(a), may be waived by Purchaser, in whole or in part at any time and
from time to time, in its sole discretion. On the terms and subject to the
conditions of the Offer and this Agreement, promptly after expiration of the
Offer, Purchaser shall accept for payment and pay for, and Parent shall cause
Purchaser to accept for payment and pay for, all Shares validly tendered and not
withdrawn pursuant to the Offer that Purchaser becomes obligated to purchase
pursuant to the Offer. Parent shall provide, or cause to be provided, the funds
necessary to purchase any and all of the Shares that Purchaser becomes obligated
to purchase pursuant to the Offer in accordance with the terms of this
Agreement.
(c) On the date of commencement of the Offer, Parent and Purchaser
shall file with the SEC with respect to the Offer a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-1") with respect to the Offer
which will comply in all material respects with the provisions of applicable
federal securities laws, and will contain the offer to purchase relating to the
Offer (the "Offer to Purchase") and forms of related letter of transmittal and
summary advertisement (which documents, together with any supplements or
amendments thereto and including the exhibits thereto, are referred to herein
collectively as the "Offer Documents"). Parent shall deliver copies of the
proposed forms of the Schedule 14D-1 and the Offer Documents to the Company
within a reasonable time prior to the commencement of the Offer for review and
comment by the Company and its counsel. Parent agrees to provide the Company and
its counsel in writing any comments that Purchaser, Parent or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt thereof. The Company, Parent and Purchaser shall promptly
correct any information provided by it for use in the Schedule 14D-1 or the
Offer Documents that shall be or shall have become false or misleading in any
material respect and Parent and Purchaser further agree to take all steps
necessary to cause the Schedule 14D-1 or Offer Documents as so corrected to be
filed with the SEC and disseminated to the stockholders of the Company, as and
to the extent required by applicable federal securities laws.
Section 1.2 Company Actions.
(a) The Company hereby consents to the Offer and represents and
warrants that (i) its Board of Directors, at a meeting duly called and held on
November 4, 1999, has duly and unanimously adopted resolutions approving the
Offer, the Merger and this Agreement and the other transactions contemplated
hereby and thereby (collectively, the "Transactions") in accordance with the
requirements of the DGCL, determining that the terms of the Offer and the Merger
are fair to, and in the best interests of, the Company's stockholders and
recommending acceptance of the Offer
3
<PAGE>
and adoption of the Merger and this Agreement by the stockholders of the
Company, and (ii) Merrill Lynch & Co., Inc. (the "Company Financial Advisor")
has delivered to the Company's Board of Directors its opinion (the "Fairness
Opinion"), dated the date of this Agreement, to the effect that, as of such
date, the cash consideration to be received by the holders of the Company Common
Stock pursuant to the Offer and the Merger, taken together, is fair from a
financial point of view to such holders (other than Parent and its affiliates)
and a complete and correct signed copy of such opinion has been delivered by the
Company to Parent. The Company has been authorized by the Company Financial
Advisor to permit the inclusion of the Fairness Opinion (and, subject to prior
review and consent by the Company Financial Advisor, a reference thereto) in the
Schedule 14D-9 referred to below and the Proxy Statement and, subject to the
Company Financial Advisor's prior review and consent, a reference thereto in the
Schedule 14D-1. The Company hereby consents to the inclusion in the Offer
Documents of the recommendations of the Company's Board of Directors described
in this Section 1.2. The Company has been advised by each of its directors and
by each executive officer who as of the date hereof is actually aware (to the
knowledge of the Company) of the Transactions that such person intends to tender
pursuant to the Offer all Shares owned by such person.
(b) The Company shall file with the SEC on the date of the
commencement of the Offer a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule 14D-9") which shall comply in all material
respects with the provisions of applicable federal securities laws, and will,
subject to Section 6.1 hereof, contain such recommendations of the Company's
Board of Directors in favor of the Offer and the Merger, and shall disseminate
the Schedule 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act
and shall mail the Schedule 14D-9 together with the Offer Documents. The Company
shall deliver the proposed forms of the Schedule 14D-9 and the exhibits thereto
to Parent within a reasonable time prior to the commencement of the Offer for
review and comment by Parent and its counsel. Parent and its counsel shall be
given a reasonable opportunity to review any amendments and supplements to the
Schedule 14D-9 prior to their filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Parent and its
counsel in writing any comments that the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt
thereof. Each of the Company, Parent and Purchaser shall promptly correct any
information provided by it for use in the Schedule 14D-9 that shall be or shall
have become false or misleading in any material respect and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the stockholders of the Company, as
and to the extent required by applicable federal securities laws.
Section 1.3 Shareholder Lists. In connection with the Offer, the
Company shall promptly furnish to, or cause to be furnished to, Parent and
Purchaser mailing labels, security position listings, any non-objecting
beneficial owner lists and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of a recent date and
of those Persons becoming record holders subsequent to such date (to the extent
available), together with all other information in the Company's possession or
control regarding the beneficial owners
4
<PAGE>
of Shares and shall furnish Parent and Purchaser with such information and
assistance as Parent, Purchaser or their respective agents may reasonably
request in communicating the Offer to the record and beneficial holders of
Shares. Subject to the requirements of law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Purchaser shall, and shall cause each of
their affiliates and their respective advisors to, hold the information
contained in any of such labels and lists in confidence, use such information
only in connection with the Offer and the Merger, and, if this Agreement is
terminated, deliver to the Company or destroy all copies of such information or
extracts therefrom then in their possession or under their control.
Section 1.4 Directors; Section 14(f).
(a) Immediately upon the acceptance for payment of and payment for a
majority of the Shares by Purchaser pursuant to the Offer, Purchaser shall be
entitled to designate the number of directors, rounded up to the nearest whole
number, on the Company's Board of Directors that equals the product of (i) the
total number of directors on the Company's Board of Directors and (ii) the
percentage that the number of Shares beneficially owned by Parent bears to the
total number of Shares outstanding on a fully diluted basis. In furtherance
thereof, concurrently with such acceptance for payment and payment for such
Shares the Company shall, upon request of Parent and in compliance with Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, use its best
efforts promptly either to increase the size of its Board of Directors or to
secure the resignations of such number of its incumbent directors, or both, as
is necessary to enable such designees of Parent to be so elected or appointed to
the Company's Board of Directors, and the Company shall take all actions
available to the Company to cause such designees of Parent to be so elected or
appointed. At such time, the Company shall, if requested by Parent, also take
all action necessary to cause the persons designated by Parent to constitute the
number of members, rounded up to the nearest whole number on (i) each committee
of the Company's Board of Directors, (ii) each board of directors (or similar
body) of each subsidiary of the Company and (iii) each committee (or similar
body) of each such board that represents the same percentage as such individuals
represent on the Company's Board of Directors.
(b) Notwithstanding the foregoing, the Company shall use its best
efforts to ensure that, in the event that Purchaser's designees are elected to
the Board of Directors of the Company, such Board of Directors shall have, at
all times prior to the Effective Time, at least two directors who are directors
on the date of this Agreement and who are not officers or affiliates of the
Company (it being understood that for purposes of this sentence, a director of
the Company shall not be deemed an affiliate of the Company solely as a result
of his status as a director of the Company), Parent or any of their respective
subsidiaries (the "Independent Directors"); and provided further, that, in such
event, if the number of Independent Directors shall be reduced below two for any
reason whatsoever the remaining Independent Director may designate a person to
fill such vacancy who shall be deemed to be Independent Directors for purposes
of this Agreement or, if no Independent Directors then remain, the other
directors may designate two persons to fill such vacancies who shall
5
<PAGE>
not be officers or affiliates of the Parent or any of its subsidiaries (other
than the Company), and such persons shall be deemed to be Independent Directors
for purposes of this Agreement.
(c) From and after the time, if any, that Parent's designees
constitute a majority of the Company's Board of Directors and prior to the
Effective Time, any amendment of this Agreement, any termination of this
Agreement by the Company, any extension of time for performance of any of the
obligations of Parent or Purchaser hereunder, any waiver of any condition to the
Company's obligations hereunder or any of the Company's rights hereunder or
other action by the Company hereunder may be effected only by the action of the
Independent Directors of the Company, which action shall be deemed to constitute
the action of any committee specifically designated by the Board of Directors of
the Company to approve the actions contemplated hereby and the full Board of
Directors of the Company; provided that, notwithstanding compliance with the
provisions of this Section 1.4(c), if there shall be no Independent Directors,
such actions may be effected by majority vote of the entire Board of Directors
of the Company, except that no such action shall amend the terms of this
Agreement or modify the terms of the Offer or the Merger in a manner materially
adverse to the holders of Shares.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the DGCL, Purchaser
shall be merged with and into the Company as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VII. Following the
Merger, the Company shall continue as the surviving corporation (the "Surviving
Corporation") under the name "Giant Cement Holding, Inc." and shall continue its
existence under the laws of the State of Delaware, and the separate corporate
existence of Purchaser shall cease. At the election of Parent, any direct or
indirect wholly owned subsidiary of Parent may be substituted for Purchaser as a
constituent corporation in the Merger.
Section 2.2 Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger (the "Certificate of Merger") with the Secretary of State of the State of
Delaware (the "Delaware Secretary"), in such form as required by and executed in
accordance with the relevant provisions of the DGCL (the date and time of the
filing of the Certificate of Merger with the Delaware Secretary (or such later
time as is specified in the Certificate of Merger) being the "Effective Time").
Section 2.3 Effects of the Merger. The Merger shall have the effects
set forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing and subject thereto, at the Effective Time all the
property, rights, privileges, immunities, powers and franchises of the Company
and Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities and
6
<PAGE>
duties of the Company and Purchaser shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 2.4 Certificate of Incorporation and By-laws.
(a) At the Effective Time and without any further action on the part
of the Company and Purchaser, the Certificate of Incorporation of Purchaser (the
"Certificate of Incorporation"), as in effect immediately prior to the Effective
Time until thereafter further amended as provided therein and under the DGCL,
shall be the certificate of incorporation of the Surviving Corporation following
the Merger.
(b) At the Effective Time and without any further action on the part
of the Company and Purchaser, the By-laws of Purchaser shall be the By-laws of
the Surviving Corporation and thereafter may be amended or repealed in
accordance with their terms or the Certificate of Incorporation of the Surviving
Corporation and as provided by law.
Section 2.5 Directors and Officers. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed (as the case may be) and qualified.
Section 2.6 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Purchaser, the Company or
the holders of any of the following securities:
(i) Each share of common stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
(ii) Each Share held in the treasury of the Company and each
Share owned by Purchaser or any direct or indirect subsidiary of the
Company, in each case immediately prior to the Effective Time, shall
be canceled and retired without any conversion thereof and no payment
or distribution shall be made with respect thereto.
(iii) Each issued and outstanding Share (other than Shares
canceled pursuant to Section 2.6(ii) and any Dissenting Shares (as
defined in Section 2.7(a)) shall be converted into the right to
receive the Share Price or any higher price that may be paid pursuant
to the Offer (the "Merger Consideration") payable to the holder
thereof, without interest, upon surrender of the certificate formerly
representing such Share in the manner provided in Section 2.8, less
any required withholding taxes.
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Section 2.7 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary, Shares
that are issued and outstanding immediately prior to the Effective Time and
which are held by stockholders who have not voted such Shares in favor of the
Merger (or consented thereto in writing), who shall have delivered a written
objection to the Merger and a demand for appraisal of such Shares in accordance
with Section 262 of the DGCL (insofar as such Section is applicable to the
Merger and provides for appraisal rights with respect thereto) and who shall not
have failed to perfect or shall not have effectively withdrawn or lost their
rights to appraisal and payment under the DGCL (the "Dissenting Shares"), shall
not be converted into the right to receive the Merger Consideration, but shall
instead entitle the holder thereof to receive that consideration determined
pursuant to Section 262 of the DGCL; provided, however, that if such holder
shall have failed to perfect or shall have effectively withdrawn such holder's
right to appraisal and payment under the DGCL, such holder's Shares shall
thereupon be deemed to have been converted, at the Effective Time, into the
right to receive the Merger Consideration, without any interest thereon.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal pursuant to the applicable provisions of the DGCL received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to the DGCL and received by the Company and (ii) the opportunity to participate
in and, following consummation of the Offer, direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL. The Company
shall not, except with the prior written consent of Parent, make any payment
with respect to any such demands for appraisal or offer to settle or settle any
such demands.
Section 2.8 Surrender of Shares.
(a) Prior to the mailing of the Proxy Statement, Parent shall appoint
a bank or trust company which is reasonably satisfactory to the Company to act
as paying agent (the "Paying Agent") for the payment of the Merger
Consideration. Prior to the Effective Time, Parent shall deposit, or shall cause
to be deposited, with the Paying Agent for the benefit of former holders of
Shares sufficient funds to make all payments pursuant to this Section 2.8. Such
funds shall be invested by the Paying Agent as directed by the Surviving
Corporation. Any net profit resulting from, or interest or income produced by,
such investments will be payable to the Surviving Corporation or as it directs.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented Shares (the "Certificates"), a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent) and instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon surrender to
the Paying Agent of a Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
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and such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
aggregate amount of Merger Consideration into which the number of Shares
previously represented by such Certificate or Certificates surrendered shall
have been converted pursuant to this Agreement. If any Merger Consideration is
to be remitted to a person whose name is other than that in which the
Certificate for Shares surrendered for exchange is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall be properly
endorsed, with signature guaranteed, or otherwise in proper form for transfer,
and that the person requesting such exchange shall have paid any transfer and/or
other taxes required by reason of the remittance of Merger Consideration to a
person whose name is other than that of the registered holder of the Certificate
surrendered, or the person requesting such exchange shall have established to
the satisfaction of the Surviving Corporation that such tax either has been paid
or is not applicable. No interest shall be paid or accrued, upon the surrender
of the Certificates, for the benefit of holders of the Certificates on any
Merger Consideration.
(c) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest received with respect thereto) which had
been deposited with the Paying Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
only to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) and only as general creditors thereof for payment of their
claim for Merger Consideration to which such holders may be entitled.
(d) Notwithstanding the provisions of Section 2.8(c), neither the
Surviving Corporation nor the Paying Agent shall be liable to any person in
respect of any Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any Certificates
representing Shares shall not have been surrendered prior to six months after
the Effective Time (or immediately prior to such earlier date on which any
Merger Consideration in respect of such Certificate would otherwise escheat to
or become the property of any governmental entity), any such cash shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(e) Parent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any former holder
of Shares such amounts as Parent (or any affiliate thereof) is required to
deduct and withhold with respect to the making of such payment under the Code
(as defined herein), or any provision of any applicable state, local or foreign
law, rule or regulation. To the extent that amounts are so withheld by Parent
and paid by Parent to the applicable taxing authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
former holder of shares in respect of which such deduction and withholding was
made by Parent.
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Section 2.9 No Further Transfer or Ownership Rights. After the
Effective Time, there shall be no further transfer on the records of the Company
(or the Surviving Corporation) or its transfer agent of certificates
representing Shares which have been converted pursuant to this Agreement into
the right to receive Merger Consideration, and if such certificates are
presented to the Company for transfer, they shall be canceled against delivery
of Merger Consideration. From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares except
as otherwise provided for herein or by applicable law. All Merger Consideration
paid upon the surrender for exchange of Certificates representing shares in
accordance with the terms of this Article II shall be deemed to have been issued
(and paid) in full satisfaction of all rights pertaining to the Shares exchanged
for Merger Consideration theretofore represented by such Certificates.
Section 2.10 Treatment of Options. Prior to the first purchase of
Shares pursuant to the Offer, the Board of Directors of the Company (or, if
appropriate, any committee thereof) shall adopt appropriate resolutions and take
all other actions necessary to provide that each outstanding stock option, stock
appreciation right (an "SAR"), or any other award providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any subsidiary (each an "Option") heretofore granted under the Company's 1994
Employee Stock Option Plan and the Company's 1994 Director Stock Option Plan
(collectively, the "Stock Option Plans"), whether or not then vested or
exercisable, shall, at or immediately prior to the Effective Time, be canceled,
and each holder thereof shall be entitled to receive a payment in cash from the
Company (which amount shall be subject to any applicable withholding taxes and
shall be paid without interest, the "Cash Payment"), upon cancellation, equal to
the product of (x) the total number of Shares subject or related to such Option,
whether or not then vested or exercisable, and (y) the excess, if any, of the
Merger Consideration over the exercise price or purchase price, as the case may
be, per Share subject or related to such Option, each such Cash Payment to be
paid to each holder of an outstanding Option upon cancellation. The Stock Option
Plans (and any Benefit Plan (as defined herein) or other plan, program or
arrangement other than the Company's tax-qualified defined contribution plan)
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any subsidiary shall terminate as of the
Effective Time.
Section 2.11 Lost Certificates. If any certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by any
person claiming such certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such certificate,
the Paying Agent will pay, in exchange for such lost, stolen or destroyed
certificate, the Merger Consideration to be paid in respect of the Shares
represented by such certificate as contemplated by Section 2.6.
Section 2.12 Closing. Upon the terms and subject to the conditions
hereof, as soon as practicable after consummation of the Offer (and in any event
within two business days after the satisfaction or waiver of the conditions set
forth in Section 7.1), and to the extent required by the DGCL after the vote of
the stockholders of the Company in favor of the approval of the Merger and
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this Agreement has been obtained, the Company and Purchaser (or Parent if
appropriate) shall execute and file with the Delaware Secretary the Certificate
of Merger, and the parties shall take all such other and further actions as may
be required by law to make the Merger effective. Prior to the filing referred to
in this Section 2.11, a closing (the "Closing") will be held at the offices of
Proskauer Rose LLP, 1585 Broadway, New York, New York 10036, (or such other
place as the parties may agree) for the purpose of confirming all of the
foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization and Qualification.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the requisite
corporate power to carry on its business as it is now being conducted. The
Company is duly qualified as a foreign corporation or licensed to do business,
and is in good standing, in each jurisdiction where the character of its
properties owned or leased or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed or in good standing has not had and could not reasonably
be expected to have a Material Adverse Effect on the Company. The Company has
delivered to Parent complete and correct copies of its Certificate of
Incorporation and Bylaws, each as amended to date.
(b) The only subsidiaries of the Company are those set forth on
Section 3.1(b)(i) of the Company Disclosure Schedule. Except as set forth on
Schedule 3.1(b)(ii) of the Company Disclosure Schedule, each subsidiary of the
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the requisite
corporate power to carry on its business as it is now being conducted. Each
subsidiary of the Company is duly qualified as a foreign corporation or licensed
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or leased or the nature of its activities
makes such qualification or licensing necessary, except where the failure to be
so qualified or licensed or in good standing has not had and could not
reasonably be expected to have a Material Adverse Effect on the Company.
(c) All of the outstanding shares of capital stock of each such
subsidiary have been validly issued and are fully paid and non-assessable and,
except as set forth in Section 3.1(c) of the Company Disclosure Schedule, are
owned by the Company, by another wholly owned subsidiary of the Company or by
the Company and another such wholly owned subsidiary, free and clear of all
pledges, claims, equities, options, liens, charges, rights of first refusal,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"). Except for the capital
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stock of its subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership,
limited liability company, joint venture or other entity.
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 20,000,000
Shares and 2,000,000 shares of preferred stock, par value $.01 per share
("Preferred Stock"). All of the issued and outstanding Shares have been duly
authorized and validly issued and are fully paid and nonassessable and are not
subject to preemptive rights. As of November 2, 1999, 8,731,562 Shares were
issued and outstanding, 760,000 Shares were reserved for issuance pursuant to
outstanding Options issued under Stock Option Plans and no shares of Preferred
Stock were issued and outstanding. Except upon the exercise of such then
outstanding Options, no additional Shares or shares of Preferred Stock have been
issued since November 2, 1999. Except as set forth in Section 3.2(a) of the
Company Disclosure Schedule: (i) there are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote ("Voting Company Debt"); (ii) there are no
outstanding securities, options, warrants, calls, rights, convertible or
exchangeable securities, "phantom" stock rights, SARs, stock-based performance
units, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its subsidiaries is a party or by which any of them
is bound obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, unit, commitment,
agreement, arrangement or undertaking; and (iii) there are not any outstanding
contractual obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire, or providing preemptive rights with respect to, any
shares of, or any outstanding options, warrants or rights of any kind to acquire
any shares of, or any outstanding securities that are convertible into or
exchangeable for any shares of, capital stock of the Company or any of its
subsidiaries. Upon the Company taking the actions referred to in Section 2.10,
no holder of Options will have any right to receive shares of capital stock of
the Surviving Corporation upon exercise of Options.
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, there are no voting trusts, proxies or other agreements, commitments
or understandings of any character to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound with respect
to the voting of any shares of capital stock of the Company or any of its
subsidiaries or with respect to the registration of the offering, sale or
delivery of any shares of capital stock of the Company or any of its
subsidiaries under the Securities Act of 1933, as amended (the "Securities
Act").
Section 3.3 Authority Relative to this Agreement (a) The Company has
all requisite corporate power and authority to execute and deliver this
Agreement and each instrument
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required hereby to be executed and delivered by the Company prior to or at the
Effective Time, to perform its obligations hereunder and thereunder, and to
consummate the Transactions (subject to the Company Stockholder Approval (as
defined herein) with respect to the Merger). The execution and delivery of this
Agreement and each instrument required hereby to be executed and delivered by
the Company prior to or at the Effective Time and the performance of its
obligations hereunder and thereunder and the consummation by the Company of the
Transactions have been duly and validly authorized by the Board of Directors of
the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Transactions (other
than the Company Stockholder Approval and the filing and recordation of
appropriate merger documents as required by the DGCL). This Agreement has been
duly and validly executed and delivered by the Company, and, assuming this
Agreement constitutes a valid and binding obligation of Parent and Purchaser,
this Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other similar laws affecting the rights and
remedies of creditors generally, and subject to general principles of equity,
whether applied by a court of law or equity.
(b) The only vote of holders of any class or series of capital stock
of the Company or any of its subsidiaries necessary to adopt or approve this
Agreement and the Merger is the adoption of this Agreement by the holders of a
majority of the outstanding Shares (the "Company Stockholder Approval"), subject
to Section 6.7(c).
Section 3.4 Absence of Certain Changes. Except as specifically
disclosed in the Company's filings and reports under the Exchange Act filed and
publicly available prior to the date of this Agreement or as set forth in
Section 3.4 of the Company Disclosure Schedule, since December 31, 1998: (i) the
Company and its subsidiaries have conducted their business only in the ordinary
course, and during such period there has not been any event, change, effect or
development that has had or could reasonably be expected to have a Material
Adverse Effect on the Company; and (ii) there has not been (A) any declaration,
setting aside or payment of any dividend or other distribution in respect of the
capital stock of the Company or any repurchase, redemption or other acquisition
by the Company or any of its subsidiaries of any capital stock of the Company;
(B) any damage, destruction or loss, whether or not covered by insurance that
has had or could reasonably be expected to have a Material Adverse Effect on the
Company; or (C) any change in accounting methods, principles or practices by the
Company affecting the consolidated assets, liabilities, results of operations or
business of the Company, except insofar as have been required by a change in
generally accepted accounting principles.
Section 3.5 SEC Reports. Since January 1, 1998, the Company has filed
all required forms, reports and documents with the SEC required to be filed by
it pursuant to the federal securities laws and the SEC rules and regulations
thereunder (collectively, the "Company SEC Documents"), all of which have
complied as of their respective filing dates in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, and the
rules promulgated thereunder. None of such forms, reports or documents at the
time filed contained any
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untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Documents
(including the notes thereto) at the time filed complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (and include, in the case of any unaudited interim
financial statements, reasonable accruals for normal year-end adjustments). No
subsidiaries of the Company are required to file periodic reports with the SEC
under the Exchange Act.
Section 3.6 Proxy Statement. If a Proxy Statement is required for the
consummation of the Merger under applicable law, the Proxy Statement will comply
in all material respects with the Exchange Act, except that no representation is
made by the Company with respect to information supplied by or on behalf of
Parent or any affiliate of Parent specifically for inclusion in the Proxy
Statement. None of the information supplied by the Company specifically for
inclusion in the Proxy Statement shall, at the time the Proxy Statement is
mailed or at the time of the Stockholder Meeting or at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
warranty as to any of the information relating to and supplied by or on behalf
of Parent and Purchaser specifically for inclusion in the Proxy Statement. The
letter to stockholders, notice of meeting, proxy statement and form of proxy, or
the information statement, as the case may be, to be distributed to stockholders
in connection with the Merger, or any schedule required to be filed with the SEC
in connection therewith, together with any amendments or supplements thereto,
are collectively referred to herein as the "Proxy Statement." If, at any time
prior to the Effective Time, any event relating to the Company or any of its
affiliates, officers or directors is discovered by the Company that shall be set
forth in a supplement to the Proxy Statement, the Company will promptly inform
Parent and Purchaser and prepare, file and disseminate such supplement as may be
required by applicable law.
Section 3.7 Consents and Approvals; No Violation. Subject to obtaining
the Company Stockholder Approval (if required under the DGCL) and the taking of
the actions described in the immediately succeeding sentence, the execution,
delivery and performance of this Agreement do not, and the consummation of the
Transactions by the Company will not, conflict with, or result in any violation
of, or default (with or without notice or lapse to time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its subsidiaries under,
or result in the termination of, or require that any consent be obtained or any
notice be given with respect to, (i) the Certificate of Incorporation or
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Bylaws of the Company or the comparable charter or organizational documents of
any of its subsidiaries, (ii) except as set forth in Section 3.7 of the Company
Disclosure Schedule, any loan or credit agreement note, bond, mortgage,
indenture, lease, license or other agreement, instrument, Contract or Permit
applicable to the Company or any of its subsidiaries or their respective
properties or assets, (iii) any judgment, order, writ, injunction, decree, law,
statute, ordinance, rule or regulation applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iv) any licenses to
which the Company or any of its subsidiaries is a party, other than, in the case
of clauses (ii), (iii) and (iv), any such conflicts, violations, defaults,
rights, Liens, losses of a material benefit, consents or notices that have not
and could not reasonably be expected to have a Material Adverse Effect on the
Company. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by the Company
or any of its subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the Transactions,
except for (i) the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (x) the Schedule 14D-9,
(y) if required, the Proxy Statement relating to the approval by the Company's
stockholders of this Agreement and (z) such reports under Section 13(a) of the
Exchange Act as may be required in connection with this Agreement and the
Transactions contemplated by this Agreement, (iii) the filing of the Certificate
of Merger pursuant to the DGCL and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made has not had and could not reasonably be expected to have a
Material Adverse Effect on the Company or materially adversely affect (or
materially delay) the consummation of the Offer.
Section 3.8 Brokerage Fees and Commissions. Except for those fees and
expenses payable to the Company Financial Advisor pursuant to the letter
agreement, dated June 10, 1999, no person is entitled to receive any investment
banking, brokerage or finder's fee or commission in connection with this
Agreement or the Transactions based upon arrangements made by or on behalf of
the Company or any of its subsidiaries or by any affiliate of the Company or any
of its subsidiaries. A copy of the above agreement has previously been delivered
to Parent.
Section 3.9 Schedule 14D-9; Offer Documents. Neither the Schedule
14D-9, any other document required to be filed by the Company with the SEC in
connection with the Transactions, nor any information supplied by the Company in
writing for inclusion in the Offer Documents or the Schedule 14D-1 shall, at the
respective times the Schedule 14D-9, any other filings by the Company, the
Schedule 14D-1, the Offer Documents or any amendments or supplements thereto are
filed with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9 and any other document
required to be filed by the Company with the SEC in connection with the
Transactions will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, no representation or warranty is made by the
Company with respect to statements made or incorporated by reference
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therein based on information supplied by or on behalf of Parent or Purchaser
specifically for inclusion or incorporation by reference therein.
Section 3.10 Litigation. Except as disclosed in the Company SEC
Documents filed prior to the date hereof, there is no claim, suit, action or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries that individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect on the
Company, or which questions or challenges the validity of this Agreement, the
Transactions or any action taken or to be taken by the Company or which attempts
to restrain, enjoin or prohibit the Transactions. Except as disclosed in the
Company SEC Documents, there is no judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against the Company or any
of its subsidiaries which individually or in the aggregate has had or could
reasonably be expected to have a Material Adverse Effect on the Company.
Section 3.11 ERISA Compliance. (a) Section 3.11(a) of the Company
Disclosure Schedule sets forth a list of all "employee benefit plans" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and any other pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus or incentive plans or other employee programs, arrangements or
agreements including, without limitation, sick leave, salary continuation for
disability and scholarship programs currently maintained by, sponsored in whole
or in part by, or contributed to by the Company or its subsidiaries or any
entity required to be aggregated with the Company (each, an "ERISA Affiliate")
pursuant to Section 414 of the Code covering any employee or former employee of
the Company or any ERISA Affiliate (collectively, the "Benefit Plans").
(b) True, correct and complete copies of the following documents, with
respect to each of the Benefit Plans have been made available or delivered to
Purchaser by the Company, to the extent applicable: (i) any plans, all
amendments thereto and related trust documents, and amendments thereto; (ii) the
most recent Forms 5500 and all schedules thereto and the most recent actuarial
reports, if any; (iii) the most recent IRS determination letter; (iv) summary
plan descriptions; (v) written communications to employees materially amending
or otherwise materially changing the terms of any Benefit Plan; and (vi) written
descriptions of all non-written agreements relating to the Benefit Plans.
(c) Except as disclosed on Section 3.11(c) of the Company Disclosure
Schedule: (i) each of the Benefit Plans intended to be "qualified" within the
meaning of Section 401(a) or 501 of the Code has been determined by the Internal
Revenue Service to be so qualified (which may be a favorable determination
letter issued to a prototype sponsor); and to the knowledge of the Company, no
facts exist which would likely result in the loss of such qualification; (ii)
each of the Benefit Plans is in material compliance with their terms and the
applicable terms of ERISA and the Code and any other applicable laws, rules and
regulations; and (iii) to the Company's knowledge, no claim, lawsuit,
arbitration or other action has been threatened or instituted against any
Benefit Plan or the assets of any trust under such plans (other than routine
benefit claims).
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(d) With respect to any Benefit Plan that is subject to Title IV of
ERISA (a "Title IV Plan"), except as otherwise disclosed in Section 3.11(d) of
the Company Disclosure Schedule: (i) no liability to the Pension Benefit
Guaranty Corporation ("PBGC") has been incurred (other than for premiums not yet
due); (ii) no notice of intent to terminate any such plan in a "distress
termination" under Section 4041 of ERISA has been filed with PBGC or distributed
to participants; (iii) no proceedings to terminate any such plan have been
instituted by the PBGC; (iv) no "accumulated funding deficiency", within the
meaning of Section 412 of the Code or Section 302 of ERISA, whether or not
waived, exists; (v) no lien has arisen or is reasonably expected to arise under
Section 412 of the Code or Section 302 of ERISA on the assets of the Company or
any subsidiary; and (vi) with respect to each Title IV Plan the funding
information set forth in footnote 10 of the Company's financial statements for
the period ending December 31, 1998 that are contained in the Company SEC
Documents fairly reports in all material respects the information contained
therein concerning the relation of liabilities, determined using the accumulated
benefit obligation methodology of Statement of Financial Accounting Standards
No. 87, of each Title IV Plan to the fair market value of such Title IV Plan's
assets.
(e) No Benefit Plan is a multiemployer plan, as defined in Section
3(37) of ERISA ("Multiemployer Plan"), or is or has been subject to Sections
4063 or 4064 of ERISA ("Multiple Employer Plans") and none of the Company or any
ERISA Affiliate has any liability (contingent or otherwise) with respect to any
Multiemployer Plan or Multiple Employer Plan.
(f) Except as set forth in Section 3.11(f) of the Company Disclosure
Schedule, all contributions (including all employer contributions and employee
salary reduction contributions) required to have been made under any of the
Benefit Plans or by law (without regard to any waivers granted under Section 412
of the Code), to any funds or trusts established thereunder or in connection
therewith have been made by the due date thereof (including any valid
extension), and all contributions for any period ending on or before the Closing
Date which are not yet due will have been to the extent required by generally
accepted accounting principles accrued on the balance sheet on or prior to the
Closing Date.
(g) No Company or any ERISA Affiliate or any organization to which
Company is a successor or parent corporation, within the meaning of Section
4069(b) of ERISA, has engaged in any transaction, within the meaning of Section
4069 of ERISA.
(h) Except as set forth in Section 3.11(h) of the Company Disclosure
Schedule, none of the Benefit Plans provide for post-employment life or health
insurance, benefits or coverage for any participant or any beneficiary of a
participant, except as may be required under the Consolidate Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and at the expense of the
participant or the participant's beneficiary. Each of the Company and any ERISA
Affiliate which maintains a "group health plan" within the meaning Section
5000(b)(1) of the Code has complied with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title
I of ERISA and the regulations thereunder.
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(i) Except as set forth in Section 3.11(i) of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee (current, former or retired) of the
Company, (ii) increase any benefits otherwise payable under any Benefit Plan or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits under any such plan.
(j) Except as set forth in Schedule 3.11(j) of the Company Disclosure
Schedule, no stock or other security issued by the Company forms or has formed a
material part of the assets of any Benefit Plan.
Section 3.12 Taxes. Except as set forth in Section 3.12 of the Company
Disclosure Schedule:
(a) all federal, State, local and foreign income and franchise Tax
Returns and all other material Tax Returns (as defined herein) that are required
to be filed by or with respect to the Company or any of its subsidiaries have
been timely filed, and all such Tax Returns are true, complete and accurate and
correctly reflect the income, or other measure of Tax (as defined herein),
required to be shown thereon; all Taxes due for the periods covered by such
returns have been paid in full; and the most recent financial statements
contained in the Company SEC Documents reflect an adequate reserve for all Taxes
of the Company and its subsidiaries for all taxable periods and portions thereof
through the date of such financial statements;
(b) no federal, State, local or foreign income or franchise or other
material Tax Return of the Company or any of its subsidiaries is under audit or
examination by any taxing authority, and no written notice of such an audit or
examination or any assertion of any claim for Taxes has been received by the
Company or a subsidiary;
(c) there is not in force any extension of time with respect to the
due date for the filing of any Tax Return or any waiver or agreement for any
extension of time for the assessment or payment of any Tax due with respect to
the period covered by any Tax Return;
(d) since October 1, 1994 none of the Company and its subsidiaries has
been a member of an affiliated group filing a consolidated federal income Tax
Return other than the affiliated group of which the Company is the common parent
corporation;
(e) neither the Company nor any of its subsidiaries is bound by any
tax sharing, tax indemnity or similar agreement with respect to Taxes;
(f) neither the Company nor any of its subsidiaries has made any
payments, or is a party to any agreement or arrangement that could obligate it
to make any payments, in each case that would not be deductible under Section
162(m) or 280G of the Code;
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(g) there are no liens for Taxes upon any asset of the Company or any
of its subsidiaries, other than liens for Taxes not yet due;
(h) the Company has made available to Parent complete copies of all
federal, State, local and foreign income or material franchise Tax Returns of
the Company and any of its subsidiaries and any audit report or other document
issued by any taxing authority with respect to the Company or any of its
subsidiaries, in each case for the three prior taxable periods;
(i) no claim has been made by a taxing authority in a jurisdiction
where the Company or any of its subsidiaries does not now file income or
franchise Tax Returns that the Company or a subsidiary is or may be subject to
income or franchise taxation by that jurisdiction;
(j) the Company is not and has not been, for the five year period
prior to the date hereof, a "United States real property holding corporation"
within the meaning of Section 897 of the Code; and
(k) neither the Company nor any of its subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355 of the Code) in a distribution of stock under the Code.
As used herein, "Tax Returns" shall mean all returns and reports of or
with respect to any Tax which are required to be filed by or with respect to the
Company or any of its subsidiaries other than returns or reports of or with
respect to Benefit Plans, and "Taxes" shall mean (i) all taxes, charges,
imposts, tariffs, fees, levies or other similar assessments or liabilities,
including income taxes, ad valorem taxes, excise taxes, withholding taxes, stamp
taxes or other taxes of or with respect to gross receipts, premiums, real
property, personal property, windfall profits, sales, use, transfers, licensing,
employment, payroll and franchises imposed by or under any statute, law, rule or
regulation, and such terms shall include any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any such tax or any contest or dispute thereof; (ii) liability
of the Company or any fiduciary for the payment of any amounts of the type
described in clause (i) as a result of being a member of an affiliated, combined
consolidated or unitary group for any taxable period; and (iii) liability of the
Company or any subsidiary for the payment of any amounts of the type described
in clauses (i) or (ii) as a result of any express or implied obligation to
indemnify any other person.
Section 3.13 Compliance with Applicable Laws. Except for any of the
following which could not reasonably be expected to have a Material Adverse
Effect on the Company and except as set forth on Section 3.13 of the Company
Disclosure Schedule:
(a) the Company and its subsidiaries have all Federal, state, local
and foreign governmental approvals, authorizations, certificates, franchises,
licenses, notices, permits and rights ("Permits") necessary for it to own, lease
or operate its properties and assets and to carry on its business as now
conducted and there has occurred no default under any such Permit; and
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(b) neither the Company nor any of its subsidiaries is in violation of
any applicable law, rule, regulation, judgement, order or decree.
Section 3.14 Environmental Matters. Except as disclosed on Section
3.14(a) of the Company Disclosure Schedule:
(a) the Company and its subsidiaries currently maintain, and are in
compliance with all material Federal, state, local, and foreign governmental
approvals, authorizations, licenses, permits issued pursuant to applicable
Environmental Laws ("Environmental Permits" (defined herein)) necessary for it
to own, lease or operate its properties and assets and to carry on its business
as now conducted, including, but not limited to, permits and authorizations
required under the Resource Conservation and Recovery Act, and any such
Environmental Permits are valid and enforceable. No proceeding is pending or to
the Company's and its subsidiaries' knowledge, is threatened, and the Company
and its subsidiaries know of no grounds which exist to revoke or limit any such
Environmental Permit that is reasonably likely to result in Environmental Costs
and Liabilities in excess of $500,000.
(b) each of the Company and its subsidiaries is in compliance with
Environmental Laws (as defined herein) and the Company has not received any
notice of, nor is there pending or, to the knowledge of the Company and its
subsidiaries, threatened, any legal proceeding alleging the violation of any
Environmental Law that is reasonably likely to result in Environmental Costs and
Liabilities in excess of $500,000. Neither the Company nor its subsidiaries has
received any written notices, orders or directives from any Governmental
Authority arising under any Environmental Permit or any federal, state or local
investigation respecting (i) Environmental Laws, (ii) Remedial Action (as
defined herein) or (iii) the Release of any Hazardous Materials (as defined
herein) with respect to the business of the Company or any of the properties or
assets owned, operated or occupied by the Company allegedly that is reasonably
likely to result in Environmental Costs and Liabilities (as defined herein) in
excess of $500,000.
(c) each of the Company and its subsidiaries and their respective
properties, assets, businesses and operations is, and to the Company's knowledge
has been, and their respective properties, assets, businesses and operations
are, and to the Company's knowledge have been, in compliance with all
Environmental Laws and Environmental Permits, except for such non-compliances
as would not reasonably be likely to result in Environmental Costs and
Liabilities in excess of $500,000.
(d) there have been no Releases of Hazardous Materials in, on, under,
from or affecting such properties, any surrounding site or any off-site location
that are reasonably likely to result in Environmental Costs and Liabilities in
excess of $500,000.
(e) there are no Hazardous Materials, including asbestos containing
materials, located at, on or under any of the properties or assets owned,
operated or occupied (or to the
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knowledge of the Company, formerly owned, operated or occupied) by the Company
that are reasonably likely to result in Environmental Costs and Liabilities in
excess of $500,000.
(f) the Company has delivered, or caused to be delivered, to Purchaser
copies of material environmental audits, evaluations, reports, assessments,
studies and tests relating to the business or the ownership or use of the
properties or assets of the Company within the past 5 years which are within the
possession or control of the Company, including assessments and reports
addressing any facilities burning hazardous waste as fuel under the Resource
Conservation and Recovery Act and with respect to the Clean Air Act, the company
has made available all materials relevant to compliance with regulations
promulgated at 64 Fed. Reg. 31898 (1999) (to be codified at 40 CFR Part 63) and
64 Fed. Reg. 52828 (1999) (to be codified at scattered parts of title 40 CFR)
concerning the operation of cement kilns, including, but not limited to, any
estimated budgets for capital expenditures required for compliance.
(g) no written claims have been made, and no suits or proceedings are
pending or, to the Company's knowledge, threatened, by any employee against the
Company that are premised on exposure to asbestos or asbestos-containing
material or PCBs.
(h) no underground storage tanks, abandoned wells or landfills are
located on any real property owned, operated or occupied by the Company, except
for those tanks, wells or landfills maintained in compliance with applicable
Environmental Laws which are not likely to result in Environmental Costs and
Liabilities in excess of $500,000.
Section 3.15 Contracts. All of the material contracts that are
required to be described in the Company SEC Documents or required to be filed as
exhibits thereto have been described or filed as required. The Company is not,
and to the knowledge of the Company the other parties thereto are not, in
violation of, or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under) any such contract, except for violations or defaults that
individually or in the aggregate have not and could not reasonably be expected
to have a Material Adverse Effect on the Company.
Section 3.16 Labor Matters. Except as set forth in Section 3.16 of the
Company Disclosure Schedule, (i) none of the employees of the Company (the
"Employees") is represented in his or her capacity as an employee of the Company
by any labor organization; (ii) the Company has not recognized any labor
organization nor has any labor organization been elected as the collective
bargaining agent of any Employees, nor has the Company entered into any
collective bargaining agreement or union contract recognizing any labor
organization as the bargaining agent of any Employees; (iii) there is no union
organization activity involving any of the Employees, pending, or to the
knowledge of the Company, threatened, nor has there ever been union
representation involving any of the Employees; (iv) there is no picketing
pending, or to the knowledge of the Company, threatened, and there are no
strikes, slowdowns, work stoppages, other job actions, lockouts, arbitrations,
grievances or other labor disputes involving any of the Employees, pending, or
to the knowledge of the Company, threatened that individually or in the
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aggregate could reasonably be expected to have a Material Adverse Effect, (v)
there are no complaints, charges or claims against the Company pending or, to
any of the knowledge of the Company, threatened which could be brought or filed,
with any public or governmental authority, arbitrator or court based on, arising
out of, in connection with, or otherwise relating to the employment or
termination of employment or failure to employ by the Company, of any individual
that individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect on the Company; (vi) the Company is in compliance with
all laws, regulations and orders relating to the employment of labor, including
all such laws, regulations and orders relating to wages, hours, the Worker
Adjustment and Retraining Notification Act and any similar state or local "mass
layoff" or "plant closing" law ("WARN"), collective bargaining, discrimination,
civil rights, safety and health, workers' compensation and the collection and
payment of withholding and/or social security taxes and any similar tax, except
where the failure to be in compliance, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect; and (vii) there
has been no "mass layoff" or "plant closing" as defined by WARN with respect to
the Company within the six (6) months prior to Closing.
Section 3.17 Title to Properties. The Company has title to, or
leasehold interests in, its properties sufficient to operate such properties and
to conduct its business in the ordinary course, except for any defects in such
titles, or any easements, restrictive covenants or similar encumbrances that
individually or in the aggregate have not had and could not reasonably be
expected to have a Material Adverse Effect on the Company. The Company and its
subsidiaries have all patents, trademarks, tradenames, service marks,
copyrights, know-how, processes and all agreements and other rights necessary to
carry on their business in substantially the same manner as now conducted. The
patents, trademarks and copyrights owned by the Company are valid and
enforceable and to the knowledge of the Company do not infringe on the rights of
any persons.
Section 3.18 Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Company SEC Documents or accrued on the June 30,
1999 balance sheet included in the Company SEC Documents, or as set forth in
Section 3.18 of the Company Disclosure Schedule, and except for liabilities
incurred in the ordinary course of business and otherwise not in contravention
of this Agreement, the Company and each of its subsidiaries does not have any
liabilities or obligations of any nature (whether absolute, contingent or
otherwise) that would be required to be reflected on a balance sheet prepared in
accordance with generally accepted accounting principles other than liabilities
or obligations that individually or in the aggregate would not have a Material
Adverse Effect on the Company.
Section 3.19 Opinion of Company Financial Advisor. The Company has
received the Fairness Opinion to the effect that, as of the date of this
Agreement, the consideration to be received by the holders of the Company Common
Stock pursuant to the Offer and the Merger, taken together, is fair from a
financial point of view to such holders (other than Parent and its affiliates)
and a complete and correct signed copy of such opinion has been delivered by the
Company to Parent. The Company has been authorized by the Company Financial
Advisor to permit the inclusion of the Fairness Opinion (and, subject to prior
review and consent by the Company
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Financial Advisor, a reference thereto) in the Schedule 14D-9 and the Proxy
Statement and, subject to the Company Financial Advisor's prior review and
consent, a reference thereto in the Schedule 14D-1.
Section 3.20 Insurance. The Company and its subsidiaries maintain
policies of fire and casualty, liability and other forms of insurance in such
amounts, with such deductibles and against such risks and losses as are, in the
Company's judgment, reasonable for the assets and properties of the Company and
its subsidiaries and customary in the Company's industry, except where the
failure to maintain any such policy has not had and could not reasonably be
expected to have a Material Adverse Effect on the Company. As of the date of
this Agreement, except as individually or in the aggregate have not had and
could not reasonably be expected to have a Material Adverse Effect on the
Company and except as set forth in Section 3.20 of the Company's Disclosure
Schedule, all such policies are in full force and effect, all premiums due and
payable thereon have been paid or accrued, and no notice of cancellation or
termination has been received by the Company with respect to any such policy.
Section 3.21 State Takeover Statutes. The Company has taken all action
necessary to render Section 203 of the DGCL inapplicable to Parent, Purchaser
and their respective affiliates, and to the Offer, the Merger, and this
Agreement. No other "fair price," "moratorium," "control share acquisition,"
"business combination," or other state takeover statute or similar statute or
regulation applies or purports to apply to the Company, Parent, Purchaser,
affiliates of Parent or Purchaser, the Offer, the Merger, and this Agreement.
The Company has no shareholder rights or "poison pill" that would be applicable
to the Offer, the Merger, this Agreement or the transactions contemplated
hereby. As a result of the foregoing actions, the only action required to
authorize the Merger is the Company Shareholder Approval and no further action
is required to authorize the other Transactions.
Section 3.22 Year 2000. Except as disclosed in the SEC Documents filed
prior to the date hereof, the Company and its subsidiaries have reviewed the
areas within their business and operations which could reasonably be expected to
have a "Year 2000 Problem" that would have a Material Adverse Effect on the
Company. Based on such review, the issues and costs with respect to Year 2000
Compliance have not had and could not reasonably be expected to have a Material
Adverse Effect on the Company. For purposes of this Agreement, "Year 2000
Compliance" means the ability to process (including calculate, compare,
sequence, display or store), transmit or receive data or data/time data from,
into and between the twentieth and twenty-first centuries, and the years 1999
and 2000, and leap year calculations without error or malfunction.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
Section 4.1 Organization and Qualification. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the requisite
corporate power to carry on its business as it is now being conducted. Each of
Parent and Purchaser is duly qualified as a foreign corporation or licensed to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or leased or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed and in good standing could not reasonably be expected to
preclude the consummation of the Offer or the Merger.
Section 4.2 Authority Relative to this Agreement. Each of Parent and
Purchaser has all requisite corporate power and authority to execute and deliver
this Agreement and each instrument required hereby to be executed and delivered
by Parent or Purchaser prior to or at the Effective Time, to perform its
obligations hereunder and thereunder, and to consummate the Transactions. The
execution and delivery by Parent and Purchaser of this Agreement and each
instrument required hereby to be exercised and delivered by Parent or Purchaser
prior to or at the Effective Time and the performance of their respective
obligations hereunder and thereunder, and the consummation by Parent and
Purchaser of the Transactions have been duly and validly authorized by the
respective Boards of Directors (or similar organizational bodies) of Parent and
Purchaser and the stockholder of Purchaser, and no other corporate proceedings
on the part of Parent or Purchaser are necessary to authorize this Agreement, or
commence the Offer or to consummate the Transactions (including the Offer) other
than filing and recordation of appropriate merger documents as required by the
DGCL. This Agreement has been duly and validly executed and delivered by each of
Parent and Purchaser and, assuming this Agreement constitutes a valid and
binding obligation of the Company, this Agreement constitutes a valid and
binding agreement of each of Parent and Purchaser, enforceable against each of
Parent and Purchaser in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights and remedies
of creditors generally, and subject to general principles of equity, whether
applied by a court of law or equity.
Section 4.3 Proxy Statement. None of the information supplied in
writing by Parent, Purchaser and their respective affiliates specifically for
inclusion in the Proxy Statement, if required, shall, at the time the Proxy
Statement is mailed, at the time of the Stockholder Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Parent and Purchaser make no
representation or warranty as to any of the information relating to and supplied
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by or on behalf of the Company specifically for inclusion in the Proxy
Statement. If, at any time prior to the Effective Time, any event relating to
Parent, Purchaser or any of their respective affiliates, officers or directors
is discovered by Parent that should be set forth in a supplement to the Proxy
Statement, Parent will promptly inform the Company.
Section 4.4 Consents and Approvals; No Violation. Subject to the
taking of the actions described in the immediately succeeding sentence, the
execution and delivery of this Agreement do not, and the consummation of the
Transactions will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the material properties or assets of Parent under (i) the certificate of
incorporation or bylaws (or similar organizational documents) of Parent or
Purchaser, (ii) any loan or credit agreement, note, bond, indenture, lease or
other agreement, instrument or Permit applicable to Parent or Purchaser or their
respective properties or assets, (iii) any judgment, order, writ, injunction,
decree, law, statute, ordinance, rule or regulation applicable to Parent or
Purchaser or their respective properties or assets, other than, in the case of
clause (ii) and (iii), any such conflicts, violations, defaults, rights or Liens
that individually or in the aggregate would not (x) impair in any material
respect the ability of Parent and Purchaser to perform their respective
obligations under this Agreement or (y) prevent or impede the consummation of
any of the Transactions. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or any other
person is required by Parent or Purchaser in connection with the execution and
delivery of this Agreement or the consummation by Parent or Purchaser, as the
case may be, of any of the Transactions, except (A) in connection with the HSR
Act, (B) pursuant to the Exchange Act, (C) the filing of the Certificate of
Merger pursuant to the DGCL, or (D) where the failure to obtain any such
consent, approval, authorization or permit, or to make any such filing or
notification, would not preclude consummation of the Offer or the Merger or
would not otherwise prevent Parent from performing its obligations under this
Agreement.
Section 4.5 Financing. Parent will have at each of (i) the time of
acceptance for purchase by Purchaser of Shares pursuant to the Offer and (ii)
the Effective Time, and will make available to Purchaser, the funds necessary to
consummate the Offer and the Merger on the terms contemplated by this Agreement.
Section 4.6 Brokerage Fees and Commissions. Except for those fees and
expenses payable to Schroder & Co. Inc., and excluding financing fees, no person
is entitled to receive any investment banking brokerage or finder's fee or
commission in connection with this Agreement or the Transactions based upon
arrangements may by or on behalf of Parent or Purchaser.
Section 4.7 Schedule 14D-1; Offer Documents. Neither the Schedule
14D-1, the Offer Documents nor any information supplied by Parent or Purchaser
in writing for inclusion in the Schedule 14D-9 shall, at the respective times
the Schedule 14D-9, the Schedule 14D-1, the Offer Documents or any amendments or
supplements thereto are filed with the SEC or are first published, sent or given
to stockholders of the Company contain any untrue statement of a material fact
or omit
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to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading. The Schedule 14D-1 and the Offer Documents will comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made by Parent or Purchaser with respect to
statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation by reference
therein.
Section 4.8 Litigation. There is no claim, suit, action or proceeding
pending or, to the knowledge of Parent or Purchaser, threatened against Parent
or Purchaser, which questions or challenges the validity of this Agreement, the
Transactions or any action or to be taken by Parent or Purchaser or which
attempts to restrain, enjoin or prohibit the Transaction.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business of the Company Pending the Merger. The
Company hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contemplated by this Agreement or consented to in writing by
Parent, it will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course consistent
with past practices;
(b) use its reasonable efforts to preserve intact its business
organization, retain the services of its respective key employees and maintain
its relationships with its respective customers and suppliers and others having
business dealings with it to the end that its goodwill and ongoing business
shall be unimpaired at the Effective Time;
(c) maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted, and maintain supplies
and inventories in quantities consistent with its customary business practice;
and
(d) use its reasonable efforts to keep in full force and effect
insurance comparable in amount and scope of coverage to that currently
maintained.
Section 5.2 Prohibited Actions by the Company. Without limiting the
generality of Section 5.1, except as set forth in Section 5.2 of the Company
Disclosure Schedule, the Company covenants and agrees that, except as expressly
contemplated by this Agreement or otherwise consented to in writing by Parent
(which consent shall not be unreasonably withheld or delayed),
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from the date of this Agreement until the Effective Time, it will not do, and
will not permit any of its subsidiaries to do, any of the following:
(a) (i) increase the compensation (or benefits) payable to or to
become payable to any director or employee, except for increases in salary or
wages of employees in the ordinary course of business and consistent with past
practice; (ii) grant any severance or termination pay (other than pursuant to
the severance policy or practice of the Company or its subsidiaries as disclosed
in Section 3.11(a) of the Company Disclosure Schedule and in effect on the date
of this Agreement) to, or enter into or amend in any material respect any
employment or severance agreement with, any employee; (iii) establish, adopt,
enter into or amend in any material respect any collective bargaining agreement
or any Benefit Plan of the Company or any ERISA Affiliate; or (iv) take any
action to accelerate any rights or benefits, or make any determinations under
any collective bargaining agreement or Benefit Plan of the Company or any ERISA
Affiliate; provided that the Company shall adopt appropriate resolutions and
take all other actions necessary to provide that each outstanding Option granted
under the Stock Option Plans, whether or not vested or exercisable, shall, at or
immediately prior to the Effective Time, be canceled, and each holder thereof
shall be entitled to receive a Cash Payment, upon cancellation equal to the
product of (x) the total number of Shares subject or related to such Option,
whether or not then vested or exercisable, and (y) the excess, if any, of the
Merger Consideration over the exercise price or purchase price, as the case may
be, per outstanding Option;
(b) declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property), outstanding
shares of capital stock, except for dividends by a wholly owned subsidiary of
the Company to the Company or another wholly owned subsidiary of the Company;
(c) redeem, purchase or otherwise acquire, or offer or propose to
redeem, purchase or otherwise acquire, any outstanding shares of capital stock
of, or other equity interests in, or any securities that are convertible into or
exchangeable for any shares of capital stock of, or other equity interests in,
or any outstanding options, warrants or rights of any kind to acquire any shares
of capital stock of, or other equity interests in, the Company or any of its
subsidiaries (other than (i) any such acquisition by the Company or any of its
wholly owned subsidiaries directly from any wholly owned subsidiary of the
Company in exchange for capital contributions or loans to such subsidiary, or
(ii) any purchase, forfeiture or retirement of shares of Company Common Stock or
the Options occurring pursuant to the terms (as in effect on the date of this
Agreement) of any existing Benefit Plan of the Company or any of its
subsidiaries, in a manner otherwise consistent with the terms of this Agreement;
(d) effect any reorganization or recapitalization; or split, combine
or reclassify any of the capital stock of, or other equity interests in, the
Company or any of its subsidiaries or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution for, shares
of such capital stock or such equity interests;
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(e) offer, sell, issue or grant, or authorize or propose the offering,
sale, issuance or grant of, any shares of capital stock of, or other equity
interests in, any securities convertible into or exchangeable for (or accelerate
any right to convert or exchange securities for) any shares of capital stock of,
or other equity interest in, or any options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in, or any
Voting Company Debt or other voting securities of, the Company or any of its
subsidiaries, or any "phantom" stock, "phantom" stock rights, SARs or
stock-based performance units;
(f) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or in any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire any assets of any
other person (other than the purchase of assets from suppliers or vendors in the
ordinary course of business and consistent with past practice);
(g) sell, lease, exchange or otherwise dispose of, or grant any Lien
with respect to, any of the properties or assets of the Company or any of its
subsidiaries that are, individually or in the aggregate, material to the
business of the Company and its subsidiaries, except for dispositions of excess
or obsolete assets and sales of inventories in the ordinary course of business
and consistent with past practice;
(h) propose or adopt any amendments to its certificate of
incorporation or bylaws or other organizational documents;
(i) effect any change in any accounting methods, principles or
practices in effect as of December 31, 1998 affecting the reported consolidated
assets, liabilities or results of operations of the Company, except as may be
required by a change in generally accepted accounting principles;
(j) (i) issue or sell any debt securities or warrants or other rights
to acquire any debt securities of the Company or any of its subsidiaries,
guarantee any such indebtedness or debt securities of another person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic effect of
any of the foregoing, or (ii) make any loans, advances or capital contributions
to, or investments in, any other person, other than to or in the Company or any
direct or indirect wholly owned subsidiary of the Company; provided, however,
nothing shall limit the Company's right to borrow pursuant to its revolving
credit agreement in the ordinary course of business;
(k) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent consolidated financial statements (or the notes thereto) of the Company
included in the Company SEC Documents or incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice;
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(l) make any Tax election except in a manner consistent with past
practice, change any method of accounting for Tax purposes, or settle or
compromise any material Tax liability;
(m) make or agree to make any new capital expenditures which
individually are in excess of $500,000 or which in the aggregate are in excess
of $2,000,000; or
(n) agree in writing or otherwise to take any of the foregoing
actions.
ARTICLE VI
COVENANTS
Section 6.1 No Solicitation.
(a) From and after the date hereof until the Effective Time or the
termination of this Agreement in accordance with Section 8.1, the Company and
its subsidiaries shall not, and the Company shall direct their respective
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by the Company or any of its subsidiaries) not to, directly or
indirectly, initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate, any inquiries or the making or submission of any Acquisition
Proposal (as defined herein) or enter into or maintain or continue discussions
or negotiate with any person or group in furtherance of such inquiries or to
obtain or induce any person or group to make or submit an Acquisition Proposal
or agree to or endorse any Acquisition Proposal or assist or participate in,
facilitate or knowingly encourage, any effort or attempt by any other person or
group to do or seek any of the foregoing or authorize any of its officers,
directors or employees or any of its subsidiaries or affiliates or any
investment banker, financial advisor, attorney, accountant or other
representative or agent retained by it or any of its subsidiaries to take any
such action; provided, however, that nothing contained in this Agreement shall
prohibit the Company or the Board of Directors of the Company from, prior to the
earlier to occur of the acceptance for payment for the Shares pursuant to the
Offer or adoption of this Agreement by the requisite vote of the stockholders of
the Company, (i) furnishing information to or (ii) entering into discussions or
negotiations with any person or entity that makes an unsolicited written
Acquisition Proposal, if, and only to the extent that in each case referred to
in (i) and (ii) above, (A) the Board of Directors of the Company, based on the
advice of independent legal counsel (who may be the Company's regularly engaged
independent legal counsel), determines in good faith that the failure to do so
would result in a breach of the fiduciary duty of the Board of Directors of the
Company to stockholders of the Company under applicable law and (B) prior to
taking such action, the Company (x) provides reasonable notice to Parent to the
effect that it intends to take such action and (y) receives from such person an
executed confidentiality agreement in reasonably customary form and in any event
containing terms at least as stringent as those contained in the confidentiality
agreement between Parent and the Company.
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(b) Except as expressly permitted by this Section 6.1, neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw
or modify in a manner adverse to Parent or Purchaser or fail to make, or propose
to withdraw or modify in a manner adverse to Parent or Purchaser or fail to
make, its approval or recommendation of the Offer or the Merger or of this
Agreement, (ii) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal, or (iii) cause the Company to accept such Acquisition
Proposal and/or enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") related to any Acquisition Proposal; provided, however, that prior
to the earlier to occur of acceptance for payment of Shares pursuant to the
Offer or adoption of this Agreement by the requisite vote of the stockholders of
the Company, the Board of Directors of the Company may terminate this Agreement
if, and only to the extent that (A) such Acquisition Proposal is a Superior
Proposal, (B) the Board of Directors of the Company, based on the advice of
independent legal counsel (who may be the Company's regularly engaged
independent counsel), determines in good faith that the failure to do so would
result in a breach of the fiduciary duty of the Board of Directors of the
Company to the stockholders of the Company under applicable law, (C) the Company
complies with its obligations under Section 8.3, (D) the Company is not in
breach of this Section 6.1 which breach has resulted in a Superior Proposal, and
(E) the Company shall have complied with its obligations under Section
8.1(d)(ii).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) above, prior to providing any information or entering
into discussions or negotiations with any person in connection with an
Acquisition Proposal or any inquiry with respect to or which could lead to an
Acquisition Proposal by such person, the Company shall promptly advise Parent of
any request for information or the submission or receipt of any Acquisition
Proposal, or any inquiry with respect to or which could lead to any Acquisition
Proposal, the material terms and conditions of such request, Acquisition
Proposal or inquiry, and the identity of the person making any such request,
Acquisition Proposal or inquiry and its response or responses thereto. The
Company will keep Parent fully informed of the status and details (including
amendments or proposed amendments) of any such request, Acquisition Proposal or
inquiry and shall promptly give Parent a copy of any information delivered to
such person which has not previously been delivered by the Company to Parent or
Purchaser. The Company will and will cause its subsidiaries and the officers,
directors, employees and other agents and advisors of the Company and its
subsidiaries to, immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted prior to the
date of this Agreement with respect to any of the foregoing.
(d) "Acquisition Proposal" means an inquiry, offer or proposal
regarding any of the following (other than the Transactions contemplated by this
Agreement) involving the Company: (i) any merger, consolidation, share exchange,
recapitalization, liquidation, dissolution, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 20% or more of the consolidated assets of the Company
and its subsidiaries, taken as a whole; (iii) any tender offer (including a self
tender offer) or exchange offer that, if consummated, would result in any person
or group beneficially owning more than 20% of the outstanding shares of any
class of equity securities of the Company or its subsidiaries or the filing
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of a registration statement under the Securities Act in connection therewith;
(iv) any acquisition of 20% or more of the outstanding shares of capital stock
of the Company or the filing of a registration statement under the Securities
Act in connection therewith or any other acquisition or disposition the
consummation of which would prevent or materially diminish the benefits to
Parent of the Merger; or (v) any public announcement by the Company or any third
party of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing. "Superior Proposal" means any
proposal made by a third party to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution or
other similar transaction, for at least 75% of then outstanding Shares, or all
or substantially all of the consolidated assets of the Company, which the Board
of Directors of the Company determines in good faith (based on the advice of a
financial advisor of nationally recognized reputation) to be more favorable to
the Company's stockholders (taking into account relevant legal, financial and
regulatory considerations and other aspects of such proposal and the third party
making such proposal and the conditions and prospects for completion of such
proposal) than the Offer and the Merger.
(e) Nothing contained in this Section 6.1 shall prohibit the Company
or the Board of Directors of the Company from taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's stockholders if the
Board of Directors of the Company, based on the advice of independent legal
counsel (who may be the Company's regularly engaged independent counsel),
determines in good faith that the failure to take such action would result in a
breach of the fiduciary duty of the Board of Directors to the stockholders of
the Company under applicable law; provided that neither the Board of Directors
of the Company nor any committee thereof shall withdraw or modify, or shall
propose to withdraw or modify, the approval or recommendation of the Board of
Directors of the Company of the Offer or the Merger or shall approve or
recommend, or shall publicly propose to approve or recommend, an Acquisition
Proposal unless the Company and the Board of Directors of the Company have
complied in all material respects with all the provisions of this Section 6.1.
Section 6.2 Access to Information. Between the date of this Agreement
and the Effective Time, the Company shall, and shall cause its subsidiaries to
(a) afford to Parent and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives full access during
normal business hours and at all other reasonable times to the officers, agents,
properties (provided that any access for environmental due diligence shall be
limited to conducting a Phase I environmental assessment consistent with ASTM
standards using a consultant reasonably acceptable to the Company), offices and
other facilities of the Company and its subsidiaries and to their books and
records (including all Tax Returns and all books and records related to Taxes
and such returns), (b) permit Parent to make such inspections as it may require
(and the Company shall cooperate with Parent in any inspections), and (c)
furnish promptly to Parent and its representatives a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and such
other information concerning the business, properties, contracts, records and
personnel of the
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Company and its subsidiaries (including financial, operating and other data and
information) in the possession of the Company or the Company's counsel,
accountants or other consultants or agents as may be reasonably requested, from
time to time, by or on behalf of Parent.
Section 6.3 Reasonable Best Efforts. Subject to the terms and
conditions herein (including Section 6.1), each of the parties hereto agrees to
use its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as soon as reasonably practicable the Transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take all such
necessary action. Each of the Company, Parent and Purchaser shall cooperate and
use their respective reasonable best efforts to make all filings, to obtain all
actions or nonactions, waivers, Permits and orders of Governmental Entities
necessary to consummate the Transactions contemplated by this Agreement and to
take all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, provided
that nothing in this Section 6.3 shall obligate Parent to consent to any action
that will diminish the value of the Company to it. The Company agrees to
cooperate with Purchaser and to assist Purchaser in identifying the
Environmental Permits required by Purchaser to operate the business from and
after the Closing Date and either transferring existing Environmental Permits of
the Company, where permissible, or obtaining new Environmental Permits. Each of
the parties hereto will furnish to the other parties such necessary information
and reasonable assistance as such other parties may reasonably request in
connection with the foregoing.
Section 6.4 Indemnification of Directors and Officers.
(a) Purchaser agrees that all rights to indemnification for acts or
omissions occurring at or prior to the Effective Time existing as of the date
hereof in favor of the current or former directors or officers, employees and
agents of the Company and its subsidiaries as provided in their respective
certificates of incorporation, bylaws or agreements disclosed in the Company SEC
Documents or filed as exhibits thereto as in effect on the date hereof shall
survive the Merger and shall continue in full force and effect in accordance
with their terms for a period of six years from the Effective Time. Parent shall
cause to be maintained for a period of six years from the Effective Time the
Company's current directors' and officers' insurance and indemnification policy
and fiduciary liability policy (the "D&O Insurance") (provided that Parent may
substitute therefor, at its election, policies or financial guarantees with the
same carriers or other reputable and financially sound carriers of at least the
same coverage and amounts containing terms and conditions which are no less
advantageous than the existing D&O Insurance) to the extent that such insurance
policies provide coverage for events occurring prior to the Effective Time for
all persons who are directors and officers of the Company on the date of this
Agreement (or were prior to the date of this Agreement), so long as the annual
premium after the date of this Agreement for such D&O Insurance during such
six-year period would not exceed 300% of the annual premium as of the date of
this Agreement. If, during such six-year period, such insurance coverage cannot
be obtained at all or can
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only be obtained for an amount in excess of 300% of the annual premium therefor
as of the date of this Agreement, Parent shall use reasonable best efforts to
cause insurance coverage to be obtained for an amount equal to 300% of the
current annual premium therefor, on terms and conditions substantially similar
to the existing D&O Insurance. Set forth in Section 6.4(a) of the Company
Disclosure Schedule is the amount of the annual premium currently paid by the
Company for its directors' and officers' liability insurance.
(b) If any claim or claims shall, subsequent to the Effective Time and
within six years thereafter, be made in writing against any present or former
director or officer of the Company based on or arising out of the services of
such person at or prior to the Effective Time in the capacity of such person as
a director or officer of the Company (and such director or officer shall have
given Parent written notice of such claim or claims within such six year
period), the provisions of subsection (a) of this Section respecting the rights
to indemnify the current or former directors or officers under the certificate
of incorporation and bylaws of the Company and its subsidiaries shall continue
in effect until the final disposition of all such claims.
(c) Notwithstanding anything to the contrary in this Section 6.4,
neither Parent nor the Surviving Corporation shall be liable for any settlement
effected without its written consent, which shall not be unreasonably withheld.
(d) The provisions of this Section 6.4 are intended to be for the
benefit of, and shall be enforceable by, each person entitled to indemnification
hereunder and the heirs and representatives of such person.
Section 6.5 Event Notices and Other Actions. (a) From and after the
date of this Agreement until the Effective Time, the Company shall promptly
notify Parent and Purchaser of (i) the occurrence or nonoccurrence of any event,
the occurrence or nonoccurrence of which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied, (ii) the
Company's failure to comply with any covenant or agreement to be complied with
by it pursuant to this Agreement which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied and (iii)
any representation or warranty made by the Company contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate in any respect
or any such representation or warranty that is not so qualified as to
materiality becoming untrue or inaccurate in any material respect. The Company's
delivery of any notice pursuant to this Section 6.5(a) shall not cure any breach
of any representation or warranty of the Company contained in this Agreement or
otherwise limit or affect the remedies available hereunder to Parent or
Purchaser.
(b) The Company shall not, and shall not permit any of its
subsidiaries to, knowingly take any action or nonaction within its reasonable
control that will, or that could reasonably be expected to, result in (i) any of
the representations and warranties of the Company set forth in this Agreement
that is qualified as to materiality becoming untrue, (ii) any of such
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representations and warranties that is not so qualified becoming untrue in any
material respect or (iii) except as otherwise permitted by Section 6.1, any
condition to the Offer set forth in Annex A, or any condition to the Merger set
forth in Article VII, not being satisfied.
Section 6.6 Employment Arrangements; Employee Plans and Benefits.
(a) Employment Arrangements and Accrued Benefits. From and after the
consummation of the Offer, Parent shall honor, fulfill and discharge and shall
cause the Surviving Corporation to honor, fulfill and discharge in accordance
with their terms (i) all existing employment, severance, consulting, change of
control and indemnification agreements and other bonus and compensation
arrangements between the Company or any of its subsidiaries and any current or
former officer, director or employee of the Company or any of its subsidiaries
as set forth on Schedule 6.6 of the Company Disclosure Schedule and (ii) with
respect to all employees, officers and directors of the Company, all legal and
contractual obligations for benefits or other amounts earned or accrued through
the Effective Time under the Benefit Plans disclosed in Schedule 3.11(a) of the
Company Disclosure Schedule.
(b) Post-Closing Benefits. For a period commencing on the Effective
Date through December 31, 2000, Parent shall provide or cause the Surviving
Corporation provide to current and former employees of the Company, compensation
and benefits that are at least comparable in the aggregate, to the compensation
and Benefit Plans currently in place for such employees excluding any equity
plans; provided, however, that with respect to employees who are subject to
collective bargaining, all compensation and benefits shall be provided in
accordance with the applicable collective bargaining agreements. From and after
the Effective Time, Parent shall, and shall cause the Surviving Corporation to,
credit the each employee and former employee of the Company for their service
with the Company and any predecessor entities to the extent credited under such
Benefit Plan (and any other service credited by the Company under its benefit
plans) prior to the Effective Time for all purposes (including, without
limitation, eligibility to participate, vesting, benefit accrual, eligibility to
commence benefits and severance) under any benefit plans of Parent or the
Surviving Corporation in which the employee or former employee of the Company
participate, to the same extent as if such service had been rendered to Parent
or any of its subsidiaries; provided, however, that the foregoing shall not
result in any duplication of benefits for the same period of service. From and
after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, recognize any and all appropriate out-of-pocket expenses of each
employee or former employee of the Company for purposes of determining such
employee's and former employee's (including their beneficiaries and dependents)
deductible and co-payment expenses under the Company's medical benefit plans.
Parent shall waive, or cause to be waived, any pre-existing condition limitation
under any welfare benefit plan maintained by Parent or any of its subsidiaries
in which employees of the Company (and their respective eligible dependents)
will be eligible to participate on or following the Effective Time to the extent
such pre-existing condition limitation was waived or satisfied under the
comparable Benefit Plan.
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(c) No Right to Employment. Nothing contained in this Agreement shall
confer upon any employee of the Company, any ERISA Affiliate or any of the
Company's subsidiaries any right with respect to employment by Parent, Purchaser
or any of Parent's subsidiaries or affiliates, nor shall anything herein
interfere with the right of Parent, Purchaser or any of Parent's subsidiaries or
affiliates to terminate the employment of any such employee at anytime, with or
without cause, or, except as provided in Sections 6.6(a) or (b) restrict Parent,
Purchaser or any of Parent's subsidiaries or affiliates in the exercise of their
independent business judgment in modifying any other terms and conditions of the
employment of any such employee.
Section 6.7 Meeting of the Company's Stockholders.
(a) To the extent required by applicable law, the Company shall
promptly after consummation of the Offer take all action necessary in accordance
with the DGCL and its Certificate of Incorporation and Bylaws to convene a
Stockholder Meeting to consider and vote on the Merger and this Agreement. At
the Stockholder Meeting, all of the Shares then owned by Parent, Purchaser or
any other subsidiary of Parent shall be voted to approve the Merger and this
Agreement. The Board of Directors of the Company shall recommend that the
Company's stockholders vote to approve the Merger and this Agreement if such
vote is sought, shall use its best efforts to solicit from stockholders of the
Company proxies in favor of the Merger and shall take all other action in its
judgment necessary and appropriate to secure the vote of stockholders required
by the DGCL to effect the Merger (including to the extent feasible providing
access to Parent's proxy solicitor to one of the ports provided to the Company
by ADP).
(b) Parent and Purchaser shall not, and they shall cause their
subsidiaries not to, sell, transfer, assign, encumber or otherwise dispose of
the Shares acquired pursuant to the Offer or otherwise prior to the Stockholder
Meeting; provided, however, that this Section 6.7(b) shall not apply to the
sale, transfer, assignment, encumbrance or other disposition of any or all such
Shares in transactions involving solely Parent, Purchaser and/or one or more of
their wholly-owned subsidiaries.
(c) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90% of the then outstanding Shares, the parties hereto agree,
at the request of the Company, to take all necessary and appropriate action to
cause the Merger to become effective, in accordance with Section 253 (in lieu of
Section 251) of the DGCL, as soon as reasonably practicable after such
acquisition, without a meeting of the stockholders of the Company.
Section 6.8 Proxy Statement. If required under applicable law, the
Company and Parent shall prepare the Proxy Statement, file it with the SEC under
the Exchange Act as promptly as practicable after Purchaser purchases Shares
pursuant to the Offer, and use all reasonable efforts to have it cleared by the
SEC. As promptly as practicable after the Proxy Statement has been cleared by
the SEC, the Company shall mail the Proxy Statement to the stockholders of the
Company as of the record date for the Stockholder Meeting.
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Section 6.9 Public Announcements. Parent and the Company shall to the
fullest extent practicable consult with each other before issuing any press
release or otherwise making any public statement with respect to the Offer and
the Merger and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or stock
exchange requirement.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, prior to the Effective
Time, of the following conditions:
(a) if required by the DGCL, this Agreement shall have been approved
by the affirmative vote of the stockholders of the Company by the requisite vote
in accordance with applicable law; provided, that this Section 7.1(a) shall not
affect the obligations contained in Section 6.7(a);
(b) no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the Merger shall
be in effect; provided, however, that each of the parties shall have used its
reasonable best efforts to prevent the entry of any such injunction or other
order and to appeal, subject to the other terms of this Agreement as promptly as
possible any injunction or other order that may be entered; and
(c) Purchaser shall have purchased Shares pursuant to the Offer.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time (notwithstanding
approval thereof by the stockholders of the Company) prior to the Effective
Time:
(a) by mutual written consent duly authorized by the Boards of
Directors of the Company, Parent and Purchaser;
(b) by Parent, Purchaser or the Company if any court of competent
jurisdiction or other Governmental Entity shall have issued a final order,
decree or ruling or taken any other final
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action restraining, enjoining or otherwise prohibiting the consummation of the
Offer or the Merger and such order, decree or ruling or other action is or shall
have become nonappealable;
(c) by Parent or Purchaser if due to the occurrence and continued
existence of any of the conditions set forth in Annex A hereto, Purchaser shall
have (i) failed to commence the Offer within the time required by Regulation 14D
under the Exchange Act or (ii) terminated the Offer without purchasing any
Shares pursuant to the Offer or (iii) failed to accept for payment Shares
pursuant to the Offer prior to January 31, 2000;
(d) by the Company (i) if there shall not have been a material breach
of any representation, warranty, covenant or agreement on the part of the
Company which would entitle Parent to terminate this Agreement in accordance
with the provisions hereof following the expiration of any applicable notice and
cure periods, and Purchaser shall have (A) failed to commence the Offer within
the time required by Regulation 14D under the Exchange Act, (B) terminated the
Offer without purchasing any Shares pursuant to the Offer, or (C) failed to
accept for payment Shares pursuant to the Offer prior to January 31, 2000; or
(ii) if prior to the acceptance of Shares pursuant to the Offer (w) the Company
notifies Parent in writing that it intends to enter into an agreement with
respect to a Superior Proposal in accordance with Section 6.1, (x) the Company
has complied in all material respects with the provisions thereof, including the
notice provisions therein, (y) Parent does not make, within three business days
after receipt of the Company's notification pursuant to clause (x) an offer that
the Company's Board of Directors determines in good faith, based on the advice
of its financial advisors, is at least as favorable to the Company's
stockholders than the Superior Proposal and (z) the Company accepts under the
circumstances permitted by Section 6.1 such Superior Proposal;
(e) by Parent or Purchaser prior to the purchase of Shares pursuant to
the Offer, if (i) any representation or warranty of the Company contained in
this Agreement (after reading out any materiality or dollar qualifications)
shall not be true and correct at any time prior to the acceptance for payment of
Shares pursuant to the Offer, except where the failure to be true and correct is
not individually or in the aggregate reasonably likely to have a Material
Adverse Effect on the Company (other than to the extent such representation and
warranty expressly relates to an earlier date, in which case such representation
and warranty shall not be true and correct as of such date except where the
failure to be true and correct is not individually or in the aggregate
reasonably likely to have a Material Adverse Effect on the Company), or (ii) the
Company shall not have performed and complied with each covenant or agreement
contained in the Agreement and required to be performed or complied with by it,
except where the failure to so perform or comply is not reasonably likely to
have a Material Adverse Effect on the Company or materially and adversely affect
the consummation of the Offer, and which breach, in the case of clause (i) and
(ii) above, shall not have been cured prior to the earlier of (A) 15 days
following notice of such breach and (B) two business days prior to the date on
which the Offer expires, or (iii) the Board of Directors of the Company or any
committee thereof shall have withdrawn, or modified, amended or changed
(including by amendment of the Schedule 14D-9), or publicly announced an
intention to do so, in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer, the Merger,
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or this Agreement, or shall have approved or recommended to the Company's
stockholders, or publicly announced an intention to do so, an Acquisition
Proposal or any other acquisition of Shares other than the Offer and the Merger,
or shall have adopted any resolutions to effect any of the foregoing; or
(f) by the Company prior to the purchase of any Shares pursuant to the
Offer if (i) there shall have been a material breach of any representation or
warranty in this Agreement on the part of Parent or Purchaser which materially
adversely affects (or materially delays) the consummation of the Offer or (ii)
Parent or Purchaser shall not have performed or complied with, in all material
respects (without reference to any materiality qualifications therein), each
covenant or agreement contained in this Agreement and required to be performed
or complied with by them, and such breach materially adversely affects (or
materially delays) the consummation of the Offer, and which breach, in the case
of clause (i) and clause (ii) above, shall not have been cured prior to the
earlier of (A) 15 days following notice of such breach and (B) two business days
prior to the date on which the Offer expires.
Section 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement, except
for the provisions of Sections 8.2, 8.3, 9.3, 9.4 and 9.7, shall forthwith
become void and have no effect, without any liability on the part of any party
or its affiliates, directors, officers, counsel, employees, agents or
stockholders. Subject to Section 8.3 below, no termination of this Agreement
shall relieve any party to this Agreement of liability for breach of this
Agreement.
Section 8.3 Termination Fee
(a) Except as provided in Section 8.3(b) and (c), all fees and
expenses incurred by the parties hereto shall be borne solely and entirely by
the party which has incurred such fees and expenses.
(b) If:
(i) Parent or Purchaser terminates this Agreement pursuant to
Section 8.1(c) or the Company terminates pursuant to Section
8.1(d)(i), in either case due to a failure to achieve the Minimum
Condition, and Parent and Purchaser are not in material breach of this
Agreement in circumstances when, prior to such termination any third
party shall have acquired beneficial ownership of at least a majority
of the outstanding Shares or announced an intention to make or
consummate an Acquisition Proposal for at least a majority of the
consolidated assets of the Company or a majority of the outstanding
Shares of the Company, and, in the case of such an Acquisition
Proposal which has not been consummated prior to such termination,
within 12 months from the date of termination of this Agreement such
Acquisition Proposal or any other Acquisition Proposal for at least a
majority of the consolidated assets of the Company or at least a
majority of the outstanding Shares of the
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Company has been consummated for consideration per Share higher than
the per Share consideration in the Offer or for an aggregate
consideration, including the retention of any equity by stockholders,
of more than the aggregate consideration of the Offer and the Merger;
(ii) Parent or Purchaser terminates this Agreement (x) pursuant
to Section 8.1(e)(iii) or (y) pursuant to Section 8.1(c) because of
the occurrence and continued existence of the conditions set forth in
paragraph (g) of Annex A; or
(iii) the Company terminates this Agreement pursuant to Section
8.1(d)(ii);
then, in any such case, the Company shall pay to Parent, a fee, in cash, equal
to $10,000,000 (which amount shall be deemed to include reimbursement of all
Expenses)(the "Termination Fee") concurrently with the termination of this
Agreement, provided, however, that any Termination Fee payable pursuant to
Section 8.3(b)(i) in the case of a Acquisition Proposal which has not been
consummated prior to the termination of this Agreement shall be paid
concurrently with the consummation of such Acquisition Proposal or any other
Acquisition Proposal for at least a majority of the consolidated assets of the
Company or at least a majority of the outstanding Shares of the Company for
consideration per Share higher than the per Share consideration in the Offer or
for an aggregate consideration, including the retention of any equity by
stockholders, of more than the aggregate consideration of the Offer and the
Merger; provided further, however, that the Company in no event shall be
obligated to pay more than one such Termination Fee with respect to all such
agreements and occurrences and such termination. Any payment required to be made
pursuant to this subsection (b) shall be made to Parent by wire transfer of
immediately available funds to an account designated by Parent.
(c) If this Agreement is terminated by Parent or Purchaser pursuant to
Section 8.1(c) because of the occurrence and continued existence of the
conditions set forth in paragraph (a) of Annex A or pursuant to Sections
8.1(e)(i) and the condition does not result from a willful breach, promptly upon
demand the Company shall reimburse Parent and Purchaser for all their actual
reasonable documented out-of-pocket fees and expenses incurred by Parent,
Purchaser and their respective affiliates in connection with this Agreement, the
Offer and the Merger, including all such fees and expenses of counsel,
accountants, investment bankers, experts and consultants to each of Parent and
Purchaser and their respective affiliates, commitment and other actual
reasonable documented fees and expenses payable to financing sources and the
expenses of the preparation, printing, filing and mailing of the Offer Documents
and any other related costs and expenses (the "Expenses"); provided, however,
that in no event shall such Expenses exceed a maximum amount of $1,000,000.
Payment of Expenses shall be the sole and exclusive remedy of Parent and
Purchaser for such a breach.
(d) For purposes of this Section 8.3, "willful" shall mean that the
Agreement is terminated as a result of one or more representations and
warranties not being true when made and one or more of the persons listed on
Schedule 8.3(d) of the Company Disclosure Schedules had
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actual knowledge at that time of events, facts, circumstances or conditions not
disclosed hereunder which caused such representations and warranties to be false
or misleading.
Section 8.4 Amendment. To the extent permitted by applicable law and
subject to Section 1.4(c), this Agreement may be amended by action taken by or
on behalf of the Boards of Directors of the Company, Parent and Purchaser at any
time before or after approval of this Agreement by the stockholders of the
Company but, after any such Stockholder approval, no amendment shall be made
that by law requires the further approval of such stockholders without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
Section 8.5 Extension; Waiver. At any time prior to the Effective
Time, subject to Section 1.1(b), a party may (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document, certificate or writing delivered
pursuant hereto, or (c) waive compliance with any of the agreements or
conditions of the other parties hereto contained herein; provided that after the
approval of the Merger by the stockholders of the Company, no extensions or
waivers shall be made that by law require further approval by such stockholders
without the approval of such stockholders. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Non-Survival of Representations and Warranties. None of
the representations and warranties made in this Agreement shall survive after
the Effective Time. This Section 9.1 shall not limit any covenant or agreement
of the parties hereto which by its terms contemplates performance after the
Effective Time.
Section 9.2 Entire Agreement; Assignment. This Agreement (including
the Company Disclosure Schedule) and, to the extent contemplated in Section 6.3,
the Confidentiality Agreement, (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof and (b) shall not be assigned
by operation of law or otherwise; provided that Parent or Purchaser may assign
any of their rights and obligations to any direct or indirect wholly owned
subsidiary of Parent, but no such assignment shall relieve Parent or Purchaser
of its obligations hereunder. Any of Parent, Purchaser or any direct or indirect
wholly owned subsidiary of Parent may purchase Shares under the Offer. Any
attempted assignment in violation of this Section 9.2 shall be void. Subject to
the preceding sentences, this
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Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 9.3 Enforcement of the Agreement. The Company agrees that
irreparable damage would occur to Parent and Purchaser in the event that any of
the provisions of this Agreement were not performed by the Company in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that Parent and Purchaser shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they are
entitled at law or in equity. The Company further agrees to waive any
requirement for the securing or posting of any bond in connection with obtaining
any such injunction or other equitable relief.
Section 9.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that Transactions are fulfilled to the extent possible. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
Section 9.5 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing (including telecopy or
similar writing) and shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section 9.5 and
the appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section 9.5 (or at such
other address for a party as shall be specified by like notice):
if to Parent or Purchaser:
Cementos Portland, S.A.
Jose Abascal, 59
28003 Madrid, Spain
Attention: Manuel Melgar, Deputy Managing Director
Telecopy: 011-34-91-396-0231
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with a copy to:
Masterman, Culbert & Tully LLP
One Lewis Wharf
Boston, MA 02110
Attention: Andrew C. Culbert, Esq.
Telecopy: (617) 227-2630
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Ellen J. Odoner, Esq.
Telecopy: (212) 310-8007
if to the Company:
Giant Cement Holding, Inc.
320-D Midland Parkway
Summerville, SC 29485
Attention: Gary L. Pechota, President and Chief Executive Officer
Telecopy: (843) 851-9881
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Steven L. Kirshenbaum, Esq.
Telecopy: (212) 969-2900
Section 9.6 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right.
Section 9.7 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the substantive laws of
the State of New York regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto. In addition, the Company,
Parent and Purchaser hereby (i) consent to submit to the personal jurisdiction
of any Federal court located in the Southern District of New York or any New
York state court located in the borough of Manhattan, City of New York in the
event any dispute arises out of
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this Agreement or any of the Transactions, (ii) agree not to attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agree not to bring any action relating to this Agreement or
any of the Transactions in any court other than a Federal court located in the
Southern District of New York or any New York state court located in the borough
of Manhattan, City of New York and (iv) waive any right to trial by jury with
respect to any claim or proceeding related to or arising out of this Agreement
or any of the Transactions. The Company, Parent and Purchaser hereby irrevocably
and unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the Transactions in the
courts of the State of New York or of the United States of America located in
the Southern District of New York or any New York state court located in the
borough of Manhattan, City of New York, and hereby further irrevocably and
unconditionally waive and agree 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.
Section 9.8 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.9 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this Agreement
except for Section 6.4(d) (which are intended to be for the benefit of the
persons entitled to therein, and may be enforced by such persons).
Section 9.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 9.11 Certain Definitions. For purposes of this Agreement
(including Annex A hereto), the following terms shall have the meanings ascribed
to them below:
(a) "affiliate" of a person shall mean (i) a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first-mentioned person and (ii) an
"associate", as that term is defined in Rule 12b-2 promulgated under the
Exchange Act.
(b) "beneficial owner" (including the term "beneficially own" or
correlative terms) shall have the meaning ascribed to such term under Rule
13d-3(a) under the Exchange Act.
(c) "business day" shall have the meaning ascribed to such term under
Rule 14d-1 of the Exchange Act.
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(d) "Company Disclosure Schedule" shall mean a letter dated the date
of the Agreement delivered by the Company to Parent and Purchaser concurrently
with the execution of the Agreement, which, among other things, shall identify
exceptions to the Company's representations and warranties contained in Article
III and covenants contained in Article V by specific section and subsection
references.
(e) "control" (including the terms "controlling," "controlled by" and
"under common control with" or correlative terms) shall mean the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management and policies of a person, whether through
ownership of voting securities or as trustee or executor, by contract or credit
arrangement, or otherwise.
(f) "Environment" means all air, surface water, groundwater, drinking
water or land, including land surface or subsurface.
(g) "Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages, fines, penalties, judgments, actions, claims,
costs and expenses (including, without limitation, fees, disbursements and
expenses of legal counsel, experts, engineers and consultants and the costs of
investigation and feasibility studies and Remedial Action) arising from any
non-compliance with or violation of or liability under Environmental Law or
order or contract with any Governmental Authority or based on any claim by any
third person.
(h) "Environmental Laws" means any federal, state, local, or foreign
law (including common law) statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction, including the requirement to register
underground storage tanks, relating to: (i) emissions, discharges, releases or
threatened releases of Hazardous Material (as defined herein) into the
environment, including, without limitation, into ambient air, soil, sediments,
land surface or subsurface, buildings or facilities, surface water, groundwater,
publicly-owned treatment works, septic systems or land; (ii) the generation,
treatment, storage, recycling, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Material, or (iii) regulating the
environment, natural resources, or public or employee health and safety,
including without limitation, the following statutes, their implementing
regulations, and any state corollaries: the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801 et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. Section 9601 et seq., the Toxic Substances
Control Act, 15 U.S.C. section 2601 et seq., the Clean Water Act, 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 33 U.S.C. ss. 2601 and the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq., the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., and the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq., as such laws have been
amended or supplemented.
(i) "Environmental Permit" means any permit, license, approval,
consent, registration, certificate or other authorization issued under any
applicable law, regulation and other
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requirement of any country, state, municipality or other subdivision thereof
relating to pollution or protection of health or the environment, including, but
not limited to (i) laws, regulations or other requirements governing discharges,
releases of Hazardous Materials (as defined herein) into ambient air, surface
water, ground water or land, (ii) otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Materials, or (iii) the containment, cleanup, or other
remediation of Hazardous Materials from any real property.
(j) "Governmental Entity" means any Federal, state or local government
or any court, administrative or regulatory agency or commission or other
domestic governmental authority or agency in the United States or the Kingdom of
Spain.
(k) "group" shall have the meaning ascribed to such term under Rule
13d-5(b)(1) under the Exchange Act.
(l) "Hazardous Materials" means any substance, material, or waste
which is regulated by any government authority and in amounts and concentrations
which are regulated, including without limitation, any substance, material, or
waste which is (i) hazardous materials, pollutants or contaminants, medical,
hazardous or infectious wastes, hazardous waste constitutents, hazardous
chemicals, hazardous or toxic pollutants, hazardous or toxic substances, or
extremely hazardous waste or restricted hazardous waste, as those terms are
defined in or regulated by any Environmental Law, (ii) petroleum, including
crude oil and any fractions thereof, (iii) natural gas, synthetic gas and any
mixtures thereof, (iv) radioactive materials including, without limitation,
source, byproduct or special nuclear materials, (v) pesticides, (vi) friable
asbestos, (vii) ureaformaldehyde, and (viii) polychlorinated biphenyls (PCBs).
(m) "knowledge of the Company" and "to the Company's knowledge" shall
mean the actual knowledge of the President, Chief Executive Officer, Chief
Financial Officer or the Vice President, Environmental Affairs.
(n) "Material Adverse Effect" shall mean any change or effect that is
(after giving effect to any appropriate reserves for such matter on the
financial statements included in the Company SEC Documents filed prior to the
date hereof) materially adverse to the business, results of operations, assets,
liabilities or financial condition of the Company and its subsidiaries, taken as
a whole, or any event, matter, condition or effect which precludes the Company
from materially performing its material obligations under this Agreement or the
consummation of the Transactions; provided, however, that in determining whether
there has been a Material Adverse Effect, any adverse effect directly
attributable to the following shall be disregarded: (i) general economic or
business conditions; (ii) general industry conditions; (iii) the taking of any
action permitted or required by this Agreement; (iv) the announcement or
pendency of the Offer, or the Merger; (v) the breach by Parent or Purchaser of
this Agreement; and (vi) a decline in the Company's stock price.
(o) "person" shall mean a natural person, company, corporation,
partnership, association, trust or any unincorporated organization.
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(p) "Releases" means past or present spills, leaks, discharges,
disposal, pumping, pouring, emissions, injection, emptying, leaching, escaping,
disposing, or dumping of Hazardous Materials into the indoor or outdoor
Environment or out of any property owned, leased, or operated by the Company or
any of its affiliates.
(q) "Remedial Action" means all actions, including, without
limitation, any capital expenditures undertaken to (i) clean up, remove, treat,
or in any other way address any Hazardous Material or other substance; (ii)
prevent the Release or threat of Release, or minimize the further Release of any
Hazardous Material or other substance so it does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (iii) perform pre- remedial studies and investigations or
post-remedial monitoring and care; or (iv) bring facilities on any property
owned, operated or leased by the Seller and the facilities located and
operations conducted thereon into compliance with all Environmental Laws and
Environmental Permits.
(r) "subsidiary" shall mean, when used with reference to a person
means any corporation or other business entity of which such person directly or
indirectly owns (i) the majority of the outstanding voting securities or (ii)
voting securities or equity interests which give such person the power to elect
a majority of the board of directors or similar governing body of such entity.
Section 9.12 Interpretation. (a) The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments
thereto and instruments incorporated therein. References to a person are also to
its permitted successors and assigns.
(b) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, on the day
and year first above written.
GIANT CEMENT HOLDING, INC.
By: GARY L. PECHOTA
-------------------------------------------
Name: Gary L. Pechota
Title: President and Chief Executive Officer
CEMENTOS PORTLAND, S.A.
By: MANUEL MELGAR
-------------------------------------------
Name: Manuel Melgar
Title: Deputy Managing Director
CP ACQUISITION, INC.
By: MANUEL MELGAR
-------------------------------------------
Name: Manuel Melgar
Title: Vice President
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ANNEX A
to
Agreement and Plan of Merger
Conditions to the Offer. Notwithstanding any other provision of the
Offer or this Agreement, in addition to (and not in limitation of) Purchaser's
rights pursuant to the Merger Agreement to extend and amend the Offer at any
time, in its sole discretion, to the extent permitted by Section 1.1 of the
Merger Agreement, Purchaser shall not be required to accept for payment or,
subject to Rule 14e-1(c) of the Exchange Act, pay for and may delay the
acceptance for payment of or, subject to Rule 14e-1(c) of the Exchange Act, the
payment for, any Shares not theretofore accepted for payment or paid for, and
Purchaser may terminate or amend the Offer if (i) a number of Shares
representing at least a majority of the outstanding Shares, on a fully diluted
basis, shall not have been validly tendered and not withdrawn immediately prior
to the expiration of the Offer ("Minimum Condition") or (ii) at any time on or
after the date of the Merger Agreement and prior to the time of acceptance of
such Shares for payment or the payment therefor, any of the following conditions
has occurred and continues to occur:
(a) any representation and warranty of the Company in the Agreement
(after reading out any materiality and dollar qualifications) shall not be true
and correct as of such time, except where the failure to be so true and correct
is not individually or in the aggregate reasonably likely to have a Material
Adverse Effect on the Company (other than to the extent any such representation
and warranty expressly relates to an earlier date, in which case such
representation and warranty shall not be true and correct as of such date,
except where the failure to be so true and correct is not individually or in the
aggregate reasonably likely to have a Material Adverse Effect on the Company)
and which breach shall not have been cured prior to the earlier of (i) 15 days
following notice of such breach and (ii) two business days prior to the date on
which the Offer expires;
(b) the Company shall not have performed and complied with each
covenant or agreement contained in the Agreement and required to be performed or
complied with by it, except where the failure to so perform or comply is not
reasonably likely to have a Material Adverse Effect on the Company or materially
and adversely affect the consummation of the Offer, and which breach shall not
have been cured prior to the earlier of (i) 15 days following notice of such
breach and (ii) two business days prior to the date on which the Offer expires;
(c) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on the NASDAQ
National Market or the Madrid Stock Exchange (excluding any coordinated trading
halt triggered as a result of a specified decrease in a market index) related to
market conditions, (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States or the Kingdom of Spain by
any Governmental Entity, (iii) any material mandatory limitation by any
Governmental Entity on the extension of credit by banks or other lending
institutions, (iv) a commencement of a war, armed hostilities or other national
or international calamity directly or indirectly involving the United States
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or the Kingdom of Spain, or (v) a drop of more than 33.33% in the Dow Jones
Industrial Average Index, measured against the value of such index on the date
of this Agreement;
(d) any applicable waiting period under the HSR Act shall not have
expired or been terminated or there shall be pending before or threatened by any
Governmental Entity any suit, action, investigation or proceeding, (i)
challenging the acquisition by Parent or Purchaser of any Shares, seeking to
make illegal, materially delay, make materially more costly or otherwise
directly or indirectly restrain or prohibit the making or consummation of the
Offer and the Merger or seeking to obtain from the Company, Parent or Purchaser
any damages that are material in relation to the Company and its subsidiaries
taken as whole, (ii) seeking to prohibit Parent or any of its subsidiaries or
affiliates from effectively controlling in any material respect the business or
operations of the Company or its subsidiaries, (iii) requiring divestiture by
Purchaser or any of its affiliates of any Shares or current business or material
assets or (iv) which otherwise is reasonably likely to have a Material Adverse
Effect on the Company or Parent;
(e) there shall be any judgment, order or injunction (including with
respect to competition or antitrust matters) enacted, entered, promulgated or
issued with respect to (i) Parent, the Company or any of their respective
subsidiaries or affiliates or (ii) the Offer or the Merger by any Governmental
Entity or court, that has resulted or is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) though (iv)
of paragraph (d) above;
(f) since the date of the Merger Agreement, there shall have occurred
any events, changes, effects or developments that, individually or in the
aggregate, have had or are reasonably likely to have, a Material Adverse Effect
on the Company;
(g) the Board of Directors of the Company or any committee thereof
shall have (i) withdrawn, or modified, amended or changed (including by
amendment of the Schedule 14D-9), or publicly announced an intention to do so,
in a manner adverse to Parent or Purchaser, its approval or recommendation of
the Offer, the Merger, or this Agreement, (ii) approved or recommended to the
Company's stockholders or publicly announced an intention to do so, an
Acquisition Proposal or any other acquisition of Shares other than the Offer and
the Merger or (iii) adopted any resolution to effect any of the foregoing; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition and, subject to Section 1.1, may
be waived by Purchaser or Parent, in whole or in part, at any time and from time
to time, in the sole discretion of Purchaser or Parent. The failure by Purchaser
or Parent or any of their respective affiliates at any time to exercise any of
the foregoing rights will not be deemed a waiver of any right, the waiver of any
such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each right
will be deemed an ongoing right which may be asserted at any time and from time
to time.
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[LETTERHEAD OF GCHI]
August 23, 1999
Cementos Portland, SA
Estella 6
31002 Pamplona, Spain
Attention: Mr. Manuel de Melgar Oliver
Deputy Managing Director
Gentlemen:
In order to allow you to evaluate the possible acquisition (the "Proposed
Acquisition") of Giant Cement Holding, Inc. (the "Company"), we will deliver to
you, upon your execution and delivery to us of this letter agreement, certain
information about the properties and operations of the Company. All information
about the Company furnished by us or our Representatives (as defined below),
whether furnished before or after the date hereof, whether oral or written, and
regardless of the manner in which it is furnished, is referred to in this letter
agreement as "Proprietary Information". Proprietary Information does not
include, however, information which (a) is or becomes generally available to the
public other than as a result of a disclosure by you or your Representatives,
(b) was available to you on a nonconfidential basis prior to its disclosure by
us or our Representatives or (c) becomes available to you on a nonconfidential
basis from a person other than us or our Representatives who is not otherwise
bound by a confidentiality agreement with us or any Representative of ours, or
is otherwise not under an obligation to us or any Representative of ours not to
transmit the information to you. As used in this letter agreement, the term
"Representative" means, as to any person, such person's affiliates and its and
their directors, officers, employees, agents, advisors (including, without
limitation, financial advisors, counsel and accountants) and controlling
persons. As used in this letter agreement, the term "person" shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership, other entity or individual.
Except as required by law, unless otherwise agreed to in writing by us,
you agree (a) to keep all Proprietary Information confidential and not to
disclose or reveal any Proprietary Information to any person other than your
Representatives who are actively and directly participating in your evaluation
of the Proposed Acquisition or who otherwise need to know the Proprietary
Information for the purpose of evaluating the Proposed Acquisition and to cause
those persons to observe the terms of this letter agreement, (b) not to use
Proprietary Information for any purpose other than in connection with your
evaluation of the Proposed Acquisition or the consummation of the Proposed
Acquisition in a manner that we have approved and (c) not to disclose to any
person (other than those of your Representatives who are actively and directly
participating in your evaluation of the Proposed Acquisition or who otherwise
need to know for the purpose of evaluating the Proposed Acquisition and, in the
case of your Representatives, whom you will cause to observe the terms of this
letter agreement) any information about the Proposed Acquisition, or the terms
or conditions or any other facts relating thereto, including, without
limitation, the fact that discussions are taking place with respect thereto or
the status thereof, or the
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fact that Proprietary Information has been made available to you or your
Representatives. You will be responsible for any breach of the terms of this
letter agreement by you or your Representatives.
In the event that you are requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any Proprietary
Information or any other information concerning the Company or the Proposed
Acquisition, you agree that you will provide us with prompt notice of such
request or requirement in order to enable us to seek an appropriate protective
order or other remedy, to consult with you with respect to our taking steps to
resist or narrow the scope of such request or legal process, or to waive
compliance, in whole or in part, with the terms of this letter agreement. In any
such event you will use your reasonable best efforts to ensure that all
Proprietary Information and other information that is so disclosed will be
accorded confidential treatment.
You also agree that for a period of one year from the date of this letter
agreement, neither you nor any of your Representatives will, without the prior
written consent of the Company or its Board of Directors:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct
or indirect rights to acquire any voting securities of the Company or
any subsidiary thereof, or of any successor to or person in control of
the Company, or any assets of the Company or any subsidiary or
division thereof or of any such successor or controlling person;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise or
influence any person or entity with respect to the voting of any
voting securities of the Company;
(c) make any public announcement with respect to, or submit a proposal
for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or any of its securities or assets;
(d) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
in connection with any of the foregoing;
(e) Seek or propose to influence or control the Management or policies of
the Company; or
(f) request the Company or any of our Representatives, directly or
indirectly, to amend or waive any provision of this paragraph.
You will promptly advise the Company of any inquiry or proposal made to you with
respect to any of the foregoing.
If you determine that you do not wish to proceed with the Proposed
Acquisition, you will promptly advise us of that decision. In that case, or in
the event that we, in our sole discretion, so request or the Proposed
Acquisition is not consummated by you, you will, (i) continue to refrain from
disclosing to any person any information regarding the Proposed Acquisition,
including without limitation the terms and conditions or other facts relating
thereto, the fact that you engaged in discussions relating thereto or the status
thereof, and (ii) upon our request, promptly deliver to us all Proprietary
Information, including all copies, reproductions, summaries, analyses or
extracts thereof or based thereon in your possession or in the possession of any
Representative of yours.
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You acknowledge that none of the Company, Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") or our other Representatives and none of
the respective officers, directors, employees, agents or controlling persons of
Merrill Lynch or such other Representatives makes any express or implied
representation or warranty as to the accuracy or completeness of any Proprietary
Information, and you agree that none of such persons shall have any liability to
you or any of your Representatives relating to or arising from your or their use
of any Proprietary Information or for any errors therein or omissions therefrom.
You also agree that you are not entitled to rely on the accuracy or completeness
of any Proprietary Information and that you shall be entitled to rely solely on
such representations and warranties regarding Proprietary Information as may be
made to you in any final acquisition agreement relating to the Proposed
Acquisition, subject to the terms and conditions of such agreement.
You agree that, without our prior written consent, you will not for a
period of one year from the date hereof directly or indirectly solicit for
employment or employ any person who is now employed by us or any of our
subsidiaries and who is identified by you as a result of your evaluation or
otherwise in connection with the Proposed Acquisition.
You agree that until a final acquisition agreement regarding the Proposed
Acquisition has been executed by you and us, neither we nor any of our
Representatives are under any legal obligation and shall have no liability to
you of any nature whatsoever with respect to the Proposed Acquisition by virtue
of this letter agreement or otherwise. You also acknowledge and agree that (i)
we and our Representatives may conduct the process that may or may not result in
the Proposed Acquisition in such manner as we, in our sole discretion, may
determine (including, without limitation, negotiating and entering into a final
acquisition agreement with any third party without notice to you); (ii) we
reserve the right to change (in our sole discretion, at any time and without
notice to you) the procedures relating to our and your consideration of the
Proposed Acquisition (including, without limitation, terminating all further
discussions with you and requesting that you return all Proprietary Information
to us); (iii) all inquiries, requests for information and other communications
with the Company will be made only through Merrill Lynch & Co. or such other
individuals as may be designated by them; and (iv) you will not contact
employees, customers or suppliers of the Company with respect to the Proposed
Acquisition or for the purpose of obtaining information for use in your
evaluation of the Proposed Acquisition.
Without prejudice to the rights and remedies otherwise available to us,
you agree we shall be entitled to equitable relief by way of injunction or
otherwise if you or any of your Representatives breach or threaten to breach any
of the provisions of this letter agreement.
It is further understood and agreed that no failure or delay by us in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and
to be performed in that state.
Any assignment of this letter agreement by you without our prior written
consent shall be void.
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This letter agreement contains the entire agreement between you and us
concerning confidentiality of the Proprietary Information, and no modification
of this letter agreement or waiver of the terms and conditions hereof shall be
binding upon you or us, unless approved in writing by each of you and us.
Please confirm your agreement with the foregoing by signing and returning
to the undersigned the duplicate copy of this letter enclosed herewith.
GIANT CEMENT HOLDING, INC.
By /s/ Terry L. Kinder
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Title: Vice President and
Chief Financial Officer
Accepted and Agreed as of the date first written above:
CEMENTOS PORTLAND, SA
By Manuel de Melgar Oliver
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Title: Director General Corporation
Cementos Portland
21-9-99
