<PAGE>
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF
THE SECURITIES EXCHANGE ACT OF 1934.
(Amendment No. )*
TRIGEN ENERGY CORPORATION
------------------------------------
(Name of Subject Company (Issuer))
T ACQUISITION CORP. (OFFEROR)
ELYO
SUEZ LYONNAISE DES EAUX
------------------------------
(Names of Filing Persons (identifying status as offeror, issuer or other
person))
COMMON STOCK, PAR VALUE $0.01 PER SHARE
------------------------------
(Title of Class of Securities)
895930105
------------------------------
(CUSIP Number of Class of Securities)
MICHEL BLEITRACH
ELYO
235 AVENUE GEORGES CLEMONCEAU
BP 4601
92746 NANTERRE CEDEX, FRANCE
011-331-41-20-10-10
WITH A COPY TO:
JEFFREY BAGNER
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004-1980
(212) 859-8000
--------------------------------------------------------
(Name, address, and telephone numbers of person authorized to
receive notices and communications on behalf of filing persons)
CALCULATION OF FILING FEE
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Transaction Valuation* $173,487,223 Amount Of Filing Fee $34,698
</TABLE>
* ESTIMATED FOR PURPOSES OF CALCULATING THE AMOUNT OF THE FILING FEE ONLY.
THIS AMOUNT ASSUMES THE PURCHASE OF 7,382,435 SHARES OF COMMON STOCK, PAR
VALUE $.01 PER SHARE (THE "SHARES"), OF TRIGEN ENERGY CORPORATION, A
DELAWARE CORPORATION (THE "COMPANY"), AT THE TENDER PRICE OF $23.50 PER
SHARE NET TO THE SELLER IN CASH, WITHOUT INTEREST THEREON. PURSUANT TO THE
AGREEMENT AND PLAN OF MERGER, DATED AS OF JANUARY 19, 2000, AMONG ELYO
("PARENT"), T ACQUISITION CORP. AND THE COMPANY, THE COMPANY REPRESENTED
THAT AS OF SUCH DATE, IT HAD 12,416,297 SHARES OUTSTANDING AND 849,210
SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF ALL OUTSTANDING OPTIONS UNDER
THE COMPANY'S EMPLOYEE BENEFIT PLANS. PARENT ALREADY BENEFICIALLY OWNS
6,507,944 SHARES, OF WHICH THE 1,637,274 SHARES HELD BY COMPAGNIE PARISENNE
DE CHAUFFAGE URBAIN ("CPCU"), A NON-WHOLLY-OWNED SUBSIDIARY OF PARENT, WILL
BE TENDERED. PARENT HAS SEPARATELY AGREED TO PURCHASE 1,012,402 SHARES FROM
THOMAS R. CASTEN ON MARCH 29, 2000, PURSUANT TO A PURCHASE AGREEMENT, DATED
JANUARY 19, 2000 BETWEEN PARENT AND MR. CASTEN. BASED ON THE FOREGOING, THE
TRANSACTION VALUE IS EQUAL TO THE PRODUCT OF (I) (A) 12,416,297 SHARES (THE
NUMBER OF SHARES OUTSTANDING), PLUS (B) 849,210 SHARES (THE NUMBER OF SHARES
RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS), MINUS (C) THE DIFFERENCE OF
(1) 6,507,944 (THE NUMBER OF SHARES BENEFICIALLY OWNED BY PARENT) MINUS
(2) 1,637,274 (THE NUMBER OF SHARES HELD BY CPCU BEING TENDERED), MINUS
(D) 1,012,402 (THE NUMBER OF SHARES HELD BY MR. CASTEN), MULTIPLIED BY
(II) $23.50. THE AMOUNT OF THE FILING FEE, CALCULATED IN ACCORDANCE WITH
RULE 0-11 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EQUALS
1/50 OF ONE PERCENT OF THE AGGREGATE OF THE CASH OFFERED BY THE BIDDER.
/ / CHECK THE BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY
RULE 0-11(A)(2) AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS
PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
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Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
</TABLE>
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/X/ third-party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/X/ going-private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: / /
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<PAGE>
INTRODUCTION
This Tender Offer Statement on Schedule TO (this "Statement") relates to the
offer by T Acquisition Corp., a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of Elyo, a SOCIETE ANONYME organized and
existing under the laws of the Republic of France ("Parent") and an indirect
wholly owned subsidiary of Suez Lyonnaise des Eaux, a SOCIETE ANONYME organized
and existing under the laws of the Republic of France, to purchase any and all
outstanding shares of Common Stock, par value $.01 per share, of Trigen Energy
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$23.50 per share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
February 28, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), copies of which are filed as Exhibits
(a)(1)(i) and (a)(1)(ii) hereto, respectively, and which are incorporated herein
by reference.
All information in the Offer to Purchase, including all schedules thereto,
is incorporated by reference in answer to all of the items in this Statement.
EXHIBITS.
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(a)(1)(i) Offer to Purchase, dated February 28, 2000.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(2) Letter to stockholders from Richard E. Kessel, President and
Chief Executive Officer of the Company.
(a)(3) Exhibit (a)(1)(i) is incorporated herein by reference.
(a)(4) Not applicable.
(a)(5)(i) Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(5)(ii) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(5)(iii) Agreement and Plan of Merger dated as of January 19, 2000,
among Elyo, T Acquisition Corp. and the Company.
(a)(5)(iv) Audited financial statements for the Company's 1998 and 1997
fiscal years, beginning on page F-1 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1998 (incorporated by reference to the Company's Annual
Report on Form 10-K filed with the Commission on March 31,
1999).
(a)(5)(v) Pages 1 through 8, inclusive, of the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended
September 30, 1999 (incorporated by reference to the
Company's Quarterly Report on Form 10-Q filed with the
Commission on November 12, 1999).
(a)(5)(vi) Joint Press Release, dated January 19, 2000.
(a)(5)(vii) Joint Press Release, dated February 28, 2000.
(b) Not applicable.
(c)(i) Summary Presentation prepared for Parent by Lazard Freres &
Co., LLC, dated January 19, 2000.
</TABLE>
2
<PAGE>
<TABLE>
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(c)(ii) Written Presentation prepared for the Special Committee by
Credit Suisse First Boston Corporation, dated January 19,
2000.
(c)(iii) Opinion of Credit Suisse First Boston Corporation, dated
January 19, 2000 (incorporated by reference from Annex A of
the Solicitation/Recommendation Statement on Schedule 14D-9
of the Company, dated February 28, 2000).
(d)(i) Tender and Voting Agreement, dated as of January 19, 2000,
among Elyo, T Acquisition Corp. and the Stockholders.
(d)(ii) Letter Agreement between Thomas R. Casten and Elyo, dated
January 19, 2000.
(d)(iii) Separation Agreement and Release, dated as of January 19,
2000, between Trigen Energy Corporation and Thomas R.
Casten.
(f) Section 262 of the Delaware General Corporation Law
(included as Schedule II to the Offer to Purchase filed
herewith as Exhibit (a)(1)(i)).
(g) Not applicable.
(h) Not applicable.
(i) Power of Attorney, dated October 27, 1998.
</TABLE>
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C>
T ACQUISITION CORP.
By: /s/ MICHEL BLEITRACH
-----------------------------------------
Name: Michel Bleitrach
Title: President
ELYO
By: /s/ MICHEL BLEITRACH
-----------------------------------------
Name: Michel Bleitrach
Title: Chief Executive Officer
SUEZ LYONNAISE DES EAUX
By: /s/ M. PATRICE HERBERT
-----------------------------------------
Name: M. Patrice Herbert*
Title: Authorized Representative
</TABLE>
Dated: February 28, 2000
- ------------------------
* A Power of Attorney authorizing M. Patrice Herbert to sign on behalf of Suez
Lyonnaise des Eaux is filed herewith as Exhibit (i).
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE
- ----------- -----
<S> <C>
(a)(1)(i) Offer to Purchase, dated February 28, 2000.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(2) Letter to stockholders from Richard E. Kessel, President and
Chief Executive Officer of the Company.
(a)(3) Exhibit (a)(1)(i) is incorporated herein by reference.
(a)(4) Not applicable.
(a)(5)(i) Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(5)(ii) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(5)(iii) Agreement and Plan of Merger dated as of January 19, 2000,
among Elyo, T Acquisition Corp. and the Company.
(a)(5)(iv) Audited financial statements for the Company's 1998 and 1997
fiscal years, beginning on page F-1 of the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (incorporated by reference to the
Company's Annual Report on Form 10-K filed with the
Commission on March 31, 1999).
(a)(5)(v) Pages 1 through 8, inclusive, of the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended
September 30, 1999 (incorporated by reference to the
Company's Quarterly Report on Form 10-Q filed with the
Commission on November 12, 1999).
(a)(5)(vi) Joint Press Release, dated January 19, 2000.
(a)(5)(vii) Joint Press Release, dated February 28, 2000.
(b) Not applicable.
(c)(i) Summary Presentation prepared for Parent by Lazard Freres &
Co., LLC, dated January 19, 2000.
(c)(ii) Written Presentation prepared for the Special Committee by
Credit Suisse First Boston Corporation, dated January 19,
2000.
(c)(iii) Opinion of Credit Suisse First Boston Corporation, dated
January 19, 2000 (incorporated by reference from Annex A
of the Solicitation/Recommendation Statement on
Schedule 14D-9 of the Company, dated February 28, 2000).
(d)(i) Tender and Voting Agreement, dated as of January 19, 2000,
among Elyo, T Acquisition Corp. and the Stockholders.
(d)(ii) Letter Agreement between Thomas R. Casten and Elyo, dated
January 19, 2000.
(d)(iii) Separation Agreement and Release, dated as of January 19,
2000, between Trigen Energy Corporation and Thomas R.
Casten.
(f) Section 262 of the Delaware General Corporation Law
(included as Schedule II to the Offer to Purchase filed
herewith as Exhibit (a)(1)(i)).
(g) Not applicable.
(h) Not applicable.
(i) Power of Attorney, dated October 27, 1998.
</TABLE>
5
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
AT
$23.50 NET PER SHARE
BY
T ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
ELYO
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SUEZ LYONNAISE DES EAUX
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 24, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON SATISFACTION OF CERTAIN TERMS AND CONDITIONS
DESCRIBED IN "THE TENDER OFFER--CONDITIONS OF THE OFFER."
THE BOARD OF DIRECTORS OF TRIGEN ENERGY CORPORATION BY UNANIMOUS VOTE OF ALL
DIRECTORS, BASED ON, AMONG OTHER THINGS, THE UNANIMOUS RECOMMENDATION OF A
SPECIAL COMMITTEE COMPRISED OF INDEPENDENT DIRECTORS, (I) DETERMINED THAT THE
MERGER IS ADVISABLE AND THAT THE TERMS OF THE OFFER AND THE MERGER, THE MERGER
AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS,
(II) APPROVED THE OFFER AND THE MERGER AND APPROVED AND ADOPTED THE MERGER
AGREEMENT, AND (III) RECOMMENDED THE OFFER TO, AND THE APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY BY, THE
STOCKHOLDERS OF THE COMPANY.
------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
----------------
The date of this Offer to Purchase is February 28, 2000.
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER
Q: WHO IS OFFERING TO BUY MY SECURITIES?
A: The offer is being made by T Acquisition Corp., a newly formed Delaware
corporation. We are a subsidiary of Elyo, a French company. Elyo is part of
the energy division of Suez Lyonnaise des Eaux, a French publicly held
company and a major worldwide provider of private infrastructure services.
Elyo is already a major stockholder of Trigen. It currently owns
approximately 53% of Trigen's outstanding common stock. Elyo has also agreed
to buy, at $23.50 per share, an additional 1,012,402 shares of Trigen common
stock, or approximately 8% of Trigen's outstanding common stock, from Thomas
Casten, the former president and chief executive officer of Trigen.
TO READ MORE ABOUT T ACQUISITION CORP., ELYO AND SUEZ LYONNAISE DES EAUX,
SEE PAGES 47 THROUGH 49.
Q: WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
A: We are making the offer for any and all shares of common stock of Trigen.
There are no other outstanding equity securities of Trigen.
Q: HOW MUCH IS THE BIDDER OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
A: We are offering to pay $23.50 per share in cash, without interest.
Q: DOES THE BIDDER HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
A: Yes. Elyo will provide T Acquisition Corp. with sufficient funds to purchase
tendered shares. Elyo will provide those funds from existing credit lines
and financial support of Suez Lyonnaise des Eaux's other affiliates.
Q: IS THE BIDDER'S FINANCIAL CONDITION RELEVANT TO MY DECISION ON WHETHER TO
TENDER IN THE OFFER?
A: No. We do not believe that the financial condition of Elyo is important to
your decision. We base this conclusion on several factors. We are paying you
cash for your shares. The offer is not subject to any financing condition.
The offer is for any and all outstanding securities of Trigen. In addition,
we will purchase your shares without any requirement that any other shares
be tendered.
Q: HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
A: You have until the expiration date of March 24, 2000 to tender your shares.
We will purchase all properly tendered shares on the expiration date if the
conditions to our offer are then met. After making these purchases, we will
continue for a limited period of time to purchase shares submitted to us. On
the other hand, if the conditions to our offer are not met on the expiration
date, we may extend the offer.
FOR MORE INFORMATION ON WHEN YOU CAN TENDER YOUR SHARES IN THE OFFER, SEE
PAGES 38 THROUGH 41.
Q: HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
A: If the offer is extended past March 24, 2000, we will make a public
announcement of the new expiration date.
Q: WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
A: The most significant condition of the offer is the absence of litigation that
is reasonably likely to delay the offer or to make the offer materially more
expensive for the bidder.
FOR A COMPLETE DISCUSSION OF THE CONDITIONS TO THE OFFER, SEE PAGES 50
THROUGH 52.
Q: HOW DO I TENDER MY SHARES?
A: If you hold your shares "of record," you can tender your shares by sending
the enclosed letter of transmittal to the depositary, Harris Trust Company
of New York, at the address listed on the enclosed letter of transmittal.
If your broker holds your shares in "street name" for you, you must direct
your broker to tender. Please contact your broker.
FOR A COMPLETE DISCUSSION OF HOW TO TENDER YOUR SHARES, SEE PAGES 41 THROUGH
43.
Q: UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
A: You can withdraw tendered shares at any time prior to the expiration date of
March 24, 2000. If the expiration date is extended, you can withdraw
tendered shares at any time prior to the new expiration date.
Q: HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
A: You can withdraw shares that you have already tendered by sending a notice of
withdrawal to the depositary.
FOR A COMPLETE DISCUSSION OF HOW TO WITHDRAW PREVIOUSLY TENDERED SHARES, SEE
PAGES 43 THROUGH 44.
i
<PAGE>
Q: WHAT DOES MY BOARD OF DIRECTORS THINK OF THE OFFER?
A: Your board of directors recommends the offer.
FOR A MORE DETAILED DESCRIPTION OF THE BOARD OF DIRECTORS' RECOMMENDATION,
SEE PAGE 8.
Q: WHY IS MY BOARD OF DIRECTORS RECOMMENDING THE OFFER?
A: A special committee of independent directors evaluated the fairness of the
offer. The special committee negotiated the terms of the offer and
recommended that the full board approve the offer.
FOR A COMPLETE DISCUSSION OF THE FACTORS THE SPECIAL COMMITTEE CONSIDERED IN
RECOMMENDING THE OFFER, SEE PAGES 6 THROUGH 7.
Q: DID THE DIRECTORS WHO ARE NOT EMPLOYEES OF THE BIDDER, ELYO OR SUEZ RECEIVE
ANY OPINIONS, APPRAISALS, OR REPORTS REGARDING THE FAIRNESS OF THE OFFER?
A: Yes. The special committee of independent directors received a written
opinion, dated January 19, 2000, from Credit Suisse First Boston Corporation
to the effect that, as of that date and based on and subject to the matters
described in the opinion, the price per share of $23.50 to be received in
the offer and the merger, taken together, by the holders of shares of Trigen
common stock was fair, from a financial point of view, to the holders of
shares of Trigen common stock, other than Elyo and its affiliates.
FOR A MORE COMPLETE DESCRIPTION OF THE OPINION OF CREDIT SUISSE FIRST
BOSTON, SEE PAGES 11 THROUGH 14.
Q: IS THIS THE FIRST STEP IN A GOING-PRIVATE TRANSACTION?
A: Yes. Because Elyo already owns over 50% of Trigen's common stock, this offer
is considered a going-private transaction.
Q: WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL TRIGEN'S SHARES ARE NOT
TENDERED IN THE OFFER?
A: Yes. If we purchase any shares in the offer, the offer will likely be
followed by a merger that will result in Elyo owning 100% of Trigen. If we
complete the merger, the public stockholders of Trigen will receive $23.50
in cash in exchange for each of their shares of Trigen common stock. Elyo
has sufficient voting power to approve the merger without the vote of any
other stockholder of Trigen.
Q: IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
A: If a significant number of shares are purchased in the offer, the Trigen
shares are not likely to continue to trade on the New York Stock Exchange.
FOR A MORE COMPLETE DESCRIPTION OF HOW THE OFFER WILL AFFECT TRIGEN'S
SHARES, SEE PAGES 49 THROUGH 50.
Q: WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
A: On February 24, 2000, the last practicable trading day before the start of
the offer, the reported closing sale price of the Trigen shares was $23.00.
FOR MORE INFORMATION ON THE PRICE RANGE OF SHARES OF TRIGEN'S COMMON STOCK,
SEE PAGE 44.
Q: IF I OBJECT TO THE PRICE BEING OFFERED, WILL I HAVE APPRAISAL RIGHTS?
A: Yes. You may elect not to tender your shares, dissent from the merger, and
have the fair value of your shares paid to you in cash.
FOR INFORMATION ON HOW TO EXERCISE APPRAISAL RIGHTS, SEE PAGES 19 THROUGH
21.
Q: WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
A: If you have more questions about the tender offer, you should contact:
MORROW & CO., INC.
Banks and Brokers Call Toll-Free:
(800) 662-5200
All Others Please Call Toll-Free:
(800) 566-9061
or
LAZARD FRERES & CO. LLC
(212) 632-6717
ii
<PAGE>
IMPORTANT
Any holder of shares of common stock of Trigen Energy Corporation desiring
to tender all or any portion of the shares owned by such holder should either
(i) complete and sign the Letter of Transmittal (as defined below) or a copy
thereof in accordance with the instructions in the enclosed Letter of
Transmittal and mail or deliver it, together with the certificate(s) evidencing
tendered shares, and any other required documents, to the Depositary (as defined
below), (ii) where applicable, cause the holder's broker, dealer, commercial
bank, trust company or custodian to tender the shares pursuant to the procedures
for book-entry transfer of shares or (iii) comply with the guaranteed delivery
procedures, in each case upon the terms set forth in "THE TENDER
OFFER--Procedures for Tendering Shares." Any holder whose shares are registered
in the name of a broker, dealer, commercial bank, trust company or custodian
must contact the holder's broker, dealer, commercial bank, trust company or
custodian if such holder desires to tender the shares. See "THE TENDER
OFFER--Procedures for Tendering Shares."
Any holder who desires to tender shares of common stock of Trigen Energy
Corporation and whose certificate(s) evidencing the shares are not immediately
available, or who cannot comply with the procedures for book-entry transfer
described in this Offer to Purchase on a timely basis, may tender such shares by
following the procedures for guaranteed delivery set forth in "THE TENDER
OFFER--Procedures for Tendering Shares."
Questions and requests for assistance may be directed to the Information
Agent (as defined below) or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal or other
related tender offer materials may be obtained from the Information Agent or
from brokers, dealers, commercial banks or trust companies.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER............. i
INTRODUCTION..................................................... 1
SPECIAL FACTORS.................................................. 2
1. Background of the Offer and the Merger; Contacts with the
Company..................................................... 2
2. Recommendation of the Special Committee and the Board of
Directors of the Company; Fairness of the Offer and the
Merger...................................................... 6
3. Position of Suez, Parent and Purchaser Regarding Fairness of
the Offer and the Merger.................................... 8
4. Analysis of Financial Advisor to Parent..................... 9
5. Opinion of the Special Committee's Financial Advisor........ 11
6. Company Financial Projections............................... 14
7. Forward Looking Statements.................................. 17
8. Purpose and Structure of the Offer and the Merger; Plans for
the Company................................................. 18
9. Rights of Stockholders in the Offer and the Merger.......... 19
10. The Transaction Documents................................... 21
11. Interests of Certain Persons in the Offer and the Merger.... 33
12. Beneficial Ownership of Shares.............................. 34
13. Related Party Transactions.................................. 35
14. Certain United States Federal Income Tax Consequences....... 36
15. Fees and Expenses........................................... 37
THE TENDER OFFER................................................. 38
1. Terms of the Offer.......................................... 38
2. Acceptance for Payment and Payment for Shares............... 40
3. Procedures for Tendering Shares............................. 41
4. Withdrawal Rights........................................... 43
5. Price Range of Shares....................................... 44
6. Dividends and Distributions................................. 45
7. Certain Information Concerning the Company.................. 45
8. Certain Information Concerning Purchaser, Parent, Suez, CAC
and Societe Generale........................................ 47
9. Source and Amount of Funds.................................. 49
10. Effect of the Offer on the Market for the Common Stock;
Exchange Act Registration................................... 49
11. Conditions of the Offer..................................... 50
12. Certain Legal Matters; Regulatory Approvals................. 52
13. Fees and Expenses........................................... 54
14. Miscellaneous............................................... 54
SCHEDULE I Information Concerning the Directors and Executive
Officers of Suez Lyonnaise des Eaux, Elyo and T
Acquisition Corp.................................... I-1
SCHEDULE II Section 262 of the General Corporation Law of the
State of Delaware................................... II-1
SCHEDULE III Certain Projections relating to Trigen Energy
Corporation........................................ III-1
</TABLE>
iv
<PAGE>
To the Holders of Common Stock of
Trigen Energy Corporation:
INTRODUCTION
T Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of Elyo, a SOCIETE ANONYME organized and existing under
the laws of the Republic of France ("Parent"), hereby offers to purchase any and
all of the issued and outstanding shares of common stock, par value $0.01 per
share (the "Shares" or "Common Stock"), of Trigen Energy Corporation, a Delaware
corporation (the "Company"), at a price of $23.50 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as they may be amended and supplemented from time
to time, together constitute the "Offer"). Parent is an indirect wholly owned
subsidiary of Suez Lyonnaise des Eaux, a SOCIETE ANONYME organized and existing
under the laws of the Republic of France ("Suez").
Holders of Shares whose Shares are registered in their own name and who
tender directly to Harris Trust Company of New York, as Depositary (the
"Depositary"), 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 incurred in connection with the
Offer by Lazard Freres & Co. LLC, as Dealer Manager (the "Dealer Manager" or
"Lazard Freres"), the Depositary, and Morrow & Co., Inc., as Information Agent
(the "Information Agent"). See "SPECIAL FACTORS--Fees and Expenses" and "THE
TENDER OFFER--Fees and Expenses."
As of February 24, 2000, there were 12,401,808 Shares outstanding. Parent
currently beneficially owns 6,507,944 Shares, constituting approximately 52.5%
of the outstanding Shares. Nominees of Parent currently constitute a majority of
the members of the Board of Directors of the Company (the "Board of Directors").
In addition, on March 29, 2000, Parent will purchase the 1,012,402 Shares
(approximately 8% of the outstanding Shares) beneficially owned by Mr. Thomas R.
Casten, the former President and Chief Executive Officer of the Company, at
$23.50 per Share. This purchase will be made under the terms of a purchase
agreement, dated January 19, 2000 (the "Casten Stock Purchase Agreement"),
between Parent and Mr. Casten. The Shares being purchased pursuant to the Casten
Stock Purchase Agreement do not include the Options (as defined below) and
Restricted Stock (as defined below) held by Mr. Casten. Also on January 19,
2000, Messrs. George Keane and Charles Bayless, the independent directors of the
Company who are the members of the special committee formed to consider Parent's
proposal to acquire 100% of the equity of the Company (the "Special Committee"),
entered into a Tender and Voting Agreement with Purchaser and Parent. Under the
terms of the Tender and Voting Agreement, Messrs. Keane and Bayless have agreed,
among other things, to tender their Shares (representing in the aggregate less
than 1% of the outstanding Shares) into the Offer (the "Tender and Voting
Agreement"). See "SPECIAL FACTORS--The Transaction Documents--The Tender and
Voting Agreements" and "--Arrangements with Thomas R. Casten."
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated as of January 19, 2000 (the "Merger Agreement"), among Parent,
Purchaser and the Company. The Merger Agreement provides that, among other
things, as promptly as practicable after consummation of the Offer and the
satisfaction of the other conditions contained in the Merger Agreement,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving Corporation").
At the effective time of the Merger (the "Effective Time"), except for Shares
held by holders exercising their rights to dissent in accordance with the
Delaware General Corporation Law (the "DGCL") and Shares held, directly or
indirectly, by Parent, each then outstanding Share will, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled and be
converted into the right to receive an amount per Share (the "Merger
Consideration") equal to the Offer Price, without interest. The terms and
conditions of the Merger Agreement are more fully described in "SPECIAL
FACTORS--The Transaction Documents--The Merger Agreement."
AS THE INDIRECT BENEFICIAL OWNER OF MORE THAN 50% OF THE OUTSTANDING SHARES,
PARENT CURRENTLY POSSESSES SUFFICIENT VOTING POWER TO CAUSE THE COMPANY TO
CONSUMMATE THE MERGER WITHOUT THE VOTE OF ANY
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OTHER STOCKHOLDERS OF THE COMPANY. Such ownership, however, does not compel any
stockholder to accept the Offer or tender such stockholder's Shares. Subject to
dissenters' rights under the DGCL, Shares not tendered in the Offer shall be
cancelled in the Merger and converted into the right to receive the Merger
Consideration, without interest. Stockholders who hold their Shares at the time
of the Merger and who fully comply with the statutory dissenters' procedures set
forth in the DGCL, the relevant provisions of which are attached as Schedule II
of the Offer to Purchase, will be entitled to dissent from the Merger and have
the fair value of their Shares (which may be more than, equal to, or less than
the Merger Consideration) judicially determined and paid to them in cash
pursuant to the procedures prescribed by the DGCL. NO DISSENTERS RIGHTS ARE
AVAILABLE TO STOCKHOLDERS IN CONNECTION WITH THE OFFER. See "SPECIAL
FACTORS--Rights of Stockholders in the Offer and the Merger."
The Offer is conditioned upon the satisfaction of certain conditions
described in "THE TENDER OFFER--Conditions of the Offer."
The Board of Directors, by unanimous vote of all directors, based on, among
other things, the unanimous recommendation of the Special Committee,
(i) determined that the Merger is advisable and that the terms of the Offer and
the Merger, the Merger Agreement and the consummation of the transactions
contemplated thereby are fair to, and in the best interests of, the Company and
its stockholders, (ii) approved the Offer and the Merger and approved and
adopted the Merger Agreement, and (iii) recommended the Offer to, and the
approval and adoption of the Merger Agreement and the transactions contemplated
thereby by, the stockholders of the Company.
The Company has advised Purchaser that Credit Suisse First Boston
Corporation ("CSFB"), financial advisor to the Special Committee, has delivered
to the Special Committee its written opinion, dated January 19, 2000, to the
effect that, as of that date and based on and subject to the matters described
in the opinion, the $23.50 per Share cash consideration to be received in the
Offer and the Merger, taken together, by the holders of Shares was fair, from a
financial point of view, to such holders (other than Parent and its affiliates).
A copy of CSFB's opinion, which sets forth the assumptions made, procedures
followed, matters considered and limitations on the review undertaken by CSFB,
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"). The Schedule 14D-9 is being mailed to the
stockholders concurrently with the mailing of this Offer to Purchase. The
Schedule 14D-9 may be inspected at, and copies may be obtained from, the same
places and in the manner set forth in "THE TENDER OFFER--Certain Information
Concerning the Company--Additional Information." Holders of Shares are urged to
read the opinion carefully in its entirety.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SPECIAL FACTORS
1. BACKGROUND OF THE OFFER AND THE MERGER; CONTACTS WITH THE COMPANY
Parent and its affiliates (the "Parent Group") initially acquired an
interest in the Company in 1986. Since that time, Parent has beneficially owned
a majority of the outstanding Shares and representatives of the Parent Group
have constituted a majority of the Board of Directors.
For a number of years, the Parent Group has periodically reviewed the nature
of its investment in the Company and has had numerous discussions with senior
management and members of the Board of Directors. These discussions included,
from time to time, a variety of potential transactions including transactions
that would increase either Parent's or the public's ownership of the equity of
the Company.
On September 20, 1999, Parent made a written proposal to the Board of
Directors to acquire all of the Shares not owned by the Parent Group for a cash
purchase price of $22 per share (the "$22 Offer").
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On September 21, 1999, as a result of the $22 Offer, the Board of Directors
appointed the Special Committee. The Special Committee was authorized, among
other things, to retain legal and financial advisors and to exercise all of the
powers and authority of the Board of Directors as the Special Committee deemed
appropriate in the best interests of the Company in connection with or in
response to the $22 Offer. The Board of Directors also agreed that because of
the time and energy involved in reviewing the transaction, the members of the
Special Committee should be entitled to receive a per diem fee of $2,500 each,
up to a maximum of $75,000 each. The Special Committee appointed CSFB as
financial advisor to the Special Committee and Troutman Sanders LLP as legal
counsel to the Special Committee. On the same day, Mr. Thomas Casten, then the
President and the Chief Executive Officer and a director of the Company,
circulated a memorandum to the members of the Board of Directors expressing
significant concerns about Parent's proposal and how it would affect the Company
and requesting that Parent meet with the Company, as soon as possible, to
discuss, among other things, Parent's plans for the Company following the
proposed acquisition.
On October 1, 1999, the members of the Special Committee and representatives
of CSFB met with representatives of Parent and its financial advisor, Lazard
Freres, to organize a procedure for reviewing the $22 Offer. The Special
Committee also indicated that it had requested that the Company's management
prepare appropriate business and financial projections and that it would need at
least several weeks for those projections to be prepared.
On October 15, 1999, the members of the Special Committee, together with
representatives of CSFB and members of management, including Mr. Casten, met
with representatives of Parent as well as with Lazard Freres. The primary
purpose of the meeting, which had been called by the Special Committee, was to
provide Parent the opportunity to describe its plans for the Company to the
Company's management, and to answer any questions it might have, in order to
allay any concerns management had. At the meeting, Parent read a prepared
statement reiterating its long-term commitment to the Company. Parent elected
not to respond to any specific questions regarding its future intentions
concerning management and the operations of the Company because Parent believed
it was an inappropriate time to do so. Following the departure of the financial
advisors and management, the Special Committee indicated that it wished to be
able to provide incentives to management of the Company in order that they would
continue to focus on the Company's business and be assured that adequate
arrangements would be put into place if and when a going private transaction
were completed. Parent agreed that it would be appropriate to retain a third
party compensation expert to make recommendations in this regard and preferred
to defer discussing any specific proposals for these incentives and arrangements
at that time.
Following the October 15, 1999 meeting, the Special Committee asked the
Company's regular compensation consultants to propose a "key manager" retention
program, and the consultants recommended enhanced "change in control" benefits
in order to reassure and retain key executives of the Company. Copies of the
recommendations were also sent to Parent and its advisors. Upon receipt of these
recommendations, Parent advised the Special Committee and its legal counsel that
it believed that the Special Committee did not have authority to enter into new
or enhanced employment or severance contracts with employees of the Company
without the prior specific approval of a majority of the full Board of
Directors. The Special Committee was also advised that Parent's nominees on the
Board of Directors, which comprised a majority, were opposed at that time to
entering into enhanced employment or severance contracts. The Special Committee
advised Parent of its disagreement with these positions.
Between October 15, 1999 and November 16, 1999, there were several
conversations between Parent and the Special Committee and their respective
legal and financial advisors regarding timetables and procedures for responding
to the $22 Offer. During this period, the Special Committee advised Parent that
management was in the process of preparing the projections that had been
requested, and that the Special Committee would be unable to meet with Parent
and its financial advisors until these projections were completed by management.
The Special Committee requested that Parent and its advisors defer conducting
further due diligence of the Company until that time.
3
<PAGE>
On November 4, 1999, copies of the projections (the "November 1999
Projections") were delivered to Parent and Lazard Freres. Following receipt of
the November 1999 Projections, representatives of Lazard Freres advised
representatives of CSFB that Parent believed that the November 1999 Projections
were aggressive and unrealistic for a number of reasons, including the fact that
it was unclear to Parent how the Company would be able to generate sufficient
capital to fund the capital expenditures needed to support the proposed revenue
growth. At the direction of the Special Committee, CSFB relayed to Lazard Freres
the Special Committee's disagreement with Parent's concerns regarding the
November 1999 Projections and the Special Committee's belief that appropriate
financing would be available.
On November 16, 1999, the members of the Special Committee, together with
the Special Committee's legal and financial advisors, met with representatives
of Parent and its legal and financial advisors. At this meeting, representatives
of Parent and Lazard Freres reiterated that Parent believed that the
November 1999 Projections should not be the basis for valuing the Company
because there was no explanation satisfactory to Parent as to how the Company's
projected growth could be financed. The Special Committee indicated that it
believed that the November 1999 Projections reasonably provided a basis for
negotiation of a purchase price to be offered to the Public Stockholders. The
Special Committee also indicated that, based on the projections, it believed
that a proper price to commence negotiations would be substantially in excess of
$22 per Share. The Special Committee asked that Parent meet with the Company's
management to review the November 1999 Projections in order to identify aspects
of the November 1999 Projections that Parent thought were incorrect. Since
Parent withdrew the $22 Offer (as described below), no such meeting was held.
In the course of the November 16 meeting, and in response to questions from
Parent, the Special Committee indicated that it had solicited, and had
authorized management of the Company to solicit, third party indications of
interest for providing equity capital to the Company or for making an offer to
purchase the entire Company at a higher price. In that regard, the Special
Committee had authorized the distribution, pursuant to customary confidentiality
agreements, of certain confidential information concerning the Company. The
Special Committee did not receive any formal offers as a result of this process;
it did, however, identify one party that was interested in making a substantial
equity investment, but not under circumstances that might involve litigation or
other disputes with Parent. The representatives of Parent advised the Special
Committee that Parent had previously indicated that its interest in the Company
was not for sale. Parent also indicated that it was unacceptable for either
management or the Special Committee to disseminate confidential information
concerning the Company to third parties since its majority interest in the
equity of the Company was not for sale. The Parent's representatives therefore
requested that the members of the Special Committee agree that they would
instruct management of the Company and other representatives of the Company to
cease soliciting third party offers and distributing confidential information.
The Special Committee indicated that it was not prepared to make such a
commitment.
At the conclusion of these discussions, Parent advised the Special Committee
that it was withdrawing the $22 Offer because Parent disagreed with the
November 1999 Projections, and because the Special Committee had indicated that,
based on those November 1999 Projections, the Special Committee believed that a
proper price to commence negotiations would be substantially in excess of $22
per Share. On November 16, 1999, Parent issued a press release publicly
announcing such withdrawal, which Parent attributed to its fundamental
disagreement with the Company over the November 1999 Projections.
Over the last several years, management and the Board of Directors have
periodically held discussions concerning long-term financing for the Company.
During the month of December, there were a series of meetings of the Board of
Directors at which management proposed several interim and long-term financing
plans to fund the proposed existing and future capital needs of the Company,
including certain immediate funding requirements. Parent's representatives on
the Board of Directors took the position that approval of these financing
proposals should be deferred until management prepared a multi-year business
plan which reflected the then contemplated capital needs of the Company.
Parent's representatives also indicated that they were not aware, before these
financial proposals were presented to them, of the
4
<PAGE>
Company's immediate need for interim financing. The Special Committee indicated
that the November 1999 Projections, which had been previously delivered to the
directors, had reflected the Company's ongoing capital needs and believed that
these projections were sufficient for the Board of Directors to make a decision.
In any event, Parent agreed to provide interim bridge financing pending review,
at a meeting of the Board of Directors to be held on January 19, 2000, of a
comprehensive funding program.
On January 7, 2000, Mr. Keane, in a memorandum sent to the Board of
Directors, expressed concern over the uncertainty created by the $22 Offer and
its abrupt withdrawal and also advised the directors of his view that there were
serious issues of strategic vision, governance and long term financing that
needed to be resolved by the Board of Directors and that resolution of these
issues centered around whether the Company remained a public company or would be
taken private. Subsequently, in a memorandum dated January 12, 2000,
Mr. Bleitrach responded in writing to Mr. Keane's January 7, 2000 memorandum,
contesting statements made by Mr. Keane in such memorandum, including
Mr. Keane's statement that the withdrawal of the $22 Offer was abrupt.
Mr. Bleitrach also reiterated Parent's concerns about the reasonableness of the
November 1999 Projections.
During 1998 and 1999, Parent and Mr. Casten had several meetings in which
they attempted to arrive at a shared view regarding strategic and governance
issues relating to the Company. Such meetings did not result in general
agreement over such issues, and Parent came to believe that the Company required
new leadership. Because of this decision, and as a result of Parent's belief
that its designees on the Board of Directors had not been kept adequately
informed of the immediate capital requirements of the Company, Parent determined
in early January 2000 to request that Mr. Casten resign as President, Chief
Executive Officer and as a director of the Company. Parent also decided to ask
Mr. Keane to resign as Chairman of the Board of Directors, but to remain as a
director. Accordingly, at a meeting in Paris on January 10, 1999 that had been
scheduled to review the Company's multi-year business plan, a representative of
Parent requested that Mr. Casten immediately resign from his positions with the
Company. Parent indicated that in light of Mr. Casten's many years of service to
the Company, it was prepared to recommend to the Board of Directors a severance
package that would include continued compensation for a two year period,
continued vesting of Mr. Casten's Options and Restricted Stock, and continuation
of certain other employee benefits. Parent told Mr. Casten and subsequently the
Special Committee that Mr. Casten would be replaced if he did not resign. Parent
called a special meeting of the Board of Directors on Thursday, January 13, 2000
at which it was expected that Mr. Casten would resign or be replaced.
On January 12, 2000, Mr. Keane, on behalf of the Special Committee, wrote a
memorandum to Parent indicating that the Special Committee had serious
reservations concerning the actions proposed by Parent to be taken at a special
meeting of the Board of Directors scheduled for January 13, 2000, particularly
the resignation or removal of Mr. Casten. Mr. Keane proposed that Parent
re-initiate its going private proposal by offering to purchase the remainder of
the Shares and informed Parent that if the going private transaction was
re-initiated at a fair price, it would be fully supported by the Special
Committee. The Special Committee asked for a response the following day.
Following receipt of that memorandum, at the Special Committee's direction,
CSFB contacted Lazard Freres by telephone to suggest that the parties resume
discussions concerning the $22 Offer. On January 12, 2000, CSFB indicated that
the Special Committee had requested that CSFB inform Lazard Freres that the
members of the Special Committee might view an offer at $26 per Share favorably.
On January 12, 2000, Fried, Frank, Harris, Shriver & Jacobson, Parent's legal
counsel ("Fried Frank"), provided an initial draft of the Merger Agreement to
the Special Committee through its representatives. On January 13, 2000, Lazard
Freres communicated to CSFB that Parent would consider increasing its Offer to
$22.75. That proposal was rejected by the Special Committee, which indicated
that it was seeking an amount in excess of $24 per Share. Also on January 13,
2000, the Board of Directors met and formally reappointed the Special Committee.
Action with respect to Mr. Casten's resignation was deferred until January 19,
2000.
5
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On January 16, 2000, representatives from Fried Frank negotiated the draft
Merger Agreement with Troutman Sanders, and Fried Frank circulated a revised
draft of the Merger Agreement later that day.
On January 17, 2000, Lazard Freres indicated to CSFB that Parent would be
prepared to increase its offer to $23.25. Lazard Freres was advised that the
Special Committee was still seeking at least $24 per Share. On January 18, 2000,
Lazard Freres indicated that, subject to the preparation of acceptable
documents, including agreements from the members of the Special Committee and
Mr. Casten in their individual capacities to accept the proposal and vote and/or
tender their Shares to support the transaction, Parent would be prepared to
increase its offer to $23.50. The Special Committee also contacted Parent
directly in order to attempt to negotiate a higher price. At the same time,
Fried Frank and Troutman Sanders continued to negotiate the remaining issues in
the draft Merger Agreement.
On January 19, 2000, at the request of the Special Committee, CSFB advised
Lazard Freres that the Special Committee was likely to respond favorably to
Parent's proposed offer of $23.50. The Special Committee then met to review the
offer and the terms of the draft Merger Agreement with CSFB and Troutman
Sanders. Also at this meeting, CSFB delivered to the Special Committee an oral
opinion (which opinion was confirmed by delivery of a written opinion dated
January 19, 2000) to the effect that, as of that date and based on and subject
to the matters described in the opinion, the $23.50 per Share cash consideration
to be received in the Offer and the Merger, taken together, by the holders of
Shares was fair, from a financial point of view, to such holders (other than
Parent and its affiliates). After full discussion, the Special Committee
unanimously determined to recommend that the Board of Directors approve the
Offer and the Merger and approve and authorize the Merger Agreement and the
other transactions contemplated thereby. Later that day, the Board of Directors
met to consider the recommendation of the Special Committee. After receiving the
recommendation of the Special Committee, the members of the Board of Directors
unanimously approved the Offer and the Merger, approved and adopted the Merger
Agreement and the transactions contemplated thereby, and recommended the Offer
to the stockholders of the Company. The Board of Directors also approved the
separation arrangements with Mr. Casten, and the terms of a $16 million
short-term loan from Elyo.
Over the course of that day, Fried Frank and Troutman Sanders finalized the
Merger Agreement and the related documentation, including the Tender and Voting
Agreement. Fried Frank and Mr. Casten's attorney also finalized the severance
arrangements with Mr. Casten. By the end of the day, the parties had agreed to
the definitive terms of the Merger Agreement and the tender and voting
agreement, and those agreements were executed by the various parties.
Mr. Casten also executed a separation agreement with the Company and the Casten
Stock Purchase Agreement. For a description of the separation arrangements with
Mr. Casten, see "--The Transaction Documents; Arrangements with Thomas R.
Casten."
2. RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS OF
THE COMPANY; FAIRNESS OF THE OFFER AND THE MERGER
THE SPECIAL COMMITTEE.
In reaching its decision to recommend that the Board of Directors approve
the Offer and the Merger and authorize the Merger Agreement, the Special
Committee considered a number of factors, including the following, which
generally supported a recommendation in favor of the Offer:
(i) The Company's uncertain financial prospects as a result of (a) the
current rate at which the Company is utilizing its available funds and
(b) uncertainty as to whether the Company would be able to raise additional
capital which would be adequate for its ongoing needs (particularly in light
of Parent's requirement that it would first need to consider meaningful
long-term business plans before it could respond to a request for approval
of a long-term financing plan).
(ii) The fact that the Company's projections reflected unprecedented
growth, and that there can be no assurances that these projections can be
realized since unprecedented growth by its nature contains certain risks.
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(iii) The historical market prices and recent trading activity of the
Shares, including the fact that the $23.50 per Share cash consideration to
be paid in the Offer and the Merger represented a substantial premium over
the recent trading price of the Shares.
(iv) The history of negotiations between the Special Committee and its
representatives and the Parent and its representatives, including the facts
that (a) the negotiations resulted in an increase in the price at which
Parent and Purchaser were prepared to acquire the Company's outstanding
Shares from $22.00 per Share to $23.50 per Share, and (b) the Special
Committee's belief that the Parent and Purchaser would not further increase
the Offer.
(v) The express unwillingness of the Parent to consider a sale of its
interest in the Company which made pursuit of other potential business
combinations impracticable.
(vi) The structure of the transaction which is designed, among other
things, to result in the receipt by stockholders at the earliest practicable
time of the consideration to be paid in the Offer and the fact that the per
Share consideration to be paid in the Offer and the Merger is the same.
(vii) The volatility in the energy industry during the current
deregulation of the electric industry and the impracticability of accurately
predicting the future results of the Company.
(viii) The opinion of CSFB dated January 19, 2000 to the effect that, as
of that date and based on and subject to the matters described in the
opinion, the $23.50 per Share cash consideration to be received in the Offer
and the Merger, taken together, by the holders of Shares was fair, from a
financial point of view, to such holders (other than Parent and its
affiliates). The full text of CSFB's written opinion dated January 19, 2000,
which sets forth the assumptions made, procedures followed, matters
considered and limitations on the review undertaken by CSFB, is attached to
the Schedule 14D-9 as Annex A and is incorporated herein by reference.
CSFB's opinion is directed only to the fairness, from a financial point of
view, of the $23.50 per Share cash consideration to be received in the Offer
and the Merger, taken together, by the holders of Shares (other than Parent
and its affiliates) and is not intended to constitute, and does not
constitute, a recommendation as to whether any stockholder should tender
Shares pursuant to the Offer or as to any other matter relating to the Offer
or the Merger. Holders of Shares are urged to read the opinion carefully in
its entirety.
(ix) The availability of dissenters' rights with respect to the Merger
under Delaware law.
(x) The absence of any "minimum condition" or other requirement that a
particular number of Shares be tendered in the Offer or that dissenters'
rights be exercised with respect to only a limited number of Shares.
(xi) The impact of the departure of Mr. Casten from the Company's
management team.
(xii) The likelihood that the proposed acquisition would be consummated
based in part on the financial resources of the Parent.
(xiii) The terms and conditions of the Merger Agreement, including the
absence of any financing condition.
(xiv) The expectation that, in the absence of Mr. Casten's leadership,
the trading price of the Shares might decline in the future.
In addition to the factors listed above, the Special Committee considered
the fact that the consummation of the Offer and the Merger would eliminate the
opportunity of the stockholders of the Company other than Parent and its
affiliates (the "Public Stockholders") to participate in any potential future
growth of the value of the Company, but believed that this loss of opportunity
was appropriately reflected by the price of $23.50 per Share to be paid in the
Offer and Merger. The Special Committee also observed the potential future
values for the Company that had been suggested in publicly released analytical
reports produced by various investment banking firms.
In light of the number and variety of factors the Special Committee
considered in connection with its evaluation of the Offer and the Merger, the
Special Committee did not find it practicable to quantify or
7
<PAGE>
otherwise assign relative weights to any of the foregoing factors and,
accordingly, the Special Committee did not do so.
THE BOARD OF DIRECTORS OF THE COMPANY.
All of the directors of the Company other than the members of the Special
Committee (Messrs. Keane and Bayless) may be considered to have an interest in
the Offer and the Merger. Accordingly, the Board of Directors based its
determination that the terms of the Offer are fair to the Public Stockholders
primarily upon the conclusion of the Special Committee described above and the
other factors described above under the caption "The Special Committee."
3. POSITION OF SUEZ, PARENT AND PURCHASER REGARDING FAIRNESS OF THE OFFER
AND THE MERGER
Because Parent currently beneficially owns a majority of the outstanding
Shares, Purchaser, Parent and their affiliates are deemed "affiliates" of the
Company engaging in a Rule 13e-3 transaction under Rule 13e-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, Suez, Parent
and Purchaser are required to consider the fairness of the Offer to the holders
of the Shares (other than Parent and its affiliates).
Suez, Parent and Purchaser believe the Offer and the Merger to be
substantially and procedurally fair to the Public Stockholders. Although Lazard
Freres did not deliver and was not requested to deliver an opinion as to the
fairness of the transaction, Suez, Parent and Purchaser have considered the
analysis of Lazard Freres as set forth below (see "--Analysis of Financial
Advisor to Parent"), in addition to the following factors:
(i) The Board of Directors and the Special Committee concluded that the
Offer and the Merger are fair to, and in the best interests of, the Public
Stockholders.
(ii) The historical and projected financial performance of the Company.
(iii) The Offer Price represents a 22.08% premium over the closing price
for the Shares on September 17, 1999, the last full trading day prior to
announcement of the $22 Offer.
(iv) The Offer Price represents a 38.24% premium over the closing price
for the Shares on January 18, 2000, the last full trading day prior to the
announcement of the execution of the Merger Agreement.
(v) The Offer is not subject to a financing condition.
(vi) The Offer provides the Public Stockholders who are considering
selling their Shares with the opportunity to sell their Shares at the Offer
Price without incurring the transaction costs typically associated with
market sales.
(vii) The ability of Public Stockholders who object to the Merger to
obtain "fair value" for their Shares if they exercise and perfect their
appraisal rights under the DGCL.
(viii) The terms of the Merger Agreement were determined through
arm's-length negotiations between the Special Committee and its legal and
financial advisors, on the one hand, and representatives of Parent, on the
other hand, and provide for the Offer in order to allow Public Stockholders
to receive payment for their Shares on an accelerated basis.
(ix) The Parent Group has sufficient stock ownership to control a
disposition of the Company and informed the Special Committee that it would
not be interested in a third-party sale of the Company.
(x) The Company's request for Parent to provide the short-term financing
to the Company to meet certain capital expenditures.
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(xi) The pendancy of the Class Action Litigation (as defined in "The
Tender Offer--Certain Legal Matters; Regulatory Approvals") asserting that
the per share price in the $22 Offer was inadequate.
(xii) Notwithstanding that CSFB's opinion, dated January 19, 2000, was
provided solely for the information and assistance of the Special Committee
and that Suez, Parent and Purchaser are not entitled to rely on such
opinion, the fact that the Special Committee received an opinion from CSFB
to the effect that, as of that date and based on and subject to the matters
described in the opinion, the $23.50 per Share cash consideration to be
received in the Offer and the Merger, taken together, by the holders of
Shares was fair, from a financial point of view, to such holders (other than
Parent and its affiliates).
Suez, Parent and Purchaser have reviewed the factors considered by the Board
of Directors in support of its decision, as described above, and have no basis
to question their consideration of or reliance on these factors. Suez, Parent
and Purchaser did not find it practicable to assign, nor did any of them assign,
specific relative weights to the foregoing factors in reaching their opinion as
to the fairness of the Offer and the Merger to the Public Stockholders.
Affiliates of Parent and Suez (other than the Company) are in the process of
engaging CSFB to provide certain financial services unrelated to the Offer and
the Merger. These services consist of an engagement of CSFB by an affiliate of
Suez regarding the monetization of water assets of a large paper company and a
potential privatization of a water distribution facility in Brazil.
4. ANALYSIS OF FINANCIAL ADVISOR TO PARENT
LAZARD FRERES ENGAGEMENT.
On October 21, 1998, Parent engaged Lazard Freres to act as its financial
advisor to advise it of its strategic alternatives with respect to its majority
interest in the Company.
In connection with its engagement as Parent's financial advisor, Lazard
Freres:
- reviewed the publicly available business and financial information
relating to the Company that Lazard Freres deemed relevant;
- reviewed selected information, including financial forecasts, relating to
the business, earnings, cash flow, assets, liabilities and prospects of
the Company, furnished to Lazard Freres by the Company and Parent;
- conducted discussions with members of senior management and
representatives of the Company and Parent concerning the matters described
above, as well as their respective businesses and prospects;
- reviewed the market prices and valuation multiples for the Common Stock
and compared them with those of selected publicly traded companies that
Lazard Freres deemed to be relevant;
- reviewed the results of operations of the Company and compared them with
those of selected publicly traded companies that Lazard Freres deemed to
be relevant;
- compared the proposed financial terms of the Offer and Merger with the
financial terms of other transactions that Lazard Freres deemed to be
relevant;
- participated in discussions and negotiations among representatives of the
Company and its financial and legal advisors and Parent and its legal
advisors;
- reviewed the executed Merger Agreement; and
- reviewed such other financial studies and analyses and took into account
such other matters as Lazard Freres deemed necessary, including an
assessment of general economic, market, and monetary conditions.
9
<PAGE>
Lazard Freres made available to the Board of Directors of Parent a summary
presentation of the significant analyses performed by Lazard Freres (the "Lazard
Freres Presentation"). The Lazard Freres Presentation was based on the
"Committed Case" projections provided by Company management. See "--Company
Financial Projections." The data contained in the Lazard Freres Presentation
were intended solely to provide additional information for the use and benefit
of the Board of Directors of Parent, and were not prepared for the purpose of
providing an opinion as to the fairness of the consideration to be paid by
Purchaser or for the purpose of addressing the merits of the underlying business
decision by Parent to engage in the Offer and Merger. A copy of the Lazard
Freres Presentation has been filed as an exhibit to the Schedule TO (the
"Schedule TO") filed with the Commission with respect to the Offer and may be
inspected and copied from the Commission in the manner specified in "THE TENDER
OFFER--Certain Information Concerning the Company--Available Information."
The following is a summary of the various types of analyses presented to the
Board of Directors of Parent in the Lazard Freres Presentation:
DISCOUNTED CASH FLOW ANALYSIS. Lazard Freres performed a discounted cash
flow analysis, based upon selected operating and financial assumptions, the
"Committed Case" forecasts and other information provided by the management of
Parent and the Company. Lazard Freres used a range of discount rates of 8.0% to
9.0% and a range of perpetuity growth rates for cash flow from .30% to 1.80% to
arrive at an enterprise value range of $710 to $775 million. Lazard Freres
subtracted from the enterprise value range aggregate estimated net debt (which
equaled short- and long-term debt PLUS minority interest PLUS preferred stock
MINUS cash) of $472 million to determine a range of estimated aggregate equity
values. Lazard Freres selected a representative range of $18.71 to $23.82 per
Share implied by this analysis for the Shares to be acquired.
ANALYSIS OF SELECTED MINORITY BUY-OUTS. Lazard Freres also analyzed
selected minority buy-out transactions, which involved repurchases of remaining
interests over $50 million from December 1991 to the present.
Lazard Freres analyzed the premium paid in these transactions to the price
of the stock one day prior to, and one month prior to, the announcement of the
proposed merger. The median premium of initial bid to one day and one month
prior to announcement was approximately 12.3% and 20.0%, respectively. The
median premium of final bid to one day and one month prior to announcement was
approximately 20.0% and 27.5%, respectively.
Lazard Freres selected a representative range of $19.08 to $21.99 per Share
implied by this analysis for the Shares to be acquired.
OTHER ANALYSES. Lazard Freres analyzed actual and estimated financial
information for five publicly-traded independent power producers, which Lazard
Freres considered to some extent similar to the Company, although not
necessarily representative of truly comparable companies. Based on this
analysis, Lazard Freres selected representative ranges of $15.17 to $20.28 per
Share implied by EBITDA multiples analysis for the Shares to be acquired. Lazard
Freres also reviewed publicly-available information for five recent acquisitions
Lazard Freres considered to some extent similar to the Merger, although not
necessarily representative of truly comparable transactions. Lazard Freres
selected representative ranges of $17.53 to $23.03 per Share implied by this
analysis for the Shares to be acquired.
The foregoing summary is not a complete description of the analysis
performed by Lazard Freres in connection with the Lazard Freres Presentation.
Lazard Freres believes that its analysis and the summary set forth above must be
considered as a whole and that selecting portions of its analysis, without
considering all factors and analyses, could create an incomplete view of the
process underlying the analyses set forth in the Lazard Freres Presentation. The
Lazard Freres Presentation was prepared solely for the purposes discussed above
and is not an appraisal or reflection of the prices at which businesses or
securities actually may be sold. Analyses based upon projected future results
are not necessarily indicative of actual future results, which may be
significantly more or less favorable than suggested by such analyses. Because
such analyses are inherently subject to uncertainty, as they are based upon
numerous factors or
10
<PAGE>
events beyond the control of the parties or their respective advisors, none of
Parent's personnel or any other person assumes responsibility if the future
results are materially different from those projected.
In preparing the Lazard Freres Presentation, Lazard Freres assumed and
relied on the accuracy and completeness of all information supplied or otherwise
made available to it, discussed with or reviewed by or for it, or
publicly-available, and did not independently verify the information or
independently evaluate or appraise any of the assets or liabilities of the
Company. In addition, Lazard Freres was not furnished with such evaluation or
appraisal and did not assume any obligation to conduct any physical inspection
of the properties or facilities of the Company.
The Lazard Freres Presentation is necessarily based upon market, economic
and other conditions as they exist and can be based on the information made
available to it as of the date of the Lazard Freres Presentation. Lazard Freres
assumed that in the course of obtaining any necessary regulatory or other
consents or approvals (contractual or otherwise) for the Offer and the Merger,
no restrictions, including any divestiture requirements or amendments or
modifications, will be imposed that will have a material adverse effect on the
contemplated benefits of the Offer and the Merger.
Lazard Freres is acting as a financial advisor to Parent in connection with
the Offer and the Merger and will receive a fee from Parent for its services, a
significant portion of which is contingent upon the consummation of the Offer
and the Merger. In addition, Parent has agreed to indemnify Lazard Freres for
certain liabilities arising out of its engagement. Lazard Freres is currently
engaged by Parent to act as its financial advisor and has, in the past, provided
financial advisory services to Parent and its affiliates and may continue to do
so and has received, and may receive, fees for the rendering of such services.
Lazard Freres's engagement with Parent was formalized in an engagement
letter ("Engagement Letter"), originally dated October 21, 1998 and amended and
renewed on August 25, 1999. Under the terms of the Engagement Letter, Parent
agreed to pay Lazard Freres for its services a cash fee of $1,400,000, which is
payable as follows: $400,000 upon delivery of the Lazard Freres Presentation and
$1,000,000 upon the closing of a transaction like the Offer and Merger during
the period of Lazard Freres's retention. Parent also agreed to reimburse Lazard
Freres for reasonable out-of-pocket expenses and reasonable fees and
disbursements of its legal counsel. Under the terms of the Engagement Letter,
Lazard Freres is to act as financial adviser to Parent in connection with the
Merger. In addition, Parent has agreed to indemnify Lazard Freres against
certain liabilities.
5. OPINION OF THE SPECIAL COMMITTEE'S FINANCIAL ADVISOR
CSFB has acted as exclusive financial advisor to the Special Committee in
connection with the Offer and the Merger. The Special Committee selected CSFB
based on CSFB's experience, expertise and familiarity with the Company and its
business. CSFB is an internationally recognized investment banking firm and is
regularly engaged in the valuation of businesses and securities in connection
with mergers and acquisitions, leveraged buyouts, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes.
In connection with CSFB's engagement, the Special Committee requested that
CSFB evaluate the fairness, from a financial point of view, to the holders of
Shares (other than Parent and its affiliates) of the consideration to be
received by such holders pursuant to the Offer and the Merger, taken together.
On January 19, 2000, at a meeting of the Special Committee held to evaluate the
proposed Offer and the Merger, CSFB rendered to the Special Committee an oral
opinion (which opinion was confirmed by delivery of a written opinion dated
January 19, 2000) to the effect that, as of that date and based on and subject
to the matters described in the opinion, the $23.50 per Share cash consideration
to be received in the Offer and the Merger, taken together, by the holders of
Shares, was fair, from a financial point of view, to such holders (other than
Parent and its affiliates).
THE FULL TEXT OF CSFB'S WRITTEN OPINION, DATED JANUARY 19, 2000, TO THE
SPECIAL COMMITTEE, WHICH SETS FORTH THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED,
MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN BY CSFB, IS ATTACHED
TO THE SCHEDULE 14D-9 AS ANNEX A AND IS INCORPORATED HEREIN BY REFERENCE.
11
<PAGE>
HOLDERS OF SHARES ARE URGED TO READ THIS OPINION CAREFULLY IN ITS ENTIRETY.
CSFB'S OPINION IS ADDRESSED TO THE SPECIAL COMMITTEE, RELATES ONLY TO THE
FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE $23.50 PER SHARE CASH
CONSIDERATION TO BE RECEIVED IN THE OFFER AND THE MERGER, TAKEN TOGETHER, BY THE
HOLDERS OF SHARES (OTHER THAN PARENT AND ITS AFFILIATES), DOES NOT ADDRESS ANY
OTHER ASPECT OF THE PROPOSED OFFER OR MERGER OR ANY RELATED TRANSACTION AND DOES
NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER SUCH
STOCKHOLDER SHOULD TENDER SHARES IN THE OFFER OR AS TO ANY OTHER MATTER RELATING
TO THE OFFER OR THE MERGER.
In arriving at its opinion, CSFB reviewed the Merger Agreement and publicly
available business and financial information relating to the Company. CSFB also
reviewed other information relating to the Company, including financial
forecasts, that the Company provided to or discussed with CSFB, and met with the
management of the Company to discuss the business and prospects of the Company.
CSFB also considered financial and stock market data of the Company and
compared those data with similar data for other publicly held companies in
businesses similar to the Company and considered, to the extent publicly
available, the financial terms of other business combinations and other
transactions recently effected. CSFB also considered other information,
financial studies, analyses and investigations and financial, economic and
market criteria which CSFB deemed relevant.
In connection with its review, CSFB did not assume any responsibility for
independent verification of any of the information provided to or otherwise
reviewed by it and relied on that information being complete and accurate in all
material respects. With respect to the financial forecasts, CSFB was advised,
and assumed, that such forecasts were reasonably prepared on bases reflecting
the best currently available estimates and judgments of the management of the
Company as to the future financial performance of the Company.
CSFB was not requested to, and did not, make an independent evaluation or
appraisal of the assets or liabilities, contingent or otherwise, of the Company,
and was not furnished with any evaluations or appraisals. CSFB's opinion was
necessarily based on information available to it, and financial, economic,
market and other conditions as they existed and could be evaluated, on the date
of its opinion. Although CSFB evaluated, from a financial point of view, the
$23.50 per Share cash consideration to be received in the Offer and Merger,
taken together, by the holders of Shares (other than Parent and its affiliates),
CSFB was not requested to, and did not, recommend the specific consideration to
be received in the Offer and the Merger, which consideration was determined
between the Special Committee and Parent. In connection with its engagement,
CSFB was not requested to, and did not, solicit third party indications of
interest in the possible acquisition of all or part of the Company. No other
limitations were imposed on CSFB with respect to the investigations made or
procedures followed by CSFB in rendering its opinion.
In preparing its opinion to the Special Committee, CSFB performed a variety
of financial and comparative analyses, including those described below. The
summary of CSFB's analyses described below is not a complete description of the
analyses underlying its opinion. The preparation of a fairness opinion is a
complex analytical process involving various determinations as to the most
appropriate and relevant methods of financial analyses and the application of
those methods to the particular circumstances and, therefore, a fairness opinion
is not readily susceptible to summary description. In arriving at its opinion,
CSFB made qualitative judgments as to the significance and relevance of each
analysis and factor considered by it. Accordingly, CSFB believes that its
analyses must be considered as a whole and that selecting portions of its
analyses and factors, without considering all analyses and factors, could create
a misleading or incomplete view of the processes underlying its analyses and
opinion.
In its analyses, CSFB considered industry performance, regulatory, general
business, economic, market and financial conditions and other matters, many of
which are beyond the control of the Company. No company, transaction or business
used in CSFB's analyses as a comparison is identical to the Company or the
proposed Offer and Merger, and an evaluation of the results of those analyses is
not entirely mathematical. Rather, the analyses involve complex considerations
and judgments concerning financial and operating characteristics and other
factors that could affect the acquisition, public trading or other values of the
companies, business segments or transactions analyzed.
12
<PAGE>
The estimates contained in CSFB's analyses and the ranges of valuations
resulting from any particular analysis are not necessarily indicative of actual
values or predictive of future results or values, which may be significantly
more or less favorable than those suggested by the analyses. In addition,
analyses relating to the value of businesses or securities do not purport to be
appraisals or to reflect the prices at which businesses or securities actually
may be sold. Accordingly, CSFB's analyses and estimates are inherently subject
to substantial uncertainty.
CSFB's opinion and financial analyses were only one of many factors
considered by the Special Committee in its evaluation of the Offer and the
Merger and should not be viewed as determinative of the views of the Special
Committee, the Board of Directors or management of the Company with respect to
the Offer and the Merger or the consideration to be received in the Offer and
the Merger.
The following is a summary of the material financial analyses underlying
CSFB's opinion dated January 19, 2000 delivered to the Special Committee in
connection with the Offer and the Merger:
DISCOUNTED CASH FLOW ANALYSES. CSFB estimated the present value of the
unlevered after-tax free cash flows that the Company could produce on a
stand-alone basis. CSFB evaluated the Company's projected free cash flows for
the years 2000 through 2009 under three scenarios based on internal estimates of
the management of the Company. The first scenario, the management case (which is
substantially similar to the "Committed Case" in "--Company Financial
Projections" below), was based on management's forecast of cash flows derived
from current operational contracts and signed development contracts. The second
scenario, the adjusted case, was based on the management case and adjusted to
reflect additional cash flows that may result from the Company's identified but
unsigned contracts and limited merchant electric power plant development at
existing Company facilities. The third scenario, the limited development case,
was based on the management case and adjusted to reflect lower cash flows from
certain of the Company's backlog of signed development contracts than was
forecasted under the management case.
Ranges of terminal values for the discounted cash flow analyses were
estimated using multiples of terminal year 2009 earnings before interest, taxes,
depreciation and amortization, commonly known as EBITDA, of 8.0x to 9.0x in the
case of the Company's operations other than its merchant power operations, and
6.5x to 7.0x in the case of the Company's merchant power operations. CSFB then
discounted to present value the free cash flow streams and terminal values using
discount rates of 8.5% to 9.0% in the case of the Company's operations other
than its merchant power operations, and 14.0% to 15.0% in the case of the
Company's merchant power operations. This analysis indicated an implied
enterprise reference range for the Company of approximately $716 million to
$798 million for the management case, approximately $742 million to
$843 million for the adjusted case and approximately $630 million to
$703 million for the limited development case, each as compared to the
enterprise value implied by the consideration payable in the Offer and the
Merger of approximately $763 million.
SELECTED COMPANIES ANALYSES. CSFB compared financial and operating data of
the Company with corresponding data of the following selected publicly traded
companies in the independent power production industry:
- The AES Corporation
- Calpine Corporation
- Cogeneration Corporation of America
CSFB reviewed enterprise values, calculated as equity market value, plus
total debt, preferred stock and minority interests, less cash and cash
equivalents, of the selected companies as multiples of, among other things,
estimated years 1999 and 2000 EBITDA and earnings before interest and taxes,
commonly known as EBIT, and equity values of the selected companies as multiples
of estimated years 1999 and 2000 net income. Estimated financial data for the
selected companies were based on publicly available research analysts'
estimates. All multiples were based on closing stock prices on January 14, 2000,
except for Cogeneration Corporation of America, the multiples of which were
based on its closing stock price on
13
<PAGE>
August 26, 1999 (the last trading day prior to Calpine Corporation's acquisition
of Cogeneration Corporation of America). CSFB then applied a range of selected
multiples derived from the selected companies data to estimated years 1999 and
2000 EBITDA, EBIT and net income of the Company based on the adjusted case
estimates. This analysis indicated an implied enterprise reference range for the
Company of approximately $670 million to $770 million, as compared to the
enterprise value implied by the consideration payable in the Offer and the
Merger of approximately $763 million.
SELECTED MERGERS AND ACQUISITIONS ANALYSES. Using publicly available
information, CSFB analyzed the purchase prices and implied transaction multiples
paid in the following selected merger and acquisition transactions in the
independent power production industry:
<TABLE>
<CAPTION>
ACQUIROR TARGET
- -------- ------
<S> <C>
- - Calpine Corporation - Cogeneration Corporation of America
- - El Paso Natural Gas Company - CE Generation LLC
- - Enron Corporation - Cogen Technologies
- - Cogentrix Energy, Inc. - Bechtel/USGen
- - NGC Corporation/The AES Corporation - Destec Energy, Inc.
- - CalEnergy Company, Inc. - Falcon Seaboard Resources, Inc.
</TABLE>
CSFB reviewed enterprise values of the selected transactions as multiples of
latest 12 months and estimated forward year EBITDA. All multiples for the
selected transactions were based on financial information available at the time
of the announcement of the relevant transaction. CSFB then applied a range of
selected multiples derived from the selected transactions data to the latest
12 months and estimated year 2000 EBITDA of the Company based on the adjusted
case estimates. This analysis indicated an implied enterprise reference range
for the Company of approximately $650 million to $780 million, as compared to
the enterprise value implied by the consideration payable in the Offer and the
Merger of approximately $763 million.
OTHER FACTORS. In the course of preparing its opinion, CSFB considered
other information and data, including the premiums implied by the consideration
payable in the Offer and the Merger relative to historical stock prices for the
Shares.
MISCELLANEOUS. Pursuant to the terms of CSFB's engagement, the Company has
agreed to pay CSFB an aggregate fee of $1.3 million for its financial advisory
services in connection with the Offer and the Merger. The Company also has
agreed to reimburse CSFB for its out-of-pocket expenses, including the fees and
expenses of its legal counsel, and to indemnify CSFB and related parties against
liabilities, including liabilities under the federal securities laws, arising
out of CSFB's engagement. CSFB and its affiliates have in the past provided
financial services to the Company and Suez, and currently are providing
financial services to the Company, unrelated to the Offer and Merger, for which
CSFB has received and may receive compensation. In the ordinary course of
business, CSFB and its affiliates may actively trade the debt and equity
securities of the Company and Suez for their own accounts and for the accounts
of customers and, accordingly, may at any time hold long or short positions in
such securities.
A copy of CSFB's written presentation to the Special Committee, dated
January 19, 2000, has been included as an exhibit to the Schedule TO and may be
inspected, copied and obtained in the manner specified in "THE TENDER
OFFER--Certain Information Concerning the Company--Available Information."
6. COMPANY FINANCIAL PROJECTIONS
The Company does not, as a matter of course, make public forecasts or
projections as to future sales, earnings or other income statement data.
However, management of the Company does prepare internal financial projections
prior to the start of each year. Such projections represent what management of
the Company believes to be a reasonable estimate of the Company's future
financial performance and reflect significant assumptions and subjective
judgments by the Company's management regarding industry
14
<PAGE>
performance and general business and economic conditions, including assumptions
regarding the Company's future development projects.
The projections set forth below were not prepared with a view to public
disclosure and are included herein for the limited purpose of giving the
Company's stockholders access to financial projections prepared by the Company's
management in January 2000 in the ordinary course of business as part of the
Company's budgeting and planning process and that were made available to Parent
and Purchaser in connection with the Offer. The January 2000 projections reflect
developments which were finalized after the preparation of the November 1999
Projections and different assumptions from such earlier projections as described
below.
The "Committed Case" scenario reflects management's forecasts based on
facilities which were either under operation, under construction or pending
construction and the addition of new customers to the Company's existing
facilities. In addition, the Committed Case assumes that the Company's existing
credit facility could be increased to support the Company's additional capital
requirements for the periods presented. The "No New Development Beyond 2000
Case" scenario was based on the Committed Case, was adjusted to reflect
management's assumptions regarding identified but unsigned development contracts
(based on management's assessment of probability) with startup dates ranging
from 2000 to 2002 and assumes the issuance in 2000 of $240 million in public
debt (and a related increase in interest cost as a result thereof) and the
continuation of the Company's existing credit facilities to support the
Company's additional capital requirements for the periods presented. The "Target
With $50 Million Additional Equity Case" scenario was based on the Committed
Case and was adjusted to reflect management's assumptions that projected growth
for 2000 as set forth in the No New Development Beyond 2000 Case will continue
at the same level in each year from 2001 through 2005 and assumes the issuance
in 2000 of $240 million in public debt (and a related increase in interest cost
as a result thereof), the issuance in 2001 of $50 million in equity and the
continuation of the Company's existing credit facilities to support the
Company's additional capital requirements for the periods presented. No analysis
beyond 2001 was made regarding the need for additional equity to support the
Company's additional capital requirements. The November 1999 Projections did not
include a scenario analogous to the Committed Case scenario. More detailed
financial projections relating to the "Committed Case" scenario described above,
which contain business segment information, is attached as Schedule III to this
Offer to Purchase.
In addition to the three scenario's set forth below, management of the
Company also prepared in January 2000 two variations of the "Target With $50
Million Additional Equity Case" scenario, one of which assumed no issuance of
additional equity and was entitled "Target With No Additional Equity Case" and
the other of which assumed the issuance of $100 million of equity and was
entitled "Target With $100 Million Additional Equity Case." The principal impact
of these two scenarios from the Target With $50 Million Additional Equity Case,
which was the case endorsed by management, are changes in the Company's total
interest costs (i.e., higher in the Target With No Additional Equity Case and
lower in the Target With $100 Million Additional Equity Case) and level of
indebtedness.
The following assumptions were not considered by management in the
preparation of the projections in January 2000 although they were reflected in
the November 1999 Projections, including the projections set forth in the
Development Growth Case scenario described in the paragraph following the
tables: (i) the sale (which had been reviewed from time to time by management
but never recommended by management or the Board of Directors) in 2000 of one of
the Company's district energy systems and an associated write-off (which
together would represent an aggregate pre-tax loss of $40 million), (ii) a
pre-tax gain in 2000 in the amount of $20 million representing the receipt of
proceeds in connection with the Company's judgment in its antitrust suit against
Oklahoma Gas & Electric Company and (iii) the vesting of all outstanding shares
of Restricted Stock granted under the Trigen Energy Corporation 1994 Stock
Incentive Plan. The November 1999 Projections also assumed that the Company's
existing credit facilities could be increased to support the Company's
additional capital requirements for the periods presented. In addition, the
January 2000 projections and the November 1999 Projections reflect the
settlement in May 1999 of the Company's litigation with PECO Energy Company and
Adwin (Schuylkill) Cogeneration, Inc. concerning
15
<PAGE>
the Company's Grays Ferry project (the "PECO Litigation"). The January 2000
projections included updated financial information and revisions relating to
several development projects for which development contracts were finalized
between the date of preparation of the November 1999 Projections and the
January 2000 projections. The updated financial information and revisions
reflected in the January 2000 projections did not result in materially different
projections from any comparable projections prepared as part of the
November 1999 Projections.
JANUARY PROJECTIONS
<TABLE>
<CAPTION>
COMMITTED CASE 2000 2001 2002 2003 2004 2005
- -------------- -------- -------- -------- ---------- ---------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Total Revenues....... $375,474 $403,371 $421,575 $436,927 $446,405 $453,035
Operating Income..... 66,319 63,241 67,853 70,800 71,530 71,218
Net Income........... 16,076 11,488 13,547 16,733 18,797 20,017
EBITDA............... 98,996 99,982 107,439 111,160 112,622 112,899
Indebtedness......... 507,926 525,407 479,745 441,582 390,177 342,346
Debt to Capital...... 71.7% 71.0% 67.3% 63.8% 59.1% 54.0%
</TABLE>
<TABLE>
<CAPTION>
NO NEW DEVELOPMENT
BEYOND 2000 CASE 2000 2001 2002 2003 2004 2005
- ------------------ -------- -------- -------- ---------- ---------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Total Revenues....... $404,483 $470,585 $542,083 $574,146 $586,662 $596,328
Operating Income..... 73,491 75,768 88,752 95,829 97,211 97,562
Net Income........... 16,755 12,973 16,785 20,758 23,294 24,986
EBITDA............... 107,619 116,580 136,632 145,996 148,151 149,091
Indebtedness......... 605,639 688,775 689,948 644,733 578,008 513,998
Debt to Capital...... 71.6% 71.8% 71.8% 69.4% 65.3% 60.7%
</TABLE>
<TABLE>
<CAPTION>
TARGET WITH $50 MILLION
ADDITIONAL EQUITY CASE 2000 2001 2002 2003 2004 2005
- ----------------------- -------- -------- -------- ---------- ---------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Total Revenues........ $425,644 $545,106 $716,485 $ 896,002 $1,074,587 $1,251,596
Operating Income...... 74,510 86,660 116,964 150,207 182,968 214,104
Net Income............ 16,261 15,414 22,196 29,726 37,075 43,997
EBITDA................ 109,447 130,208 173,004 218,181 262,874 305,799
Indebtedness.......... 633,060 788,009 984,284 1,177,061 1,336,994 1,464,309
Debt to Capital....... 72.5% 68.7% 70.0% 71.1% 71.1% 70.4%
</TABLE>
As part of the November 1999 Projections, management of the Company included
a "Development Growth Case" scenario. The projections set forth in this scenario
reflected management's forecasts based on facilities which were either under
operation, under construction or pending construction and the addition of new
customers to the Company's existing facilities. In addition, the Development
Growth Case reflected management's assumptions that projected growth for 2000,
based on management's assumptions (including an assessment of probability)
regarding identified but unsigned development contracts with startup dates
ranging from 2000 to 2002, will increase at a compounded annual growth rate of
20% per year from 2001 through 2005, which resulted in revenues increasing from
$401 million in 2000 to $1,233 million in 2005, operating income increasing from
$67 million in 2000 to $268 million in 2005 and EBITDA increasing from
$105 million in 2000 to $376 million in 2005. The projections made available to
Parent in January 2000 did not include a scenario analogous to the Development
Growth Case scenario.
THE COMPANY HAS ADVISED SUEZ, PARENT AND PURCHASER THAT IT DOES NOT, AS A
MATTER OF COURSE, DISCLOSE PROJECTIONS AS TO FUTURE REVENUES, EARNINGS OR OTHER
INCOME STATEMENT DATA AND THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO
PUBLIC DISCLOSURE. IN ADDITION, THE PROJECTIONS WERE NOT
16
<PAGE>
PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, OR WITH A
VIEW TO COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS, WHICH
WOULD REQUIRE A MORE COMPLETE PRESENTATION OF THE DATA THAN AS SHOWN ABOVE. THE
PROJECTIONS HAVE NOT BEEN EXAMINED, REVIEWED OR COMPILED BY THE COMPANY'S
INDEPENDENT AUDITORS, AND ACCORDINGLY THEY HAVE NOT EXPRESSED AN OPINION OR ANY
OTHER ASSURANCE ON SUCH PROJECTIONS. THE FORECASTED INFORMATION IS INCLUDED
HEREIN SOLELY BECAUSE SUCH INFORMATION WAS FURNISHED TO PARENT AND PURCHASER
PRIOR TO THE OFFER. ACCORDINGLY, NONE OF SUEZ, PARENT, PURCHASER OR THE COMPANY
OR ANY OTHER PERSON IS MAKING ANY REPRESENTATION AS TO THE PROJECTIONS INCLUDED
IN THIS OFFER TO PURCHASE, AND NONE OF SUEZ, PARENT, PURCHASER, THE COMPANY OR
ANY OTHER PERSON ASSUMES ANY RESPONSIBILITY AS TO THE ACCURACY THEREOF. IN
ADDITION, BECAUSE THE ESTIMATES AND ASSUMPTIONS UNDERLYING THE PROJECTIONS ARE
INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES, WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND ARE
BEYOND THE CONTROL OF THE COMPANY, SUEZ, PARENT AND PURCHASER, THERE CAN BE NO
ASSURANCE THAT RESULTS SET FORTH IN THE ABOVE PROJECTIONS WILL BE REALIZED AND
IT IS EXPECTED THAT THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND PROJECTED
RESULTS, AND ACTUAL RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN THOSE SET
FORTH ABOVE.
7. FORWARD LOOKING STATEMENTS
THE MATTERS DISCUSSED UNDER THE HEADINGS "--BACKGROUND OF THE OFFER AND THE
MERGER; CONTACTS WITH THE COMPANY," "--RECOMMENDATION OF THE SPECIAL COMMITTEE
AND THE BOARD OF DIRECTORS OF THE COMPANY; FAIRNESS OF THE OFFER AND THE
MERGER," "--ANALYSIS OF FINANCIAL ADVISOR TO PARENT," "--OPINION OF THE SPECIAL
COMMITTEE'S FINANCIAL ADVISOR," "--COMPANY FINANCIAL PROJECTIONS" AND "THE
TENDER OFFER--CERTAIN INFORMATION CONCERNING THE COMPANY" CONTAIN
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. STOCKHOLDERS
ARE CAUTIONED THAT, IN ADDITION TO THE OTHER FACTORS SET FORTH UNDER THE
HEADINGS "--BACKGROUND OF THE OFFER AND THE MERGER; CONTACTS WITH THE COMPANY,"
"--RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS OF THE
COMPANY; FAIRNESS OF THE OFFER AND THE MERGER," "--POSITION OF SUEZ, PARENT AND
PURCHASER REGARDING FAIRNESS OF THE OFFER AND THE MERGER," "--ANALYSIS OF
FINANCIAL ADVISOR TO PARENT," AND "--OPINION OF THE SPECIAL COMMITTEE'S
FINANCIAL ADVISOR," THE FOLLOWING FACTORS MAY CAUSE THE COMPANY'S ACTUAL
FINANCIAL PERFORMANCE TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH
FORWARD-LOOKING STATEMENTS:
- supply and demand for the Company's products;
- competitive pricing pressures;
- weather patterns;
- changes in industry laws and regulations;
- failure to sign up new development projects on the terms, conditions and
timing projected by management;
- competitive technology; and
- failure to achieve the Company's cost reduction targets or complete
construction on schedule.
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8. PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY
PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER. The purpose of the Offer
and the Merger is to enable Parent, through Purchaser, to acquire the entire
equity interest in the Company. Parent desires to own the entire equity interest
in the Company at this time to integrate certain of the Company's operations
into Parent's existing energy business. This integration will allow Parent to
achieve additional operating efficiencies and will provide the flexibility to
respond quickly to an increasingly competitive industry. This will be
accomplished by Parent, through Purchaser, making the Offer, which will enable
Parent to acquire as many outstanding Shares not beneficially owned by Parent as
possible as a first step in acquiring the entire equity interest in the Company.
Through the Merger, Parent will acquire all Shares not purchased pursuant to the
Offer. Upon consummation of the Merger, the Company will become an indirect
wholly owned subsidiary of Parent.
Under the DGCL, the approval of the Board of Directors and the affirmative
vote of the holders of a majority of the outstanding Common Stock is required to
approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger. While the approval and adoption of the Merger
Agreement and the transactions contemplated thereby requires the affirmative
vote of a majority of the votes cast by all stockholders of the Company entitled
to vote thereon, Parent already has voting power in excess of that amount.
Furthermore, if 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 ("Short-Form Merger") provisions of
Section 253 of the DGCL, without any action by any other stockholder of the
Company or the Board of Directors. In such event, Purchaser intends to effect a
Short-Form Merger as promptly as practicable following the purchase of Shares in
the Offer.
The Offer is structured so that no approval of the holders of the Shares
held by the Public Stockholders is required. The Purchaser will, subject to the
conditions of the Offer, accept for payment any and all Shares validly tendered
in accordance with the terms of the Offer.
PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER. Pursuant to the
Merger Agreement, upon completion of the Offer, Parent and Purchaser intend to
effect the Merger in accordance with the Merger Agreement. See "SPECIAL
FACTORS--The Transaction Documents; The Merger Agreement."
After consummation of the Merger, Parent intends to explore ways in which
the Company's new position as an indirect wholly owned subsidiary of Parent
might allow the Company to lower its cost of capital and administrative costs
and respond quickly to opportunities and changes in the energy market. Parent
intends that U.S. citizens continue to play a very significant role in the
management of the Company. Parent will continue to evaluate all aspects of the
business, operations, capitalization and management of the Company during the
pendency of the Offer and after the consummation of the Offer and the Merger and
will take such further actions as it deems appropriate under the circumstances
then existing.
As a result of the Offer, the interest of Parent in the Company's net book
value and net earnings will be increased in proportion to the number of Shares
acquired in the Offer. If the Merger is consummated, Parent's interest in the
net book value, net earnings and equity of the Company will equal 100% and
Parent will be entitled to all benefits resulting from such interest, including
all income generated by the Company's operations and any future increase in the
Company's value. Similarly, Parent will also bear the risk of losses generated
by the Company's operations and any future decrease in the value of the Company
after the Merger. Subsequent to the Merger, the Public Stockholders will cease
to have any equity interest in the Company, will not have the opportunity to
participate in the earnings and growth of the Company after the Merger and will
not have any right to vote on corporate matters. Similarly, the Public
Stockholders will not face the risk of losses generated by the Company's
operations or decline in the value of the Company after the Merger.
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The Shares are currently traded on the New York Stock Exchange. However, as
a result of the Merger, Parent will be the sole stockholder of the Company and
there will be no public market for the Shares. Following the consummation of the
Merger, Shares will no longer be quoted on the New York Stock Exchange and the
registration of the Shares under the Exchange Act will be terminated.
Accordingly, after the Merger there will be no publicly traded equity securities
of the Company. Moreover, the Company will no longer be required to file
periodic reports with the Commission under the Exchange Act, and will no longer
be required to comply with the proxy rules of Regulation 14A under Section 14
under the Exchange Act. In addition, the Company's officers, directors and 10%
stockholders will be relieved of the reporting requirements and restrictions on
"short-swing" trading contained in Section 16 of the Exchange Act with respect
to the Shares. See "THE TENDER OFFER--Effect of the Offer on the Market for the
Common Stock; Exchange Act Registration." It is expected that, if Shares are not
accepted for payment by Purchaser pursuant to the Offer and the Merger is not
consummated, the Company's current management, under the general direction of
the Board of Directors, will continue to manage the Company as an ongoing
business.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time, and the officers of the Company immediately prior
to the Effective Time, will be the directors and the officers, respectively, of
the Surviving Corporation after the Merger, until their respective successors
are elected or appointed and qualified in accordance with applicable law. The
directors of Purchaser are Michel Bleitrach and Olivier Degos, each of whom is
an employee of Parent. See Schedule I to this Offer to Purchase for more
information concerning these persons.
After consummation of the Merger, Parent plans to cause the Company to
fulfill its existing contractual commitments and to exploit the business
opportunities that are available to the Company in order to maximize the
Company's opportunities for revenues and profit. Parent believes that a full
integration of the Company into Parent will enable the combined entity to
realize efficiencies and economies of scale. See "--Background of the Offer and
the Merger; Contacts with the Company."
Other than by virtue of the Merger and the other transactions contemplated
by the Merger Agreement and except as otherwise described above or elsewhere in
this Offer to Purchase, Suez, Parent and Purchaser have no current plans or
proposals that relate to or would result in: (i) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (ii) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (iii) any material change
in the Company's capitalization or dividend policy or indebtedness; (iv) any
change in the management of the Company, the composition of the Board of
Directors or any change in any material term of the employment contract of any
executive officer; or (v) any other material change in the Company's corporate
structure or business.
9. RIGHTS OF STOCKHOLDERS IN THE OFFER AND THE MERGER
No dissenter's or appraisal rights are available to stockholders in
connection with the Offer. If the Merger is consummated, however, record
stockholders of the Company who have not validly tendered their Shares or voted
in favor of the Merger (if a vote is required) will have certain rights under
the DGCL to an appraisal of, and to receive payment in cash of the fair value
of, their Shares (the "Appraisal Shares"). Stockholders who perfect appraisal
rights by complying with the procedures set forth in Section 262 of the DGCL
("Section 262"), a copy of which is attached as Schedule II to this Offer to
Purchase, will have the fair value of their Appraisal Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
determined by the Delaware Court of Chancery and will be entitled to receive a
cash payment equal to such fair value from the Surviving Corporation. Any such
judicial determination of the fair value of Shares could be based upon any
valuation method or combination of methods the court deems appropriate to use.
The value so determined could be more or less than the Offer Price or Merger
Consideration. In addition, such stockholders may be entitled to receive payment
of a fair rate of interest from the Effective Time on the amount determined to
be the fair
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value of their Appraisal Shares. THE PRESERVATION AND EXERCISE OF APPRAISAL
RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
Under Section 262, if the Merger is submitted to a vote of the stockholders
of the Company at a meeting thereof, the Company must, not less than 20 days
prior to the meeting held for the purpose of obtaining stockholder approval of
the Merger, notify each of the Company's stockholders entitled to appraisal
rights that such rights are available. If the Merger is accomplished by a
Short-Form Merger, the Company, either before the Effective Time or within ten
days thereafter, must notify each of the stockholders entitled to appraisal
rights of the Effective Time and that appraisal rights are available. In either
case, the notice must include a copy of Section 262.
If the Merger is not a Short-Form Merger, a holder of Appraisal Shares
wishing to exercise appraisal rights will be required to deliver to the Company
before the taking of the vote on the Merger or within 20 days after the date of
mailing the notice described in the preceding paragraph, a written demand for
appraisal of such holder's Appraisal Shares. A holder of Appraisal Shares
wishing to exercise such holder's appraisal rights must be the record holder of
such Appraisal Shares on the date the written demand for appraisal is made and
must continue to hold of record such Appraisal Shares through the Effective
Time. Accordingly, a holder of Appraisal Shares who is the record holder of
Appraisal Shares on the date the written demand for appraisal is made, but who
thereafter transfers such Appraisal Shares prior to the Effective Time, will
lose any right to appraisal in respect of such Appraisal Shares.
If the Merger is a Short-Form Merger, a holder of Appraisal Shares wishing
to exercise appraisal rights will be required to deliver to the Company, within
20 days after the date of mailing the notice by the Company described above, a
written demand for appraisal of such holder's Appraisal Shares.
A demand for appraisal must be executed by or on behalf of the stockholder
of record and must reasonably inform the Company of the identity of the
stockholder of record and that such stockholder intends thereby to demand an
appraisal of such Appraisal Shares.
A person having a beneficial interest in Appraisal Shares that are held of
record in the name of another person, such as a broker, fiduciary, depository or
other nominee, will have to act to cause the record holder to execute the demand
for appraisal and to follow the requisite steps properly and in a timely manner
to perfect appraisal rights. If Appraisal Shares are owned of record by more
than one person, as in joint tenancy or tenancy in common, the demand will have
to be executed by or for all joint owners. An authorized agent, including an
agent for two or more joint owners, may execute a demand for appraisal for a
stockholder of record, provided that the agent identifies the record owner and
expressly discloses, when the demand is made, that the agent is acting as agent
for the record owner. If a stockholder owns Appraisal Shares through a broker
who in turn holds the Appraisal Shares through a central securities depository
nominee such as CEDE & Co., a demand for appraisal of such Appraisal Shares will
have to be made by or on behalf of the depository nominee and must identify the
depository nominee as Appraisal Shares' record holder.
A record holder, such as a broker, fiduciary, depository or other nominee,
who holds Appraisal Shares as a nominee for others, will be able to exercise
appraisal rights with respect to the Appraisal Shares held for all or less than
all of the beneficial owners of those Appraisal Shares as to which such person
is the record owner. In such case, the written demand must set forth the number
of Shares covered by the demand. Where the number of Shares is not expressly
stated, the demand will be presumed to cover all Appraisal Shares standing in
the name of such record owner.
Within 120 days after the Effective Time, but not thereafter, the Company or
any stockholder who has complied with the statutory requirements summarized
above and who is otherwise entitled to appraisal rights may file a petition in
the Delaware Court of Chancery demanding a determination of the fair value of
such holders' Appraisal Shares. There is no present intention on the part of
Purchaser to file an appraisal petition on behalf of the Company, and
stockholders who seek to exercise appraisal rights should
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not assume that the Company will file such a petition or that the Company will
initiate any negotiations with respect to the fair value of Appraisal Shares.
Accordingly, it will be the obligation of the stockholders seeking appraisal
rights to initiate all necessary action to perfect any appraisal rights within
the time prescribed in Section 262. Within 120 days after the Effective Time,
any stockholder who has theretofore complied with the provisions of Section 262
will be entitled, upon written request, to receive from the Company a statement
setting forth the aggregate number of Shares not voting in favor of the Merger
(if applicable) and with respect to which demands for appraisal were received as
well as the number of holders of such Shares. Such statement must be mailed
within ten days after the written request therefor has been received by the
Company.
If a petition for appraisal is timely filed, after a hearing on such
petition the Delaware Court of Chancery will determine the stockholders entitled
to appraisal rights and will appraise the fair value of their Appraisal Shares,
exclusive of any element of value arising from the accomplishment or expectation
of the Merger, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value from the Effective Time.
The costs of the proceeding may be determined by the Delaware Court of
Chancery and taxed upon the parties as the Delaware Court of Chancery deems
equitable under the circumstances. However, costs do not include attorneys' fees
or expert witness fees. Upon application of a stockholder, the Delaware Court of
Chancery may also order all or a portion of the expenses incurred by any
stockholder, including reasonable attorneys' fees and the fees and expenses of
experts, to be charged pro rata against the value of all of the Appraisal Shares
entitled to appraisal.
At any time within 60 days after the Effective Time, any stockholder shall
have the right to withdraw its demand for appraisal and to accept the Merger
Consideration. After this period, the stockholder may withdraw such holder's
demand for appraisal only with the consent of Purchaser. If any stockholder who
properly demands appraisal of such holder's Appraisal Shares under Section 262
fails to perfect, or effectively withdraws or loses, such holder's right to
appraisal as provided in the DGCL, the Appraisal Shares of such stockholder will
be converted into the right to receive the Merger Consideration. A stockholder
will fail to perfect, or effectively lose or withdraw, such stockholder's right
to appraisal if, among other things, no petition for appraisal is filed within
120 days after the Effective Time or if the stockholder delivers to the Company
a written withdrawal of such stockholder's demand for appraisal.
Except as otherwise disclosed in the Offer to Purchase, none of Purchaser,
Parent or Suez have made any provision in connection with the Offer or the
Merger to obtain counsel or appraisal services for unaffiliated security holders
at the expense of Purchaser, Parent or Suez.
10. THE TRANSACTION DOCUMENTS
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement,
which is incorporated herein by reference and a copy of which has been included
an exhibit to the Schedule TO. The Merger Agreement may be inspected at, and
copies may be obtained from, the same places and in the manner set forth in "THE
TENDER OFFER--Certain Information Concerning the Company--Additional
Information".
THE OFFER. The Merger Agreement provides for the commencement of the Offer.
The obligation of Purchaser, and of Parent to cause Purchaser, to commence the
Offer and to accept for payment, and to pay for, any shares of Common Stock
tendered pursuant to the Offer, is subject to the satisfaction of certain
conditions that are set forth below the caption "THE TENDER OFFER--Conditions of
the Offer" (such conditions, the "Offer Conditions"). Purchaser may waive any of
the Offer Conditions or make any other changes in the terms and conditions of
the Offer without the prior written consent of the Company or the Special
Committee. Notwithstanding the foregoing, Purchaser and Parent have agreed that,
without the
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prior written consent of the Company, no changes may be made that (i) reduce the
maximum number of Shares subject to the Offer, (ii) decrease the Offer Price,
(iii) change the form of consideration payable in the Offer, or (iv) amend or
modify the Offer Conditions in any manner adverse to the holders of Shares.
Under the terms of the Merger Agreement, Purchaser may, without the consent of
the Company, extend the Offer: (i) if at the then scheduled expiration date of
the Offer any of the Offer Conditions shall not have been satisfied or waived,
until such time as all such conditions shall have been satisfied or waived;
(ii) for any period required by any statute or rule, regulation, interpretation
or position of the Commission applicable to the Offer; (iii) for any period
required by applicable law in connection with an increase in the consideration
to be paid pursuant to the Offer; and (iv) from time to time, for an aggregate
period of not more than ten business days (for all such extensions under this
clause (iv)) beyond the latest expiration date that would be permitted under
clause (i), (ii) or (iii) of this sentence. If at the scheduled Expiration Date
of the Offer, all of the Offer Conditions have been satisfied, Purchaser shall,
regardless of the number of Shares tendered, immediately accept and promptly pay
for all Shares tendered. Following announcement of the results of the Offer (and
notwithstanding the provision in the Merger Agreement permitting Purchaser to
extend the Offer for up to ten business days), Purchaser shall begin the
Subsequent Offering Period (as defined below) for a period of three days. If,
following the expiration of the initial offering period and the purchase of all
Shares tendered pursuant to the Offer during that period and the first three
days of the Subsequent Offering Period, Parent and Purchaser own less than 90%
of the outstanding Shares following consummation of the Offer, Purchaser will
extend the Subsequent Offering Period until the earlier of (i) twenty business
days from the Expiration Date and (ii) the time Parent and Purchaser become the
owners of at least 90% of the outstanding Shares so that a Short-Form Merger can
be effected. See "THE TENDER OFFER--Terms of the Offer."
THE MERGER. The Merger Agreement provides that, subject to the terms and
conditions set forth in the Merger Agreement and the applicable provisions of
the DGCL, Purchaser will be merged with and into the Company and the separate
existence of Purchaser will cease. The Company will be the Surviving Corporation
of the Merger and will be an indirect wholly owned subsidiary of Parent. In the
Merger, each share of common stock of Purchaser outstanding immediately prior to
the Effective Time will be converted into and exchanged for one validly issued,
fully paid and non-assessable share of Common Stock, $.01 par value per share,
of the Surviving Corporation. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than Shares owned by
Parent or Purchaser or held by the Company, all of which shall be cancelled, and
Shares held by stockholders who perfect appraisal rights under the DGCL) will,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive the Merger Consideration. The
Merger Agreement provides that (subject to the provisions of the Merger
Agreement and the applicable provisions of the DGCL) the closing of the Merger
shall occur promptly following the satisfaction or, to the extent permitted
under the Merger Agreement, waiver of the conditions to the Merger set forth in
the Merger Agreement.
TREATMENT OF STOCK OPTIONS AND RESTRICTED STOCK. The Merger Agreement
provides that all options to acquire Shares (individually, an "Option" and
collectively, the "Options") outstanding immediately prior to the Effective Time
under any stock option plan or under any agreement, whether or not then
exercisable, shall be cancelled at the Effective Time. Promptly after the
Effective Time, each holder of an Option will receive from the Surviving
Corporation, for each Share subject to an Option, whether or not then
exercisable, an amount in cash equal to the excess, if any, of the Merger
Consideration over the per Share exercise price of such Option without interest,
in full settlement of the Company's (and the Surviving Corporation's)
obligations under each Option. To the extent that the per Share exercise price
of any Option equals or exceeds the Merger Consideration, at the Effective Time,
such Option will be cancelled and the holder of such Option will not receive or
be entitled to receive any consideration from Parent, Purchaser or the Surviving
Corporation. All amounts payable in respect of Options shall be subject to all
applicable withholding of taxes. Immediately prior to the filing of the
certificate of merger (the "Certificate of Merger") relating to the Merger with
the Secretary of State of the State of Delaware, all shares of Restricted Stock
(as defined in the Trigen Energy Corporation 1994 Stock Incentive Plan) granted
under
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the Trigen Energy Corporation 1994 Stock Incentive Plan will be canceled and
each holder of shares of Restricted Stock will promptly after the Effective Time
receive from the Surviving Corporation, for each share of Restricted Stock, an
amount of cash equal to one-fourth of the Merger Consideration. Under the terms
of the Separation Agreement, if the Merger is consummated, on January 19, 2002,
Mr. Casten will also receive, in respect of each Share of Restricted Stock owned
by him, an amount of cash equal to three-fourths of the Merger Consideration.
See "--Arrangements with Thomas P. Casten." In connection with the foregoing,
the Surviving Corporation intends, in accordance with the Trigen Energy
Corporation 1994 Stock Incentive Plan, to implement an incentive plan following
the Effective Time.
BOARD REPRESENTATION. The Merger Agreement provides that, promptly upon the
purchase of Shares pursuant to the Offer, Parent shall be entitled to designate
such number of directors as will give Parent representation on the Board of
Directors equal to the product of (i) the number of directors on the Board of
Directors and (ii) the percentage that the number of Shares owned by Purchaser
or Parent bears to the number of Shares outstanding (the "Percentage"). The
Company has agreed, upon request by Parent, promptly to increase the size of the
Board of Directors and/or exercise its best efforts to secure the resignations
of such number of directors as is necessary to enable Parent's designees to be
elected to the Board of Directors and to cause Parent's designees to be so
elected. However, Parent has agreed that until the Effective Time the Board of
Directors will have at least one member who is not designated by Parent or
Purchaser. At the request of Parent, the Company will use its best efforts to
cause such individuals designated by Parent to constitute the same Percentage of
(i) each committee of the Board of Directors, (ii) the board of directors of
each subsidiary of the Company, and (iii) each committee of each such
subsidiary's board of directors. The Company's obligations to appoint designees
to the Board of Directors are subject to Section 14(f) of the Exchange Act.
Following the election or appointment of the designees of Parent to the Board of
Directors but prior to the Effective Time, any permitted termination of the
Merger Agreement by the Company, any amendment of the Merger Agreement requiring
action by the Board of Directors, any extension of time for the performance of
any of the obligations or other acts of Parent or Purchaser, and any waiver of
compliance with any of the agreements or conditions contained in the Merger
Agreement for the benefit of the Company must be authorized by a majority of the
Board of Directors not designated by Parent.
STOCKHOLDER MEETING. The Merger Agreement provides that, if required by
applicable law, the Company, acting through the Board of Directors, shall
(i) call a meeting of its stockholders (the "Stockholder Meeting") for the
purpose of voting on the Merger, (ii) hold the Stockholder Meeting as soon as
practicable after the purchase of Shares pursuant to the Offer and (iii) unless
taking such action would be inconsistent with the fiduciary duties of the Board
of Directors or the directors constituting the Special Committee, as determined
by such directors in good faith after consultation with independent legal
counsel, recommend to its stockholders the approval of the Merger and the
transactions contemplated thereby. If a Stockholder Meeting is called, the
Company will use its reasonable best efforts to solicit from the stockholders of
the Company proxies in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated thereby, unless otherwise required
by applicable fiduciary duties, as determined by such directors in good faith
after consultation with independent legal counsel. At the Stockholder Meeting,
Parent will cause all the Shares then owned by Parent, Purchaser or any other
subsidiary or affiliate of Parent to be voted in favor of the Merger. The Merger
Agreement provides that, notwithstanding the foregoing, if Purchaser, or any
other direct or indirect subsidiary of Parent, acquires at least 90 percent of
the outstanding Shares, the parties to the Merger Agreement shall take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer, without a vote of stockholders
of the Company, in accordance with the "Short-Form Merger" provisions of the
DGCL. The Merger Agreement is required to be submitted to the stockholders of
the Company whether or not the Board of Directors determines at any time
subsequent to declaring its advisability that the Merger Agreement is no longer
advisable and recommends that the stockholders reject it.
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REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties by the Company with respect to (i) the due
organization, existence and, subject to certain limitations, the qualification,
good standing, corporate power and authority of the Company and its
subsidiaries; (ii) the due authorization, execution, and delivery of the Merger
Agreement and certain ancillary documents executed in connection therewith and
the consummation of the transactions contemplated thereby, and the validity and
enforceability thereof; (iii) subject to certain exceptions and limitations, the
compliance by the Company and its subsidiaries with all applicable foreign,
federal, state or local laws, statutes, ordinances, rules, regulations, orders,
judgments, rulings and decrees of any foreign, federal, state or local judicial,
legislative, executive, administrative or regulatory body or authority, or any
court, arbitration, board or tribunal; (iv) the capitalization of the Company,
including the number of shares of capital stock of the Company outstanding and
the number of Options outstanding; (v) subject to certain exceptions and
limitations, the absence of consents and approvals necessary for consummation by
the Company of the Merger and the absence of any violations, breaches or
defaults which would result from compliance by the Company with any provision of
the Merger Agreement; (vi) compliance with the Securities Act of 1933, as
amended (the "Securities Act") and the Exchange Act, in connection with each
registration statement, report, proxy statement or information statement (as
defined under the Exchange Act) prepared by the Company since December 31, 1996,
the Schedule 14D-9, the information statement, if any, filed by the Company in
connection with the Offer pursuant to Rule 14f-1 under the Exchange Act and any
schedule required to be filed by the Company with the Commission or any
amendment or supplement thereto; (vii) subject to certain exceptions and
limitations, the absence of pending or (to the knowledge of the Company)
threatened claims, actions, suits, proceedings, arbitrations, investigations or
audits; (viii) the absence of certain changes or effects; (ix) certain tax
matters; (x) certain employee benefit and ERISA matters; (xi) certain labor and
employment matters; (xii) certain fees in connection with the transactions
contemplated by the Merger Agreement; (xiii) subject to certain limitations, the
possession by the Company and its subsidiaries of necessary franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders; (xiv) certain environmental matters;
(xv) certain insurance policy matters; (xvi) the opinion of CSFB; (xvii) state
takeover statutes; (xviii) the required vote of stockholders of the Company with
respect to the transactions contemplated by the Merger Agreement;
(xix) regulation as a utility and (xx) year 2000 compliance.
Parent and Purchaser have also made certain representations and warranties,
including with respect to (i) the due incorporation, existence, good standing
and, subject to certain limitations, corporate power and authority of Parent and
Purchaser; (ii) the due authorization, execution and delivery of the Merger
Agreement and certain ancillary documents executed in connection therewith and
the consummation of the transactions contemplated thereby, and the validity and
enforceability thereof; (iii) subject to certain exceptions and limitations, the
absence of consents and approvals necessary for consummation of the transactions
contemplated by the Merger Agreement by Parent and Purchaser and the absence of
any violations, breaches or defaults which would result from compliance by
Parent and Purchaser with any provision of the Merger Agreement; (iv) the
interim operations by Purchaser; (v) the sufficiency of funds available to
Parent and Purchaser for the consummation of the Offer and the Merger and
(vi) absence of any material misstatements or omissions in this Offer to
Purchase, the Schedule TO and the exhibits thereto.
CONDUCT UNTIL THE MERGER. The Company has agreed that from the date of the
Merger Agreement to the Effective Time, unless disclosed to Parent at the time
of the execution of the Merger Agreement or Parent has consented in writing
thereto, the Company will, and will cause each of its subsidiaries to:
(i) conduct its operations according to its ordinary course of business
consistent with past practice; (ii) use its reasonable best efforts to preserve
intact its business organizations and goodwill, keep available the services of
its officers and employees and maintain satisfactory relationships with those
persons having business relationships with them; (iii) promptly upon the
discovery thereof, notify Parent of the existence of any breach of any
representation or warranty contained in the Merger Agreement (or, in the case of
any
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representation or warranty that makes no reference to Material Adverse Effect,
any breach of such representation or warranty in any material respect). The
Merger Agreement defines a Material Adverse Effect as a material adverse effect
on the business, operations, or financial condition of the Company and its
subsidiaries taken as a whole or the ability of the Company and its subsidiaries
to conduct their business after the Closing consistent in all material respects
with the manner conducted in the past; provided, however, that "Material Adverse
Effect" does not include any change, effect, condition, event or circumstance
arising out of or attributable to (i) any decrease in the market price of the
Shares (but not any change, effect, condition, event or circumstance underlying
such decrease to the extent that it would otherwise constitute a Material
Adverse Effect), (ii) changes, effects, conditions, events or circumstances that
generally affect the industries in which the Company or its subsidiaries operate
(including legal and regulatory changes), (iii) general economic conditions or
changes, effects, conditions or circumstances affecting the securities markets
generally or (iv) changes arising from the consummation of the transactions
contemplated by the Merger Agreement or the announcement of the execution of the
Merger Agreement.
The Company has also agreed that from the date of the Merger Agreement to
the Effective Time, unless disclosed to Parent at the time of the execution of
the Merger Agreement or Parent has consented in writing thereto, the Company
will not, and will not permit any of its subsidiaries to,
(i) amend its certificate of incorporation or by-laws;
(ii) issue, sell or pledge (A) any shares of its capital stock or other
ownership interest in the Company (other than issuances of Common Stock in
respect of any exercise of Options outstanding on the date of the Merger
Agreement and as disclosed to Parent at the time of the execution of the Merger
Agreement) or its subsidiaries, (B) any securities convertible into or
exchangeable for any such shares or other ownership interest, or (C) any rights,
warrants or options to acquire or with respect to any such shares of capital
stock, ownership interest, or convertible or exchangeable securities (or
derivative instruments in respect of the foregoing);
(iii) effect any stock split or otherwise change its capitalization as it
existed on the date of the Merger Agreement, or directly or indirectly redeem,
purchase or otherwise acquire any shares of its capital stock or capital stock
of its subsidiaries;
(iv) (A) grant, confer or award any option, warrant, convertible security or
other right to acquire any shares of its capital stock or take any action to
cause to be exercisable any otherwise unexercisable option under any existing
stock option plan (except as otherwise required by the terms of such
unexercisable options), (B) accelerate or waive any or all of the goals,
restrictions or conditions imposed under any award under the Trigen Energy
Corporation 1994 Performance Stock Incentive Plan, or (C) issue, sell, grant or
award any shares of capital stock or any right to acquire shares of capital
stock under any Company stock plan (except as otherwise required by such plan);
(v) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any shares of its capital stock or other ownership
interests (other than such payments by the subsidiaries to the Company);
(vi) mortgage or otherwise encumber, subject to any encumbrance, or sell,
lease or otherwise dispose of any of its property or assets (including capital
stock of its subsidiaries), other than encumbrances that are incurred in the
ordinary course of business, consistent with past practice, the sale or
disposition of inventory in the ordinary course of business or the sale, lease,
encumbrance or other disposition of assets which, individually or in the
aggregate, are obsolete or not material to the Company and its subsidiaries
taken as a whole;
(vii) (A) acquire by merger, purchase or any other manner, any business or
entity or any division thereof for consideration in excess of $1,000,000 in the
aggregate; or (B) otherwise acquire any assets which would be material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
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whole, except for purchases of inventory, supplies or capital equipment in the
ordinary course of business consistent with past practice and the acquisition of
assets for consideration in excess of $1,000,000 in the aggregate;
(viii) except for borrowings under existing credit facilities and excepting
transactions between the Company and any subsidiary, incur or assume any
long-term or short-term debt or issue any debt securities or assume, guarantee
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the debt or other obligations of any other person, other than
obligations (other than debt) of its subsidiaries incurred in the ordinary
course of business;
(ix) (A) make any loans, advances or capital continuations to, or
investments in, any other person (other than to subsidiaries of the Company),
except with respect to commitments outstanding on the date of the Merger
Agreement, or (B) forgive any loans, advances or capital contributions to, or
investments in, any other person (other than with respect to subsidiaries of the
Company) for an amount in excess of $1,000,000 in the aggregate (as to clauses
(A) and (B) collectively);
(x) except as contemplated by the Merger Agreement or in the ordinary course
of business consistent with past practice (A) increase the compensation payable
or to become payable to its officers or employees, (B) other than in accordance
with existing policies and arrangements, grant any severance pay to the
Company's officers, directors or employees or (C) establish, adopt, enter into
or amend any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee, except to
the extent required by applicable law or the terms of a collective bargaining
agreement or a contractual obligation existing on the date of the Merger
Agreement;
(xi) change any of the accounting principles or practices used by the
Company, except as may be required by generally accepted accounting principles;
(xii) pay, discharge or satisfy any material claims, material liabilities or
material obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of (A) any such
material claims, material liabilities or material obligations in the ordinary
course of business and consistent with past practice or (B) material claims,
material liabilities or material obligations reflected or reserved against in,
or contemplated by, the consolidated financial statements (or the notes thereto)
contained in the Company's filings with the Commission;
(xiii) agree to the settlement of any claim or litigation, which settlement
would have a Material Adverse Effect;
(xiv) make, change or rescind any material tax election (other than
recurring elections that customarily are made in connection with the filing of
any tax return; provided that any such elections are consistent with the past
practices of the Company or its Subsidiaries, as the case may be); or settle or
compromise any material tax liability that is the subject of any audit, claim
for delinquent taxes, examination, action, suit, proceeding or investigation by
any taxing authority;
(xv) except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect on the date of the Merger
Agreement or as contemplated by the Merger Agreement, accelerate the payment,
right to payment or vesting of any bonus, severance, profit sharing, retirement,
deferred compensation, stock option, insurance or other compensation or
benefits;
(xvi) enter into any agreement, understanding or commitment that restrains,
limits or impedes the ability of the Company or any of its subsidiaries to
compete with or conduct any business or line of business, including geographic
limitations on the activities of the Company or any of its subsidiaries;
(xvii) materially modify, amend or terminate any material contract, or
waive, relinquish, release or terminate any right or claim, in each case, except
in the ordinary course of business consistent with past practice;
(xviii) other than with respect to commitments outstanding as of the date of
the Merger Agreement, make any capital expenditures for the Company and its
subsidiaries in excess $1,000,000, in the aggregate;
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(xix) take any action to cause the Common Stock to be delisted from the New
York Stock Exchange prior to the consummation of the Offer; or
(xx) agree in writing or otherwise to take any of the foregoing actions.
ACCESS TO INFORMATION. Under the Merger Agreement, from the date of the
Merger Agreement to the closing date of the Merger, the Company has agreed, and
has agreed to cause its subsidiaries to, (i) give Parent and its authorized
representatives reasonable access, upon reasonable notice and during reasonable
hours to all books, records, personnel, offices and other facilities and
properties of the Company and its subsidiaries and their accountants and
accountants' work papers, (ii) permit Parent to make such copies and inspections
thereof as Parent may reasonably request and (iii) furnish Parent with such
financial and operating data and other information with respect to the business
and properties of the Company and its subsidiaries as Parent may from time to
time reasonably request; provided that no investigation or information furnished
pursuant to the Merger Agreement shall affect any representations or warranties
made by the Company therein or the conditions to the obligations of Parent to
consummate the transactions contemplated thereby. Parent has agreed to hold all
information furnished on a confidential basis by or on behalf of the Company or
any of its subsidiaries in confidence.
NO SOLICITATION. The Company has agreed in the Merger Agreement (a) that
from the date of the Merger Agreement to the Effective Time, neither it nor any
of its subsidiaries will, and it will direct and use its best efforts to cause
its officers, directors, employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, the Company or any of its subsidiaries (any such
proposal or offer being hereinafter referred to as an "Alternative Proposal") or
engage in any negotiations concerning, or provide any confidential information
or data to, afford access to the properties, books or records of the Company or
any of its subsidiaries to, or have any discussions with, any person relating to
an Alternative Proposal, or otherwise facilitate any effort or attempt to make
or implement an Alternative Proposal; (b) that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the foregoing, and it
will take the necessary steps to inform such parties of the obligations
undertaken under the no solicitation provision of the Merger Agreement; and
(c) that it will notify Parent immediately of the identity of the potential
acquiror and the terms of such person's or entity's proposal if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, the Company; provided, however, that the no solicitation provision shall
not prohibit the Company or its subsidiaries, upon approval by the Special
Committee, from (i) prior to the acceptance for payment of Shares pursuant to
the Offer, furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited bona fide
proposal to acquire the Company pursuant to a merger, consolidation, share
exchange, purchase of substantially all of the assets of the Company, a business
combination or other similar transaction, if, and only to the extent that,
(A) such proposal was not initially solicited, encouraged or knowingly
facilitated by the Company, its subsidiaries or their agents in violation of the
no solicitation provision of the Merger Agreement, (B) such proposal is not
subject to a financing condition and involves consideration that provides a
higher value per share than the Merger Consideration, (C) the Board of
Directors, or the Special Committee, determines in good faith based on the
advice of outside counsel that the failure to take such action would be
inconsistent with its fiduciary duties to stockholders imposed by law, and
(D) prior to furnishing information to, or entering into discussions or
negotiations with, such person or entity, the Company provides written notice to
Parent to the effect that it is furnishing information to, or entering into
discussions or negotiations with, such person or entity; and (ii) to the extent
applicable, complying with Rule 14e-2(a) promulgated under the Exchange Act with
regard to an Alternative Proposal. Nothing in the no solicitation provision of
the
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Merger Agreement (x) permits the Company to terminate the Merger Agreement
(except as specifically provided in the termination provisions of the Merger
Agreement), (y) permits the Company to enter into any agreement with respect to
an Alternative Proposal during the term of the Merger Agreement, or (z) affects
any other obligation of the Company under the Merger Agreement.
FEES AND EXPENSES. Except as set forth below or as otherwise provided in
the Merger Agreement, whether or not the Offer or the Merger is consummated, all
fees, costs and expenses incurred in connection with the Merger Agreement and
the transactions contemplated by the Merger Agreement will be paid by the party
incurring such fees, costs and expenses.
In the Merger Agreement, the Company has agreed that, under certain
circumstances, it will reimburse Parent and its affiliates for their
out-of-pocket expenses incurred in connection with the Offer, the Merger and the
other transactions contemplated by the Merger Agreement. The Company is
obligated to pay Parent's out-of-pocket expenses under the following
circumstances: (i) Parent terminates the Merger Agreement because of the failure
of the condition to the Offer that the representations and warranties made by
the Company in the Merger Agreement that are qualified by materiality or
Material Adverse Effect are true and correct in all respects when made or
thereafter have ceased to be true and correct in all respects as if made at the
scheduled or extended expiration of the Offer (except to the extent that any
such representation or warranty refers specifically to another date, in which
case such representation or warranty shall be true and correct in all respects
as of such other date), the other representations and warranties made by the
Company in the Merger Agreement are true and correct in all material respects
when made or thereafter have ceased to be true and correct in all respects as if
made at the scheduled or extended expiration of the Offer (except to the extent
that any such representation or warranty refers specifically to another date, in
which case such representation or warranty shall be true and correct in all
material respects as of such other date) or because the Company has breached and
failed to have complied in all material respects with any of its obligations
under the Merger Agreement; (ii) the Special Committee terminates the Merger
Agreement in accordance with its terms because of an Alternative Proposal which
the Special Committee in good faith determines is more favorable from a
financial point of view to the stockholders of the Company as compared to the
Offer and the Merger and the Special Committee determines in good faith based on
advice of outside counsel that the failure to take such action would be
inconsistent with its fiduciary duties to stockholders imposed by law; or
(iii) if prior to purchasing any Shares pursuant to the Offer, Parent terminates
the Merger Agreement because the Special Committee shall have withdrawn or
modified in a manner that is materially adverse to Parent or Purchaser its
approval or recommendation of the Merger Agreement, the Offer, the Merger or any
other transaction contemplated by the Merger Agreement or shall have recommended
another merger, consolidation or business combination involving, or acquisition
of, the Company or its assets or another tender offer for the Shares or the
Special Committee shall have resolved to do any of the foregoing.
Under the terms of the Merger Agreement, Parent has agreed that, under
certain circumstances, it will reimburse the Company for its out-of-pocket
expenses incurred in connection with the Offer, the Merger and the other
transactions contemplated by the Merger Agreement. Parent will be obligated to
pay the Company's out-of-pocket expenses if the Special Committee terminates the
Merger Agreement because Parent or Purchaser has breached in any material
respect any of their respective representations, warranties or covenants
contained in the Merger Agreement.
FILINGS; OTHER ACTIONS. The Merger Agreement provides that, subject to the
terms and conditions provided in the Merger Agreement, the Company, Parent and
Purchaser have agreed to: (a) use their reasonable best efforts to cooperate
with one another in (i) determining which filings are required to be made prior
to the expiration of the Offer or the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, governmental entities or other third parties in connection
with the execution and delivery of the Merger Agreement and other ancillary
documents and the consummation of the transactions contemplated thereby and
(ii) timely make all such filings and timely seek all such consents, approvals,
permits, authorizations and waivers; and
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(b) use their reasonable best efforts to take, or cause to be taken, all other
action and do, or cause to be done, all other things necessary, proper or
appropriate to consummate and make effective the transactions contemplated by
the Merger Agreement. If, at any time after the Effective Time, any further
action is necessary or desirable to carry out the purpose of the Merger
Agreement, the proper officers and directors of Parent and the Surviving
Corporation are required to take all such necessary action.
CONDITIONS TO THE MERGER. The obligations of Parent and the Company to
effect the Merger are subject to the satisfaction or waiver, where permissible,
prior to the Effective Time, of the following conditions: (i) if approval of the
Merger Agreement and the Merger by the holders of Shares is required by
applicable law, the Merger Agreement and the Merger shall have been approved by
the requisite vote of such holders; (ii) any review or approval required by
governmental authorities in countries in which the Company or its subsidiaries
have operations material to the Company and its subsidiaries, taken as a whole,
shall have been completed or obtained; and (iii) no United States federal or
state or Republic of France governmental authority or other agency or commission
or court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order decree,
injunction or other order which is in effect and prohibits or has the effect of
prohibiting the consummation of the Merger or makes the consummation of the
Merger illegal.
TERMINATION. The Merger Agreement, notwithstanding approval thereof by the
stockholders of the Company, may be terminated at any time prior to the
Effective Time:
(a) by mutual written consent of the board of directors of Parent and the
Special Committee;
(b) by Parent or the Special Committee,
(i) if either the purchase of Shares pursuant to the Offer has not been
consummated on or before March 15, 2000 or the Effective Time shall not have
occurred on or before June 30, 2000 (provided that the right to terminate
the Merger Agreement pursuant to this clause (i) shall not be available to
any party whose failure to fulfill any obligation under the Merger Agreement
has been the cause of or resulted in the failure of the Effective Time to
occur on or before such date);
(ii) if there shall be any law that makes consummation of the Offer or
the Merger illegal or prohibited, or if any court of competent jurisdiction
in the United States or the Republic of France shall have issued an order,
judgment, decree or ruling, or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, judgment, decree, ruling
or other action shall have become final and non-appealable;
(c) by the Special Committee,
(i) if there is an Alternative Proposal which the Special Committee in
good faith determines is more favorable from a financial point of view to
the stockholders of the Company as compared to the Offer and the Merger, and
the Special Committee determines in good faith, based upon advice of outside
counsel, that the failure to take such action would be inconsistent with its
fiduciary duties to stockholders imposed by law; provided, however, that
this right to terminate shall not be available in certain circumstances; or
(ii) if Parent or Purchaser shall have breached in any material respect
any of their respective representations, warranties or covenants contained
in the Merger Agreement; or
(d) by Parent,
(i) prior to the acceptance of any Shares under the Offer, if due to an
occurrence or circumstance that would result in the failure of any of the
Offer Conditions, Parent shall have terminated the Offer without having
accepted any Shares for payment thereunder, unless such failure to accept
Shares for payment or to pay for Shares shall have been caused by or
resulted from the failure of Parent or Purchaser to perform any obligation
of either of them contained in the Merger Agreement;
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(ii) prior to the purchase of any Shares validly tendered pursuant to
the Offer, if the Special Committee shall have withdrawn or modified in a
manner that is materially adverse to Parent or Purchaser its approval or
recommendation of the Merger Agreement, the Offer, the Merger or any other
transaction contemplated by the Merger Agreement or if the Special Committee
shall have recommended another merger, consolidation or business combination
involving, or acquisition of, the Company or its assets or another tender
offer for the Shares, or the Special Committee shall have resolved to do any
of the foregoing.
INDEMNIFICATION. The Merger Agreement provides that the Surviving
Corporation will maintain in effect for not less than six years after the
Effective Time the Company's current directors and officers insurance policies,
if such insurance is obtainable (or policies of at least the same coverage
containing terms and conditions no less advantageous to the current and all
former directors and officers of the Company), with respect to acts or failures
to act prior to the Effective Time, including acts relating to the transactions
contemplated by the Merger Agreement; provided, however, that in order to
maintain or procure such coverage, the Surviving Corporation shall not be
required to maintain or obtain policies providing such coverage except to the
extent such coverage can be provided at an annual cost of no greater than two
times the most recent annual premium paid by the Company prior to the date of
the Merger Agreement (the "Cap"); and provided, further, that if equivalent
coverage cannot be obtained, or can be obtained only by paying an annual premium
in excess of the Cap, the Purchaser or the Surviving Corporation will only be
required to obtain only as much coverage as can be obtained by paying an annual
premium equal to the Cap.
The Merger Agreement also provides that to the extent, if any, not provided
by an existing right of indemnification or the agreement or policy, from and
after the Effective Time, the Surviving Corporation is required to indemnify and
hold harmless each person who is, or has been at any time prior to the date of
the Merger Agreement or who becomes prior to the Effective Time, an officer or
director of the Company or any of its subsidiaries (each, an "Indemnified
Party"), against all losses, expenses, claims, damages or liabilities or,
subject to the last sentence of this paragraph, amounts paid in settlement,
arising in connection with any claim, action, suit, proceeding or investigation
(an "Action") arising out of or pertaining to acts or omissions by such person
in his or her capacity as such, which acts or omissions occurred prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time to the fullest extent permitted by law. In the event of any such Action,
the Company as the Surviving Corporation will control the defense of such Action
with counsel selected by the Company as the Surviving Corporation, which counsel
shall be reasonably acceptable to the Indemnified Party; provided, however, that
the Indemnified Party shall be permitted to participate in the defense of such
Action through counsel selected by the Indemnified Party, which counsel shall be
reasonably acceptable to the Company as the Surviving Corporation, at the
Indemnified Party's expense. Notwithstanding the foregoing, if there is any
conflict between the Company as the Surviving Corporation and any Indemnified
Parties or there are additional defenses available to any Indemnified Parties,
the Indemnified Parties shall be permitted to participate in the defense of such
Action with counsel selected by the Indemnified Parties, which counsel shall be
reasonably acceptable to the Company as the Surviving Corporation, and the
Company as the Surviving Corporation will be required to pay the reasonable fees
and expenses of such counsel, as accrued and in advance of the final disposition
of such Action to the fullest extent permitted by applicable law; provided,
however, that the Company as the Surviving Corporation will not be obligated to
pay the reasonable fees and expenses of more than one counsel for all
Indemnified Parties in any single Action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such Action. The members of
the Special Committee are entitled to select their own counsel pursuant to the
preceding sentence with respect to any litigation relating to the transactions
contemplated by the Merger Agreement; provided, however, that such counsel must
be reasonably acceptable to Parent. The Surviving Corporation shall not be
liable for any settlement effected without its written consent, which consent
shall not unreasonably be withheld.
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Purchaser has also agreed to cause the Company as the Surviving Corporation
to keep in effect all provisions in the Surviving Corporation's certificate of
incorporation and by-laws that provide for exculpation of director and officer
liability and indemnification (and advancement of expenses related thereto) of
the past and present officers and directors of the Company at least to the
extent they are presently indemnified by the Company and such provisions may not
be amended except as either required by applicable law or to make changes
permitted by law that would enhance the rights of past or present officers and
directors to indemnification or advancement of expenses. These provisions
provide that a director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that the foregoing does not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which
the director derived an improper personal benefit.
AMENDMENT. To the extent permitted by applicable law, the Merger Agreement
may be amended by action taken by or on behalf of the boards of directors of the
Company and Parent and, in the case of the Company, with the approval of the
Special Committee at any time before or after adoption of the Merger Agreement
by the stockholders of the Company (if required); provided, however, that after
any such stockholder approval, no amendment shall be made which decreases the
Merger Consideration or which adversely affects the rights of, or the income tax
consequences to, the Public Stockholders thereunder without the approval of such
stockholders. The Merger Agreement may not be amended except by an instrument in
writing signed on behalf of Parent, Purchaser and the Company.
TIMING. The exact timing and details of the Merger will depend upon legal
requirements and a variety of other factors, including the number of Shares
acquired by Purchaser pursuant to the Offer. Although Purchaser has agreed to
cause the Merger to be consummated on the terms, and subject to the conditions,
contained in the Merger Agreement, there can be no assurance as to the timing of
the Merger.
THE TENDER AND VOTING AGREEMENT
The following is a summary of the material provisions of the Tender and
Voting Agreement, a copy of which has been included as an exhibit to the
Schedule TO. The Tender and Voting Agreement may be inspected at, and copies may
be obtained from, the same places and in the same manner set forth in "THE
TENDER OFFER--Certain Information Concerning the Company--Available
Information." The summary is qualified in its entirety by reference to the text
of such agreement.
Concurrently with the execution and delivery of the Merger Agreement, each
of the members of the Special Committee (Messrs. Keane and Bayless) as well as
the Bayless Family Trust, of which Mr. Bayless is the trustee, have entered into
the Tender and Voting Agreement with Purchaser and Parent. Pursuant to the
Tender and Voting Agreement, Messrs. Keane and Bayless have agreed, among other
things, to tender promptly pursuant to the Offer the Shares held by them, and
not to withdraw any such Shares, and to various other provisions described
below.
TRANSFER OF THE SHARES. Each of Messrs. Keane and Bayless agreed that
during the term of the Tender and Voting Agreement, except as otherwise
expressly provided therein, he will not (a) tender into any tender or exchange
offer or otherwise sell, transfer, pledge, assign, hypothecate or otherwise
dispose of, or encumber with any lien, any of the Shares, (b) acquire any Shares
or other securities of the Company (other than in connection with a transaction
in connection with certain anti-dilution adjustments provided for in the Tender
and Voting Agreement or by exercising any options held by him), (c) deposit the
Shares into a voting trust, enter into a voting agreement or arrangement with
respect to the Shares or grant any proxy or power of attorney with respect to
the Shares, (d) enter into any contract, option or other arrangement (including
any profit sharing arrangement) or undertaking with respect to the direct or
indirect acquisition or sale, transfer, pledge, assignment, hypothecation or
other disposition of any interest
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in or the voting of any Shares or any other securities of the Company,
(e) exercise any rights (including, without limitation, under Section 262 of the
DGCL) to demand appraisal of any Shares which may arise with respect to the
Merger, or (f) take any other action that would in any way restrict, limit or
interfere with the performance of his obligations under the Tender and Voting
Agreement or the transactions contemplated by the Tender and Voting Agreement or
which would otherwise diminish the benefits of the Tender and Voting Agreement
to Parent or Purchaser.
TENDER OF SHARES. Each of Messrs. Keane and Bayless agreed that he will
validly tender (or cause the record owner of such Shares to validly tender) and
sell (and not withdraw) pursuant to and in accordance with the terms of the
Offer not later than the fifth business day after commencement of the Offer (or
the earlier of the expiration date of the Offer and the fifth business day after
such Shares are acquired by him if he acquires Shares after the date of the
Merger Agreement), or, if he has not received this Offer to Purchase and related
documents by such time, within two business days following receipt of such
documents, all of the then outstanding Shares beneficially owned by him
(including the Shares outstanding as of the date of the Merger Agreement and
Shares issued following the exercise (if any) of his Options).
VOTING AGREEMENT. The Tender and Voting Agreement also provides that each
of Messrs. Keane and Bayless (a) agrees to appear (or not appear, if requested
by Parent or Purchaser) at any annual, special, postponed or adjourned meeting
of the stockholders of the Company or otherwise cause the Shares he beneficially
owns to be counted as present (or absent, if requested by Parent or Purchaser)
thereat for purposes of establishing a quorum and to vote or consent, and
(b) constitutes and appoints Parent and Purchaser, or any nominee thereof, with
full power of substitution, during and for the term of the Tender and Voting
Agreement as his true and lawful attorney and proxy for and in his name, place
and stead, to vote all the Shares he beneficially owns at the time of such vote,
at any annual, special, postponed or adjourned meeting of the stockholders of
the Company (and this appointment will include the right to sign his name (as
stockholder) to any consent, certificate or other document relating to the
Company that the laws of the State of Delaware may require or permit), in the
case of both (a) and (b) above, in favor of approval and adoption of the Merger
Agreement and approval and adoption of the Merger and the other transactions
contemplated thereby.
REPRESENTATIONS AND WARRANTIES. Messrs. Keane and Bayless made customary
representations and warranties to Parent and Purchaser, including with respect
to their beneficial ownership of Shares, their authority to enter into and
perform their obligations under the Tender and Voting Agreement, the due
execution and delivery by them of the Tender and Voting Agreement, the absence
of any financial advisor or other intermediary and the acknowledgement of
Parent's reliance on the Tender and Voting Agreement in executing the Merger
Agreement.
Each of Parent and Purchaser has also made customary representations and
warranties under the Tender and Voting Agreement, including with respect to
Parent's and Purchaser's authority to enter into and perform its obligations
under the Tender and Voting Agreement and the due execution and delivery by
Parent and Purchaser of the Tender and Voting Agreement.
TERMINATION. The Tender and Voting Agreement will terminate upon the
earliest of: (a) as to any of Messrs. Keane and Bayless and the Bayless Family
Trust, upon the purchase of all the Shares beneficially owned by such
stockholder pursuant to the Offer in accordance with the Tender and Voting
Agreement, or (b) the earlier to occur of (i) the Effective Time and
(ii) termination of the Merger Agreement in accordance with its terms.
ARRANGEMENTS WITH THOMAS R. CASTEN
The following is a summary of the material provisions of the Separation
Agreement (as defined below) and the Casten Stock Purchase Agreement, copies of
which have been included as exhibits to the Schedule TO. The Separation
Agreement and the Casten Stock Purchase Agreement may be inspected at,
32
<PAGE>
and copies may be obtained from, the same places and in the same manner set
forth in "THE TENDER OFFER--Certain Information Concerning the
Company--Available Information." The summary is qualified in its entirety by
reference to the text of such agreement.
THE SEPARATION AGREEMENT AND RELEASE. Pursuant to a separation agreement
and release (the "Separation Agreement"), dated January 19, 2000, between
Thomas R. Casten and the Company, Mr. Casten resigned from his positions as
President, Chief Executive Officer and a director of the Company. Under the
terms of the Separation Agreement, Mr. Casten is eligible for salary and
benefits continuation until the earlier of (a) January 19, 2002, or (b) the date
on which Mr. Casten breaches any of his obligations under the Separation
Agreement. Mr. Casten's obligations include non-disparagement, non-competition,
cooperation, non-solicitation and confidentiality covenants. If Mr. Casten
breaches any of these covenants, his right to payments under the terms of the
Separation Agreement will be extinguished. Restricted Stock and unvested Options
held by Mr. Casten will continue to vest in accordance with their terms as if
Mr. Casten remained employed by the Company and to the extent not vested on
January 19, 2002 will become fully vested on that date to the extent not
previously canceled by reason of a breach of this Agreement. Alternatively,
immediately prior to the Effective Time if the Merger occurs, (i) Mr. Casten's
Options will be canceled and he will receive for each Share subject thereto the
excess of the Merger Consideration over the exercise price, and
(ii) Mr. Casten's shares of Restricted Stock will be canceled and he will
receive an amount per share equal to the Merger Consideration in respect of
one-fourth of such shares and will be eligible to receive on January 19, 2002 an
amount per share equal to the Merger Consideration in respect of three-fourths
of such shares. Under the terms of the Separation Agreement, Mr. Casten is
entitled to remain a general partner of the Trenton District Energy Company
("TDEC"), but may not interfere with or participate in the day-to-day operations
of TDEC. The Company has agreed that if TDEC refinances, the Company will,
subject to certain exceptions, use its good faith efforts so that Mr. Casten
does not recognize income as a result of such refinancing as long as such
efforts do not adversely impact TDEC, the Company or its affiliates.
CASTEN STOCK PURCHASE AGREEMENT. In addition, on January 19, 2000, pursuant
to the Casten Stock Purchase Agreement, Mr. Casten agreed to sell to Parent on
March 29, 2000, the 1,012,402 Shares beneficially owned by him (which excludes
options and Restricted Stock held by Mr. Casten) at $23.50 per Share. If Parent
is legally barred at that time from purchasing these Shares by reason of court
order or otherwise, Parent will buy these Shares on the date two business days
following the date that such legal prohibition ceases.
11. INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER
In considering the recommendations of the Board of Directors and the Special
Committee, stockholders should be aware that certain officers and directors of
Suez, Parent, Purchaser and the Company have interests in the Offer and the
Merger which are described below and which may present them with certain
potential conflicts of interest. As a result of Parent's current ownership of
approximately 52.5% of the outstanding Shares and five of the Company's nine
directors being officers or directors of Parent or one of its affiliates, Parent
may be deemed to control the Company.
Mr. Patrick Buffet, a director of the Company, is a director of Parent and
executive vice president of Suez. Mr. Philippe Brongniart, a director of the
Company, is a director of Parent and a member of the executive board of Suez.
Mr. Olivier Degos, a director of the Company, is Parent's corporate vice
president in charge of international affairs. Mr. Michel Bleitrach, a director
of the Company, is chairman and chief executive officer of Parent.
Mr. Dominique Mangin d'Ouince, a director of the Company, is director of the
international development of the water division of Suez and was a managing
director of Lyonnaise des Eaux from 1990 to 1997. In addition, Mr. Jean M.
Malahieude is an executive vice president, engineering of the Company and is an
executive vice president of Cofreth American Corporation, a direct, wholly owned
subsidiary of Parent ("CAC").
33
<PAGE>
Messrs. Bayless and Keane are the directors of the Company who constitute
the Special Committee. These directors have each been compensated in the amount
of $2,500 per day up to an aggregate amount of $75,000, for serving as members
of the Special Committee. This compensation was authorized by the Board of
Directors in order to compensate the members thereof for the significant
additional time commitment that was required of them in connection with
fulfilling their duties and responsibilities as members of the Special Committee
and was paid without regard to whether the Special Committee approved the Offer
and the Merger or whether the Offer or the Merger was consummated. As of
January 31, 2000, Messrs. Bayless and Keane have earned $39,620 and $73,500,
respectively, as compensation for their service on the Special Committee.
Mr. Keane is a director of United Water Resources Inc. Parent and United Water
Resources Inc. signed a merger agreement in August of 1999 pursuant to which
Parent intends to acquire the approximately 70% of United Water Resources Inc.
it does not already own. Consummation of that transaction is pending certain
regulatory approvals.
As of January 27, 2000, the directors and executive officers of the Company,
as a group, beneficially owned an aggregate of 547,794 Shares (representing 5.7%
of the then outstanding Shares), excluding Shares subject to Options and shares
of Restricted Stock. As of January 27, 2000, the members of the Special
Committee, as a group, beneficially owned an aggregate of approximately 38,697
Shares (representing less than 1% of the then outstanding Shares), excluding
Shares subject to Options. All such Shares held by directors and executive
officers will be treated in the Offer and the Merger in the same manner as
Shares held by the Public Stockholders. In the aggregate, the directors and
executive officers of the Company will be entitled to receive approximately
$12,873,182.50 for their Shares upon consummation of the Offer and the Merger
(based upon the number of Shares (other than shares of Restricted Stock) owned
as of January 27, 2000) and the members of the Special Committee will be
entitled to receive an aggregate of approximately $909,380 for their Shares upon
consummation of the Offer and the Merger (based upon the number of Shares owned
as of January 27, 2000). For a description of certain arrangements with
Thomas R. Casten, the former President and Chief Executive Officer of the
Company and a former member of the Board of Directors, see "--The Transaction
Documents; Arrangements with Thomas R. Casten."
As of January 27, 2000, the directors and executive officers of the Company,
as a group, had (i) Options to acquire an aggregate of 350,000 Shares at an
average exercise price of $16.20 per Share and (ii) 162,143 shares of Restricted
Stock. As of January 27, 2000, the members of the Special Committee, as a group,
had (i) Options to acquire an aggregate of 40,000 Shares, and no shares of
Restricted Stock. All such Options held by such directors and executive officers
of the Company will be treated in the Offer and the Merger in the same manner as
Options held by other Option holders. All such shares of Restricted Stock held
by such directors and executive officers of the Company will be treated in the
Merger in the same manner as shares of Restricted Stock held by the other
holders of Restricted Stock (except for the arrangements with Mr. Casten; see
"--The Transaction Documents; Arrangements with Thomas R. Casten"). See "--The
Transaction Documents--The Merger Agreement." Based upon the average exercise
price of Options held by directors and executive officers of the Company and the
Offer Price, the directors and executive officers of the Company, as a group,
will receive total consideration of $3,507,590 (before applicable taxes) for
their Options and shares of Restricted Stock.
The Special Committee and the Board of Directors were aware of these actual
and potential conflicts of interest and considered them along with the other
matters described under "--Recommendation of the Special Committee and the Board
of Directors; Fairness of the Offer and the Merger."
12. BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information, as of January 27, 2000,
regarding the ownership of Common Stock by Purchaser, Parent, Suez and any
director or executive officer of Purchaser, Parent or Suez. To the best of the
knowledge of Purchaser, Parent and Suez after making reasonable inquiry, all
such directors and executive officers and all directors of the Company who are
representatives of Parent
34
<PAGE>
currently intend to tender their Shares into the Offer, except to the extent
that the tendering would subject that person to the "short-swing profit" rules
of Section 16(b) of the Exchange Act. In addition, based upon disclosures made
by the Company in the Schedule 14D-9, Purchaser, Parent and Suez understand that
all executive officers, other directors, affiliates and subsidiaries of the
Company intend to tender the Shares held of record or beneficially owned by them
(other than Restricted Stock or Options). Except as indicated below, the
executive officers and directors of Suez, Parent and Purchaser do not own any
Shares.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF SHARES OF COMMON STOCK
NUMBER OF SUBJECT TO BENEFICIALLY
NAME OF BENEFICIAL OWNER SHARES OWNED OPTIONS OWNED(1)
- ------------------------ ------------ ---------------- ---------------
<S> <C> <C> <C>
Suez(2).......................................... 6,507,944 -- 52.5%
Parent........................................... 6,507,944 -- 52.5%
Purchaser........................................ -- -- --
Olivier Degos(3)................................. 764 10,000 *
Michel Bleitrach(3).............................. 4,485 10,000 *
Dominique Mangin d'Ouince(3)..................... 4,856 10,000 *
Philippe Brongniart(3)........................... 2,933 10,000 *
Patrick Buffet(3)................................ 1,822 10,000 *
</TABLE>
- ------------------------
* Less than 1% of Shares
(1) Based upon 12,401,808 Shares outstanding as of January 27, 2000.
(2) All Shares are owned indirectly by Suez through its direct wholly owned
subsidiary, Societe Generale de Belgique ("Societe Generale"). Societe
Generale owns all Shares indirectly through its direct wholly owned
subsidiary, Parent. Parent owns all Shares indirectly through its
subsidiaries, CAC and Compagnie Parisenne de Chauffage Urbain ("CPCU"). CAC
holds 4,870,670 Shares, or 39.3% of the outstanding Shares. The principal
address of CAC is c/o Trigen Energy Corporation, One Water Street, White
Plains, New York 10601. CPCU holds 1,637,274 Shares, or 13.2% of the
outstanding Shares. The principal address of CPCU is 185, Rue de Bercy,
Paris 75561 France. CPCU currently intends to tender the Shares held by it
into the Offer. CAC currently intends to transfer the Shares held by it to
Purchaser after the expiration of the Offer.
(3) On January 7, 2000, the following members of the Board of Directors received
Shares from the Company as payment of their directors' fees, based on a
price of $17.375 per Share: Michel Bleitrach (241 Shares), Philippe
Brongniart (201 Shares), Olivier Degos (282 Shares), Dominique Mangin
d'Ouince (241 Shares) and Patrick Buffet (241 Shares). These Shares are
included in the above table.
13. RELATED PARTY TRANSACTIONS
LICENSE AGREEMENT. Parent and the Company have entered into an Intercompany
Services and License Agreement (the "License Agreement"), dated August 10, 1994.
Under the License Agreement, Parent has the right to use such technical
knowledge to construct, operate and maintain community energy systems within
North America as well as the right to use patents and licenses of Parent and its
subsidiaries in connection with the generation and distribution of electricity,
chilled water and waste incineration. Parent may also make available to the
Company, upon request, new support letters or other similar credit support, at
mutually agreed rates. Pursuant to the License Agreement, the Company has the
first right to develop any corporate opportunities relating to the application
of the licensed technologies in North America that are presented to Parent or
its subsidiaries. Neither the Company nor its subsidiaries may engage in
activities that may cause the Company to become or be regulated as a public
utility holding company or a subsidiary of a public utility holding company
under federal, state or local laws or regulations. The initial term of the
License Agreement was for three years with automatic two year renewals, unless
terminated sooner as a result of a default or bankruptcy or related event or a
change of
35
<PAGE>
control with respect to the Company. The Company reimbursed Parent and its
affiliates and/or paid third party providers on behalf of Parent $318,786 for
salary, bonus, and expenses paid to Jean Malahieude, an executive officer of the
Company, and an additional $178,448 for benefits of Mr. Malahieude and other
professionals in 1998.
CERTAIN INDEBTEDNESS. On December 30, 1998, CAC, a wholly owned subsidiary
of Parent, loaned the Company $50 million at a 7.38% interest rate pursuant to
an unsecured subordinated redeemable term note (the "Note"), which requires
repayment on December 31, 2010. The Note calls for interest payments that are
not made by the Company when due to be capitalized, up to an amount equivalent
to eight interest payments. Further past due interest or any past due portion of
the loan principal is to accrue interest at a rate of 9.38%. A change in control
of the Company is not an event of default under the terms of the Note, as long
as the change involves transfer of securities of the Company to a majority-owned
affiliate of Suez. The indebtedness evidenced by the Note is expressly
subordinate to all senior debt of the Company. The Note may be redeemed at the
option of CAC from the proceeds of any public or private offering of equity by
the Company.
In addition, on January 19, 2000, Parent loaned the Company $16 million at
an interest rate of LIBOR plus 2.25% pursuant to an unsecured senior promissory
note. The note is due and payable on March 31, 2000. See "--Background of the
Offer and Merger; Contacts with the Company."
14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO HOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER
OR WHOSE SHARES ARE CONVERTED INTO THE RIGHT TO RECEIVE CASH IN THE MERGER. THE
SUMMARY IS BASED ON THE PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), APPLICABLE CURRENT AND PROPOSED UNITED STATES TREASURY
REGULATIONS ISSUED THEREUNDER, JUDICIAL AUTHORITY AND ADMINISTRATIVE RULINGS AND
PRACTICE, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY WITH RETROACTIVE EFFECT,
AT ANY TIME AND, THEREFORE, THE FOLLOWING STATEMENTS AND CONCLUSIONS COULD BE
ALTERED OR MODIFIED. THE DISCUSSION DOES NOT ADDRESS HOLDERS OF SHARES IN WHOSE
HANDS SHARES ARE NOT CAPITAL ASSETS, NOR DOES IT ADDRESS HOLDERS WHO HOLD SHARES
AS PART OF A HEDGING, "STRADDLE," CONVERSION OR OTHER INTEGRATED TRANSACTION, OR
WHO RECEIVED SHARES UPON CONVERSION OF SECURITIES OR EXERCISE OF WARRANTS OR
OTHER RIGHTS TO ACQUIRE SHARES OR PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK
OPTIONS OR OTHERWISE AS COMPENSATION, OR TO HOLDERS OF SHARES WHO ARE IN SPECIAL
TAX SITUATIONS (SUCH AS INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, FINANCIAL
INSTITUTIONS, UNITED STATES EXPATRIATES OR NON-U.S. PERSONS). FURTHERMORE, THE
DISCUSSION DOES NOT ADDRESS THE TAX TREATMENT OF HOLDERS WHO EXERCISE
DISSENTERS' RIGHTS IN THE MERGER, NOR DOES IT ADDRESS ANY ASPECT OF FOREIGN,
STATE OR LOCAL TAXATION OR ESTATE AND GIFT TAXATION.
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL
INFORMATIONAL PURPOSES ONLY. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH
HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE
APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE
PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION
AND EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes under the Code (and also may
be a taxable transaction under applicable state, local, foreign and other income
tax laws). In general, for federal income tax purposes, a holder of Shares will
recognize gain or loss in an amount equal to the difference between its adjusted
tax basis in the Shares sold pursuant to the Offer or converted into the right
to receive cash in the Merger and the amount of cash received therefor. Gain or
loss must be determined separately for each block of Shares (i.e., Shares
acquired at the same cost in a single transaction) sold pursuant to the Offer or
converted to cash in the Merger. Such gain or loss will be capital gain or loss
and will be long-term gain or loss if, on the date of sale (or, if applicable,
the Effective Time), the Shares were held for more than one year.
36
<PAGE>
Under the United States federal income tax backup withholding rules,
payments in connection with the Offer or the Merger may be subject to "backup
withholding" at a rate of 31%. In order to avoid backup withholding, each
tendering stockholder, unless an exemption applies, must provide the Depositary
with such stockholder's correct taxpayer identification number and certify that
such stockholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. Backup withholding is
not an additional tax but merely an advance payment, which may be refunded to
the extent it results in an overpayment of tax. Certain persons generally are
entitled to exemption from backup withholding, including corporations, financial
institutions and certain foreign individuals. Each stockholder should consult
with such holder's own tax advisor as to such holder's qualification for
exemption from backup withholding and the procedure for obtaining such
exemption.
All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to Purchaser and the Depositary). 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 Instruction 9 to the
Letter of Transmittal.
15. FEES AND EXPENSES
The following is an estimate of expenses to be incurred in connection with
the Offer and the Merger. The fees and expenses of CSFB are also discussed in
"--Opinion of the Special Committee's Financial Advisor," and the fees and
expenses of Lazard Freres are also discussed in "--Analysis of Financial Advisor
to Parent." The Merger Agreement provides that all costs and expenses incurred
in connection with the Offer and the Merger will be paid by the party incurring
such costs and expenses, except in certain circumstances where Parent or the
Company is required to reimburse the other party for its out-of-pocket expenses.
See "--The Transaction Documents; The Merger Agreement--Fees and Expenses."
The following table presents the estimated fees and expenses to be incurred
in connection with the Offer and the Merger:
<TABLE>
<S> <C>
Financial Advisors Fees..................................... $2,850,000
Legal Fees and Expenses..................................... 1,000,000
Printing and Mailing........................................ 125,000
Filing Fees................................................. 34,000
Depositary Fees............................................. 20,000
Information Agent Fees...................................... 16,000
Special Committee Fees and Expenses......................... 125,000
Miscellaneous............................................... 200,000
----------
Total................................................. $4,370,000
==========
</TABLE>
37
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for any and all Shares
validly tendered prior to the Expiration Date and not withdrawn in accordance
with the procedures set forth below in "--Withdrawal Rights" as soon as
practicable after the Expiration Date. The term "Expiration Date" means 12:00
Midnight, New York City time, on March 24, 2000 unless and until Purchaser, in
its sole discretion (but subject to the terms of the Merger Agreement), shall
have extended the period of time during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in "--Conditions of the
Offer." If the Offer Conditions are not satisfied or any of the events specified
in "--Conditions of the Offer" have occurred or are determined by Purchaser to
have occurred prior to the Expiration Date, Purchaser, subject to the terms of
the Merger Agreement, expressly reserves the right (but is not obligated) to
(i) terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders, (ii) waive all the unsatisfied
conditions and, subject to complying with the terms of the Merger Agreement and
the applicable rules and regulations of the Commission, accept for payment and
pay for all Shares validly tendered prior to the Expiration Date and not
theretofore withdrawn, (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain the Shares
that have been tendered during the period or periods for which the Offer is
extended or (iv) amend the Offer.
Subject to the terms of the Merger Agreement, the applicable rules and
regulations of the Commission and applicable law, Purchaser expressly reserves
the right, in its sole discretion, at any time and from time to time, to waive
any Offer Condition or otherwise amend the Offer in any respect by giving oral
or written notice of such waiver or amendment to the Depositary.
In the Merger Agreement, Purchaser has agreed that it will not, without the
prior consent of the Company, extend the Offer if all of the Offer Conditions
are satisfied or waived, except that Purchaser may, without the consent of the
Company, extend the Offer: (i) if at the then scheduled Expiration Date of the
Offer any of the Offer Conditions shall not have been satisfied or waived, until
such time as all such conditions shall have been satisfied or waived; (ii) for
any period required by any statute or rule, regulation, interpretation or
position of the Commission applicable to the Offer; (iii) for any period
required by applicable law in connection with an increase in the consideration
to be paid pursuant to the Offer; and (iv) from time to time, for an aggregate
period of not more than ten business days (for all such extensions under this
clause (iv)) beyond the latest expiration date that would be permitted under
clause (i), (ii) or (iii) of this sentence. However, Parent will not extend the
Offer if at the then scheduled Expiration Date all of the Offer Conditions have
been satisfied, regardless of the number of Shares tendered (and notwithstanding
the provision in the Merger Agreement permitting Purchaser to extend the Offer
for up to 10 business days). In addition, Purchaser and Parent have agreed that,
without the prior written consent of the Company, no changes may be made that
(i) reduce the maximum number of Shares subject to the Offer, (ii) decrease the
Offer Price, (iii) change the form of consideration payable in the Offer, or
(iv) amend or modify the Offer Conditions in any manner adverse to the holders
of Shares. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer. Tendering stockholders will continue
to have the right to withdraw any tendered Shares during such extension. See
"--Withdrawal Rights." Under no circumstances will interest be paid on the
purchase price for tendered Shares, whether or not the Offer is extended.
Any such extension, delay, termination, waiver or amendment will be
followed, as promptly as practicable, by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m.,
Eastern time, on the next business day after the previously scheduled Expiration
Date in accordance with the public announcement requirements of Rule 14e-1 of
the Exchange
38
<PAGE>
Act. Subject to applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act, which require that material changes be promptly
disseminated to stockholders in a manner reasonably designed to inform them of
such changes) and without limiting the manner in which Purchaser may choose to
make any public announcement, Purchaser will have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release to the Dow Jones News Service or as otherwise may be
required by applicable law.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material Offer Condition,
Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following material changes in the terms of the offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, a minimum period of ten business days is
generally required to allow for adequate dissemination to stockholders and
investor response.
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, provide a subsequent offering period of from three business
days to twenty business days in length following the purchase of Shares on the
Expiration Date (the "Subsequent Offering Period"). Purchaser currently intends
to provide a Subsequent Offering Period of at least three days and, if Parent
and Purchaser own less than 90% of the outstanding Shares following expiration
of the initial offering period and the purchase of all Shares tendered pursuant
to the Offer during that period and the first three days of the subsequent
Offering Period, Purchaser will extend the Subsequent Offering Period until the
earlier of (i) twenty business days from the Expiration Date and (ii) the time
at which Parent and Purchaser become the owner of at least 90% of the
outstanding Shares so that a Short-Form Merger can be effected. A Subsequent
Offering Period is an additional period of time, following the expiration of the
Offer and the purchase of Shares in the Offer, during which stockholders may
tender Shares that had not been purchased in the Offer. A Subsequent Offering
Period is not an extension of the Offer which already will have been completed.
During a Subsequent Offering Period, tendering stockholders will not have
withdrawal rights and Purchaser will promptly purchase and pay for any Shares
tendered at the same price paid in the Offer. Rule 14d-11 provides that
Purchaser may provide a Subsequent Offering Period so long as, among other
things, (i) the initial twenty business days period of the Offer has expired;
(ii) the Purchaser offers the same form and amount of consideration for Shares
in the Subsequent Offering Period as in the Offer; (iii) Purchaser accepts and
promptly pays for all Shares tendered during the Offer prior to the Expiration
Date; (iv) Purchaser announces the results of the Offer, including the
approximate number and percentage of Shares deposited in the Offer, no later
than 9:00 a.m. Eastern time on the next business day after the Expiration Date
and immediately begins the Subsequent Offering Period; and (v) Purchaser
immediately accepts and promptly pays for Shares as they are tendered during the
Subsequent Offering Period. In the event Purchaser elects to extend the
Subsequent Offering Period, it will notify stockholders of the Company
consistent with the requirements of the Commission.
IF SHARES ARE PURCHASED ON THE EXPIRATION DATE, PURCHASER WILL INCLUDE A
SUBSEQUENT OFFERING PERIOD FOR A PERIOD OF THREE DAYS. PURCHASER WILL EXTEND THE
SUBSEQUENT OFFERING PERIOD UNTIL THE EARLIER OF (i) THAT TIME AT WHICH PARENT
AND PURCHASER OWN AT LEAST 90% OF THE OUTSTANDING SHARES AND (ii) TWENTY
BUSINESS DAYS FROM THE EXPIRATION DATE. PURSUANT TO RULE 14D-7 UNDER THE
EXCHANGE ACT, NO WITHDRAWAL RIGHTS APPLY TO SHARES TENDERED DURING THE
SUBSEQUENT OFFERING PERIOD. THE OFFER PRICE WILL BE PAID TO SHAREHOLDERS
TENDERING SHARES IN THE SUBSEQUENT OFFERING PERIOD.
39
<PAGE>
The Company has provided Purchaser with the Company's stockholder lists and
security position listings in respect of the Shares for the purpose of
disseminating this Offer to Purchase, the Letter of Transmittal and other
relevant materials to stockholders. This Offer to Purchase, the Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares whose names appear on the Company's list of stockholders and will be
furnished, for subsequent transmittal to beneficial owners of Shares, to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's list of
stockholders or, where applicable, who are listed as participants in the
security position listing of The Depository Trust Company.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered prior to the Expiration Date (and not
properly withdrawn in accordance with "--Withdrawal Rights") as promptly as
practicable after the Expiration Date. Subject to applicable rules of the
Commission and the terms of the Merger Agreement, Purchaser expressly reserves
the right, in its discretion, to delay acceptance for payment of, or payment
for, Shares in order to comply, in whole or in part, with any applicable law.
See "--Terms of the Offer," and "--Certain Legal Matters--Regulatory Approvals."
The reservation by Purchaser of the right to delay the acceptance or
purchase of, or payment for, the Shares is subject to the provisions of Rule
14e-1(c) under the Exchange Act, which requires the Purchaser to pay the
consideration offered or to return the Shares deposited by, or on behalf of,
stockholders, promptly after the termination or withdrawal of the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares (the "Certificates") or timely confirmation of a book-
entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depositary Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in "--Procedures for Tendering
Shares", (ii) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed with any required signature
guarantees, or an Agent's Message (as defined below) in connection with a
book-entry transfer and (iii) any other documents required to be included with
the Letter of Transmittal under the terms and subject to the conditions thereof
and of this Offer to Purchase.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant in the Book-Entry Transfer
Facility tendering the Shares 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 properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares. Upon the terms
and subject to the conditions of the Offer, payment for Shares accepted 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 payments from Purchaser and transmitting payments to such tendering
stockholders whose Shares have been accepted for payment.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY PARENT OR PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT OR
EXTENSION OF THE EXPIRATION DATE.
If any validly tendered Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer, or if Certificates are
submitted evidencing more Shares than are tendered,
40
<PAGE>
certificates evidencing Shares not purchased will be returned, without expense,
to the tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedure set forth in "--Procedures for Tendering Shares", such
Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable following the expiration or termination of
the Offer.
IF, PRIOR TO THE EXPIRATION DATE, PURCHASER INCREASES THE CONSIDERATION TO
BE PAID PER SHARE PURSUANT TO THE OFFER, PURCHASER WILL PAY SUCH INCREASED
CONSIDERATION FOR ALL SUCH SHARES PURCHASED PURSUANT TO THE OFFER, WHETHER OR
NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN CONSIDERATION.
Purchaser reserves the right to assign to Parent, or to any other direct or
indirect wholly owned subsidiary of Suez, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such 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.
3. PROCEDURES FOR TENDERING SHARES
VALID TENDER OF SHARES. In order for Shares to be validly tendered pursuant
to the Offer, a stockholder must, prior to the Expiration Date, either
(i) deliver to the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase (a) a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees, (b) the Certificates representing Shares to be tendered
and (c) any other documents required to be included with the Letter of
Transmittal under the terms and subject to the conditions thereof and of this
Offer to Purchase, (ii) cause such stockholder's broker, dealer, commercial bank
or trust company to tender applicable Shares pursuant to the procedures for
book-entry transfer described below or (iii) comply with the guaranteed delivery
procedures described below.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Shares by (i) causing such securities to be
transferred in accordance with the Book-Entry Transfer Facility's procedures
into the Depositary's account and (ii) causing the Letter of Transmittal to be
delivered to the Depositary by means of an Agent's Message. Although delivery of
Shares may be effected through book-entry transfer, either the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, together with any required signature guarantees, or an Agent's
Message in lieu of the Letter of Transmittal, and any other required documents,
must, in any case, be transmitted to and received by the Depositary prior to the
Expiration Date at one of its addresses set forth on the back cover of this
Offer to Purchase, or the tendering stockholder must comply with the guaranteed
delivery procedures described below. Delivery of documents or instructions to
the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
SIGNATURE GUARANTEE. All signatures on a Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other firm which is a bank, broker, dealer, credit
union or savings association (each of the foregoing being referred to as an
"Eligible Institution" and collectively as "Eligible Institutions"), unless the
Shares tendered thereby are tendered
41
<PAGE>
(i) by the registered holder of Shares who has not completed the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 to the Letter of Transmittal.
If a Certificate is registered in the name of a person other than the signer
of the Letter of Transmittal, or if payment is to be made, or a Certificate not
accepted for payment or not tendered is to be returned to, a person other than
the registered holder(s), then the Certificate 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 Certificate, with the signature(s) on such
certificate or stock powers guaranteed as described above. See Instructions 1, 5
and 7 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's 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 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 provided by Purchaser, is received by
the Depositary as provided below prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer, together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantee (or, in the case of a book-entry transfer, a Book-Entry
Confirmation along with an Agent's Message) and any other documents required
by such Letter of Transmittal, are received by the Depositary within three
Trading Days after the date of execution of the Notice of Guaranteed
Delivery. A "Trading Day" is any day on which the New York Stock Exchange is
open for business.
Any Notice of Guaranteed Delivery may be delivered by hand, transmitted by
facsimile transmission or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
OTHER REQUIREMENTS. 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 (i) certificates evidencing such
Shares or a Book-Entry Confirmation of the delivery of such Shares (unless
Purchaser elects, in its sole discretion, to make payment for such Shares
pending receipt of the Certificates or a Book-Entry Confirmation, if available,
with respect to such Certificates), (ii) a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES
TO BE PAID BY PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
TENDER CONSTITUTES AN AGREEMENT. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering stockholder and Purchaser on the terms and subject to the
conditions of the Offer.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including, but not limited to, time of receipt) and acceptance for
payment of any tendered Shares pursuant to any of the procedures described above
will be determined by Purchaser, in its sole discretion, whose determination
will be final and binding on all parties. Purchaser reserves the absolute right
to reject any or all tenders of any Shares determined by it not to be in proper
form or if the acceptance for payment of, or payment for, such Shares may, in
the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its
42
<PAGE>
sole discretion, to waive any of the Offer Conditions (subject to the terms of
the Merger Agreement) or any defect or irregularity in any tender with respect
to Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
have been cured or waived. None of Suez, Parent, Purchaser or any of their
respective affiliates, the Depositary, the Information Agent or any other person
or entity 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 interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal (or delivering
an Agent's Message) as set forth above, a tendering stockholder irrevocably
appoints each designee of Purchaser as such stockholder's attorney-in-fact and
proxy, with full power of substitution, to vote in such manner as such
attorney-in-fact and proxy (or any substitute thereof) shall deem proper in its
sole discretion, and to otherwise act (including pursuant to written consent) 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 any and all
dividends, distributions, rights or other securities issued or issuable in
respect of such Shares on or after January 1, 2000). All such proxies shall be
considered coupled with an interest in the tendered Shares and shall be
irrevocable. This appointment will be effective if, when, and only to the extent
that, Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
acceptance for payment, all prior proxies given by such stockholder with respect
to such Shares and other securities will, without further action, be revoked,
and no subsequent proxies may be given (and, if given, will not be deemed
effective). The designees of Purchaser will, with respect to the Shares and
other securities for which the 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, special, adjourned or postponed
meeting of the Company's stockholders, by written consent in lieu of any such
meeting or otherwise. Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon Purchaser's acceptance
for payment of such Shares, Purchaser must be able to exercise all rights
(including, without limitation, all voting rights) with respect to such Shares
and receive all dividends and distributions.
BACKUP WITHHOLDING. Under United States federal income tax law, the amount
of any payments made by the Depositary to stockholders (other than corporate and
certain other exempt stockholders) pursuant to the Offer may be subject to
backup withholding tax at a rate of 31%. To avoid such backup withholding tax
with respect to payments made pursuant to the Offer, a non-exempt, tendering
stockholder must provide the Depositary with such stockholder's correct taxpayer
identification number and certify under penalties of perjury that such
stockholder is not subject to backup withholding tax by completing the
Substitute Form W-9 included as part of the Letter of Transmittal. If backup
withholding applies with respect to a stockholder or if a stockholder fails to
deliver a completed Substitute Form W-9 to the Depositary or otherwise establish
an exemption, the Depositary is required to withhold 31% of any payments made to
such stockholder. See "SPECIAL FACTORS--Certain United States Federal Income Tax
Consequences" of this Offer to Purchase and the information set forth under the
heading "Important Tax Information" contained in the Letter of Transmittal.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after April 27, 2000, or at such later time as may
apply if the Offer is extended.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
43
<PAGE>
and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described below. Any such
delay will be an extension of the Offer to the extent required by law.
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
set forth 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 the name of the registered
holder of such Shares, if different from that of the person who tendered such
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 the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution, unless such Shares have been
tendered for the account of an Eligible Institution. Shares tendered pursuant to
the procedure for book-entry transfer as set forth in "--Procedures for
Tendering Shares" may be withdrawn only by means of the withdrawal procedures
made available by the Book-Entry Transfer Facility, must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares and must otherwise comply with the Book-Entry Transfer
Facility's procedures.
Withdrawals of tendered Shares may not be rescinded without Purchaser's
consent and any Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. 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, which determination will be final and binding.
None of Suez, Parent, Purchaser or any of their affiliates, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Any Shares properly withdrawn may be re-tendered at any time prior to the
Expiration Date by following any of the procedures described in "--Procedures
for Tendering Shares."
5. PRICE RANGE OF SHARES
The primary market for the Shares is the New York Stock Exchange. The ticker
symbol for the Shares is "TGN." The following table sets forth, for the periods
indicated, the high and low sales prices per share of Common Stock on the New
York Stock Exchange as reported by the Bloomberg Professional Service and the
amount of dividends paid on the Common Stock:
<TABLE>
<CAPTION>
HIGH LOW DIVIDEND AMOUNT
-------- -------- ---------------
<S> <C> <C> <C>
1998:
First Quarter............................................. $19 15/16 $14 13/16 $0.035
Second Quarter............................................ 15 1/8 12 1/8 $0.035
Third Quarter............................................. 13 15/16 9 3/4 $0.035
Fourth Quarter............................................ 15 5/16 11 5/16 $0.035
1999:
First Quarter............................................. $16 13/16 $11 3/8 $0.035
Second Quarter............................................ 19 7/16 13 5/8 $0.035
Third Quarter............................................. 24 3/16 17 1/8 $0.035
Fourth Quarter............................................ 24 16 $0.035
2000:
First Quarter (through February 24, 2000)................. $23 7/16 $16 1/4 --
</TABLE>
On September 17, 1999, the last full trading day prior to the public
announcement of the $22 Offer, the reported closing sales prices of the Common
Stock on the New York Stock Exchange was $19.25 per Share. On January 18, 2000,
the last full trading day prior to the public announcement of the execution of
the Merger Agreement, the closing sales price of the Common Stock reported on
the New York Stock
44
<PAGE>
Exchange was $17.00 per Share. On February 24, 2000, the last practicable
trading day prior to the date of this Offer to Purchase, the last reported sales
price of the Common Stock on the New York Stock Exchange was $23.00 per share.
Stockholders are urged to obtain current market quotations for the Common Stock.
6. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the Merger Agreement, without Parent's written consent, the
Company will not, and will cause each of its subsidiaries not to, (i) with
certain exceptions, issue, sell or pledge any shares of its capital stock or
other ownership interest in the Company or any subsidiary, or any securities
convertible into or exchangeable for any such shares or ownership interest, or
any rights, warrants or options to acquire or with respect to any such shares of
capital stock, ownership interest, or convertible or exchangeable securities (or
derivative instruments in respect of the foregoing); (ii) effect any stock split
or otherwise change its capitalization as it exists on the date hereof, or
directly or indirectly redeem, purchase or otherwise acquire any shares of its
capital stock or capital stock of any subsidiary of the Company; or
(iii) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any shares of its capital stock or other ownership
interests (other than any such payments to the Company by any of its
subsidiaries).
7. CERTAIN INFORMATION CONCERNING THE COMPANY
THE COMPANY. The information concerning the Company contained in this Offer
to Purchase, including financial information, has been taken from or is based
upon publicly available documents and records on file with the Commission and
other public sources. None of Suez, Parent, Purchaser or any of their affiliates
assumes any responsibility for the accuracy or completeness of the information
concerning the Company contained in such documents and records or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any such information but which are unknown to
them.
The Company develops, owns and operates community energy systems and
cogeneration facilities. The Company currently operates fourteen district energy
systems serving urban customers and sixteen single customer
industrial/commercial sites. The Company's major customers include industrial
plants, electric utilities, commercial and office buildings, government
buildings, colleges and universities, hospitals, residential complexes, hotels,
sports arenas and convention centers. The Company is a Delaware corporation. The
address of the Company's principal executive offices is One Water Street, White
Plains, New York 10601. The telephone number of the Company at such offices is
(914) 286-6600.
FINANCIAL INFORMATION. Certain financial information relating to the
Company is hereby incorporated by reference to the audited financial statements
for the Company's 1998 and 1997 fiscal years set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 (the "1998
10-K"), beginning on page F-1 of such reports; and (ii) the sections of the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999
(the "September 1999 10-Q") set forth under the following captions: (a) "The
Consolidated Statements of Operations for the Three Months and Nine Months Ended
September 30, 1999 and 1998 (Unaudited)", (b) "Consolidated Balance Sheets as of
September 30, 1999 (Unaudited) and December 31, 1998", (c) "Consolidated
Statements of Cash Flows for the Nine Months Ended September 30, 1999 and 1998
(Unaudited)" and (d) "Notes to Consolidated Financial Statements (Unaudited)."
These reports may be inspected at, and copies may be obtained from, the same
places and in the manner set forth below under "--Available Information," below.
Set forth below is certain selected consolidated financial information
relating to the Company and its subsidiaries which has been derived from the
financial statements contained in the 1998 10-K and the September 1999 10-Q.
More comprehensive financial information is included in these reports and other
documents filed by the Company with the Commission. The financial information
that follows is qualified in its entirety by reference to these reports and
other documents, including the financial statements and related notes contained
therein.
45
<PAGE>
TRIGEN ENERGY CORPORATION
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
($ IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------- -------------------
1998 1997 1999 1998
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues.......................................... $242,394 $240,651 $204,052 $176,545
Operating expenses
Fuel and consumables............................ 95,957 114,168 84,860 74,012
Production and operating costs.................. 53,840 47,086 39,783 36,068
Depreciation.................................... 19,780 16,021 18,312 17,401
General and administrative...................... 40,994 34,633 30,588 27,785
-------- -------- -------- --------
Total operating expenses.......................... 210,571 211,908 173,543 155,266
-------- -------- -------- --------
Operating income.................................. 31,823 28,743 30,509 21,279
Other income (expense)
Interest expense................................ (23,742) (18,976) (18,829) (17,613)
Other income, net............................... 5,570 2,448 15,397 4,931
Earnings before minority interests, income taxes
and extraordinary item and cumulative effect of
a change in an accounting principle............. 13,651 12,215 27,077 8,597
Minority interests in earnings of subsidiaries.... (2,519) (3,699) 2,390 2,374
Earnings before income taxes and extraordinary
item and cumulative effect of a change in an
accounting principle............................ 11,132 8,516 24,687 6,223
Income taxes...................................... 4,575 3,491 10,220 2,676
-------- -------- -------- --------
Earnings before extraordinary item and cumulative
effect of a change in an accounting principle... 6,557 5,025 14,467 3,547
Extraordinary loss from extinguishment of debt,
net of income tax benefit....................... (299) -- -- (299)
-------- -------- -------- --------
Cumulative Effect of a Change in an Accounting
Principle....................................... -- -- (4,903) --
Net Earnings...................................... $ 6,258 $ 5,025 $ 9,564 $ 3,248
======== ======== ======== ========
PER SHARE:
BASIC EARNINGS PER COMMON SHARE
Before extraordinary item and cumulative effect of
a change in an accounting principle............. $ .55 $ .42 $ 1.20 $ .30
Extraordinary loss................................ (.03) -- -- (.03)
Cumulative effect of a change in an accounting
principle....................................... -- -- (.41) --
-------- -------- -------- --------
Net Earnings...................................... $ .52 $ .42 $ .79 $ .27
======== ======== ======== ========
DILUTED EARNINGS PER COMMON SHARE
Before extraordinary item and cumulative effect of
a change in an accounting principle............. $ .55 $ .41 $ 1.20 $ .30
Extraordinary loss................................ (.03) -- -- (.03)
Cumulative effect of a change in an accounting
principle....................................... -- -- (.41) --
-------- -------- -------- --------
Net earnings...................................... $ .52 $ .41 $ .79 $ .27
======== ======== ======== ========
Dividends paid.................................... .14 .14 .105 .105
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------- -------------------
1998 1997 1999 1998
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)......................... $ (9,543) $ (2,095) $ 4,236 $ (3,915)
Property, plant and equipment, net................ 442,755 388,448 484,768 433,389
Current assets.................................... 66,086 69,687 81,891 60,969
Noncurrent assets................................. 109,315 67,834 128,698 103,167
Total assets...................................... 618,156 525,969 695,357 597,525
Current liabilities............................... 75,629 71,782 77,655 64,884
Noncurrent liabilities............................ 394,599 308,705 459,132 385,192
Stockholders' equity.............................. 147,928 145,482 158,570 147,449
OTHER DATA
Ratio of earnings to fixed charges................ 1.2x 1.4x 1.7x 1.1x
Book value per share.............................. $ 12.32 $ 11.99 $ 13.12 $ 12.28
</TABLE>
AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities, any material interests
of such persons in transactions with the Company and other matters is required
to be disclosed in reports filed with the Commission. These reports and other
information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection and copying
at prescribed rates at regional offices of the Commission located at Seven World
Trade Center, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Electronic filings
filed through the Commission's Electronic Data Gathering, Analysis and
Retrieval, or EDGAR, system, including those made by or in respect of the
Company, are publicly available through the Commission's home page on the
Internet at http://www.sec.gov.
On February 10, 2000, the Company announced its results for the fourth
quarter of 1999 and for the year ended December 31, 1999. According to the
announcement, the Company had the following results:
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
------------------- -------------------
1999 1998* 1999 1998
-------- -------- -------- --------
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues.............................................. $76,368 $65,849 $280,420 $242,394
Operating Income...................................... 9,042 10,544 39,551 31,823
Net Earnings.......................................... 1,641 3,010 11,205 6,258
Net Earnings per Share (basic)........................ 0.14 0.25 0.93 0.52
Net Earnings per Share (diluted)...................... 0.13 0.25 0.92 0.52
</TABLE>
- ------------------------
* Restated to reflect a change in accounting policy for interim reporting for
certain operating costs from an average costing method to an actual costing
method as of January 1, 1998.
8. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT, SUEZ, CAC AND SOCIETE
GENERALE
PURCHASER. Purchaser, a newly incorporated Delaware corporation, has not
conducted any business other than in connection with the Offer and the Merger
Agreement. All of the issued and outstanding shares of capital stock of
Purchaser are held by CAC. The principal address of Purchaser is c/o Elyo, 235
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Avenue Georges Clemenceau BP 4601 92746 Nanterre Cedex, France. The telephone
number is 011-331-41-20-10-10.
PARENT. Parent, a SOCIETE ANONYME organized and existing under the laws of
the Republic of France, is a direct, wholly owned subsidiary of Societe
Generale. The principal business of Parent is producing power and services,
including cogeneration, district heating and cooling systems, waste-to-energy,
electricity distribution and associated production, and operation and
maintenance. The principal executive offices of Parent are located at 235 Avenue
Georges Clemenceau BP 4601 92746 Nanterre Cedex, France. The telephone number is
011-331-41-20-10-10.
SUEZ. Suez Lyonnaise des Eaux is a publicly-held SOCIETE ANONYME organized
and existing under the laws of the Republic of France. The principal business of
Suez is operating private infrastructure services in more than 120 countries,
providing electricity and natural gas, waste treatment, communications services,
and water services and maintains interests in construction, and capital
investments. Suez was formed as a result of the 1997 merger of Compagnie de Suez
(builder of the Suez Canal) and Lyonnaise des Eaux. The principal executive
offices of Suez are located at 1, rue d'Astorg, 75008 Paris, France. The
telephone number is 011-33-1-40-06-64-00.
CAC. Cofreth American Corporation, a Delaware corporation, is a direct,
wholly owned subsidiary of Parent which, as of the date of this Offer to
Purchase, holds 4,870,670 Shares. The principal business of CAC is holding the
Shares on behalf of Parent. The principal address of CAC is c/o Trigen Energy
Corporation, One Water Street, White Plains, New York 10601.
SOCIETE GENERALE. Societe Generale de Belgique, a SOCIETE ANONYME A
DIRECTOIRE ET CONSEIL DE SURVEILLANCE organized and existing under the laws of
the Republic of Belgium, is a direct subsidiary of Suez. The principal business
of Societe Generale is to hold Suez's equity participation in financial and
energy-related businesses. The principal executive offices of Societe Generale
are located at Rue Royale 30, B-100 Brussels, Belgium.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Purchaser, Parent and Suez are set forth in Schedule I to
this Offer to Purchase.
During the last five years, none of Purchaser, Parent, Suez, CAC, Societe
Generale or, to the best of their knowledge, any of the persons listed in
Schedule I to this Offer to Purchase (i) has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or (ii) was a
party to any judicial or administrative proceeding that resulted in a judgment,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
Except as described in this Offer to Purchase (i) none of Purchaser, Parent,
Suez, CAC, Societe Generale or, to the best of their knowledge, any of the
persons listed in Schedule I to this Offer to Purchase, or any associate or
majority-owned subsidiary of Suez, Parent, Purchaser or the Company,
beneficially owns or has any right to acquire, directly or indirectly, any
equity securities of the Company and (ii) none of Purchaser, Parent, Suez, CAC,
Societe Generale or to the best of their knowledge, any of the persons or
entities referred to above has effected any transaction in such equity
securities during the past 60 days. Suez, Parent and Purchaser disclaim
beneficial ownership of any Common Stock owned by any pension plans of Suez,
Parent, Purchaser or any affiliate of Suez, Parent or Purchaser.
Except as described in this Offer to Purchase, none of Purchaser, Parent,
Suez, CAC, Societe Generale or, to the best of their knowledge, any of the
persons listed in Schedule I to this Offer to Purchase has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, joint ventures, loan or option
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<PAGE>
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
since January 1, 1998, none of Purchaser, Parent, Suez, CAC, Societe Generale or
to the best of their knowledge, any of the persons listed on Schedule I to this
Offer to Purchase has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, since
January 1, 1998, there have been no contacts, negotiations or transactions
between any of Purchaser, Parent, Suez, CAC, Societe Generale or their
affiliates or, to the best of their knowledge, any of the persons listed in
Schedule I to this Offer to Purchase, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
AVAILABLE INFORMATION. None of Purchaser, Parent, Suez, CAC or Societe
Generale is subject to the informational reporting requirements of the Exchange
Act, nor are any of them required to file reports and other information with the
Commission relating to its businesses, financial condition or other matters.
Except as otherwise disclosed in this Offer to Purchase, none of Purchaser,
Parent or Suez have made, or are making, any provision in connection with the
Offer or the Merger to grant unaffiliated security holders access to the files
of any of Purchaser, Parent or Suez.
9. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The amount of
funds required by Purchaser to purchase all of the outstanding Common Stock
pursuant to the Offer and to pay related fees and expenses is expected to be
approximately $178 million. Purchaser will obtain such funds from Parent. Parent
anticipates that it will obtain such funds from available credit lines and
financial support of the Parent Group.
The margin regulations promulgated by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") place restrictions on the amount of
credit that may be extended for the purposes of purchasing margin stock,
including if such credit is secured directly or indirectly by margin stock.
Purchaser believes that the financing of the acquisition of the Shares will be
in full compliance with the margin regulations.
10. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON STOCK; EXCHANGE ACT
REGISTRATION
MARKET FOR 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.
STOCK QUOTATION. Shares are traded primarily on the New York Stock
Exchange. According to published guidelines of the New York Stock Exchange, the
Shares might no longer be eligible for quotation on the New York Stock Exchange
if, among other things, the number of Shares publicly held was less than
1,100,000, there were fewer than 2,000 holders of round lots, the aggregate
market value of the publicly held Shares was less than $40,000,000, net tangible
assets were less than $40,000,000 and there were fewer than two registered and
active market makers for the Shares. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10 percent of the Shares
are not considered as being publicly held for this purpose. According to the
Company, as of January 27, 2000, there were 458 holders of record of Shares (not
including beneficial holders of Shares in street name), and as of January 27,
2000, there were 12,401,808 Shares outstanding.
If the Shares were to cease to be quoted on the New York Stock Exchange, the
market for the Shares could be adversely affected. It is possible that the
Shares would be traded or quoted on other securities exchanges or in the
over-the-counter market, and that price quotations would be reported by such
exchanges, or through Nasdaq or other sources. The extent of the public market
for the Shares and the
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<PAGE>
availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration under the Exchange Act may be terminated upon
application of the Company to the Commission if the Shares are neither listed on
a national securities exchange nor held by 300 or more holders of record.
Termination of registration under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its stockholders and
to the Commission and would make certain provisions of the Exchange Act no
longer applicable to the Company, such as the short-swing profit recovery
provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a
proxy statement pursuant to Section 14(a) of the Exchange Act in connection with
stockholders' meetings, the related requirement of furnishing an annual report
to stockholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions. 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 may be impaired or eliminated. Parent intends to seek to cause
the Company to apply for termination of registration of the Common Stock under
the Exchange Act as soon after the consummation of the Offer as the requirements
for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities," as such
term is defined under the regulations of the Federal Reserve Board, which has
the effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
the Offer, the Shares would no longer constitute "margin securities" for the
purposes of the margin regulations of the Federal Reserve Board and therefore
could no longer be used as collateral for loans made by brokers. In any event,
the Shares will cease to be "margin securities" if registration of the Shares
under the Exchange Act is terminated.
11. CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement,
Purchaser is not required to accept for payment or to pay for any shares of
Common Stock not theretofore accepted for payment or paid for, and may terminate
or amend the Offer if at any time on or after the date of the Merger Agreement
and before the acceptance of such Shares for payment or the payment therefor,
any of the following conditions exist or shall occur and remain in effect:
(a) there shall have been instituted, pending or threatened any
litigation by the Government of the United States or the Republic of France
or by any agency or instrumentality thereof or by any other third person
(including any individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization, entity or group
(as defined in the Exchange Act)) or nongovernmental entity that would be
reasonably likely to (i) restrict the acquisition by Parent or Purchaser (or
any of its affiliates) of Shares pursuant to the Offer or restrain, prohibit
or delay the making or consummation of the Offer or the Merger, (ii) make
the purchase of or payment for some or all of the Shares pursuant to the
Offer or the Merger illegal, (iii) impose limitations on the ability of
Parent or Purchaser (or any of their affiliates) effectively to acquire or
hold, or to require Parent, Purchaser or the Company or any of their
respective affiliates or subsidiaries to dispose of or hold separate, any
portion of their assets or the business of any one of them, (iv) impose
material limitations on the ability of Parent, Purchaser or their affiliates
to exercise full rights of ownership of
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<PAGE>
the shares of Common Stock purchased by it, including, without limitation,
the right to vote the shares purchased by it on all matters properly
presented to the stockholders of the Company, (v) limit or prohibit any
material business activity by Parent, Purchaser or any of their affiliates,
including, without limitation, requiring the prior consent of any person or
entity (including the Government of the United States of America and the
Republic of France, and any instrumentality thereof) to future transactions
by Parent, Purchaser or any of their affiliates (Parent and Purchaser
acknowledge that the regulatory nature of some of the Company's assets and
businesses may result in the limitation of Parent's and its affiliates in
certain utility-related areas) or (vi) make materially more costly (A) the
making of the Offer, (B) the acceptance for payment of, or payment for, some
or all of the Shares pursuant to the Offer, (C) the purchase of Shares
pursuant to the Offer or (D) the consummation of the Merger; or
(b) there shall have been a subsequent development in any action or
proceeding relating to the Company or any of its subsidiaries that would
(i) be reasonably likely to be materially adverse either to Parent and
Purchaser or to Company and its subsidiaries taken as a whole or (ii) make
materially more costly (A) the making of the Offer, (B) the acceptance for
payment of, or payment for, some or all of the Shares pursuant to the Offer,
(C) the purchase of Shares pursuant to the Offer or (D) the consummation of
the Merger; or
(c) there shall have been any action taken, or any law promulgated,
enacted, entered, enforced or deemed applicable to the Offer or the Merger
by any governmental entity that could directly or indirectly result in any
of the consequences referred to in subsection (a) above; or
(d) the Merger Agreement shall have been terminated in accordance with
its terms; or
(e) the Tender and Voting Agreement or the Casten Stock Purchase
Agreement shall not be in effect; or
(f) (i) any of the representations and warranties made by the Company in
the Merger Agreement that are qualified by materiality or Material Adverse
Effect shall not have been true and correct in all respects when made, or
shall thereafter have ceased to be true and correct in all respects as if
made at the scheduled or extended expiration of the Offer (except to the
extent that any such representation or warranty refers specifically to
another date, in which case such representation or warranty shall be true
and correct in all respects as of such other date), or the other
representations and warranties made by the Company in the Merger Agreement
shall not have been true and correct in all material respects when made, or
shall thereafter have ceased to be true and correct in all material respects
as if made at the scheduled or extended expiration of the Offer (except to
the extent that any such representation or warranty refers specifically to
another date, in which case such representation or warranty shall be true
and correct in all material respects as of such other date), or (ii) the
Company shall have breached or failed to comply in any material respect with
any of its obligations under the Merger Agreement; or
(g) Parent and the Special Committee shall have agreed that Parent will
terminate the Offer or postpone the acceptance for payment of or payment for
Shares thereunder; or
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) a
declaration of any banking moratorium by federal or state authorities or any
suspension of payments in respect of banks or any limitation (whether or not
mandatory) imposed by federal or state authorities on the extension of
credit by lending institutions in the United States or the Republic of
France, (iii) any mandatory limitation by the federal government that has a
material adverse effect generally on the extension of credit by banks and
other financial institutions generally, (iv) a commencement of a war, armed
hostilities or any other international or national calamity directly or
indirectly involving the United States or the Republic of France, or (v) in
the case of any of the
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foregoing existing at the time of the commencement of the Offer, in the sole
judgment of the Parent, a material acceleration or worsening thereof.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition and may be waived by Purchaser or Parent, in
whole or in part, at any time and from time to time in their 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 such right, the waiver of any such
right with respect to particular facts and other 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 that may be asserted at any time and from
time to time.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
GENERAL. Except as otherwise disclosed herein, neither Parent nor Purchaser
is aware of (i) 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 Purchaser pursuant to the
Offer or the Merger or otherwise or (ii) any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser as contemplated herein. Should any such approval or other action be
required, Purchaser currently contemplates that it would seek such approval or
action. Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See "--Conditions of the Offer." While,
except as described in this Offer to Purchase, Purchaser does not currently
intend to delay the acceptance for payment of Shares tendered pursuant to the
Offer pending the outcome of any such matter, there can be no assurance that any
such approval or action, if needed, would be obtained or would be obtained
without substantial conditions, that adverse consequences might not result to
the business of the Company, Suez, Parent or Purchaser or that certain parts of
the businesses of the Company, Suez, Parent or Purchaser might not have to be
disposed of in the event that such approvals were not obtained or any other
actions were not taken.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to the date the interested stockholder became
an interested stockholder, the board of directors of the corporation approved
either the business combination or the transaction in which the interested
stockholder became an interested stockholder. The Company has represented to
Parent and Purchaser in the Merger Agreement that the Board of Directors has
taken all necessary action so that the restrictions contained in Section 203 of
the DGCL applicable to a "business combination" will not apply to the execution,
delivery or performance of the Merger Agreement, the Offer, the Merger or the
transactions contemplated by the Merger Agreement or the Casten Stock Purchase
Agreement.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In EDGAR V. MITE CORP., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements 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 acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme
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<PAGE>
Court was by its terms applicable only to corporations that had a substantial
number of holders in the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not believe that any state takeover statutes apply to the
Offer. Neither Parent nor Purchaser has currently complied with any state
takeover statute or regulation. Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer or the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer or the Merger, Purchaser
might be required to file certain information with, or receive approvals from,
the relevant state authorities. In addition, if enjoined, Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer and the Merger. In such case,
Purchaser may not be obligated to accept for payment any Shares tendered. See
"--Conditions of the Offer."
ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules that have been promulgated thereunder by the Federal
Trade Commission (the "FTC"), certain transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice and the FTC and certain waiting period requirements have
been satisfied. However, the acquisition of Shares by Purchaser pursuant to the
Offer is not subject to these requirements because Parent and its affiliates
currently owns in excess of 50% of the outstanding Shares.
OTHER MATTERS. In September, 1999, three individual stockholders of the
Company, namely Michael Fothergill, Rosa Cortez and Sarah Berkowitz, filed
complaints (the "Complaints") in the Court of Chancery for the State of Delaware
against the Company, Parent and certain officers and directors of the Company,
Suez and Parent, with respect to the Company's September 21, 1999 announcement
that it had received from Suez, through Parent, an offer to purchase all of the
outstanding shares it did not already hold at a price of $22 per Share. The
Complaints, which are substantively identical, purport to assert class action
claims on behalf of all persons, other than the defendants and their affiliates,
who own Shares. The essence of the Complaints is that the per share price of the
$22 Offer contained in the September 21, 1999 announcement is inadequate, and
that any agreement between Suez and the Company to consummate an offer at that
price would constitute a breach of the fiduciary duties owed by the defendants
to the minority stockholders of the Company. The Complaints seek injunctive
relief, recission, damages, costs (including attorneys' and experts' fees) and
other relief. The Complaints have been consolidated into a single class action
litigation (the "Class Action Litigation").
On January 20, 2000, one of the lead counsel for the purported class (the
"Class") contacted counsel for Parent to discuss the status of the transaction
in light of the announcement of the Merger Agreement, and to discuss the pending
Class Action Litigation. As a result, counsel for Parent and counsel for the
Class began to discuss means of settling the Class Action Litigation. Counsel
for Parent advised counsel for the Class that one of the factors that Parent
took into account in increasing its proposal from $22 per share to $23.50 was
the Class Action Litigation. Over the next several weeks, Parent and counsel for
the plaintiffs discussed the transaction.
On February 15, 2000, a draft of the Offer to Purchase (the "Draft") was
provided to counsel for the Class. On February 22, 2000, counsel for Parent and
counsel for the Class reached an agreement in principle, subject to court
approval, to settle the Class Action Litigation (the "Proposed Settlement") on
behalf of a class consisting of all persons (other than the defendants and their
affiliates) who own Shares or owned Shares after September 23, 1999, the date of
the announcement of the $22 Offer (except as provided below). The Proposed
Settlement is memorialized in a Memorandum of Understanding. The principal
elements of the Proposed Settlement are (1) the undertaking by Purchaser, under
certain
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circumstances, to include a Subsequent Offering Period pursuant to Rule 14d-11
(described in "--Terms of the Offer"), and (2) the agreement to include as a
schedule to this Offer to Purchase more detailed financial projections,
containing business segment information, than the projections that had been
contained in the Draft (see "SPECIAL FACTORS--Company Financial Projections")
and (3) the agreement to include in the Offer to Purchase enhanced disclosure
regarding information concerning engagements between CSFB and Parent (see
"SPECIAL FACTORS--Position of Suez, Parent and Purchaser Regarding Fairness of
the Offer and the Merger"). The Proposed Settlement further contemplates that
the Class Action Litigation will be dismissed with prejudice, and that releases
will be given to the Company, Parent, their employees, officers and directors,
affiliates and agents, for all matters arising out of this transaction. The
Proposed Settlement is subject to the execution of definitive settlement
documents by all defendants and to court approval.
Parent believes that under existing Delaware precedents and law, an informed
stockholder who accepts the benefits of this transaction by having such
stockholder's Shares purchased pursuant to the Offer or by voting for the Merger
and accepting the consideration paid in connection therewith has accepted the
transaction and, accordingly, were the settlement not approved, should not be
included as a member of the purported class which participates in any subsequent
class action recovery. If the conditions to the Proposed Settlement are not
satisfied, Parent may under certain circumstances be entitled to terminate the
Offer and not purchase any tendered Shares. See "--Conditions of the Offer."
13. FEES AND EXPENSES
Except as set forth in this Offer to Purchase, neither Parent nor Purchaser
will pay any fees or expenses to any broker, dealer or other person for
soliciting tenders of Shares pursuant to the Offer.
Parent and Purchaser have engaged Lazard Freres as the Dealer Manager in
connection with the Offer, and as financial advisor in connection with Parent's
proposed acquisition of the Company. Parent has also agreed to indemnify Lazard
Freres and certain other persons against certain liabilities in connection with
the Offer, including certain liabilities under the federal securities laws. See
"--SPECIAL FACTORS--Analysis of Financial Advisor to Parent."
Purchaser and Parent have also retained Harris Trust Company of New York as
the Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the United States federal securities laws.
In addition, Purchaser and Parent have retained Morrow & Co., Inc. to act as
the Information Agent in connection with the Offer. The Information Agent will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the United States federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering material to their customers.
14. MISCELLANEOUS
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with such state statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with any such state statute, the Offer will not be made
to (and tenders will not be accepted from or on behalf of) the
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stockholders in such state. In any jurisdiction where the securities, blue sky
or other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by the Dealer Manager or
one or more registered brokers or dealers which are licensed under the laws of
such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Suez, Parent or Purchaser not contained in this
Offer to Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
Suez, Parent and Purchaser have filed with the Commission the Schedule TO,
together with exhibits, pursuant to Sections 13(e) and 14(d)(1) of the Exchange
Act and Rules 13e-3 and 14d-3 promulgated thereunder, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. The Schedule TO and any amendments thereto, including exhibits, may be
inspected at, and copies may be obtained from, the same places and in the manner
set forth in "--Certain Information Concerning the Company--Additional
Information" (except that they will not be available at the regional offices of
the Commission).
February 28, 2000 T Acquisition Corp.
55
<PAGE>
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
SUEZ LYONNAISE DES EAUX, ELYO AND T ACQUISITION CORP.
1. SUPERVISORY BOARD AND EXECUTIVE OFFICERS OF SUEZ LYONNAISE DES EAUX
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five years
of each member of the Supervisory Board and each executive officer of Suez. The
principal address of Suez Lyonnaise des Eaux and, unless indicated below, the
current business address for each individual listed below is c/o Suez Lyonnaise
des Eaux, 1, rue d'Astorg, 75008 Paris, France. Telephone: 011-33-1-40-06-64-00.
Each such person is, unless indicated below, a citizen of France.
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Jerome Monod................ 68 Chairman of the Supervisory Board, Suez Lyonnaise des
Eaux (1997-present); Chairman of the Board, Lyonnaise
des Eaux (1980-1997).
Jean Guy Gandois............ 69 Vice Chairman of the Supervisory Board, Suez Lyonnaise
des Eaux (1997-present); Chairman and CEO, Cockerill
Sambre (1987-1999); President, French National Council
of Employers (1996-1997); Chairman and CEO, Pechiney
(1986-1996).
Gerhard Cromme.............. 56 Chairman of the Executive Board, Thyssen Krupp AG
(1999-present); Member of the Supervisory Board, Suez
Lyonnaise des Eaux (1997-present); Chairman of the
Executive Board, Fried. Krupp AG Hoesch-Krupp
(1989-1999). Mr. Cromme is a German citizen.
Etienne Davignon............ 67 Chairman, Societe Generale de Belgique (1985-present);
Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present). Mr. Davignon is a Belgian citizen.
Paul Desmarais, Jr.......... 44 Chairman of the Board and Co-Chief Executive, Power
Corporation of Canada (1998-present); Chairman of the
Board, Power Financial Corporation (1990-present);
Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1998-present); Director, Tractebel S.A. (1990-present);
Director, Electrafina S.A. (1999-present); Director,
Investors Group Inc. (1983-present); Director, London
Insurance Group Inc. (1997-present); Director, London
Life Insurance Company (1997-present); Director, Pargesa
Holdings S.A. (1992-present); Director, Groupe Brux-
elles Lambert S.A. (1990-present); Director, Imerys
(1991-present); Director, Rhodia (1999-present);
Director, GWL&A Financial (1998-present); Director,
Great-West Life & Annuity Insurance Company
(1991-present); Director, The Great-West Life Assurance
Company (1994-present); Director, Great-West Lifeco Inc.
(1984-present); Director, Gesca Ltd. (1985-present);
Director, La Presse Ltd. (1981-present); Director, Les
Journaux Trans-Canada Inc. (1996-present); Director,
PetroFina S.A. (1992-1999); Director, Gold Circle
Insurance
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Company (1990-1998); Director, ParFinance (1990-1998);
Director, Royale-Vendome S.A. (1991-1998); Director,
Fibelpar S.A. (1990-1998); Director, Les Publications
J.T.C. Inc. (1985-1996); Director and Member of the
International Council, INSEAD; Chairman, Canadian
Foundation for International Management for INSEAD;
Chairman, McGill University Faculty of Management
International Advisory Board; Chairman, HEC Interna-
tional Advisory Committee. Mr. Desmarais is a Canadian
citizen.
Reto Domeniconi............. 62 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Directeur General, Nestle SA
(1983-1996). Mr. Domeniconi is a Swiss citizen.
Lucien Douroux.............. 65 Chairman of the Supervisory Board, Credit Agricole
Indosuez (1999-present); Member of the Supervisory
Board, Suez Lyonnaise des Eaux (1997-present); Chief
Executive Officer, Caisse Nationale de Credit Agricole
(1993-1999).
Pierre Faurre............... 57 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman and Chief Executive Officer,
SAGEM (1987-present).
Ricardo Fornesa Ribo........ 68 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1998-present); Chief Executive Officer, Sociedad
General de Aguas de Barcelona, S.A. (1979-present);
Board Secretary and Assistant to the President, Caixa
d'Estalvis i Pensions de Barcelona (1979-present); Vice
President, Inmobiliara Colonial (1992-present);
Director, E. Nacional Hidroelectrica del Ribagorzana
(ENHER) Electricity (1994-present); Director, Derivados
Forestales (1997-present); (Director, Cia de
Telecomunicaciones de Chile (1997-present). President,
Cia. de Seguros Adeslas, S.A. (1994-1998). Mr. Fornesa
Ribo is a Spanish citizen.
Albert Frere................ 73 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman of the Board, Groupe Bruxelles
Lambert S.A. (1988-present); Chairman of the Board,
Petrofina S.A. (1990-present); Chairman of the Board,
Electrafina S.A. (1982-present); Chairman of the Board,
Frere-Bourgeois S.A. (1970-present); Chairman of the
Board, Erbe S.A. (1975-present); Deputy Chairman,
Managing Director, and Member of the Executive
Committee, Pargesa Holding S.A. (1981-present); Deputy
Chairman, Compagnie Benelux Paribas S.A. (1973-pre-
sent); Deputy Chairman, Total Fina S.A. (1999-present);
Director, Coparex S.A. (1978-present); Director,
Television Francaise 1, S.A. (1996-present); Director,
L.V.M.H. S.A. (1997-present); Director, Audiofina S.A.
(1992-present); Director, CLT/UFA (1987-present);
Honorary Member of the Council of Regents, Banque
Nationale de Belgique S.A. (1995-present). Mr. Frere is
a Belgian citizen.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Frederick Holliday.......... 64 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman, Northumbrian Water Group
(1993-present); Chairman, The Go-Ahead Group Plc (as of
1997); Board Member, Brewin Dolphin Plc (as of 1996);
Chairman, Northern Venture Capital Fund (1985); Board
Member, Shell UK Limited (1980-1998); Board Member,
Union Railways (1993-1996); Board Member, British Rail
(1990-1993); Vice Chancellor, Durham University
(1980-1990); Chairman, Northern Regional Board, Lloyds
Bank (1986-1989); President of the Freshwater Biological
Association; President, British Trust for Ornithology;
former Council Member for WaterAid; former Chairman of
the Nature Conservancy Council; Past President of the
Scottish Marine Biological Association. Mr. Holliday is
a British citizen.
Philippe Jaffre............. 53 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman and Chief Executive Officer,
Elf Aquitaine (1993-1999).
Jacques Lagarde............. 61 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Executive Vice President, the Gillette
Company (1993-1998). Mr. Lagarde is an American citizen.
Jean Peyrelevade............ 59 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman, Credit Lyonnais
(1993-present).
Claude Pierre-Brossolette... 71 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Chairman, Caisse de Refinancement de
l'Habit (1995-present); Director, Credit Lyonnais
(1994-present); Chairman of the Supervisory Board,
Picelli Cables (1992-present); Director, Compagnie des
Signaux (1996-present); Chairman, Banque Eurofin
(1995-1996).
Jean Syrota................. 62 Member of the Supervisory Board, Suez Lyonnaise des Eaux
(1997-present); Advisor, CEA (1999-present); Chairman
and Chief Executive, Compagnie Generale des Matieres
Nucleaires (COGEMA) (1988-present); Director, TOTAL S.A.
(1993-present); Director, Framatome (1989-present);
Permanent Representative of COGEMA, Usinor
(1995-present); Director, SAGEM (1996-present); Board
Member, CFC (1989-present); Board Member, FBFC
(1989-present); Director, ERAP (1998-present); Director,
CEA-Industrie (1993-1999); Permanent representative of
COGEMA, EURODIF (1989-1997).
Gerard Mestrallet........... 50 President of the Executive Board and Chief Executive
Officer, Suez Lyonnaise des Eaux (1997-present);
Chairman and Chief Executive Officer, Compagnie de Suez
(1995-1997); Chief Executive Officer and Chairman of the
Management Committee, Societe Generale de Belgique
(1991-1995).
Philippe Brongniart......... 61 Member of the Executive Board, Suez Lyonnaise des Eaux
(1997-present); Director, Trigen Energy Corporation
(199[ ]-present) Executive Vice President, Lyonnaise des
Eaux (1993-1997).
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Francois Jaclot............. 50 Executive Vice President and Member of the Executive
Board, Suez Lyonnaise des Eaux (1997-present); Director,
Paris Premiere (1999-present); Director, Societe
Generale de Belgique (1996-present); Director, GTM
(1998-present); Director, Sita (1998-present); Director,
Elyo (1998-present); Director, TPS (1998-present);
Director, Banque Sofinco (1996-present); Director, Suez
Industrie (1996-present); Director, M6 (1998-present);
Director, Lyonnaise Communications (1998-present);
Senior Executive Vice President; Compagnie de Suez
(1996-1997); Managing Partner, Demachy Worms & Compagnie
(1994-1995).
Patrick Buffet.............. 46 Executive Vice President, Suez Lyonnaise des Eaux
(1998-present); Director, Trigen Energy Corporation
(1998-present); Director of International Holdings,
Societe Generale de Belgique (1994-1998).
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF ELYO
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each director and executive officer of Elyo. The principal address of Elyo
and, unless indicated below, the current business address for each individual
listed below is c/o Elyo, 235 Avenue Georges Clemenceau BP 4601 92746 Nanterre
Cedex, France. Telephone: 011-331-41-20-10-10. Each such person is, unless
indicated below, a citizen of France. Directors are identified by an asterisk.
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Jean-Daniel Levy*........... 58 Managing Director, Elyo (1995-present).
Christine Morin-Postel*..... 53 Chief Executive Officer of Societe Generale de Belgique
(1997-present). Director and Chairman, Trigen Energy
Corporation (2000-present); Chairman and Chief Executive
Officer, Compagnie Hypothecaire (1995-1998); Chairman
and Chief Executive Officer, credisuez (1995-1997);
Managing Partner, Financiere Indosuez (1995-1996).
Klaus Wendel*............... 56 Directeur des Participations of Societe Generale de
Belgique (1998-present); Directeur des Systemes de
Gestion, Societe Generale de Belgique (1988-1998). Mr.
Wendel is a German citizen.
Philippe Brongniart*........ 61 Member of the Executive Board, Suez Lyonnaise des Eaux
(1997-present); Director, Trigen Energy Corporation
(1997-present); Executive Vice President, Lyonnaise des
Eaux (1993-1997).
Patrick Buffet*............. 46 Executive Vice President, Suez Lyonnaise des Eaux
(1998-present); Director, Trigen Energy Corporation
(1998-present); Director of International Holdings,
Societe Generale de Belgique (1994-1998).
Francois Jaclot*............ 50 Executive Vice President and Member of the Executive
Board, Suez Lyonnaise des Eaux (1997-present); Director,
Societe
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Generale de Belgique (1996-present); Director, GTM
(1998-present); Director, Sita (1998-present); Director,
Elyo (1998-present); Director, TPS (1998-present);
Director, Banque Sofinco (1996-present); Director, Suez
Industrie (1996-present); Director, M6 (1998-present);
Director, Lyonnaise Communications (1998-present);
Senior Executive Vice President; Compagnie de Suez
(1996-1997); Managing Partner, Demachy Worms & Com-
pagnie (1994-1995).
Olivier Kreiss*............. 57 Vice Chairman, GTM Group (1999-Present); Chairman and
Chief Executive Officer, Degremont (1992-1999).
Jacques Petry*.............. 45 Chairman and Chief Executive Officer, SITA
(1996-present); President of the International Water
Division, Suez Lyonnaise des Eaux (1995-1996).
Bernard Kasriel*............ 53 Vice President and Chief Operating Officer, Lafarge S.A.
(1995-present).
Michel Bleitrach............ 54 Chairman and Chief Executive Officer, Elyo
(1993-present) Director, Trigen Energy Corporation
(1995-present); President and Director, T Acquisition
Corp. (2000-present).
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF T ACQUISITION CORP.
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each director and executive officer of T Acquisition Corp. Each person
identified below has held his position since the formation of T Acquisition
Corp. on January 14, 2000. The principal address of T Acquisition Corp. and,
unless indicated below, the current business address for each individual listed
below is c/o Cofreth American Corporation, 1 Water Street, White Plains, NY
10601. Telephone: (914) 948-9150. Each such person is, unless indicated below, a
citizen of France. Directors are identified by an asterisk.
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS AGE MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ---------------- -------- --------------------------------------------------------
<S> <C> <C>
Michel Bleitrach*........... 54 President, T. Acquisition Corp. (2000-present); Chairman
and Chief Executive Officer, Elyo (1993-present);
Director, Trigen Energy Corporation (1995-present).
Olivier Degos*.............. 37 Treasurer and Secretary, T Acquisition Corp.
(2000-present); International Director, Elyo
(1999-present); Director, Trigen Energy Corporation
(1999-present); Chief Financial Officer, Elyo
(1995-1998); Deputy Chief Financial Officer; The SITA
Group (1994-1995).
Michel Caillard............. 46 Vice President, T Acquisition Corp. (2000-present);
General Counsel, Elyo (1997-present); General Counsel,
F.C.R. (1995-1997).
</TABLE>
I-5
<PAGE>
SCHEDULE II
SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
SECTION 262. APPRAISAL RIGHTS
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to sec. 228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to
sec. 251(g) of this title), secs. 252, 254, 257, 258, 263 or 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall be
available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to determine
the stockholders entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders;
and further provided that no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under
this section shall be available for the shares of any class or series of stock
of a constituent corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to secs. 251, 252, 254, 257,
258, 263 and 264 of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of record
by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b., of this paragraph; or
d. Any combination of the shares of stock, depository receipts and cash in
lieu of fractional shares or fractional depository receipts described in the
foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation party
to a merger effected under sec. 253 of this title is not owned by the parent
corporation immediately prior to the merger, appraisal rights shall be available
for the shares of the subsidiary Delaware corporation.
II-1
<PAGE>
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting, shall
notify each of its stockholders who was such on the record date for such meeting
with respect to shares for which appraisal rights are available pursuant to
subsection (b) or (c) hereof that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall include in such notice
a copy of this section. Each stockholder electing to demand the appraisal of
such stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of such
stockholder's shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such stockholder's shares. A proxy or
vote against the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written demand
as herein provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective;
or
(2) If the merger or consolidation was approved pursuant to sec. 228 or
sec. 253 of this title, each constitutent corporation, either before the
effective date of the merger or consolidation or within ten days thereafter,
shall notify each of the holders of any class or series of stock of such
constitutent corporation who are entitled to appraisal rights of the approval of
the merger or consolidation and that appraisal rights are available for any or
all shares of such class or series of stock of such constituent corporation, and
shall include in such notice a copy of this section; provided that, if the
notice is given on or after the effective date of the merger or consolidation,
such notice shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any
stockholder entitled to appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of
such holder's shares. If such notice did not notify stockholders of the
effective date of the merger or consolidation, either (i) each such constitutent
corporation shall send a second notice before the effective date of the merger
or consolidation notifying each of the holders of any class or series of stock
of such constitutent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or within
10 days after such effective date; provided, however, that if such second notice
is sent more than 20 days following the sending of the first notice, such second
notice need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice that
such notice has been given shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constitutent corporation
may fix, in advance, a record date that shall be not more than 10 days prior to
the date the notice is given, provided, that if the notice is given on or after
the effective date of the merger or consolidation, the record date shall
II-2
<PAGE>
be such effective date. If no record date is fixed and the notice is given prior
to the effective date, the record date shall be the close of business on the day
next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
II-3
<PAGE>
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(1) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 339, L.
'98, eff. 7-1-98.)
II-4
<PAGE>
SCHEDULE III
TRIGEN ENERGY CORPORATION
JANUARY 2000 "COMMITTED CASE" FINANCIAL PROJECTIONS
The Company has advised Suez, Parent and Purchaser that it does not, as a
matter of course, disclose projections as to future revenues, earnings or other
income statement data and the projections were not prepared with a view to
public disclosure. In addition, the projections set forth below were not
prepared in accordance with generally accepted accounting principles, or with a
view to compliance with the published guidelines of the Commission or the
American Institute of Certified Public Accountants regarding projections, which
would require a more complete presentation of the data than as shown above. The
projections have not been examined, reviewed or compiled by the Company's
independent auditors, and accordingly they have not expressed an opinion or any
other assurance on such projections. However, management of the Company does
prepare internal financial projections prior to the start of each year as a
matter of course. Such projections represent what management of the Company
believes to be a reasonable estimate of the Company's future financial
performance and reflect significant assumptions and subjective judgments by the
Company's management regarding industry performance and general business and
economic conditions, including assumptions regarding the Company's future
development projects. The projections are included herein solely because such
information was furnished to Parent and Purchaser prior to the Offer.
Accordingly, none of Suez, Parent, Purchaser, the Company, or any other person
assumes any responsibility as to the accuracy thereof. In addition, because the
estimates and assumptions underlying the projections are inherently subject to
significant economic and competitive uncertainties and contingencies, which are
difficult or impossible to predict accurately and are beyond the control of the
Company, Suez, Parent and Purchaser, there can be no assurance that results set
forth in the above projections will be realized and it is expected that there
will be differences between actual and projected results, and actual results may
be materially higher or lower than those set forth below. For a description of
certain assumptions relevant to these projections, see "SPECIAL FACTORS--Company
Financial Projections."
III-1
<PAGE>
TRIGEN ENERGY CORPORATION
1 (A) COMMITTED CASE PROJECTIONS
REVISED: JANUARY 7, 2000
<TABLE>
<CAPTION>
BUDGET MEDIUM TERM PLAN
---------- --------------------------------------------------------------
2000 2001 2002 2003 2004 2005
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
PHYSICALS
Sales
Steam.............. Mlb/yr 23,521,289 25,403,352 26,478,751 27,021,759 27,225,172 27,334,902
Hot Water.......... MMbtu/yr 1,708,642 2,103,386 2,183,014 2,184,281 2,206,406 2,206,406
Chilled Water...... MtonH/yr 157,488 166,761 227,277 228,914 231,259 232,917
Electricity........ Mwh/yr 1,282,201 1,539,117 1,580,616 1,654,519 1,652,215 1,619,133
REVENUES:
Revenues from Sales
Heating................................. 232,566 260,768 273,897 284,374 289,413 294,837
Cooling................................. 21,929 25,406 28,324 29,198 31,751 32,373
Electricity............................. 64,111 70,126 72,861 75,078 74,670 74,831
---------- ---------- ---------- ---------- ---------- ----------
Total Revenues from Sales............... 318,605 356,300 375,082 388,650 395,833 402,042
% CHANGE FROM PRIOR YR................ 23.2% 11.8% 5.3% 3.6% 1.8% 1.6%
Fees Earned & Other Revenue............... 41,734 44,110 43,875 45,437 47,567 49,481
Equity in Earnings/(Losses) of Unconsol.
Entity.................................. 15,135 2,962 2,618 2,840 3,005 1,512
---------- ---------- ---------- ---------- ---------- ----------
TOTAL REVENUES.......................... 375,474 403,371 421,575 436,927 446,405 453,034
% CHANGE FROM PRIOR YR................ 31.3% 7.4% 4.5% 3.6% 2.2% 1.5%
EXPENSES
Fuel & Consumables........................ 136,463 154,367 164,706 171,773 176,370 180,668
% OF TOTAL REVENUES................... 36.3% 38.3% 39.1% 39.3% 39.5% 39.9%
Production & Operating Costs.............. 99,540 109,319 107,310 110,735 112,550 113,450
% OF TOTAL REVENUES................... 26.5% 27.1% 25.5% 25.3% 25.2% 25.0%
Depreciation Expense...................... 27,674 31,725 34,867 35,644 36,378 36,979
% OF TOTAL REVENUES................... 7.4% 7.9% 8.3% 8.2% 8.1% 8.2%
General & Admin. & Amortization........... 45,477 44,719 46,840 47,976 49,577 50,719
% OF TOTAL REVENUES................... 12.1% 11.1% 11.1% 11.0% 11.1% 11.2%
---------- ---------- ---------- ---------- ---------- ----------
Total Operating Expenses.................. 309,155 340,131 353,723 366,127 374,875 381,816
% OF TOTAL REVENUES................... 82.3% 84.3% 83.9% 83.8% 84.0% 84.3%
Operating Income.......................... 66,319 63,241 67,853 70,800 71,530 71,218
% OF TOTAL REVENUES................... 17.7% 15.7% 16.1% 16.2% 16.0% 15.7%
Interest Expense.......................... 34,377 35,410 37,208 34,340 31,970 28,599
Interest (Income)......................... (1,512) (1,530) (1,501) (1,910) (1,902) (1,893)
Other Expense/(Income).................... 485 1,388 1,184 1,157 956 752
Minority Interest in Earn/(Loss) of Cons.
Entity.................................. 5,536 8,367 7,843 8,659 8,429 9,602
---------- ---------- ---------- ---------- ---------- ----------
INCOME BEFORE TAX......................... 27,434 19,605 23,119 28,555 32,077 34,158
% OF TOTAL REVENUES................... 7.3% 4.9% 5.5% 6.5% 7.2% 7.5%
Income Tax Expense........................ 11,358 8,116 9,571 11,822 13,280 14,142
% OF INCOME BEFORE TAX................ 41.4% 41.4% 41.4% 41.4% 41.4% 41.4%
NET INCOME BEF. EXTRAORD. GAIN / (LOSS)...
16,076 11,488 13,547 16,733 18,797 20,017
% OF TOTAL REVENUES................... 4.3% 2.8% 3.2% 3.8% 4.2% 4.4%
Extraord. Gain / (Loss) Net of Tax........ -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
NET INCOME................................ 16,076 11,488 13,547 16,733 18,797 20,017
EARNINGS PER SHARE........................ $ 1.33 $ 0.94 $ 1.11 $ 1.37 $ 1.53 $ 1.63
---------- ---------- ---------- ---------- ---------- ----------
AVERAGE SHARES OUTSTANDING................ 12,122 12,157 12,194 12,226 12,252 12,269
</TABLE>
III-2
<PAGE>
TRIGEN ENERGY CORPORATION
1 (A) COMMITTED CASE PROJECTIONS
REVISED: JANUARY 7, 2000
<TABLE>
<CAPTION>
BUDGET MEDIUM TERM PLAN
-------- ----------------------------------------------------
2000 2001 2002 2003 2004 2005
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATIONS
Income BeforeTax & Minority Interest........... 32,970 27,972 30,962 37,214 40,506 43,761
Minority Interest in (Earnings)/Losses......... (5,536) (8,367) (7,843) (8,659) (8,429) (9,602)
Income Tax Expense............................. (11,358) (8,116) (9,571) (11,822) (13,280) (14,142)
------- ------- ------- ------- ------- -------
NET INCOME................................. 16,076 11,488 13,547 16,733 18,797 20,017
Depreciation Expense........................... 27,674 31,725 34,867 35,644 36,378 36,979
Amortization Expense........................... 6,322 6,216 5,611 5,586 5,413 5,190
Deferred Tax Expense (Benefit)................. 2,092 528 855 (5,595) (242) (404)
Minority Interest in Operations................ 5,536 8,367 7,843 8,659 8,429 9,602
Changes in Current Accounts:
Accounts Receivable........................ (4,945) (2,672) (2,944) (1,958) 148 363
Inventory.................................. (22) (85) 12 (41) (21) (37)
Prepaid Costs & Other Assets............... 1,117 (551) 1,511 1,522 972 (3,553)
Accounts Payable........................... 5,819 4,357 (2) (20) (1,726) (1,807)
Accrued Expenses........................... 4,435 (592) (449) (1,769) (2,117) (5,155)
------- ------- ------- ------- ------- -------
NET CASH PROVIDED BY OPERATIONS................ 64,104 58,781 60,852 58,761 66,031 61,196
CASH FLOW FROM INVESTING ACTIVITIES
Plant, Property, and Equipment................. (93,573) (69,043) (11,452) (10,917) (5,044) (4,091)
Investment in Subsidiaries..................... (6,398) (1,475) (1,801) (2,095) (2,260) (768)
------- ------- ------- ------- ------- -------
NET CASH (USED IN) INVESTING ACTIVITIES........ (99,971) (70,518) (13,254) (13,012) (7,304) (4,859)
CASH FLOW FROM FINANCING ACTIVITIES
Long Term Borrowings:.......................... 50,123 37,191 (23,785) (19,684) (30,598) (31,402)
Common Stock Sales / (Repurchases)............. 944 773 773 773 773 579
Short Term Bank Debt, Net...................... 8,739 477 70 1,797 (1,838) (3,150)
Change in Minority Interest.................... (5,388) (6,517) (2,709) (8,359) (8,094) (9,085)
Payments on Long Term Debt & Obligations....... (18,550) (20,187) (21,947) (20,276) (18,969) (13,279)
NET CASH PROVIDED BY FINANCING ACTIVITIES...... 35,868 11,737 (47,599) (45,749) (58,726) (56,337)
------- ------- ------- ------- ------- -------
NET INCREASE/(DECREASE) IN CASH................ 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Dividends Paid................................. (1,697) (1,702) (1,707) (1,712) (1,715) (1,718)
</TABLE>
III-3
<PAGE>
TRIGEN ENERGY CORPORATION
1 (A) COMMITTED CASE PROJECTIONS
REVISED: JANUARY 7, 2000
<TABLE>
<CAPTION>
BUDGET MEDIUM TERM PLAN
-------- ----------------------------------------------------
2000 2001 2002 2003 2004 2005
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents.................. 15,000 15,000 15,000 15,000 15,000 15,000
Accounts Receivable, Net................... 55,973 58,645 61,589 63,547 63,399 63,036
Inventory, at Cost......................... 7,499 7,584 7,573 7,613 7,634 7,671
Prepaid Costs and other Current Assets..... 7,341 7,892 6,381 4,859 3,887 7,440
------- ------- ------- ------- ------- -------
Current Assets........................... 85,814 89,122 90,543 91,019 89,920 93,147
Investment in Nonconsolidated
Subsidiaries............................... 28,635 30,109 31,910 34,005 36,266 37,034
Non-Current Cash and Equivalents............. 4,581 4,581 4,581 4,581 4,581 4,581
Property, Plant, and Equipment, Net.......... 629,860 666,341 642,499 617,474 586,255 553,992
Other Deferred Costs and Intangible Assets... 66,633 61,666 56,939 52,347 48,176 44,533
------- ------- ------- ------- ------- -------
TOTAL ASSETS............................. 815,522 851,819 826,473 799,426 765,198 733,287
======= ======= ======= ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short Term Bank Debt....................... 41,286 41,763 41,833 43,630 41,792 38,642
Accounts Payable........................... 27,942 32,047 32,941 33,809 35,124 35,744
Accrued Expenses........................... 31,029 30,749 30,362 28,626 25,554 20,399
Current Portion of Long Term Debt.......... 11,942 5,619 22,044 15,039 8,001 7,245
------- ------- ------- ------- ------- -------
Current Liabilities...................... 112,199 110,178 127,179 121,105 110,471 102,031
Total Long Term Debt......................... 466,640 483,644 437,912 397,952 348,385 303,704
Of Which, Current Portion of Long Term
Debt....................................... (11,942) (5,619) (22,044) (15,039) (8,001) (7,245)
Deferred Tax Liability....................... 48,577 49,105 49,961 44,365 44,123 43,719
------- ------- ------- ------- ------- -------
TOTAL LIABILITIES........................ 615,474 637,308 593,007 548,383 494,978 442,209
Minority Interest in Consolidated Entities... 19,590 21,441 26,575 26,874 27,209 27,726
Stockholder's Equity
Common Stock............................... 124 124 124 124 124 124
Additional Paid-in Capital................. 120,668 120,668 120,668 120,668 120,668 120,668
Treasury Stock & Restricted, at Cost....... (3,132) (2,359) (1,586) (814) (41) 538
Retained Earnings.......................... 62,796 74,636 87,685 104,190 122,260 142,021
------- ------- ------- ------- ------- -------
TOTAL STOCKHOLDER'S EQUITY............... 180,457 193,070 206,891 224,169 243,011 263,352
------- ------- ------- ------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY... 815,521 851,819 826,473 799,427 765,198 733,287
======= ======= ======= ======= ======= =======
</TABLE>
III-4
<PAGE>
TRIGEN ENERGY CORPORATION
1 (A) COMMITTED CASE PROJECTIONS
REVISED: JANUARY 5, 2000
<TABLE>
<CAPTION>
KEY DATA AND RATIOS 2000 2001 2002 2003 2004 2005
- ------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
EBIT IN '000 $........................ 66,319 63,241 67,853 70,800 71,530 71,218
% OF REVENUES......................... 18% 16% 16% 16% 16% 16%
EBITDA IN '000 $...................... 98,996 99,982 107,439 111,160 112,622 112,899
% OF REVENUES......................... 26% 25% 25% 25% 25% 25%
------- ------- ------- ------- ------- -------
EBITDA/ASSETS IN %.................... 12.1% 11.7% 13.0% 13.9% 14.7% 15.4%
------- ------- ------- ------- ------- -------
AVERAGE INTEREST RATE................. 7.0% 6.9% 7.4% 7.5% 7.7% 7.8%
------- ------- ------- ------- ------- -------
Debt Coverage ratio before Tax (1).... 1.57 1.51 1.55 1.82 1.97 2.38
------- ------- ------- ------- ------- -------
DEBT TO CAPITAL IN %.................. 71.7% 71.0% 67.3% 63.8% 59.1% 54.0%
------- ------- ------- ------- ------- -------
Pretax Interest Coverage.............. 1.89 1.75 1.79 2.03 2.20 2.46
------- ------- ------- ------- ------- -------
Funds from Operations interest
coverage............................ 2.59 2.60 2.64 2.72 3.09 3.42
------- ------- ------- ------- ------- -------
Funds from Operations/Debt............ 0.18 0.18 0.21 0.21 0.25 0.29
------- ------- ------- ------- ------- -------
TOTAL DEBT IN '000 $.................. 507,926 525,407 479,745 441,582 390,177 342,346
------- ------- ------- ------- ------- -------
EBITDA/Interest expense............... 2.88 2.82 2.89 3.24 3.52 3.95
------- ------- ------- ------- ------- -------
EPS................................... 1.33 0.95 1.12 1.38 1.56 1.66
------- ------- ------- ------- ------- -------
INCOME BEFORE TAX..................... 27,434 19,605 23,119 28,555 32,077 34,158
------- ------- ------- ------- ------- -------
NET INCOME............................ 16,076 11,488 13,547 16,733 18,797 20,017
------- ------- ------- ------- ------- -------
ROE AFTER TAX--ON 1 YEAR (BASED ON
AVERAGE EQUITY)..................... 9.3% 6.2% 6.8% 7.8% 8.0% 7.9%
------- ------- ------- ------- ------- -------
ROA BEFORE TAX........................ 13.6% 12.4% 12.7% 12.9% 13.0% 13.0%
------- ------- ------- ------- ------- -------
ROCE (BASED ON NOPAT WITH 41.4%
TAXES).............................. 6.3% 5.8% 5.7% 6.1% 6.4% 6.7%
------- ------- ------- ------- ------- -------
</TABLE>
III-5
<PAGE>
Manually signed copies of the Letters of Transmittal, properly completed and
duly signed, will be accepted. The Letter of Transmittal, Certificates and any
other required documents should be sent by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of the addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th) Floor
New York, NY 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 701-7636 or 7637
FOR INFORMATION TELEPHONE (CALL COLLECT):
(212) 701-7624
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
as set forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal, or other related tender offer materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
445 Park Avenue, 5(th) Floor
New York, New York 10022
Collect Call: (212) 754-8000
Banks and Brokerage Firms, Please Call: (800) 662-5200
Stockholders, Please Call: (800) 566-9061
THE DEALER MANAGER FOR THE OFFER IS:
LAZARD FRERES & CO. LLC
30 Rockefeller Plaza
New York, New York 10020
(212) 632-6717
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 28, 2000
BY
T ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
ELYO
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SUEZ LYONNAISE DES EAUX
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 24, 2000, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT COURIER:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th) Floor
New York, NY 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(for Eligible Institutions only)
(212) 701-7636 or 7637
FOR INFORMATION TELEPHONE (CALL COLLECT)
(212) 701-7624
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE
FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON THE CERTIFICATE(S) ENCLOSED
CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY)
CERTIFICATE TOTAL NUMBER OF NUMBER OF SHARES
NUMBER(S)* SHARES REPRESENTED TENDERED**
BY CERTIFICATE(S)*
Total Number of
Shares
* Need not be completed by stockholders delivering Shares by book-entry transfer through the Depositary.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the
Depositary are being tendered. See Instruction 4.
CHECK HERE IF CERTIFICATES HAVE BEEN LOST OR MUTILATED. SEE INSTRUCTION 12.
</TABLE>
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE
PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Trigen
Energy Corporation. If either certificates evidencing Shares (as defined below)
("Certificates") are to be forwarded with this Letter of Transmittal or, unless
an Agent's Message (as defined in the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by Harris Trust Company of New York at the Book-Entry
Transfer Facility (as defined under "THE TENDER OFFER--Acceptance for Payment
and Payment for Shares" of the Offer to Purchase) pursuant to the procedures set
forth under "THE TENDER OFFER--Procedures for Tendering Shares" of the Offer to
Purchase. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary
prior to the Expiration Date (as defined under "THE TENDER OFFER--Terms of the
Offer" of the Offer to Purchase), or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Shares according to the
guaranteed delivery procedures set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase. See Instruction 2.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Stockholder(s): ______________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T Acquisition Corp., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Elyo, a SOCIETE
ANONYME organized under the laws of the Republic of France ("Parent") and an
indirect, wholly owned subsidiary of Suez Lyonnaise des Eaux, a SOCIETE ANONYME
organized and existing under the laws of the Republic of France, the
above-described shares of Common Stock, par value $0.01 per share (the
"Shares"), of Trigen Energy Corporation, a Delaware corporation (the "Company"),
pursuant to Purchaser's offer to purchase any and all of the outstanding Shares
at a purchase price of $23.50 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated February 28, 2000 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which, as
amended from time to time, together with the Offer to Purchase collectively
constitute the "Offer"). The Offer is being made pursuant to an Agreement and
Plan of Merger, dated as of January 19, 2000 (the "Merger Agreement"), among
Parent, Purchaser and the Company. The undersigned understands that Purchaser
reserves the right to assign its right to purchase all or any portion of the
Shares tendered pursuant to the Offer to a wholly owned subsidiary of Parent,
but any such assignment will not relieve Purchaser of its obligations under the
Offer or prejudice the rights of the tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of, or payment for,
the Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchaser all right, title and interest in
and to all the Shares that are being tendered hereby (and any and all other
shares or other securities issued or issuable in respect of such Shares on or
after the date of the Offer to Purchase) and irrevocably appoints Harris Trust
Company of New York (the "Depositary") the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and such other
shares or securities), with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares (and such other shares or securities),
or transfer ownership of such Shares (and such other Shares or securities) on
the account books maintained by the Book-Entry Transfer Facility, together, in
any such case, with all accompanying evidences of transfer and authenticity, to
or upon the order of the Purchaser, (b) present such Shares (and such other
shares or securities) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and such other shares or securities), all in accordance with the terms
and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints each designee of Purchaser as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to the full extent of the rights of the undersigned with respect
to the Shares tendered herewith and accepted for payment by Purchaser prior to
the time of any vote or other action (and any and all other shares or other
securities issued or issuable in respect of such Shares on or after the date of
the Offer to Purchase). All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest. Such appointment will be
effective when, and only to the extent that, Purchaser accepts such Shares for
payment. Upon such acceptance for payment, all prior powers of attorney and
proxies given by the stockholder with respect to such Shares (and such other
shares and securities) will, without further action, be revoked and no
subsequent powers of attorney and proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The designees of Purchaser will, with respect to the Shares (and
such other shares and securities) 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
Company's stockholders, or any adjournment or postponement thereof, by written
consent in lieu of any such meeting or otherwise. Purchaser reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon Purchaser's payment for such Shares, Purchaser must be able to exercise
full voting and other rights with respect to such Shares (and such other shares
and securities), including voting at any meeting of stockholders then scheduled.
3
<PAGE>
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other shares or other securities issued or issuable in
respect of such Shares on or after the date of the Offer to Purchase) and that
when the same are accepted for payment by Purchaser, Purchaser will acquire good
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim. The undersigned,
upon request, will 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 such other shares or
securities).
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, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described under "THE TENDER OFFER--Terms of the Offer" 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.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the Shares tendered hereby.
Unless otherwise indicated in this Letter of Transmittal under "Special
Payment Instructions," please issue the check for the purchase price and return
any Shares not tendered or not purchased in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and return any Certificates not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price and
return any Shares not tendered or not purchased in the name(s) of, and mail such
check and any certificates to, the person(s) so indicated. Unless otherwise
indicated under "Special Payment Instructions," in the case of book-entry
delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility with respect to any Shares not accepted for payment. The
undersigned recognizes that Purchaser has no obligation, pursuant to the
"Special Payment Instructions," to transfer any Shares from the name of the
registered holder(s) thereof if Purchaser does not accept for payment any of the
Shares so tendered.
4
<PAGE>
- ---------------------------------------------
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 and/or 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 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 certificate(s) to:
Name _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE A ZIP CODE)
__________________________________________________________________________
(RECIPIENT'S TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- ---------------------------------------------------------
- ---------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment and/or Certificates for Shares not tendered or not
accepted for payment are to be mailed to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail check and/or certificate(s) to:
Name _______________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE A ZIP CODE)
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT:
STOCKHOLDER: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF STOCKHOLDER(S)
Dated: _______________, 2000
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON
CERTIFICATE(S) OR ON A SECURITY POSITION LISTING OR BY THE PERSON(S)
AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND DOCUMENTS
TRANSMITTED HEREWITH. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR,
GUARDIAN, ATTORNEY-IN-FACT, AGENT, OFFICER OF A CORPORATION OR OTHER PERSON
ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE SET FORTH FULL
TITLE AND SEE INSTRUCTION 5).
Name(s) ____________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE A ZIP CODE)
__________________________________________________________________________
Area Code and Telephone No. ________________________________________________
(HOME)
_____________________________________
(BUSINESS)
Tax Identification Number or Social Security Number: _______________________
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY, PLACE MEDALLION
GUARANTEE IN SPACE BELOW.
Authorized Signature(s): ___________________________________________________
Name: ______________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: _____________________________________________________________________
Name of Firm: ______________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE A ZIP CODE)
Area Code and Telephone Number: ____________________________________________
Dated: ______________________________________________________________ , 1999
- --------------------------------------------------------------------------------
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, signatures
on Letters of Transmittal must be guaranteed by a member in good standing of the
Securities Transfer Agents Medallion Program, or by any other firm which is a
bank, broker, dealer, credit union or savings association (each of the foregoing
being referred to as an "Eligible Institution" and, collectively, as "Eligible
Institutions"), except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box labeled "Special Delivery
Instructions" or the box labeled "Special Payment Instructions" on the Letter of
Transmittal or (ii) for the account of any Eligible Institution. See Instruction
5. If the Certificates are registered in the name of a person other than the
signer of this Letter of Transmittal, or if payment is to be made, or
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered holder, then the Certificates must be endorsed
or accompanied by duly executed stock powers, in either case, signed exactly as
the name of the registered holder appears on such Certificates, with the
signatures on such Certificates or stock powers guaranteed by an Eligible
Institution as provided herein. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be used if
either Certificates are to be forwarded herewith or, unless an Agent's Message
is utilized, if the delivery of Shares is to be made by book-entry transfer
pursuant to the procedures set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
electronically, as well as a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by this Letter of Transmittal or an Agent's Message (as defined in the
Offer to Purchase) in the case of a book-entry delivery, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal by the Expiration Date (as defined in the Offer to Purchase).
Stockholders who cannot deliver their Shares and all other required documents to
the Depositary by the Expiration Date must tender their Shares pursuant to the
guaranteed delivery procedures set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase. Pursuant to such procedures,
(a) such tender must be made by or through an Eligible Institution; (b) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, must be received by the
Depositary prior to the Expiration Date; and (c) the Certificates for all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation (as
defined in the Offer to Purchase)), together with a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof), and 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, all as provided under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase. The
term "trading day" is any day on which the New York Stock Exchange is open for
business.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a manually signed facsimile thereof), the tendering stockholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided in this Letter of Transmittal is
inadequate, the information required under "Description of Shares Tendered"
should be listed on a separate schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any Certificate delivered
to the Depositary are to be tendered, fill in the number of Shares which are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
Certificate for the remainder of the Shares represented by the old
Certificate(s) will be sent to the person(s) signing this Letter of Transmittal
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as promptly as practicable after the Expiration Date. All Shares represented by
Certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
7
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL; INSTRUMENTS OF TRANSFER AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the Certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
Certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s), in which case, the Certificate(s) for such Shares
tendered hereby must be endorsed, or accompanied by appropriate stock powers, in
either case, signed exactly as the name(s) of the registered holder(s)
appears(s) on the Certificate(s) for such Shares. Signatures on any such
Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Certificate 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 Certificates
for such Shares. Signature(s) on any such Certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any 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.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Purchaser will pay any stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or Shares not tendered or not
purchased are to be returned in the name of, any person other than the
registered holder(s), then the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check or any Certificates not
tendered or not purchased are to be mailed to someone other than the person(s)
signing this Letter of Transmittal or to the person(s) signing this Letter of
Transmittal at an address other than that shown above, the appropriate boxes on
this Letter of Transmittal should be completed. Stockholders tendering Shares by
book-entry transfer may request that Shares not purchased be credited to an
account maintained at the Book-Entry Transfer Facility as such stockholder may
designate under "Special Payment Instructions." If no such instructions are
given, any such Shares not purchased will be credited to an account maintained
at the Book-Entry Transfer Facility.
8
<PAGE>
8. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below
and to certify that the stockholder is not subject to backup withholding.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering stockholder to a penalty and 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. 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, the tendering stockholder should follow the
instructions set forth in Part 3 of the Substitute Form W-9 and sign and date
both the Substitute Form W-9 and the "Certificate of Awaiting Taxpayer
Identification Number." If the stockholder has indicated in Part 3 that a TIN
has been applied for and the Depositary is not provided with a TIN by the time
of payment, the Depositary will withhold 31% of all payments of the purchase
price, if any, made thereafter pursuant to the Offer until a TIN is provided to
the Depositary. Such amounts, however, will be refunded if a TIN is provided to
the Depositary within 60 days.
9. FOREIGN HOLDERS. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may be
obtained from the Information Agent at the address or telephone number set forth
below.
11. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by
Purchaser, in whole or in part, at any time or from time to time, in Purchaser's
sole discretion, as set forth in the Offer to Purchase.
12. LOST OR DESTROYED CERTIFICATES. If any Certificate(s) representing
Shares has been lost or destroyed, the holders should promptly notify the
Company's transfer agent, American Stock Transfer and Trust Company, at (800)
937-5449. The holders will then be instructed as to the procedure to be followed
in order to replace the Certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS OF SECURITIES
(SEE INSTRUCTION 11)
<TABLE>
<C> <S> <C>
- --------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE Social Security Number(s)
FORM W-9 YOUR TIN IN THE BOX AT OR ------------------------
Department of the Treasury RIGHT AND CERTIFY BY Employer Identification Number(s)
Internal Revenue Service SIGNING AND DATING BELOW
-----------------------------------------------------------------------
Part 2--CERTIFICATION--Under Penalties of Perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and
Payer's Request for Taxpayer (2) I am not subject to backup withholding because: (a) I am exempt
Identification Number ("TIN") 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.
-----------------------------------------------------------------------
Part 3: Awaiting TIN / /
- --------------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you are subject to backup withholding you receive another notification from the IRS
stating that you are no longer subject to backup withholding, do not cross out item (2).
SIGNATURE DATE , 2000
NAME (please print)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM W-9 MY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY CASH 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.
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable cash payments made to me thereafter
will be withheld until I provide a taxpayer identification number to the payer
and that, if I do not provide my taxpayer identification number within sixty
days, such retained amounts shall be remitted to the IRS as backup
withholding.
SIGNATURE ____________________________ DATE ___________________________ , 2000
NAME (please print) __________________________________________________________
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 INSTRUCTIONS.
10
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the IRS. 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, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of, and by signing and dating, the substitute Form W-9. In order for a
foreign individual to qualify as an exempt recipient, that stockholder must
submit a statement, signed under penalties of perjury, attesting to that
individual's exempt status. Such statements may be obtained from the Depositary.
All exempt recipients (including foreign persons wishing to qualify as exempt
recipients) should 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
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder 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 certifying that the TIN provided on the Substitute
Form W-9 is correct.
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 registered in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on which
number to report.
11
<PAGE>
MANUALLY SIGNED 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 ITS ADDRESS SET FORTH
ON THE FIRST PAGE OF THIS LETTER OF TRANSMITTAL.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers listed below. Additional copies of
the 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 promptly furnished 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]
445 Park Avenue, 5(th) Floor
New York, New York 10022
Collect Call: (212) 754-8000
Banks and Brokerage Firms Call:
(800) 662-5200
Stockholders Please Call:
(800) 566-9061
12
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Common Stock, par
value $0.01 per share (the "Shares"), of Trigen Energy Corporation, a Delaware
corporation, are not immediately available or the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary prior to the Expiration Date (as
defined in the Offer to Purchase, dated February 28, 2000 (the "Offer to
Purchase")). This Notice of Guaranteed Delivery may be delivered by hand,
facsimile transmission or mailed to Harris Trust Company of New York (the
"Depositary"). See "THE TENDER OFFER--Procedures for Tendering Shares" of the
Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT COURIER:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th) Floor
New York, NY 10005
</TABLE>
BY FACSIMILE TRANSMISSION:
(for Eligible Institutions Only)
(212) 701-7636 or 7637
FOR INFORMATION TELEPHONE (CALL COLLECT):
(212) 701-7624
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH
ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in the Offer to Purchase) 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.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T Acquisition Corp., a Delaware
corporation and an indirect, wholly owned subsidiary of Elyo, a SOCIETE ANONYME
organized and existing under the laws of the Republic of France and an indirect
wholly owned subsidiary of Suez Lynonnaise des Eaux, a SOCIETE ANONYME organized
and existing under the laws of the Republic of France, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"), receipt of each of which is
hereby acknowledged, the number of Shares indicated below, pursuant to the
guaranteed delivery procedure set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: SIGN HERE
Certificate No(s). (if available): Name(s) of Record Holder(s):
(Please Type or Print)
If Shares will be tendered by book-entry Addresses:
transfer:
Name of Tendering Institutions (Include a Zip Code)
Area Code and Telephone No.:
Account No.:
Signature(s):
Dated: , 2000
</TABLE>
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, as Eligible Institution (as such term is defined under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase), hereby
guarantees to deliver to the Depositary at one of its addresses set forth above
the certificates representing the Shares tendered hereby, in proper form for
transfer, or a Book-Entry Confirmation (as defined under "THE TENDER OFFER--
Acceptance for Payment and Payment for Shares" of the Offer to Purchase) with
respect to transfer of such Shares into the Depositary's account at The
Depository Trust Company, together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery of Shares, and any other documents required
by the Letter of Transmittal, all within three New York Stock Exchange trading
days after the date hereof.
<TABLE>
<S> <C>
Name of Firm:
(Authorized Signature)
Address: Name:
Title:
(Include a Zip Code)
Area Code and Tel. No.: Date:
</TABLE>
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY.
CERTIFICATES SHOULD BE SENT TOGETHER WITH A LETTER OF TRANSMITTAL.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
AT
$23.50 NET PER SHARE
BY
T ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
ELYO
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SUEZ LYONNAISE DES EAUX
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 24, 2000, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees: February 28, 2000
We are writing to you in connection with the offer by T Acquisition Corp., a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
Elyo, a SOCIETE ANONYME organized and existing under the laws of the Republic of
France ("Parent") and an indirect wholly owned subsidiary of Suez Lyonnaise des
Eaux, a SOCIETE ANONYME organized and existing under the laws of the Republic of
France ("Suez Lyonnaise"), to purchase any and all outstanding shares of Common
Stock, par value $0.01 per share (the "Shares"), of Trigen Energy Corporation, a
Delaware corporation (the "Company"), at a price of $23.50 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 28, 2000 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the "Offer")
enclosed herewith. The Offer is being made in connection with the Agreement and
Plan of Merger, dated as of January 19, 2000 (the "Merger Agreement"), among
Parent, Purchaser and the Company. Holders of Shares whose certificates for such
Shares (the "Certificates") are not immediately available or who cannot deliver
their Certificates and all other required documents to Harris Trust Company of
New York (the "Depositary") or complete the procedures for book-entry transfer
prior to the Expiration Date (as defined under "THE TENDER OFFER--Terms of the
Offer" of the Offer to Purchase) must tender their Shares according to the
guaranteed delivery procedures set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and for forwarding to your clients
are copies of the following documents:
1. The Offer to Purchase, dated February 28, 2000.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal may
be used to tender Shares.
3. A letter to stockholders of the Company from Richard E. Kessel, President
and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed by the Company
with the Securities and Exchange Commission and mailed to the stockholders of
the Company.
<PAGE>
4. The Notice of Guaranteed Delivery for Tender of Shares to be used to
accept the Offer if the guaranteed delivery procedures set forth under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase are to
be followed.
5. A printed form of a letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, MARCH 24, 2000, UNLESS
THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $23.50 per Share, net to the seller in cash, without
interest.
2. The Offer is being made for any and all of the outstanding Shares. There
is no minimum number of Shares required to be tendered.
3. 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 transfer of Shares pursuant to the
Offer. However, federal income tax backup withholding at a rate of 31% may be
required unless an exemption is available or unless the required taxpayer
identification information is provided. See "Important Tax Information" of the
Letter of Transmittal.
4. The special committee of the independent directors of the board of
directors of the Company (the "Company Board") has unanimously recommended that
the Company Board approve the Offer and the Merger (as defined in the Offer to
Purchase) and approve and adopt the Merger Agreement. The Company Board has
determined that the Merger is advisable and in the best interests of the
stockholders of the Company, and has approved the Merger. The Company Board has
also approved the Offer and recommended the Offer to the Company's stockholders.
5. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) Certificates pursuant to the procedures
set forth under "THE TENDER OFFER--Procedures for Tendering Shares" of the Offer
to Purchase or a timely Book-Entry Confirmation (as defined in the Offer to
Purchase) with respect to such Shares, (b) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares, and (c) any other
documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when Certificates for
Shares or Book-Entry Confirmations are actually received by the Depositary.
In order to take advantage of the Offer, (i) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantees or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal should be sent to the Depositary and (ii) Certificates representing
the tendered Shares or a timely Book-Entry Confirmation should be delivered to
the Depositary in accordance with the instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
2
<PAGE>
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase.
None of Suez Lyonnaise, Parent or Purchaser or any officer, director, agent
or other representative of Purchaser, Parent or Suez Lyonnaise will pay any fees
or commissions to any broker, dealer or other person (other than the Depositary
and Morrow & Co., Inc. (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 you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients. Purchaser will pay or cause to be paid any transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent or the Dealer Manager at their respective addresses and
telephone number set forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
T ACQUISITION CORP.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF SUEZ LYONNAISE, PARENT, PURCHASER, THE
DEPOSITARY, THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND
THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
[TRIGEN ENERGY CORPORATION LETTERHEAD]
February 28, 2000
Dear Stockholder:
On January 19, 2000, Trigen Energy Corporation (the "Company"), Elyo
("Parent"), a societe anonyme organized and existing under the laws of the
Republic of France, and T Acquisition Corp. ("Purchaser"), a Delaware
corporation and an indirect wholly owned subsidiary of Parent, entered into a
merger agreement providing for the acquisition of any and all of the Common
Stock, par value $0.01 per share, of the Company at $23.50 cash per share.
The Purchaser has today commenced a cash tender offer for any and all of
the issued and outstanding shares of Common Stock of the Company at a price
of $23.50 net per share. The merger agreement provides that, following the
tender offer, Purchaser will merge with and into the Company and any
remaining shares of Common Stock of the Company will be converted into the
right to receive $23.50 per share in cash, without interest.
At a meeting on January 19, 2000, your Board of Directors (the "Board")
by unanimous vote of all directors, based on, among other things, the
unanimous recommendation of a Special Committee comprised of independent
directors, (i) determined that the merger is advisable and that the terms of
the offer and the merger, the merger agreement and the consummation of the
transactions contemplated thereby are fair to, and in the best interests of,
the Company and its stockholders, (ii) approved the offer and the merger and
approved and adopted the merger agreement, and (iii) recommended the offer
to, and the approval and adoption of the merger agreement and the
transactions contemplated thereby by, the stockholders of the Company.
In arriving at its recommendation, the Board gave careful consideration
to the factors described in the enclosed tender offer materials and Schedule
14D-9, including, among other things, the opinion of Credit Suisse First
Boston Corporation, the Special Committee's financial advisor, that as of
January 19, 2000, and based on and subject to the matters described in the
opinion, the price per share of $23.50 to be received in the offer and the
merger, taken together, by the holders of shares of Trigen common stock is
fair, from a financial point of view, to the holders of shares of Trigen
common stock, other than Elyo and its affiliates.
Enclosed for your consideration are copies of the tender offer materials
and the Company's Schedule 14D-9, which are being filed today with the
Securities and Exchange Commission. These documents should be read
carefully.
Sincerely,
___________________________________
Richard E. Kessel, President &
Chief Executive Officer
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
AT
$23.50 NET PER SHARE
BY
T ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
ELYO
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SUEZ LYONNAISE DES EAUX
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 24, 2000, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated
February 28, 2000 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") relating to an offer by T Acquisition
Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned
subsidiary of Elyo, a SOCIETE ANONYME organized and existing under the laws of
the Republic of France ("Parent") and an indirect wholly owned subsidiary of
Suez Lyonnaise des Eaux, a SOCIETE ANONYME organized and existing under the laws
of the Republic of France, to purchase any and all outstanding shares of Common
Stock, par value $0.01 per share (the "Shares"), of Trigen Energy Corporation, a
Delaware corporation (the "Company"), at a price of $23.50 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of January 19, 2000 (the "Merger
Agreement"), among Purchaser, Parent and the Company. This material is being
forwarded to you as the beneficial owner of Shares carried by us in your account
but not registered in your name.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender any or all of the Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $23.50 per Share, net to the seller in cash, without
interest.
2. The Offer is being made for any and all of the outstanding Shares. There
is no minimum number of Shares required to be tendered.
3. 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 transfer of Shares pursuant to the
Offer. However, federal income tax backup withholding at a rate of 31% may be
required, unless an exemption is available or unless the required taxpayer
identification information is provided. See "Important Tax Information" of the
Letter of Transmittal.
<PAGE>
4. The special committee of the independent directors of the board of
directors of the Company (the "Company Board") has unanimously recommended that
the Company Board approve the Offer and the Merger (as defined in the Offer to
Purchase) and approve and adopt the Merger Agreement. The Company Board has
determined that the Merger is advisable and in the best interests of the
stockholders of the Company, and has approved the Merger. The Company Board has
also approved the Offer and recommended the Offer to the Company's stockholders.
5. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by Harris Trust Company of New York (the "Depositary") of
(a) certificates for Shares pursuant to the procedures set forth under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase or a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to such Shares, (b) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry delivery of Shares, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations are actually received by the Depositary.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 24, 2000, UNLESS THE OFFER IS EXTENDED.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise indicated in such
instruction form. An envelope to return your instruction to us is enclosed.
PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE
TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making of
the Offer or acceptance thereof would not be in compliance with the securities
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 Lazard Freres & Co. LLC, the Dealer Manager for
the Offer, or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIGEN ENERGY CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated February 28, 2000, and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer") in connection with the offer by T Acquisition Corp., a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
Elyo, a SOCIETE ANONYME organized and existing under the laws of the Republic of
France ("Parent"), and an indirect wholly owned subsidiary of Suez Lyonnaise des
Eaux, a SOCIETE ANONYME organized and existing under the laws of the Republic of
France, to purchase any and all outstanding shares of Common Stock, par value
$0.01 per share (the "Shares"), of Trigen Energy Corporation, a Delaware
corporation (the "Company"), at a price of $23.50 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer. Purchaser has been formed by Parent in connection with
the Offer and the transactions contemplated thereby. The Offer is being made in
connection with the Agreement and Plan of Merger dated as of January 19, 2000,
among Purchaser, Parent and the Company.
This will instruct you to tender to Purchaser the number of Shares indicated
below (or if no number is indicated below, all Shares) which are held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Number of Shares to be Tendered:*
- ---------------------------------------------------------
<TABLE>
<S> <C>
SIGN HERE
Account Number: ----------------------------
--------------------------------------------
Date: ---------------------------------, 2000
--------------------------------------------
Signature(s)
--------------------------------------------
--------------------------------------------
(Print Name(s))
--------------------------------------------
(Print Address(es))
--------------------------------------------
(Area Code and Telephone Number(s))
--------------------------------------------
(Taxpayer Identification or
Social Security Number(s))
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ---------------------------------------------------
<S> <C> <C>
GIVE THE SOCIAL
SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ---------------------------------------------------
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor or
guardian or committee incompetent person(3)
for a designated ward,
minor, or incompetent
person
7. a) The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee);
b) So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
- ---------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ---------------------------------------------------
<S> <C> <C>
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate, The legal entity (Do
or 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 The organization
or educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments.
</TABLE>
- ---------------------------------------------
- ---------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(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
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 (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEE EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, 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 nonexempt 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 EXEMPT FROM BACKUP WITHHOLDINGS
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- 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 not paid in money.
- Payments made by certain foreign corporations.
- Payments to nonresident aliens subject to withholding under Section 1441.
Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: you may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding.
FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM. SIGN AND DATE THE FORM AND RETURN IT TO
THE PAYER. IF YOU ARE NOT A NON-RESIDENT OR FOREIGN ENTITY NOT SUBJECT TO BACKUP
WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE
OF FOREIGN STATUS).
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 sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and the regulations under those sections.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. Payers must be given
the numbers whether or not recipients are required to file a tax return. Payers
must generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully 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
Unless otherwise noted herein, all references to section numbers or
regulations are references to the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
<PAGE>
Exhibit 99(a)(5)(iii)
============================
AGREEMENT AND PLAN OF MERGER
among
ELYO S.A.
T ACQUISITION CORP.
and
TRIGEN ENERGY CORPORATION
Dated as of January 19, 2000
============================
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of
January 19, 2000, between Elyo S.A., a societe anonyme organized and existing
under the laws of the Republic of France ("PARENT"), T Acquisition Corp., a
Delaware corporation and an indirect, wholly owned subsidiary of Parent
("PURCHASER"), and Trigen Energy Corporation, a Delaware corporation (the
"COMPANY").
RECITALS
WHEREAS, Parent beneficially owns through its wholly and
majority owned subsidiaries, an aggregate of 6,507,944 shares (the "PARENT
SHARES") of common stock, par value $.01 per share (the "SHARES" or the "COMMON
STOCK"), of the Company, constituting approximately 52.7% of the total
outstanding Shares, and has proposed to the Company that Purchaser acquire all
of the remaining issued and outstanding Shares;
WHEREAS, on or prior to the Effective Time (as defined below)
Parent will cause the Parent Shares to be transferred to Purchaser;
WHEREAS, the special committee of the independent directors of
the board of directors of the Company (the "COMPANY BOARD") established to
consider Parent's proposal (the "SPECIAL COMMITTEE") has unanimously recommended
that the Company Board approve the Offer (as defined below), and approve and
authorize the Merger (as defined below) and this Agreement;
WHEREAS, in furtherance of Parent's acquisition of all the
remaining issued and outstanding Shares, it is proposed that Purchaser may elect
to make a cash tender offer (the "OFFER") in compliance with Section 14(d)(i) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to acquire
any and all of the issued and outstanding Shares for $23.50 per Share (the "PER
SHARE AMOUNT"), net to the sellers in cash, upon the terms and subject to the
conditions of this Agreement and the Offer;
WHEREAS, the respective boards of directors of Parent,
Purchaser and the Company have deemed it advisable and in the best interests of
their respective stockholders to consummate, and have approved, the merger of
Purchaser with and into the Company (the "MERGER"), upon the terms and subject
to the conditions set forth herein;
WHEREAS, the Company Board has approved the Offer and resolved
to recommend the Offer to the Company's stockholders; and
-1-
<PAGE>
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. THE OFFER.
1.1 THE OFFER. (a) Subject to the provisions of this Agreement
and this Agreement not having been terminated, Purchaser shall commence, as
promptly as practicable, and Parent shall cause Purchaser to commence, within
the meaning of Rule 14d-2 under the Exchange Act, the Offer. The obligation of
Purchaser, and of Parent to cause Purchaser, to commence the Offer and to accept
for payment, and to pay for any shares of Common Stock tendered pursuant to the
Offer shall be subject to the satisfaction of the conditions set forth in
EXHIBIT A and the terms and conditions of this Agreement (the "OFFER
CONDITIONS"). Subject to the provisions of this Agreement, the Offer shall
initially expire on the 20th business day from and after the date the Offer is
commenced, including the date of the commencement of the Offer as the first
business day in accordance with Rule 14d-2, unless this Agreement is terminated
in accordance with ARTICLE 8, in which case the Offer (whether or not previously
extended in accordance with the terms hereof) shall expire on such date of
termination.
(b) Purchaser expressly reserves the right to waive any
condition set forth on Exhibit A without the consent of the Company, and to make
any other changes in the terms and conditions of the Offer. However, without the
prior written consent of the Company, Purchaser shall not (i) reduce the maximum
number of Shares subject to the Offer, (ii) decrease the Per Share Amount, (iii)
change the form of consideration payable in the Offer, or (iv) amend or modify
the Offer Conditions in any manner adverse to the holders of Shares.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, extend the Offer at any time and from time to time: (i) if at the then
scheduled expiration date of the Offer any of the Offer Conditions shall not
have been satisfied or waived, until such time as all such conditions shall have
been satisfied or waived; (ii) for any period required by any statute or rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or its staff applicable to the Offer; (iii) for any period required
by applicable law in connection with an increase in the consideration to be paid
pursuant to the Offer; and (iv) from time to time, for an aggregate period of
not more than ten (10) business days (for all such extensions under this clause
(iv)) beyond the latest expiration date that would be permitted under clause
(i), (ii) or (iii) of this sentence. So long as this Agreement is in effect and
the Offer
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Conditions have not been satisfied or waived, Purchaser shall, and Parent shall
cause Purchaser to, cause the Offer not to expire. Subject to and in accordance
with the terms and conditions of the Offer and this Agreement (but subject to
the right of termination in accordance with ARTICLE 8), Purchaser shall, and
Parent shall cause Purchaser to, accept for payment and pay for, in accordance
with the terms of the Offer, all Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the expiration of the Offer.
In addition to the foregoing, Purchaser may provide for a "subsequent offering
period" to the extent provided in Rule 14d-11 under the Exchange Act, as in
effect as of January 24, 2000, after the purchase of Shares pursuant to the
Offer.
1.2. ACTIONS BY PARENT AND PURCHASER. (a) As soon as
reasonably practicable following execution of this Agreement, Parent and
Purchaser shall file with the SEC a Tender Offer Statement and a Rule 13e-3
Transaction Statement on Schedule TO, including all exhibits thereto (together
with all amendments and supplements thereto, the "SCHEDULE TO") with respect to
the Offer, the Merger and the other transactions contemplated hereby. The
Schedule TO shall contain or incorporate by reference an offer to purchase (the
"OFFER TO PURCHASE") and forms of the related letter of transmittal and any
related documents (the Schedule TO, the Offer to Purchase and such other
documents, together with all supplements or amendments thereto, collectively,
the "OFFER DOCUMENTS"). The Offer Documents shall comply in all material
respects with the requirements of the Exchange Act. On the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, the Offer Documents shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Purchaser with respect to information
supplied by the Company for inclusion in the Offer Documents. Each of Parent and
Purchaser agrees to correct promptly, and the Company agrees to notify Parent
promptly as to, any information provided by it for use in the Offer Documents,
if and to the extent such information shall have become false or misleading in
any material respect, and each of Parent and Purchaser further agrees to take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to all of the holders of Shares, in each
case as and to the extent required by applicable federal securities laws. Parent
and Purchaser agree to provide the Company and the Special Committee and their
respective counsel in writing any comments Parent, Purchaser or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly after receipt of such comments. Parent and Purchaser shall use their
respective reasonable best efforts to respond to such comments promptly and
shall provide the Company copies of any written responses and telephonic
notification of any verbal responses by Parent, Purchaser or their counsel.
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(b) Parent shall provide or cause to be provided to Purchaser
all of the funds necessary to purchase any Shares that Purchaser becomes
obligated to purchase pursuant to the Offer.
1.3. ACTIONS BY THE COMPANY. (a) The Company hereby approves
of the Offer and represents and warrants that (i) the Special Committee has
recommended that the Company Board approve the Offer and the Merger, and approve
and authorize this Agreement, and the other transactions contemplated hereby and
(ii) the Company Board at a meeting duly called and held, has, by unanimous vote
of all directors and based on the recommendation of the Special Committee
described in the preceding clause (i) duly adopted resolutions: (A) approving
the Offer and the Merger and approving and adopting this Agreement, (B)
determining that the Merger is advisable and that the terms of the Offer and
Merger are fair to, and in the best interests of, the Company and the Company's
stockholders, (C) recommending that the Company's stockholders accept the Offer
and, if approval is required by applicable law, approve the Merger and approve
and adopt this Agreement, and (D) taking all actions necessary to render Section
203 of the Delaware General Corporation Law (the "DGCL") inapplicable to the
Offer, the Merger, this Agreement or any of the transactions contemplated
hereby. The Company hereby consents to the inclusion in the Offer Documents of
the recommendation of the Company Board and the recommendation of the Special
Committee described in the first sentence of this SECTION 1.3(A). The Company
shall provide for inclusion in the Offer Documents any information reasonably
requested by Parent or Purchaser, and to the extent requested by Parent or
Purchaser, the Company shall cooperate in the preparation of the Offer
Documents. The Company further represents and warrants that (i) the Special
Committee has been duly authorized and constituted, and (ii) the Special
Committee, at a meeting thereof duly called, determined that this Agreement, the
Merger and the Offer are fair to and in the best interests of the stockholders
of the Company (other than the Parent and its affiliates).
(b) As soon as reasonably practicable on the date of the
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (such Schedule 14D-9, together with all amendments and supplements
thereto, "SCHEDULE 14D-9") containing the recommendations of the Company Board
and the Special Committee described in SECTION 1.3(A) and shall disseminate the
Schedule 14D-9 to the stockholders of the Company to the extent required by Rule
14d-9 promulgated under the Exchange Act and any other applicable federal or
state securities laws. To the extent practicable, the Company shall cooperate
with Purchaser and/or Parent in mailing or otherwise disseminating the Schedule
14D-9 with the appropriate Offer Documents to the Company's stockholders.
Parent, Purchaser and their counsel shall be given an opportunity to review and
comment upon the Schedule 14D-9 prior to the filing thereof with the SEC. The
Schedule 14D-9 shall comply in all material respects with the requirements of
the Exchange Act. On the
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date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, the Schedule 14D-9 shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or Purchaser for inclusion in the Schedule 14D-9. The Company agrees to
correct promptly, and each of Parent and Purchaser agrees to notify the Company
promptly as to, any information provided by it for use in the Schedule 14D-9, if
and to the extent such information 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 to be
disseminated to all of the holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company agrees to provide
Parent and Purchaser and their counsel in writing any comments the Company or
its counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments. The Company agrees to use its
reasonable best efforts, after consultation with Parent, to respond promptly to
all such comments of and requests by the SEC. The Company shall provide Parent
copies of any written responses and telephonic notification of any verbal
responses by the Company and its counsel.
(c) In connection with the Offer, the Company shall promptly,
or shall cause its transfer agent to promptly, furnish Purchaser with mailing
labels containing the names and addresses of the record holders of Shares, each
as of the most recent date together with copies of all lists of stockholders and
security position listings and all other information in the Company's possession
or control regarding the beneficial owners of Common Stock, and shall furnish to
Purchaser such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Purchaser may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer and the Merger, Parent and Purchaser shall hold in
confidence the information contained in any of such labels, lists and files,
shall use such information only in connection with the Offer and the Merger,
and, if this Agreement is terminated in accordance with Section 8.1, shall
deliver to the Company all copies of such information then in their possession.
(d) Subject to the terms and conditions of this Agreement, if
there shall occur a change in law or in a binding judicial interpretation of
existing law which would, in the absence of action by the Company or the Company
Board, prevent the Purchaser, were it to acquire a specified percentage of the
shares of Common Stock then outstanding, from approving and adopting this
Agreement by its affirmative vote as the holder of a majority of shares of
Common Stock and without the affirmative vote of any
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other stockholder, the Company will use its best efforts to promptly take or
cause such action to be taken.
ARTICLE 2
2. THE MERGER.
2.1. THE MERGER. At the Effective Time, subject to the terms
and conditions of this Agreement and the applicable provisions of the DGCL,
Purchaser shall be merged with and into the Company and the separate corporate
existence of Purchaser shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING
CORPORATION"). The Merger shall have the effects specified in the DGCL.
2.2. THE CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "CLOSING") shall take place at the
offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New
York, New York, at 10:00 a.m., local time, as soon as practicable following the
satisfaction (or waiver if permissible) of the conditions set forth in ARTICLE
7. The date on which the Closing occurs is hereinafter referred to as the
"CLOSING DATE."
2.3. EFFECTIVE TIME. If all the conditions to the Merger set
forth in ARTICLE 7 shall have been fulfilled or waived in accordance herewith
and this Agreement shall not have been terminated as provided in ARTICLE 8 (and
subject to SECTION 3.6), the parties hereto shall cause a certificate of merger
meeting the requirements of Section 251 of the DGCL ("CERTIFICATE OF MERGER") to
be properly executed and filed with the Secretary of State of the State of
Delaware in accordance with such Section on the Closing Date. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL or at
such later time which the parties hereto shall have agreed upon and designated
in such filing as the effective time of the Merger (the "EFFECTIVE TIME").
2.4 CERTIFICATE OF INCORPORATION, BY-LAWS, DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. Unless otherwise agreed by the Company
and Parent prior to the Closing, at the Effective Time:
(a) The certificate of incorporation of the Surviving
Corporation shall be amended and restated in its entirety as set forth in
Exhibit B hereto, until duly amended in accordance with applicable law and the
terms thereof;
(b) The by-laws of Purchaser as in effect immediately prior to
the Effective Time shall be the by-laws of the Surviving Corporation, until duly
amended in
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accordance with applicable law, the terms thereof, and the Surviving
Corporation's certificate of incorporation;
(c) The officers of the Company immediately prior to the
Effective Time shall continue to serve in their respective offices of the
Surviving Corporation from and after the Effective Time, until their successors
are duly appointed or elected in accordance with applicable law and the
Surviving Corporation's certificate of incorporation and by-laws; and
(d) The directors of Purchaser immediately prior to the
Effective Time shall be the directors of the Surviving Corporation from and
after the Effective Time, until their successors are duly appointed or elected
in accordance with applicable law, and the Surviving Corporation's certificate
of incorporation and by-laws.
ARTICLE 3
3. EFFECT OF THE MERGER ON SECURITIES OF PURCHASER AND THE COMPANY.
3.1. PURCHASER STOCK. At the Effective Time, each share of
common stock, $.01 par value per share, of Purchaser that is outstanding
immediately prior to the Effective Time shall be converted into and exchanged
for one validly issued, fully paid and non-assessable share of common stock,
$.01 par value per share, of the Surviving Corporation.
3.2. COMPANY SECURITIES. (a) Other than as set forth in the
immediately following sentence, at the Effective Time, each share of Common
Stock issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of Parent, Purchaser,
the Company or the holder thereof, be converted into the right to receive the
Per Share Amount or any higher per share price as may be paid in the Offer,
without interest (the "MERGER CONSIDERATION") in accordance with SECTION 3.3
upon the surrender of a certificate or certificates (a "CERTIFICATE")
representing such shares of Common Stock. The following Shares shall not be
converted into the right to receive the Per Share Amount at the Effective Time:
(i) Restricted Stock granted under and defined in the Trigen Energy Corporation
1994 Stock Incentive Plan, which, in accordance with Section 3.2(c)(ii), shall
be canceled immediately prior to the filing of the Certificate of Merger; (ii)
shares of Common Stock owned by Parent directly or by Purchaser or held by the
Company, all of which shall be canceled; and (iii) Dissenting Shares (as defined
below).
(b) Each Share issued and held in the Company's treasury at
the Effective Time, or held by Purchaser or by Parent directly, or any wholly
owned subsidiary of Parent or Purchaser, shall, by virtue of the Merger and
without any action on
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the part of Parent, Purchaser, the Company or the holder thereof, cease to be
outstanding and shall be canceled and retired without payment of any
consideration therefor.
(c) (i) The Company shall, immediately prior to the Effective
Time, (A) terminate each Company stock option, stock appreciation rights,
restricted stock or similar plan, and any other plan, program or arrangement
providing for the issuance, grant or purchase of any other interest in respect
of the capital stock of the Company or any of its Subsidiaries (as defined
below), and (B) amend the provisions of any other Company Employee Benefit Plan
(as defined below), or related trust or funding vehicle, providing for the
issuance, holding, transfer or grant of any Shares, or any interest in respect
of any Shares (such plans set forth in clauses (A) or (B), collectively, the
"COMPANY STOCK PLANS"), to provide no continuing rights to acquire, hold,
transfer, or grant any Shares or any interest in any Shares. With respect to the
1994 Employee Stock Purchase Plan, prior to the Effective Time, the Company
shall cause the "Exercise Date" for the current "Purchase Period" to be
accelerated and occur on a date no later than the date of the Effective Time.
(ii) All options to acquire Shares outstanding
immediately prior to the Effective Time under any Company Stock Plan or under
any agreement (an "OPTION"), whether or not then exercisable, shall (by all
necessary and appropriate action taken on or prior to the date of this
Agreement of the Company Board or such appropriate committee or committees of
the Company Board) be canceled at the Effective Time and each holder of an
Option shall promptly after the Effective Time receive from the Surviving
Corporation, for each share of Common Stock subject to an Option, an amount
in cash equal to the excess, if any, of the Merger Consideration over the per
share exercise price of such Option, without interest, in full settlement of
the Company's (and the Surviving Corporation's) obligations under each such
Option. To the extent that the per share exercise price of any Option equals
or exceeds the Merger Consideration, at the Effective Time such Option shall
be canceled and the holder of such Option shall not receive or be entitled to
receive any consideration from Parent, Purchaser or the Surviving
Corporation. The amount payable pursuant to this SECTION 3.2(C) shall be
subject to all applicable withholding of taxes.
(iii) Immediately prior to the filing of the
Certificate of Merger, all shares of Restricted Stock shall be canceled and
each holder of a share of Restricted Stock shall promptly after the Effective
Time receive from the Surviving Corporation, for each share of Restricted
Stock, an amount of cash equal to one-fourth of the Merger Consideration. In
connection with the foregoing, the Surviving Corporation intends, in
accordance with the Trigen Energy Corporation 1994 Stock Incentive Plan, to
implement an incentive plan following the Effective Time.
3.3. EXCHANGE OF CERTIFICATES REPRESENTING COMMON STOCK. (a)
Prior to the Effective Time, Parent shall appoint a commercial bank or trust
company, subject to
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the reasonable satisfaction of the Company, to act as paying agent hereunder for
payment of the Merger Consideration upon surrender of Certificates (the "PAYING
AGENT"). Parent shall take all steps necessary to cause the Surviving
Corporation to provide the Paying Agent with cash in amounts necessary to pay
for all the shares of Common Stock pursuant to SECTION 3.2(A) and, in connection
with the Options, pursuant to SECTION 3.2(C), as and when such amounts are
needed by the Paying Agent. Such amounts shall hereinafter be referred to as the
"EXCHANGE FUND."
(b) As soon as practicable after the Effective Time, Parent
shall cause the Paying Agent to mail to each holder of record of shares of
Common Stock (i) a letter of transmittal which shall specify that delivery shall
be effected, and risk of loss and title to such Certificates shall pass, only
upon delivery of the Certificates to the Paying Agent and which letter shall be
in such form and have such other provisions as are customary for letters of this
nature and (ii) instructions for effecting the surrender of such Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate to the
Paying Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of cash
into which shares of Common Stock theretofore represented by such Certificate
shall have been converted pursuant to SECTION 3.2, and the shares represented by
the Certificate so surrendered shall forthwith be canceled. No interest will be
paid or will accrue on the cash payable upon surrender of any Certificate. In
the event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made with respect to such Common
Stock to such a transferee if the Certificate representing such shares of Common
Stock is presented to the Paying Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this SECTION
3.3, each Certificate shall be deemed, at any time after the Effective Time, to
represent only the right to receive on such surrender the amount, without any
interest thereon, of cash into which shares of Common Stock theretofore
represented by such Certificate shall have been converted pursuant to SECTION
3.2.
(c) At or after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged as provided in this ARTICLE 3.
(d) Any portion of the Exchange Fund (including the proceeds
of any interest and other income received by the Paying Agent in respect of all
such funds) that remains unclaimed by the former stockholders of the Company six
months after the Effective Time shall be delivered to the Surviving Corporation.
Any former stockholders
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of the Company who have not theretofore complied with this ARTICLE 3 may
thereafter look only to the Surviving Corporation for payment of any Merger
Consideration, without any interest thereon, that may be payable in respect of
each share of Common Stock such stockholder holds as determined pursuant to this
Agreement.
(e) None of Parent, the Company, the Surviving Corporation,
the Paying Agent or any other Person shall be liable to any former holder of
shares of Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed 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 which may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration payable in respect thereof pursuant to this
Agreement.
3.4. ADJUSTMENT OF MERGER CONSIDERATION. In the event that,
subsequent to the date of this Agreement but prior to the Effective Time, the
outstanding shares of Common Stock shall have been changed into a different
number of shares or a different class as a result of a stock split, reverse
stock split, stock dividend, subdivision, reclassification, split, combination,
exchange, recapitalization or other similar transaction, the Merger
Consideration shall be appropriately adjusted to eliminate the effects of that
event.
3.5. DISSENTING COMPANY STOCKHOLDERS. Notwithstanding any
provision of this Agreement to the contrary, if required by the DGCL but only to
the extent required thereby, Shares that are issued and outstanding immediately
prior to the Effective Time and which are held by holders of such Shares who
have properly exercised appraisal rights with respect thereto in accordance with
Section 262 of the DGCL (the "DISSENTING SHARES") will not be exchangeable for
the right to receive the Merger Consideration. Each holder of such Dissenting
Shares will be entitled to receive payment of the appraised value of such Shares
in accordance with the provisions of such Section 262 unless and until such
holder fails to perfect or effectively waive, withdraw or lose his or her rights
to appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively waives, withdraws or loses such right,
such Shares will thereupon be treated as if they had been converted into and to
have become exchangeable for, at the Effective Time, the right to receive the
Merger Consideration, without any interest or dividends thereon. The Company
will give Parent prompt notice of any demands received by the Company for
appraisals of Shares prior to the Effective Time and, prior to the Effective
Time, the Parent shall have the right to participate in all
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negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Parent, voluntarily make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
3.6. MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding
the foregoing, in the event that Purchaser, or any other direct or indirect
subsidiary of Parent, shall acquire at least 90 percent of the outstanding
Shares, the parties hereto shall take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after the expiration
of the Offer without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
ARTICLE 4
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Parent and Purchaser as of the date of this
Agreement as follows:
4.1. EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Each of
the Company and each of its Subsidiaries is (i) duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and
(ii) is duly licensed or qualified to do business as a foreign corporation and
is in good standing under the laws of any other state of the United States in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so qualified or to be in good standing would not have and would
not be likely to have, individually or in the aggregate, a material adverse
effect on the business, operations, or financial condition of the Company and
its Subsidiaries taken as a whole or the ability of the Company and its
Subsidiaries to conduct their business after the Closing consistent in all
material respects with the manner conducted in the past (a "MATERIAL ADVERSE
EFFECT"); provided, however, that "Material Adverse Effect" shall not include
any change, effect, condition, event or circumstance arising out of or
attributable to (i) any decrease in the market price of the Shares (but not any
change, effect, condition, event or circumstance underlying such decrease to the
extent that it would otherwise constitute a Material Adverse Effect), (ii)
changes, effects, conditions, events or circumstances that generally affect the
industries in which the Company or the Subsidiaries operate (including legal and
regulatory changes), (iii) general economic conditions or changes, effects,
conditions or circumstances affecting the securities markets generally or (iv)
changes arising from the consummation of the transactions contemplated hereby or
the announcement of the execution of this Agreement. Each of the Company and
each of its Subsidiaries has all requisite power and authority to own or lease
and operate its properties and carry on its business as now conducted. The
Company has heretofore made available to Parent true, accurate and complete
copies of
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the certificate of incorporation and by-laws, each as amended to date as and
currently in effect.
4.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. (a) The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and all agreements and documents contemplated hereby (the
"ANCILLARY DOCUMENTS"), to perform its obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Ancillary Documents by the Company and
the consummation by the Company of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
(including without limitation the unanimous approval of the independent
directors of the Company Board), and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement and the Ancillary
Documents or to consummate the transactions contemplated hereby and thereby
(other than the approval of this Agreement by the holders of a majority of the
Shares if required by applicable law). This Agreement has been, and any
Ancillary Document at the time of execution will have been, duly and validly
executed and delivered by the Company, and (assuming this Agreement and such
Ancillary Documents to which Parent and/or Purchaser is a party each constitutes
a valid and binding obligation of Parent and/or Purchaser as the case may be)
constitutes and will constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
4.3. COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries is in violation of any order of any foreign, federal, state or
local judicial, legislative, executive, administrative or regulatory body or
authority or any court, arbitration board or tribunal ("GOVERNMENTAL ENTITY"),
or any foreign, federal, state or local law, statute, ordinance, rule,
regulation, order, judgment or decree ("LAWS") applicable to the Company or its
Subsidiaries or any of their respective properties or assets, except for
violations which, individually or in the aggregate, would not have or be likely
to have a Material Adverse Effect or prevent or delay or be likely to prevent or
delay the consummation of the transactions contemplated hereby.
4.4. CAPITALIZATION, ETC. The authorized capital stock of the
Company consists of 60,000,000 shares of Common Stock and 15,000,000 shares of
preferred stock, $.01 par value ("PREFERRED STOCK"). As of the date hereof, (a)
12,416,297 shares of Common Stock are outstanding, (b) no shares of Preferred
Stock are outstanding and no series of Preferred Stock has been established, (c)
9,670 shares of Common Stock are held by the Company in its treasury, and (d) no
shares of capital stock of the Company are held by the Company's Subsidiaries.
SECTION 4.4 of the disclosure letter, dated as of the date hereof, delivered by
the Company to Parent (the "COMPANY DISCLOSURE LETTER") sets
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forth a complete and accurate list, as of the date hereof, of (i) the number of
outstanding Options, (ii) the number of shares of Common Stock which can be
acquired upon the exercise of all outstanding Options, respectively, and (iii)
the exercise price of each outstanding Option. The Company has no outstanding
bonds, debentures, notes or other obligations entitling the holders thereof to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the holders of the Common Stock on any matter. Except as set
forth in SECTION 4.4 of the Company Disclosure Letter, since September 30, 1999,
the Company (i) has not issued any shares of Common Stock other than upon the
exercise of Options, (ii) has granted no Options to purchase shares of Common
Stock under the Company Stock Plans to the executive officers of the Company,
(iii) has not granted any Award (as defined in the Trigen Energy Corporation
1994 Stock Incentive Plan) to any of the executive officers of the Company, and
(iv) has not split, combined or reclassified any of its shares of capital stock.
All issued and outstanding shares of Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. Except as set
forth above in this SECTION 4.4 or in SECTION 4.4 of the Company Disclosure
Letter, there are no other shares of capital stock or voting securities of the
Company, and no existing options, warrants, calls, subscriptions, convertible
securities, and no stock appreciation rights or limited stock appreciation
rights or other rights (including rights of first refusal), agreements or
commitments which obligate the Company or any of its Subsidiaries to issue,
transfer or sell any shares of capital stock of, or equity interests in, or any
material assets of, the Company or any of its Subsidiaries. There are no
outstanding obligations of the Company or any Subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company. At the
Effective Time, each outstanding Option, and each outstanding Award awarded or
granted under the Trigen Energy Corporation 1994 Stock Incentive Plan, shall be
canceled without the consent of any other party or the payment of any
consideration other than as provided in SECTION 3.2. After the Effective Time,
the Surviving Corporation will have no obligation to issue, transfer or sell any
shares of capital stock of the Company or the Surviving Corporation pursuant to
any Company Employee Benefit Plan. There are no voting trusts or other
agreements or understandings to which the Company or any of its Subsidiaries is
a party with respect to the voting of capital stock of the Company or any of its
Subsidiaries.
4.5. NO VIOLATION. (a) Except as set forth in SECTION 4.5 of
the Company Disclosure Letter, neither the execution and delivery by the Company
of this Agreement or any of the Ancillary Documents nor the consummation by the
Company of the transactions contemplated hereby or thereby will: (i) violate,
conflict with or result in a breach of any provision of the certificate of
incorporation or by-laws of the Company or any Subsidiary; (ii) violate,
conflict with, result in a breach of any provision of, constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, result in the termination or in a right of termination of,
accelerate the performance required by or benefit obtainable under, result in
the triggering of any
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payment or other obligations pursuant to, result in the creation of any lien,
pledge, charge, assessment, security interest, mortgage, claim, option,
easement, imperfection of title, tenancy or other legal or equitable right of
others, or other encumbrance of any character whatsoever (including, without
limitation, right of first refusal) (each an "ENCUMBRANCE") upon any of the
properties of the Company or any of its Subsidiaries under, or result in there
being declared void, voidable, or without further binding effect, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust or any license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their respective properties is bound (each, a "CONTRACT" and,
collectively, "CONTRACTS"), except for any of the foregoing matters specified in
this clause (ii) which, individually or in the aggregate, would not have or be
likely to have a Material Adverse Effect or prevent or delay or be likely to
prevent or delay the consummation of the transactions contemplated hereby; (iii)
other than the filings provided for in SECTION 2.3 and the filings required
under the Exchange Act, require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity, the lack of
which, individually or in the aggregate, would have or be likely to have a
Material Adverse Effect or, by law, prevent or delay the consummation of the
transactions contemplated hereby; or (iv) violate any Laws applicable to the
Company, any of its Subsidiaries or any of their respective assets, except for
violations which, individually or in the aggregate, would not have or be likely
to have a Material Adverse Effect or materially adversely affect or be likely to
materially adversely affect the ability of the Company to consummate the
transactions contemplated hereby, except for any of the foregoing matters
specified in clauses (ii), (iii) and (iv) which might result from either the
nature of Parent's other businesses or assets being such that the Company no
longer would qualify as an owner of a "Qualified Facility" or would be subject
to state regulatory requirements, including approvals, as a result of Parent's
or Purchaser's being a foreign controlled corporation.
(b) For purposes of this Agreement, a "Subsidiary" means, with
respect to the Parent, the Company or any other Person, any entity of which the
Parent, the Company or such other Person, as the case may be (either alone or
through or together with any other Subsidiary), owns, directly or indirectly,
stock or other equity interests the holders of which are generally entitled to
more than 50% of the vote for the election of the board of directors or other
governing body of such corporation or other legal entity; provided that for
purposes of this Agreement any joint venture with Cinergy Corp., a Delaware
corporation shall be a "Subsidiary" of Parent whether or not Parent owns 50% of
the stock or other equity interest of such joint venture.
4.6. COMPANY REPORTS; OFFER DOCUMENTS. (a) The Company has
made available to Parent each registration statement, report, proxy statement or
information statement (as defined under the Exchange Act) prepared by it since
December 31, 1996,
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each in the form (including exhibits and any amendments thereto) filed with the
SEC (collectively, the "COMPANY REPORTS"). As of their respective dates, the
Company Reports (i) complied as to form in all material respects with the
applicable requirements of the Securities Act of 1933, as amended, the Exchange
Act, and the rules and regulations thereunder and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading, except for such
untrue statements or omissions which, individually or in the aggregate, would
not have or be likely to have a Material Adverse Effect. Each of the
consolidated balance sheets of the Company included in the Company Reports
(including the related notes and schedules) fairly presented in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of its date, and each of the consolidated statements of operations, cash
flows and stockholders' equity of the Company included in or incorporated by
reference into the Company Reports (including the related notes and schedules)
fairly presented in all material respects the results of operations, cash flows
and shareholders' equity of the Company and its Subsidiaries for the periods set
forth therein, in each case in accordance with generally accepted accounting
principles ("GAAP") consistently applied during the periods involved, except as
may be noted therein and except that the unaudited interim financial statements
are subject to normal year-end adjustments and do not contain all of the
footnote disclosures required by GAAP.
(b) None of the Schedule 14D-9, the information statement, if
any, filed by the Company in connection with the Offer pursuant to Rule 14f-1
under the Exchange Act (the "INFORMATION STATEMENT"), any schedule required to
be filed by the Company with the SEC or any amendment or supplement thereto, at
the respective times such documents are filed with the SEC or first published,
sent or given to the Company's stockholders, will contain any untrue statement
of a material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
the Parent or Purchaser specifically for inclusion in the Schedule 14D-9 or
Information Statement or any amendment or supplement. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the Offer Documents, at the time such documents are filed with the
SEC, or first published, sent or given to the Company's stockholders, will
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. If at any time prior to the Effective Time the Company shall obtain
knowledge of any facts with respect to itself, any of its officers and directors
or any of its Subsidiaries that would require the supplement or amendment to the
Schedule 14D-9 or the information supplied by the Company for inclusion or
incorporation by reference in the Offer Documents in
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order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or to comply with applicable Laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
Law, disseminated to the stockholders of the Company, and in the event Parent
shall advise the Company as to its obtaining knowledge of any facts that would
make it necessary to supplement or amend any of the foregoing documents, the
Company shall promptly amend or supplement such document as required and
distribute the same to its stockholders.
4.7. LITIGATION. As of the date hereof, except as set forth in
the Company Reports or in SECTION 4.7 of the Company Disclosure Letter or as may
have been or may be brought as a result of Parent's offer to purchase the
Company and related transactions, (i) there are no claims, actions, suits,
proceedings, arbitrations, investigations or audits (collectively, "LITIGATION")
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity (other than, in the case of
Litigation by non-Governmental Entities, in the ordinary course of business),
except Litigation which, individually or in the aggregate, would not have or be
likely to have a Material Adverse Effect or prevent or delay or be likely to
prevent or delay the consummation of the transactions contemplated hereby, nor
does the Company have knowledge of any facts or circumstances that it believes
would be likely to form the basis for any such claims, actions, suits,
proceedings, arbitrations, investigations or audits; (ii) no Governmental Entity
has indicated in writing an intention to conduct any audit, investigation or
other review with respect to the Company or any of its Subsidiaries, except for
audits, investigations or reviews which, individually or in the aggregate, would
not have or be likely to have a Material Adverse Effect or prevent or delay or
be likely to prevent or delay the consummation of the transactions contemplated
hereby, if adversely determined; and (iii) there is no material judgment,
decree, order, injunction, writ or rule of any court, governmental department,
commission, agency, instrumentality or authority or any arbitrator outstanding
against the Company or any Subsidiary (except that the Company makes no
representation with respect to any such items as may result from litigation
brought as a result of Parent's offer to purchase the Company and related
transactions).
4.8. ABSENCE OF CERTAIN CHANGES. Since September 30, 1999,
there has not been (i) any event, occurrence or condition, except any event,
occurrence or condition which, individually or in the aggregate, would not have
or be likely to have a Material Adverse Effect, (ii) any amendments or changes
in the certificate of incorporation or by-laws of the Company, (iii) any
material change by the Company or any of its Subsidiaries in its accounting
methods, principles or practices, (iv) any declaration, setting aside or payment
of any dividend or distribution in respect of any capital stock of the Company
or any redemption, repurchase or other acquisition of any of its securities
(other than regular quarterly dividends on the shares of Common Stock in an
amount no greater than $.035), or (v) other than pursuant to the contractual
arrangements referred to in Section 4.10, any
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increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except in the ordinary course of business consistent with past
practice.
4.9. TAXES. Except as set forth in SECTION 4.9 of the Company
Disclosure Letter:
(a) The Company and its Subsidiaries have timely filed (taking
into account extensions) all material Tax Returns (as defined below) required to
be filed by any of them. All such Tax Returns are true, correct and complete,
except for such instances which, individually or in the aggregate, would not
have or be likely to have a Material Adverse Effect.
(b) The Company and its Subsidiaries have paid all Taxes (as
defined below) required to be paid by any of them or claimed or asserted by any
taxing authority to be due, except for failures to so pay which, individually or
in the aggregate, would not have or be likely to have a Material Adverse Effect,
and except for those Taxes being contested in good faith and for which adequate
reserves have been established in the financial statements included in the
Company Reports in accordance with GAAP.
(c) The most recent financial statements contained in the
Company Reports reflect full reserves for all Taxes payable by the Company and
its Subsidiaries for all Tax periods and portions thereof through the date of
such financial statements, except to the extent that any failure to so reserve,
individually or in the aggregate, would not have or be likely to have a Material
Adverse Effect.
For purposes of this Agreement,
"TAX" (and, with correlative meaning, "TAXES") means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any Governmental
Entity.
"TAX RETURN" means any return, report or similar statement required to
be filed with respect to any Tax (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
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4.10. EMPLOYEE BENEFIT PLANS. (a) For purposes of this
Agreement, "COMPANY EMPLOYEE BENEFIT PLANS" means all "employee benefit plans,"
as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and all other material employee benefit or
compensation arrangements, including, without limitation, any such arrangements
providing severance pay, sick leave, vacation pay, salary continuation for
disability, retirement benefits, deferred compensation, bonus pay, incentive
pay, stock options (including those held by directors, employees, and
consultants), hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, that are maintained by the Company or
any of its Subsidiaries or to which the Company or of its Subsidiaries is
obligated to contribute thereunder for current or former directors, employees,
independent contractors, consultants and leased employees of the Company or any
of its Subsidiaries.
(b) Except as set forth in SECTION 4.10 of the Company
Disclosure Letter, (i) the execution of, and performance of the transactions
contemplated in, this Agreement will not, either alone or upon the occurrence of
subsequent events, result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any employee
or Company Employee Benefit Plan, and (ii) there are no material employment or
severance agreements or severance policies applicable to the Company or any of
its Subsidiaries.
(c) The Company Employee Benefit Plans have been maintained in
all material respects in accordance with their terms and with all provisions of
ERISA and the Internal Revenue Code of 1986, as amended (including rules and
regulations thereunder) (the "CODE") and all other applicable federal and state
laws and regulations except for such failures to so maintain which, individually
or in the aggregate, would not have or be likely to have a Material Adverse
Effect.
4.11. LABOR AND EMPLOYMENT MATTERS. Except for such matters
which, individually or in the aggregate, would not have or be likely to have a
Material Adverse Effect, there is no (i) unfair labor practice, labor dispute
(other than routine individual grievances) or labor arbitration proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries relating to their businesses, (ii) activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any of its Subsidiaries, or (iii) lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to such
employees. The Company is in compliance with all Laws regarding employment,
employment practices, terms and conditions of employment and wages and Laws,
except for such noncompliance which, either individually or in the aggregate,
would not have or be likely to have a Material Adverse Effect.
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4.12. BROKERS. Except for Credit Suisse First Boston
Corporation (the "FINANCIAL ADVISOR"), the arrangements of which have been
disclosed to Parent in writing, no broker, finder or financial advisor is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement that is based upon any
arrangement made by or on behalf of the Company.
4.13. PERMITS. The Company and its Subsidiaries are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for the Company and its Subsidiaries to
own, lease and operate its properties or to lawfully conduct their respective
businesses as presently conducted (the "COMPANY PERMITS"), except where the
failure to have any of the Company Permits, individually or in the aggregate,
would not have or be likely to have a Material Adverse Effect. As of the date
hereof, (a) no modification, revocation, suspension or cancellation of any of
the Company Permits is pending or, to the knowledge of the Company threatened,
and (b) no Company Permit is subject to any outstanding order, decree, judgment,
stipulation or investigation that would be likely to affect such Company Permit,
except, in the case of (a) or (b), any suspensions or cancellations which,
individually or in the aggregate, would not have or be likely to have a Material
Adverse Effect.
4.14. ENVIRONMENTAL MATTERS. (a) Except as set forth in the
Company Reports filed prior to the date hereof or as would not, individually or
in the aggregate, have or be likely to have a Material Adverse Effect:
(i) the Company and each of its Subsidiaries has at
all times been operated, and is, in compliance with all applicable Environmental
Laws (as defined below);
(ii) the Company and each of its Subsidiaries has
obtained or has applied for all applicable environmental, health and safety
permits, licenses, variances, approvals and authorizations required under
Environmental Laws (collectively, "ENVIRONMENTAL PERMITS") necessary for the
conduct of its operations, and such Environmental Permits are in effect or,
where applicable, a renewal application has been timely filed, and the Company
and its Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits;
(iii) there is no Environmental Claim (as defined
below) pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries;
(iv) to the knowledge of the Company, there have been
no Releases (as defined below) of any Hazardous Materials (as defined below)
that would be
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reasonably likely to form the basis of any Environmental Claim against the
Company, any of its Subsidiaries or any predecessor thereof; and
(v) none of the properties currently owned, leased or
operated, or, to the knowledge of the Company, formerly owned, leased or
operated, by the Company, its Subsidiaries or any predecessor thereof, are now,
or were in the past, listed on the National Priorities List of Superfund Sites,
any analogous state list or any database listing sites for the purpose of
investigation under Environmental Laws.
(b) For purposes of this Agreement:
(i) "ENVIRONMENTAL CLAIM" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
information requests, directives, claims, liens, investigations, proceedings or
notices of noncompliance, violation or status as a potentially responsible
Person or otherwise liable party by any Person (including any Governmental
Entity) relating to or alleging potential liability (including, without
limitation, potential responsibility for or liability for enforcement,
investigatory costs, cleanup costs, response costs, removal costs, natural
resources damages, property damages, personal injuries or penalties) relating to
(A) the presence, or Release or threatened Release into the environment, of any
Hazardous Materials at any location; or (B) circumstances forming the basis of
any violation or alleged violation of any Environmental Law; or (C) any and all
claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief relating to any Environmental Laws.
(ii) "ENVIRONMENTAL LAWS" means all applicable
federal, state and local laws, rules, requirements, regulations and judicial or
administrative opinions, orders or decrees, and any common law causes of action,
in each case relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or protection of human or employee health or safety including, without
limitation, laws and regulations relating to Releases of Hazardous Materials.
(iii) "HAZARDOUS MATERIALS" means (A) any petroleum
or any by-products or fractions thereof, asbestos or asbestos-containing
materials, urea formaldehyde foam insulation, any form of natural gas,
explosives, polychlorinated biphenyls ("PCBS"), radioactive materials, ionizing
radiation or electromagnetic field radiation; (B) any chemicals, materials or
substances which are included in the definition of "wastes," "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
substances," "toxic substances," "toxic pollutants," "pollutants,"
"contaminants," or words of similar import under any Environmental Law; and (C)
any other chemical, material or substance, regulated under any Environmental
Law.
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(iv) "RELEASE" means any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including without limitation ambient air,
atmosphere, soil, surface water, groundwater or property).
4.15. INSURANCE POLICIES. The Company and its Subsidiaries
have obtained and maintained in full force and effect insurance with insurance
companies or associations in such amounts, on such terms and covering such
risks, as is customarily carried by reasonably prudent persons conducting
businesses or owning or leasing assets similar to those conducted, owned or
leased by the Company, except any failures to obtain or maintain such insurance
which, individually or in the aggregate, would not have or be likely to have a
Material Adverse Effect.
4.16. OPINION OF FINANCIAL ADVISOR. The Special Committee has
received the written opinion of the Financial Advisor to the effect that, as of
the date hereof, the proposed consideration to be received, in the Offer and
Merger Agreement, taken together, by the holders of shares (other than Parent
and its affiliates) of the Company pursuant to the Offer and the Merger is fair
to such holders of shares (other than Parent and its affiliates) from a
financial point of view (the "OPINION"). The Company hereby represents and
warrants that it has been authorized by the Financial Advisor to permit the
inclusion of the Opinion and references thereto, subject to prior review and
consent by the Financial Advisor (such consent not to be unreasonably withheld),
in the Offer to Purchase, the Schedule TO, the Schedule 14D-9 and the Proxy
Statement (as defined below).
4.17. STATE TAKEOVER STATUTES. The Company Board has taken all
necessary action so that the restrictions contained in Section 203 of the DGCL
applicable to a "business combination" (as defined in such Section 203) will not
apply to the execution, delivery or performance of the Agreement or to the
Offer, the Merger or the transactions contemplated hereby or the letter
agreement, dated January 19, 2000 (the "CASTEN STOCK PURCHASE AGREEMENT"),
between Mr. Thomas Casten and Parent relating to the purchase by Parent or
Purchaser of the Shares owned by Mr. Casten.
4.18. REQUIRED VOTE OF COMPANY STOCKHOLDERS. Unless the Merger
may be consummated in accordance with Section 253 of the DGCL, the only vote of
the stockholders of the Company required to adopt this Agreement, the Ancillary
Documents and to approve the Merger and the transactions contemplated hereby and
thereby, is the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock.
4.19. REGULATION AS A UTILITY. The Company and/or the
Subsidiaries are regulated as a public utility in the states set forth on
SECTION 4.19 of the Company Disclosure Letter. Except as set forth on SECTION
4.19 of the Company Disclosure Letter, neither the Company nor any "subsidiary
company" or "affiliate" of the Company is
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subject to regulation as a public utility or public service company (or similar
designation) by the United States or any state of the United States. All filings
required to be made by the Company or any of its Subsidiaries since December 31,
1998, under any applicable laws or orders relating to the regulation of public
utilities, have been filed with the appropriate public utility commission,
health agency or other appropriate governmental entity (including, without
limitation, to the extent required, the state public utility regulatory agencies
in the states identified in SECTION 4.19 of the Company Disclosure Letter), as
the case may be, including all forms, statements, reports, agreements (oral or
written) and all documents, exhibits, amendments and supplements appertaining
thereto, including but not limited to all rates, tariffs, franchises, service
agreements and related documents and all such filings complied, as of their
respective dates, with all applicable requirements of the appropriate laws or
orders, except any filings or failures to comply which, individually or in the
aggregate, would not have or be likely to have, a Material Adverse Effect.
Except as specified on SECTION 4.19 of the Company Disclosure Letter, no
approval of any public utilities regulatory authority (including all public
utility control or public service commissions and similar state regulatory
bodies) is required for the Company's execution and delivery of this Agreement
or the performance of its obligations under this Agreement or the consummation
of the transactions contemplated hereby.
4.20. YEAR 2000 COMPLIANCE. (a) The computer systems of the
Company and its Subsidiaries are Year 2000 Compliant, except for such failures
to be Year 2000 Compliant as would not, individually or in the aggregate, have
or be likely to have a Material Adverse Effect. All inventory, products and
independently developed applications of the Company and its Subsidiaries that
is, consists of, includes or uses computer software is Year 2000 Compliant,
except for such failures to be Year 2000 Compliant as would not, individually or
in the aggregate, have or be likely to have a Material Adverse Effect. To the
knowledge of the Company, any failures on the part of the customers of and
suppliers to the Company and its Subsidiaries to be Year 2000 Compliant will
not, individually or in the aggregate, have or be likely to have a Material
Adverse Effect.
(b) The term "YEAR 2000 COMPLIANT", with respect to a computer
system or software program, means that such computer system or program: (i) is
capable of recognizing, processing, managing, representing, interpreting and
manipulating correctly date-related data for dates earlier and later than
January 1, 2000; (ii) has the ability to provide date recognition for any data
element without limitation; (iii) has the ability to function automatically into
and beyond the year 2000 without human intervention and without any change in
operations associated with the advent of the year 2000; (iv) has the ability to
interpret data, dates and time correctly into and beyond the year 2000; (v) has
the ability not to produce noncompliance in existing data, nor otherwise corrupt
such data, into and beyond the year 2000; (vi) has the ability to process
correctly after January 1,
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2000, data containing dates before that date; and (vii) has the ability to
recognize all "leap year" dates, including February 29, 2000.
ARTICLE 5
5. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER. Parent and
Purchaser hereby represent and warrant to the Company as of the date of this
Agreement as follows:
5.1. EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Each of
Parent and Purchaser is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, operate and lease its properties
and carry on its business as now conducted, except where the failure to have
such power and authority, individually or in the aggregate, would not materially
adversely affect the ability of Parent and Purchaser to consummate the
transactions contemplated hereby and by the Ancillary Documents.
5.2. AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
Parent and Purchaser has the requisite corporate power and authority to execute
and deliver this Agreement and the Ancillary Documents and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Documents and the consummation by Parent and
Purchaser of the transactions contemplated hereby and thereby have been duly and
validly authorized by the respective Boards of Directors of Parent and Purchaser
and by Parent as the sole stockholder of Purchaser and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement and the Ancillary Documents or to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and any Ancillary
Documents at the time of execution will have been, duly and validly executed and
delivered by Parent and Purchaser, and (assuming this Agreement and such
Ancillary Documents each constitutes a valid and binding obligation of the
Company) constitutes and will constitute the valid and binding obligations of
each of Parent and Purchaser, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
5.3. NO VIOLATION. Neither the execution and delivery of this
Agreement or any of the Ancillary Documents by the Parent and Purchaser, nor the
consummation by them of the transactions contemplated hereby or thereby, will
(i) violate, conflict with or result in any breach of any provision of the
respective certificates of incorporation or by-laws of the Parent or Purchaser;
(ii) other than the filings provided for in SECTION 2.3 and the filings required
under the Exchange Act, require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity, the lack of
which, individually or in the aggregate, would have or be likely to have a
Material
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Adverse Effect on the ability of the Parent or Purchaser to consummate the
transactions contemplated hereby, (iii) violate any Laws applicable to the
Parent or the Purchaser or any of their respective assets, except for violations
which, individually or in the aggregate, would not have or be likely to have a
Material Adverse Effect on the ability of the Parent or Purchaser to consummate
the transactions contemplated hereby, and (iv) violate, conflict with or result
in a breach of any provision of, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, result in
the termination or in a right of termination of, accelerate the performance
required by or benefit obtainable under, result in the creation of any
Encumbrance upon any of the properties of the Parent or Purchaser under, or
result in there being declared void, voidable, or without further binding
effect, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust or any license, franchise, permit, lease, contract,
agreement or other instrument, commitment or obligation to which the Parent or
Purchaser is bound, except for any of the foregoing matters which, individually
or in the aggregate, would not materially adversely affect the ability of Parent
and Purchaser to consummate the transactions contemplated hereby and by the
Ancillary Documents.
5.4. INTERIM OPERATIONS OF PURCHASER. Purchaser was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations as
contemplated hereby.
5.5. FINANCING. At the consummation of the Offer and at the
Effective Time, Parent will have or will cause the Purchaser to have funds
available to it sufficient to consummate the Offer and the Merger on the terms
contemplated hereby.
5.6 INFORMATION SUPPLIED. None of the Offer Documents or any
amendment or supplement thereto, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, will contain any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading except that no representation is made by the
Parent or Purchaser with respect to information supplied by the Company
specifically for inclusion in the Offer Documents or any amendment or
supplement. None of the information supplied or to be supplied by Parent or
Purchaser for inclusion or incorporation by reference in the Schedule 14D-9
will, at the time such documents are filed with the SEC or distributed to the
Company's stockholders, contains any untrue statements of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time prior to the Effective Time the Parent
or Purchaser shall obtain knowledge of any facts with respect to itself, any of
its officers and directors or any of its Subsidiaries that would require the
supplement or amendment to the
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Offer Documents or the information supplied by Parent or Purchaser for inclusion
or incorporation by reference in the Schedule 14D-9 in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading, or to comply with applicable Laws, such amendment or supplement
shall be promptly filed with the SEC and, as required by Law, disseminated to
the stockholders of the Company, and in the event the Company shall advise
Parent or Purchaser as to its obtaining knowledge of any facts that would make
it necessary to supplement or amend any of the foregoing documents, Parent or
Purchaser shall promptly amend or supplement such document as required and
distribute the same to the Company's stockholders.
ARTICLE 6
6. COVENANTS.
6.1. ALTERNATIVE PROPOSALS. The Company agrees (a) that,
between the date hereof and the Effective Time, neither it nor any of its
Subsidiaries shall, and it shall direct and use its best efforts to cause its
officers, directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, the Company or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as an "ALTERNATIVE PROPOSAL") or
engage in any negotiations concerning, or provide any confidential information
or data to, afford access to the properties, books or records of the Company or
any of its Subsidiaries to, or have any discussions with, any Person relating to
an Alternative Proposal, or otherwise facilitate any effort or attempt to make
or implement an Alternative Proposal; (b) that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the foregoing, and it
will take the necessary steps to inform such parties of the obligations
undertaken in this SECTION 6.1; and (c) that it will notify Parent immediately
of the identity of the potential acquirer and the terms of such Person's or
entity's proposal if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company; provided, however, that
nothing contained in this SECTION 6.1 shall prohibit the Company or its
Subsidiaries, upon approval of the Special Committee, from (i) prior to the
acceptance for payment of shares of Common Stock by Purchaser pursuant to the
Offer, furnishing information to, or entering into discussions or negotiations
with, any Person or entity that makes an unsolicited bona fide proposal to
acquire the Company pursuant to a merger, consolidation, share exchange,
purchase of substantially all of the assets of the Company, a business
combination or
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other similar transaction, if, and only to the extent that, (A) such proposal
was not initially solicited, encouraged or knowingly facilitated by the Company,
its Subsidiaries or their agents in violation of this SECTION 6.1, (B) such
proposal is not subject to a financing condition and involves consideration that
provides a higher value per share than the Merger Consideration, (C) the Company
Board, or the Company's directors constituting the Special Committee, determines
in good faith based on the advice of outside counsel that the failure to take
such action would be inconsistent with its fiduciary duties to stockholders
imposed by Law, and (D) prior to furnishing information to, or entering into
discussions or negotiations with, such Person or entity, the Company provides
written notice to Parent to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such Person or entity. The
Company shall keep Parent immediately informed of the status of any such
discussions or negotiations (including the identify of such Person or entity and
the terms of any proposal); and (ii) to the extent applicable, complying with
Rule 14e-2(a) promulgated under the Exchange Act with regard to an Alternative
Proposal. Nothing in this SECTION 6.1 shall (x) permit the Company to terminate
this Agreement (except as specifically provided in ARTICLE 8 hereof), (y) permit
the Company to enter into any agreement with respect to an Alternative Proposal
during the term of this Agreement, or (z) affect any other obligation of the
Company under this Agreement. Notwithstanding anything to the contrary in this
SECTION 6.1, Parent and Purchaser have advised the Company Board that they have
no intention of selling the Parent Shares or the Shares acquired by Purchaser in
the Offer pursuant to such an Alternative Proposal.
6.2. INTERIM OPERATIONS. (a) From the date of this Agreement
until the Effective Time, except as set forth in SECTION 6.2 of the Company
Disclosure Letter, unless Parent has consented in writing thereto, the Company
shall, and shall cause its Subsidiaries to, (i) conduct its operations according
to its ordinary course of business consistent with past practice; (ii) use its
reasonable best efforts to preserve intact its business organizations and
goodwill, keep available the services of its officers and employees, and
maintain satisfactory relationships with those Persons having business
relationships with them; and (iii) upon the discovery thereof, promptly notify
Parent of the existence of any breach of any representation or warranty
contained herein (or, in the case of any representation or warranty that makes
no reference to Material Adverse Effect, any breach of such representation or
warranty in any material respect) or the occurrence of any event that would
cause any representation or warranty contained herein no longer to be true and
correct (or, in the case of any representation or warranty that makes no
reference to Material Adverse Effect, to no longer be true and correct in any
material respect).
(b) From and after the date of this Agreement until the
Effective Time, except as set forth in SECTION 6.2 of the Company Disclosure
Letter, unless Parent has
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consented in writing thereto, the Company shall not, and shall cause each of its
Subsidiaries not to:
(i) amend its certificate of incorporation or
by-laws;
(ii) issue, sell or pledge any shares of its
capital stock or other ownership interest in the Company (other than issuances
of Common Stock in respect of any exercise of stock options outstanding on the
date hereof and disclosed in SECTION 4.4 of the Company Disclosure Letter) or
its Subsidiaries, or any securities convertible into or exchangeable for any
such shares or ownership interest, or any rights, warrants or options to acquire
or with respect to any such shares of capital stock, ownership interest, or
convertible or exchangeable securities (or derivative instruments in respect of
the foregoing);
(iii) effect any stock split or otherwise change
its capitalization as it exists on the date hereof, or directly or indirectly
redeem, purchase or otherwise acquire any shares of its capital stock or
capital stock of its Subsidiaries;
(iv) (A) grant, confer or award any option, warrant,
convertible security or other right to acquire any shares of its capital stock
or take any action to cause to be exercisable any otherwise unexercisable option
under any Company Stock Plan (except as otherwise required by the terms of such
unexercisable options), (B) accelerate or waive any or all of the goals,
restrictions or conditions imposed under any Award, or (C) issue, sell, grant or
award any shares of capital stock or any right to acquire shares of capital
stock under any Company Stock Plan (except as otherwise required by such plan);
(v) declare, set aside or pay any dividend
or make any other distribution or payment with respect to any shares of its
capital stock or other ownership interests (other than such payments by the
Subsidiaries to the Company);
(vii) mortgage or otherwise encumber or subject
to any Encumbrance, or sell, lease or otherwise dispose of any of its property
or assets (including capital stock of its Subsidiaries), other than Encumbrances
that are incurred in the ordinary course of business, consistent with past
practice, the sale or disposition of inventory in the ordinary course of
business or the sale, lease, encumbrance or other disposition of assets which,
individually or in the aggregate, are obsolete or not material to the Company
and its Subsidiaries taken as a whole;
(viii) (A) acquire by merger, purchase or any other
manner, any business or entity or any division thereof for consideration in
excess of $1,000,000 in the aggregate; or (B) otherwise acquire any assets which
would be material, individually or in the aggregate, to the Company and its
Subsidiaries taken as a whole, except for purchases of inventory, supplies or
capital equipment in the ordinary course of business consistent
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with past practice and the acquisition of assets for consideration in excess of
$1,000,000 in the aggregate;
(ix) except for borrowings under existing credit
facilities and excepting transactions between the Company and any Subsidiary,
incur or assume any long-term or short-term debt or issue any debt securities or
assume, guarantee or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the debt or other obligations of any other
Person, other than obligations (other than debt) of its Subsidiaries incurred in
the ordinary course of business;
(x) (A) make any loans, advances or capital
continuations to, or investments in, any other Person (other than Subsidiaries),
except with respect to commitments outstanding as of the date hereof, or (B)
forgive any loans, advances or capital continuations to, or investments in, any
other Person (other than Subsidiaries), for an aggregate amount in excess of
$1,000,000 (as to clauses (A) and (B) collectively);
(xi) except as contemplated by this Agreement or
in the ordinary course of business consistent with past practices (A) increase
the compensation payable or to become payable to its officers or employees, (B)
other than in accordance with existing policies and arrangements, grant any
severance pay to its officers, directors or employees or (C) establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer or
employee, except to the extent required by applicable law or the terms or a
collective bargaining agreement or a contractual obligation existing on the date
hereof;
(xii) change any of the accounting principles or
practices used by the Company, except as may be required by GAAP;
(xiii) pay, discharge or satisfy any material claims,
material liabilities or material obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction (A) of any such material claims, material liabilities or material
obligations in the ordinary course of business and consistent with past practice
or (B) of material claims, material liabilities or material obligations
reflected or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) contained in the Company Reports;
(xiv) agree to the settlement of any claim or
litigation, which settlement would have a Material Adverse Effect;
(xv) make, change or rescind any material Tax
election (other than recurring elections that customarily are made in connection
with the filing of any Tax
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Return; provided that any such elections are consistent with the past practices
of the Company or its Subsidiaries, as the case may be) or settle or compromise
any material Tax liability that is the subject of any audit, claim for
delinquent Taxes, examination, action, suit, proceeding or investigation by any
Taxing authority;
(xv) except to the extent required under
existing employee and director benefit plans, agreements or arrangements as in
effect on the date of this Agreement or as contemplated by this Agreement,
accelerate the payment, right to payment or vesting of any bonus, severance,
profit sharing, retirement, deferred compensation, stock option, insurance or
other compensation or benefits
(xix) enter into any agreement, understanding
or commitment that restrains, limits or impedes the ability of the Company or
any of its Subsidiaries to compete with or conduct any business or line of
business, including geographic limitations on the activities of the Company or
any of its Subsidiaries;
(xx) materially modify, amend or terminate
any material contract, or waive, relinquish, release or terminate any right or
claim, in each case, except in the ordinary course of business consistent with
past practice;
(xxi) other than with respect to commitments
outstanding as of the date hereof, make any capital expenditures in the
aggregate for the Company and its Subsidiaries in excess $1,000,000, in the
aggregate;
(xxii) take any action to cause the Common Stock to
be delisted from the New York Stock Exchange prior to the completion of the
offer; and
(xxiii) agree in writing or otherwise to take any of
the foregoing actions.
6.3. COMPANY STOCKHOLDER APPROVAL; PROXY STATEMENT. (a) If
approval or action in respect of the Merger by the stockholders of the Company
is required by applicable Law, the Company, acting through the Company Board,
shall (i) call a meeting of its stockholders (the "STOCKHOLDERS MEETING") for
the purpose of voting upon this Agreement and the transactions contemplated
hereby, (ii) hold the Stockholders Meeting as soon as practicable following the
purchase of shares of Common Stock pursuant to the Offer, and (iii) unless
taking such action would be inconsistent with the fiduciary duties of the
directors of the Company or of the Company's directors constituting the Special
Committee, as determined by such directors in good faith, and after consultation
with independent legal counsel, recommend to its stockholders the approval of
this Agreement and the transactions contemplated hereby. In the event a
Stockholders Meeting is called, the Company shall use its reasonable best
efforts to solicit from the stockholders of the Company proxies in favor of the
approval and adoption of this Agreement, and the
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transactions contemplated hereby and to secure the vote or consent of
stockholders required by the DGCL to approve and adopt this Agreement, unless
otherwise required by the applicable fiduciary duties of the directors of the
Company or of the Company's directors constituting the Special Committee, as
determined by such directors in good faith, and after consultation with
independent legal counsel. This Agreement must be submitted to the stockholders
of the Company whether or not the Company Board determines at any time
subsequent to declaring its advisability that the Agreement is no longer
advisable and recommends that the stockholders reject it.
(b) If required by applicable Law, the Company will, as soon
as practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement (such proxy statement, and any amendments or
supplements thereto, the "PROXY STATEMENT") or, if applicable, an Information
Statement with the SEC with respect to the Stockholders Meeting and will use its
best efforts to respond to any comments of the SEC or its staff and to cause the
Proxy Statement to be cleared by the SEC. The Company will notify Parent of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent promptly with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC, on the other hand. The Company shall give Parent and its
counsel the opportunity to review the Proxy Statement prior to it being filed
with the SEC and shall give Parent and its counsel the opportunity to review all
amendments and supplements to the Proxy Statement and all responses to requests
for additional information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company and Parent agrees to use its best
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests 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. If at any time prior to
the approval of this Agreement by the Company's stockholders there shall occur
any event which should be set forth in an amendment or supplement to the Proxy
Statement, the Company will prepare and mail to its stockholders such an
amendment or supplement.
(c) The Company represents and warrants that the Proxy
Statement will comply in all material respects with the Exchange Act and, at the
respective times filed with the SEC and distributed to stockholders of the
Company, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes no representation or
warranty as to any information included in the Proxy Statement that was provided
by Parent or Purchaser. The Parent represents and warrants that none of the
information supplied by Parent or Purchaser for inclusion in the Proxy Statement
will, at the respective times filed with the SEC and distributed to stockholders
of the Company,
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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 the light of the circumstances under which they were made, not
misleading. Parent agrees that Parent will promptly inform the Company of the
discovery by it or Purchaser of any information that should be set forth in an
amendment or supplement to the Proxy Statement.
(d) The Company shall use its best efforts to obtain the
necessary approvals by its stockholders of the Merger, this Agreement and the
transactions contemplated hereby.
(e) Parent agrees to cause all shares of Common Stock
purchased by Purchaser pursuant to the Offer and all other shares of Common
Stock owned by Parent, Purchaser or any other subsidiary or affiliate of Parent
to be voted in favor of the approval of the Merger.
6.4. COMPANY BOARD REPRESENTATION; SECTION 14(f). (a) Promptly
upon the purchase of shares of Common Stock pursuant to the Offer, Parent shall
be entitled to designate such number of directors, rounded up to the next whole
number, as will give Parent representation on the Company Board equal to the
product of (i) the number of directors on the Company Board and (ii) the
percentage that the number of shares of Common Stock owned by Purchaser or
Parent bears to the number of shares of Common Stock then outstanding (the
"Percentage"), and the Company shall, upon request by Parent, promptly increase
the size of the Company Board and/or exercise its best efforts to secure the
resignations of such number of directors as is necessary to enable the Parent's
designees to be elected to the Company Board and shall cause the Parent's
designees to be so elected; provided, however, that until the Effective Time,
the Company Board shall have at least one member who is not designated by Parent
or Purchaser. At the request of Parent, the Company will use its best efforts to
cause such individuals designated by Parent to constitute the same Percentage of
(i) each committee of the Company Board, (ii) the board of directors of each
Subsidiary and (iii) each committee of each Subsidiary's board of directors. The
Company's obligations to appoint designees to the Company Board shall be subject
to Section 14(f) of the Exchange Act. The Company shall take, at its expense,
all action necessary to effect any such election, and shall include in the
Schedule 14D-9 the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder. Parent will supply to Company in writing, and
be solely responsible for, any information with respect to itself and its
nominees, directors and affiliates that is required by Section 14(f) and Rule
14f-1.
(b) Following the election or appointment of Parent's
designees pursuant to this SECTION 6.4 and prior to the Effective Time, the
approval of a majority of the directors of the Company then in office who are
not designated by Parent shall be required to authorize any permitted
termination of this Agreement by the Company, any amendment of this Agreement
requiring action by the Company Board, any extension of
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time for the performance of any of the obligations or other acts of Parent or
Purchaser, and any waiver of compliance with any of the agreements or conditions
contained herein for the benefit of the Company.
6.5. FILINGS; OTHER ACTION. Subject to the terms and
conditions herein provided, the Company, Parent, and Purchaser shall: (a) use
their reasonable best efforts to cooperate with one another in (i) determining
which filings other than under the Exchange Act are required to be made prior to
the expiration of the Offer or the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, Governmental Entities or other third parties in connection
with the execution and delivery of this Agreement and any other Ancillary
Documents and the consummation of the transactions contemplated hereby and
thereby and (ii) timely making all filings under the Exchange Act and all such
other filings and timely seek all required consents, approvals, permits,
authorizations and waivers; and (b) use their reasonable best efforts to take,
or cause to be taken, all other action and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purpose of
this Agreement, the proper officers and directors of Parent and the Surviving
Corporation shall take all such necessary action.
6.6. ACCESS TO INFORMATION. (a) From the date of this
Agreement until the Closing, the Company shall, and shall cause its Subsidiaries
to, (i) give Parent and its authorized representatives reasonable access, upon
reasonable notice and during reasonable business hours to all books, records,
personnel, offices and other facilities and properties of the Company and its
Subsidiaries and their accountants and accountants' work papers, (ii) permit
Parent to make such copies and inspections thereof as Parent may reasonably
request and (iii) furnish Parent with such financial and operating data and
other information with respect to the business and properties of the Company and
its Subsidiaries as Parent may from time to time reasonably request; provided
that no investigation or information furnished pursuant to this SECTION 6.6
shall affect any representation or warranty made herein by the Company or the
conditions to the obligations of Parent to consummate the transactions
contemplated by this Agreement.
(b) Parent shall hold all information furnished on a
confidential basis by or on behalf of the Company or any of the Company's
Subsidiaries or representatives pursuant to Section 6.6(a) in confidence.
6.7. PUBLICITY. The initial press release relating to this
Agreement shall be issued jointly by the Company and Parent. Thereafter, the
Company and Parent shall obtain the prior consent of each other before issuing
any press release or otherwise making public statements with respect to the
transactions contemplated hereby, except as
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may be required by Law or any listing agreement with any national securities
exchange with respect thereto.
6.8. FURTHER ACTION. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the
transactions contemplated hereby, including the Merger.
6.9. INSURANCE; INDEMNITY. (a) Purchaser will (and the
Surviving Corporation as successor to the Purchaser as a result of the Merger
will) maintain in effect for not less than six years after the Effective Time,
the Company's current directors and officers insurance policies, if such
insurance is obtainable (or policies of at least the same coverage containing
terms and conditions no less advantageous to the current and all former
directors and officers of the Company) with respect to acts or failures to act
prior to the Effective Time, including acts relating to the transactions
contemplated by this Agreement; provided, however, that in order to maintain or
procure such coverage, the Surviving Corporation shall not be required to
maintain or obtain policies providing such coverage except to the extent such
coverage can be provided at an annual cost of no greater than 2 times the most
recent annual premium paid by the Company prior to the date hereof (the "Cap");
and provided, further, that if equivalent coverage cannot be obtained, or can be
obtained only by paying an annual premium in excess of the Cap, Purchaser or the
Surviving Corporation shall only be required to obtain as much coverage as can
be obtained by paying an annual premium equal to the Cap.
(b) To the extent, if any, not provided by an existing right
of indemnification or the agreement or policy, from and after the Effective
Time, Purchaser and following the Merger, the Surviving Corporation shall
indemnify and hold harmless each Person who is, or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, an officer or
director of the Company or any of its Subsidiaries (each, an "INDEMNIFIED
PARTY"), against all losses, expenses, claims, damages or liabilities or,
subject to the last sentence of this paragraph, amounts paid in settlement,
arising in connection with any claim, action, suit, proceeding or investigation
(an "ACTION") arising out of or pertaining to acts or omissions by such Person
in their capacities as an officer or director, as the case may be, of the
Company, which acts or omissions occurred prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time to the fullest
extent permitted by law. In the event of any such Action, the Surviving
Corporation shall control the defense of such Action with counsel selected by
the Surviving Corporation, which counsel shall be reasonably acceptable to the
Indemnified Party; provided, however, that the Indemnified Party shall be
permitted to participate in the defense of such Action through counsel selected
by the Indemnified Party, which counsel shall be reasonably acceptable to the
Surviving Corporation, at the Indemnified Party's expense. Notwithstanding the
foregoing, if there is any conflict between the
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Surviving Corporation and any Indemnified Parties or there are additional
defenses available to any Indemnified Parties, the Indemnified Parties shall be
permitted to participate in the defense of such Action with counsel selected by
the Indemnified Parties, which counsel shall be reasonably acceptable to the
Surviving Corporation, and Purchaser shall cause the Surviving Corporation to
pay the reasonable fees and expenses of such counsel, as accrued and in advance
of the final disposition of such Action to the fullest extent permitted by
applicable law; provided, however, that the Surviving Corporation shall not be
obligated to pay the reasonable fees and expenses of more than one counsel for
all Indemnified Parties in any single Action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such Action. Parent and
Purchaser acknowledge that the members of the Special Committee shall be
entitled to select their own counsel pursuant to the preceding sentence with
respect to any litigation related to the transactions contemplated hereby;
provided, however, that such counsel must be reasonably acceptable to Parent.
Any Indemnified Party wishing to claim indemnification under this SECTION 6.9,
upon learning of any such claim, action, suit, proceeding or investigation
eligible for indemnification under this SECTION 6.9, shall notify the Surviving
Corporation, but failure to notify the Surviving Corporation shall not relieve
it from any liability which it may have under this SECTION 6.9, except to the
extent that such failure results in the forfeiture of substantive rights or
defenses. The Surviving Corporation shall not be liable for any settlement
effected without its written consent, which consent shall not unreasonably be
withheld.
(c) Purchaser will, and following the Merger, will cause the
Surviving Corporation to, keep in effect all provisions in the Surviving
Corporation's certificate of incorporation and by-laws that provide for
exculpation of director and officer liability and indemnification (and
advancement of expenses related thereto) of the past and present officers and
directors of the Company at least to the extent they are presently indemnified
by the Company and such provisions shall not be amended except as either
required by applicable Law or to make changes permitted by Law that would
enhance the rights of past or present officers and directors to indemnification
or advancement of expenses.
(d) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or other
entity and shall not be the continuing or surviving corporation or entity of the
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets to any individual, corporation or other entity, then and
in each such case, proper provisions shall be made so that the successors and
assigns of the Surviving Corporation shall assume all of the obligations set
forth in this SECTION 6.9.
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(e) The provisions of this SECTION 6.9 are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified Parties,
their heirs and their representatives.
6.10. CERTAIN EMPLOYEE AGREEMENTS. Subject to Section 6.11,
Parent, Purchaser and the Company and its Subsidiaries shall honor, without
modification, all contracts, agreements, collective bargaining agreements and
commitments of the parties prior to the date hereof which apply to any current
or former employee or current or former director of the Company or its
Subsidiaries; provided, however, that this undertaking does not prevent Parent,
Purchaser or the Company from enforcing or complying with such contracts,
agreements, collective bargaining agreements and commitments in accordance with
their terms, including, without limitation, exercising any right to amend,
modify, suspend, revoke or terminate any such contract, agreement, collective
bargaining agreement or commitment under any such contract, agreement,
collective bargaining agreement or commitment or under applicable law. Any
workforce reductions carried out following the Effective Time by Parent or the
Company and their subsidiaries shall be done in accordance with all applicable
collective bargaining agreements, and all laws and regulations governing the
employment relationship and termination thereof, including, without limitation,
the Worker Adjustment and Retraining Notification Act and regulations
promulgated thereunder, and any comparable state or local law.
6.11. EMPLOYEE BENEFIT PLANS.
(a) MAINTENANCE OF THE COMPANY BENEFIT PLANS. Each of the
Company Employee Benefit Plans (other than Company Stock Plans) in effect at the
date hereof shall be maintained in effect with respect to the employees or
former employees of the Company and any of its Subsidiaries, who are covered by
any such benefit plan immediately prior to the Effective Time (the "AFFILIATED
EMPLOYEES") until Parent, Purchaser or the Company otherwise determine after the
Effective Time; provided, however, that nothing herein contained shall limit any
right contained in any such Company Employee Benefit Plan or under applicable
law to amend, modify, suspend, revoke or terminate any such plan; provided
further, however, that Parent, Purchaser or the Company or their subsidiaries
shall provide benefits to the Affiliated Employees for a period of not less than
one year following the Effective Time which are no less favorable in the
aggregate than those provided under the Company Employee Benefit Plans (other
than Company Stock Plans) (with respect to employees and former employees of the
Company and its Subsidiaries). Without limitation of the foregoing, with respect
to any benefit plan established to replace any Company Employee Benefit Plan
(other than Company Stock Plans); each participant in any such Company Employee
Benefit Plan shall receive credit for purposes of eligibility to participate and
vesting under any benefit plan of the Company or any of its Subsidiaries or
affiliates for service credited for the
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corresponding purpose under such benefit plan; provided, however, that such
crediting of service shall not operate to duplicate any benefit to any such
participant or the funding for any such benefit or cause any such Company
Employee Benefit Plan to fail to comply with the applicable provisions of the
Code or ERISA.
(b) WELFARE BENEFITS PLANS. With respect to any welfare
benefit plan established to replace any Company Employee Benefit Plan which is a
welfare benefit plan in which Affiliated Employees may be eligible to
participate after the Effective Time, other than limitations, exclusions or
waiting periods that are already in effect with respect to such Affiliated
Employees and that have not been satisfied as of the Effective Time, such
replacement plans shall waive all limitations to pre-existing conditions,
exclusions and waiting periods with respect to participation and coverage
requirements and provide each Affiliated Employee with credit for other
co-payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements applicable to the same
calendar year under any welfare plans that such Affiliated Employees are
eligible to participate in after the Effective Time.
ARTICLE 7
7. CONDITIONS.
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction or waiver, where permissible, prior to the Effective
Time, of the following conditions:
(a) If approval of this Agreement and the Merger by the
holders of Common Stock is required by applicable Law, this Agreement and the
Merger shall have been approved by the requisite vote of such holders.
(b) Any review or approval required by governmental
authorities in countries in which the Company or its Subsidiaries have
operations material to the Company and its Subsidiaries, taken as a whole, shall
have been completed or obtained.
(c) No United States federal or state or Republic of France
governmental authority or other agency or commission or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order decree, injunction or other order which
is in effect and prohibits or has the effect of prohibiting the consummation of
the Merger or makes such consummation illegal.
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ARTICLE 8
8. TERMINATION.
8.1. TERMINATION. This Agreement, notwithstanding approval
thereof by the stockholders of the Company, may be terminated at any time prior
to the Effective Time:
(a) by mutual written consent of the Board of Directors of
the Parent and the Special Committee;
(b) by the Parent or the Special Committee:
(i) if either (i) the purchase of Shares
pursuant to the Offer has not been consummated on or before March 15, 2000, or
the Effective Time shall not have occurred on or before June 30, 2000 (provided
that the right to terminate this Agreement pursuant to this clause (i) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Effective Time
to occur on or before such date); or
(ii) if there shall be any Law that makes
consummation of the Offer or the Merger illegal or prohibited, or if any court
of competent jurisdiction in the United States or the Republic of France shall
have issued an order, judgment, decree or ruling, or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, ruling or other action shall have become final and
non-appealable;
(c) by the Special Committee,
(i) if there is an Alternative Proposal which
the Special Committee in good faith determines is more favorable from a
financial point of view to the stockholders of the Company as compared to the
Offer and the Merger, and the Special Committee determines in good faith based
upon advice of outside counsel, that the failure to take such action would be
inconsistent with its fiduciary duties to stockholders imposed by Law; provided,
however, that the right to terminate this Agreement pursuant to this SECTION
8.1(C) shall not be available (i) if the Company has breached its obligations
under SECTION 6.1, or (ii) if the Alternative Proposal (x) is subject to a
financing condition or (y) involves consideration that is not entirely cash or
does not permit stockholders to receive the payment of the offered consideration
in respect of all shares at the same time, unless the Special Committee has been
furnished with a written opinion of the Financial Advisor or other nationally
recognized investment banking firm to the effect that (in the case of clause
(x)) the Alternative Proposal is readily financeable and (in the case of clause
(y)) that such offer provides a higher value per share than the
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consideration per share pursuant to the Offer or the Merger, or (iii) if, prior
to or concurrently with any purported termination pursuant to this SECTION
8.1(C), the Company shall not have paid the fees and expenses contemplated by
SECTION 8.2, or (iv) if the Company has not provided Parent and Purchaser with
five business days prior written notice of its intent to so terminate this
Agreement and delivered to the Parent and Purchaser a copy of the written
agreement embodying the Alternative Proposal in its then most definitive form;
(ii) if Parent or Purchaser shall have breached
in any material respect any of their respective representations, warranties or
covenants contained in this Agreement;
(d) by the Parent,
(i) prior to the acceptance of any shares of
Common Stock under the Offer, if due to an occurrence or circumstance that would
result in the failure of any condition specified in Exhibit A, Parent shall have
terminated the Offer without having accepted any Shares for payment thereunder
unless such occurrence or circumstance that would result in the failure of any
such condition shall have been caused by or resulted from the failure of Parent
or Purchaser to perform any obligation of either of them contained in this
Agreement; or
(ii) prior to the purchase of any Common Stock
validly tendered pursuant to the Offer, the Special Committee shall have
withdrawn or modified in a manner that is, materially adverse to Parent or
Purchaser, its approval or recommendation of this Agreement, the Offer, the
Merger or any other transaction contemplated hereby or shall have recommended
another merger, consolidation or business combination involving, or acquisition
of, the Company or its assets or another tender offer for Common Stock, or shall
have resolved to do any of the foregoing.
8.2. EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
ARTICLE 8, all obligations of the parties hereto shall terminate, except the
obligations of the parties pursuant to this SECTION 8.2 and SECTIONS 6.6(B), 9.5
and 9.6, and there shall be no liability on the part of the Company, the Parent,
Purchaser or their respective officers or directors, except for any breach of a
party's obligations under such provisions. If this Agreement shall terminate
pursuant to Section 8.1(b)(i) as a result of the failure of the Company to
satisfy the condition set forth in paragraphs (f) of EXHIBIT A, or pursuant to
8.1(C) or 8.1(D)(II), the Company shall promptly, but in no event later than two
business days after any such termination, reimburse Parent and its affiliates
for the out-of-pocket expenses of Parent and its affiliates, incurred in
connection with or arising out of the Offer, the Merger or the transactions
contemplated hereby or by the Ancillary Documents, including reasonable
attorneys' fees. If this Agreement shall terminate pursuant to
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Section 8.1(c)(ii), Parent shall promptly, but in no event later than two
business days after any such termination, reimburse the Company its
out-of-pocket expenses incurred in connection with or arising out of the Offer,
the Merger or the transactions contemplated hereby or by the Ancillary
Documents, including reasonable attorneys' fees. The parties agree that such
reimbursement of expenses shall be Parent's and Purchaser's exclusive remedy for
any loss, liability, damage or claim arising out of or in connection with any
such termination of this Agreement. The Company acknowledges that the agreements
contained in this SECTION 8.2 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent and
Purchaser would not enter into this Agreement. Notwithstanding the foregoing, no
party hereto shall be relieved from liability for any willful, material breach
of this Agreement.
8.3. AMENDMENT. To the extent permitted by applicable law,
this Agreement may be amended by action taken by or on behalf of the board of
directors of each of the parties hereto and, in the case of the Company, with
the approval of the Special Committee at any time before or after adoption of
this Agreement by the stockholders of the Company (if required); PROVIDED,
HOWEVER, that after any such stockholder approval (if required), no amendment
shall be made which decreases the Merger Consideration or which adversely
affects the rights of, or the income tax consequences to, the Company's
stockholders (other than Parent and its Affiliates) hereunder without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all of the parties.
8.4. EXTENSION; WAIVER. At any time prior to the Effective
Time, any party hereto, by action taken by its board of directors, may, to the
extent legally allowed, (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 made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein; PROVIDED, HOWEVER, that, if the Company seeks to make such extension or
waiver as provided in (a), (b) or (c) above, it must first obtain the approval
of the Special Committee. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
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ARTICLE 9
9. GENERAL PROVISIONS.
9.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement, or in any instrument
delivered pursuant to this Agreement, shall survive the Effective Time.
9.2. NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date of receipt and shall be delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by facsimile, to the applicable
party at the following addresses or facsimile numbers (or at such other address
or telecopy number for a party as shall be specified by like notice):
If to Parent or Purchaser:
Elyo S.A.
235 Avenue Georges Clemenceau BP 4601
92746 Nanterre Cedex
France
Facsimile: 01 41 20 10 10
Attention: Michel Caillard
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Facsimile: (212) 859-4000
Attention: Jeffrey Bagner, Esq.
If to the Company:
Trigen Energy Corporation
One Water Street
White Plains, New York 10601
Facsimile: (914) 948-9157
Attention: Eugene Murphy, Esq.
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With a copy to:
Troutman Sanders LLP
Bank of America Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
Facsimile: (404) 885-3900
Attention: W. Brinkley Dickerson, Jr., Esq.
9.3. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties; provided, however, that either
Parent or Purchaser (or both) may assign its rights hereunder (including,
without limitation, the right to make the Offer and/or to purchase shares of
Common Stock pursuant to the Offer) to a wholly owned subsidiary of Parent; and,
further provided that nothing shall relieve the assignor from its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, except for the provisions of SECTION 6.9 which may be enforced
directly by the beneficiaries thereof, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or
their respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
9.4. ENTIRE AGREEMENT. This Agreement, the Company Disclosure
Letter, the Exhibits, the Ancillary Documents and any other documents delivered
by the parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto.
9.5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws. Each of the Company, Parent and Purchaser hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the United States District Court for the State of Delaware or any court of
the State of Delaware (the "DELAWARE COURTS") for any litigation arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum. Parent
hereby appoints The Corporation Trust Company as agent for service of process.
The
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address of such agent for service of process is Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
9.6. FEES AND EXPENSES. Except as otherwise provided in
SECTION 8.2, whether or not the Merger is consummated, all fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees, costs and
expenses.
9.7. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the following meanings:
(i) "AFFILIATE" of a Person means 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.
(ii) "KNOWLEDGE" of any party hereto shall
mean the knowledge of any of the executive officers of that party.
(iii) "PERSON" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, entity or group (as defined in the Exchange Act).
9.8. HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever. The table of contents contained
in this Agreement is for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
9.9. INTERPRETATION. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural Persons shall include corporations and partnerships
and vice versa. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be understood to be followed by the words "without
limitation."
9.10. WAIVERS. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement or in any of the Ancillary Documents. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
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9.11. SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
9.12. ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.13. COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be an original. All such counterparts shall together constitute
one and the same instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year first
written above.
TRIGEN ENERGY CORPORATION
By: /s/ Richard E. Kessel
---------------------
Name: Richard E. Kessel
Title: Executive Vice President
ELYO S.A.
By: /s/ Olivier Degos
---------------------
Name: Oliver Degos
Title: Corporate Vice President
T ACQUISITION CORP.
By: /s/ Olivier Degos
---------------------
Name: Oliver Degos
Title: Secretary
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1.....................................................................................................2
1. The Offer.........................................................................................2
1.1 The Offer...............................................................................2
1.2. Actions by Parent and Purchaser........................................................3
1.3. Actions by the Company.................................................................4
ARTICLE 2.....................................................................................................6
2. The Merger........................................................................................6
2.1. The Merger.............................................................................6
2.2. The Closing............................................................................6
2.3. Effective Time.........................................................................6
2.4 Certificate of Incorporation, Bylaws, Directors and
Officers of the Surviving Corporation.......................................... 7
ARTICLE 3.....................................................................................................7
3. Effect of the Merger on Securities of Purchaser and the Company...................................7
3.1. Purchaser Stock........................................................................7
3.2. Company Securities.....................................................................7
3.3. Exchange of Certificates Representing Shares...........................................9
3.4. Adjustment of Merger Consideration.....................................................10
3.5. Dissenting Company Stockholders........................................................11
3.6. Merger Without Meeting of Stockholders.................................................11
ARTICLE 4.....................................................................................................11
4. Representations and Warranties of the Company.....................................................11
4.1. Existence; Good Standing; Corporate Authority..........................................12
4.2. Authorization, Validity and Effect of Agreements.......................................12
4.3. Compliance with Laws...................................................................13
4.4. Capitalization, etc....................................................................13
4.5. No Violation...........................................................................14
4.6. Company Reports; Offer Documents.......................................................15
4.7. Litigation.............................................................................17
4.8. Absence of Certain Changes.............................................................17
4.9. Taxes................................................................................ 18
4.10. Employee Benefit Plans................................................................19
4.11. Labor and Employment Matters..........................................................19
4.12. Brokers...............................................................................20
4.13. Permits...............................................................................20
4.14. Environmental Matters.................................................................20
4.15. Insurance Policies....................................................................22
4.16. Opinion of Financial Advisor..........................................................22
</TABLE>
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<TABLE>
<S> <C>
4.17. State Takeover Statutes...............................................................22
4.18. Required Vote of Company Stockholders.................................................23
4.19. Regulation as a Utility...............................................................23
4.20. Year 2000 Compliance,.................................................................24
ARTICLE 5.....................................................................................................24
5. Representations and Warranties of Parent and Purchaser............................................24
5.1. Existence; Good Standing; Corporate Authority..........................................24
5.2. Authorization, Validity and Effect of Agreements.......................................25
5.3. No Violation...........................................................................25
5.4. Interim Operations of Purchaser........................................................26
5.5. Financing..............................................................................26
5.6. Information Supplied...................................................................26
ARTICLE 6.....................................................................................................27
6. Covenants.........................................................................................27
6.1. Alternative Proposals..................................................................27
6.2. Interim Operations.....................................................................28
6.3. Company Stockholder Approval; Proxy Statement..........................................31
6.4. Company Board Representation; Section 14(f)............................................33
6.5. Filings; Other Action..................................................................34
6.6. Access to Information..................................................................34
6.7. Publicity..............................................................................35
6.8. Further Action.........................................................................35
6.9. Insurance; Indemnity...................................................................35
6.10. Certain Employee Agreements...........................................................37
6.11. Employee Benefit Plans................................................................37
ARTICLE 7.....................................................................................................38
7. Conditions........................................................................................38
7.1. Conditions to Each Party's Obligation to Effect the Merger.............................38
ARTICLE 8.....................................................................................................39
8. Termination.......................................................................................39
8.1. Termination............................................................................39
8.2. Effect of Termination and Abandonment..................................................41
8.3. Amendment..............................................................................41
8.4. Extension; Waiver......................................................................41
ARTICLE 9.....................................................................................................42
9. General Provisions................................................................................42
9.1. Nonsurvival of Representations and Warranties..........................................42
9.2. Notices.42
9.3. Assignment; Binding Effect.............................................................43
9.4. Entire Agreement.......................................................................43
9.5. Governing Law..........................................................................44
</TABLE>
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<TABLE>
<S> <C>
9.6. Fee and Expenses.......................................................................44
9.7. Certain Definitions....................................................................44
9.8. Headings...............................................................................44
9.9. Interpretation.........................................................................45
9.10. Waivers...............................................................................45
9.11. Severability..........................................................................45
9.12. Enforcement of Agreement..............................................................45
9.13. Counterparts..........................................................................45
</TABLE>
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EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement,
Purchaser shall not be required to accept for payment or to pay for any shares
of Common Stock not theretofore accepted for payment or paid for, and may
terminate or amend the Offer if at any time on or after the date of this
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exist or shall occur and remain in
effect:
(a) there shall have been instituted, pending or
threatened any litigation by the Government of the United States or the
Republic of France or by any agency or instrumentality thereof or by
any other third Person or nongovernmental entity that would be
reasonably likely to (i) restrict the acquisition by Parent or
Purchaser (or any of its affiliates) of shares of Common Stock pursuant
to the Offer or restrain, prohibit or delay the making or consummation
of the Offer or the Merger, (ii) make the purchase of or payment for
some or all of the shares of Common Stock pursuant to the Offer or the
Merger illegal, (iii) impose limitations on the ability of Parent or
Purchaser (or any of their affiliates) effectively to acquire or hold,
or to require Parent, Purchaser or the Company or any of their
respective affiliates or subsidiaries to dispose of or hold separate,
any portion of their assets or the business of any one of them, (iv)
impose material limitations on the ability of Parent, Purchaser or
their affiliates to exercise full rights of ownership of the shares of
Common Stock purchased by it, including, without limitation, the right
to vote the shares purchased by it on all matters properly presented to
the stockholders of the Company, (v) limit or prohibit any material
business activity by Parent, Purchaser or any of their affiliates,
including, without limitation, requiring the prior consent of any
Person or entity (including the Government of the United States of
America and the Republic of France, and any instrumentality thereof) to
future transactions by Parent, Purchaser or any of their affiliates
(Parent and Purchaser acknowledge that the regulatory nature of some of
the Company's assets and businesses may result in the limitation of
Parent's and its affiliates in certain utility-related areas) or (vi)
make materially more costly (A) the making of the Offer, (B) the
acceptance for payment of, or payment for, some or all of the Shares
pursuant to the Offer, (C) the purchase of Shares pursuant to the Offer
or (D) the consummation of the Merger; or
(b) there shall have been a subsequent development in
any action or proceeding relating to the Company or any of its
Subsidiaries that would (i) be reasonably likely to be materially
adverse either to Parent and Purchaser or to
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Company and its Subsidiaries taken as a whole or (ii) make materially
more costly (A) the making of the Offer, (B) the acceptance for
payment of, or payment for, some or all of the shares pursuant to the
Offer, (C) the purchase of shares pursuant to the Offer or (D) the
consummation of the Merger; or
(c) there shall have been any action taken, or any
Law promulgated, enacted, entered, enforced or deemed applicable to the
Offer or the Merger by any Governmental Entity that could directly or
indirectly result in any of the consequences referred to in subsection
(a) above; or
(d) this Agreement shall have been terminated in
accordance with its terms; or
(e) the Tender and Voting Agreement, dated as of
January 19, 2000, among Parent, Purchaser, Charles E. Bayless and
George F. Keane, or the Casten Stock Purchase Agreement, shall not be
in effect; or
(f) (i) any of the representations and warranties
made by the Company in this Agreement that are qualified by materiality
or Material Adverse Effect shall not have been true and correct in all
respects when made, or shall thereafter have ceased to be true and
correct in all respects as if made at the scheduled or extended
expiration of the Offer (except to the extent that any such
representation or warranty refers specifically to another date, in
which case such representation or warranty shall be true and correct in
all respects as of such other date), or the other representations and
warranties made by the Company in this Agreement shall not have been
true and correct in all material respects when made, or shall
thereafter have ceased to be true and correct in all material respects
as if made at the scheduled or extended expiration of the Offer (except
to the extent that any such representation or warranty refers
specifically to another date, in which case such representation or
warranty shall be true and correct in all material respects as of such
other date) or (ii) the Company shall have breached or failed to comply
in any material respect with any of its obligations under this
Agreement; or
(g) Parent and the Special Committee shall have
agreed that Parent shall terminate the Offer or postpone the acceptance
for payment of or payment for Shares thereunder; or
(h) there shall have occurred (i) any general
suspension of, or limitation on prices for, trading in securities on
any national securities exchange or in the over the counter market in
the United States, (ii) a declaration of any banking moratorium by
federal or state authorities or any suspension of payments in respect
of banks or any limitation (whether or not mandatory) imposed by
federal or state authorities on the extension of credit by lending
institutions in the
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United States or the Republic of France, (iii) any mandatory
limitation by the federal government that has a material adverse
effect generally on the extension of credit by banks and other
financial institutions generally, (iv) a commencement of a war, armed
hostilities or any other international or national calamity directly
or indirectly involving the United States or the Republic of France,
or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, in the sole judgment of the Parent, a
material acceleration or worsening thereof.
The foregoing conditions are for the sole benefit of Parent
and Purchaser and may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to any such condition and may be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time, in the sole
discretion of Parent. The failure by Parent or Purchaser at any time to exercise
any of the foregoing rights will not be deemed a waiver of any right, the waiver
of such right with respect to any particular facts or circumstances shall not be
deemed a waiver with respect to any other facts or circumstances, and each right
will be deemed an ongoing right which may be asserted at any time and from time
to time.
Should the Offer be terminated pursuant to the foregoing
provisions, all tendered shares of Common Stock not theretofore accepted for
payment shall promptly be returned by the depositary to the tendering
stockholders.
-3-
<PAGE>
EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TRIGEN ENERGY CORPORATION
************
FIRST: The name of the Corporation is Trigen Energy
Corporation.
SECOND: The address of the Corporation's registered office in
the State of Delaware is Corporation Trust Center, 1209 Orange Street in the
City of Wilmington, County of New Castle, Delaware 19801. The name of its
registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares which the Corporation shall
have authority to issue is 100 shares of Common Stock, par value $.01 per share.
FIFTH: The Board of Directors is expressly authorized to
adopt, amend, or repeal the by-laws of the Corporation.
SIXTH: Elections of directors need not be by written ballot
unless the by-laws of the Corporation shall otherwise provide.
SEVENTH: A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director; PROVIDED, HOWEVER, that the
foregoing shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the General Corporation Law of Delaware, or (iv) for any transaction from
which the director derived
-1-
<PAGE>
an improper personal benefit. If the General Corporation Law of Delaware is
hereafter amended to permit further elimination or limitation of the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of Delaware as so amended. Any repeal or modification of this
Article SEVENTH by the stockholders of the Corporation or otherwise shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
EIGHTH: The Corporation reserves the right to amend, alter,
change, or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
-2-
<PAGE>
Exhibit 99(a)(5)(vi)
TRIGEN AND ELYO ANNOUNCE DEFINITIVE AGREEMENT
WHITE PLAINS, N.Y. and NANTERRE, France, Jan. 19 /PRNewswire/ -- Trigen Energy
Corporation (NYSE: TGN) and ELYO, an energy subsidiary of the Suez Lyonnaise des
Eaux Group, jointly announced today that they have entered into a definitive
agreement for ELYO to purchase all the outstanding shares of Trigen it does not
already own for $23.50 a share in cash. ELYO's subsidiaries currently own
approximately 53% of Trigen common stock.
The Trigen Board of Directors approved the merger agreement after a Special
Committee of independent directors, with the advice of Credit Suisse First
Boston and legal counsel, Troutman Sanders, had determined that the transaction
was fair to Trigen shareholders.
Trigen will retain its name and headquarters in White Plains, N.Y.
Trigen also announced that effective today, Richard E. Kessel, currently
executive vice president, chief operating officer and a director of Trigen,
was elected president and chief executive officer. Mr. Kessel joined Trigen
in 1993, when the company acquired United Thermal Corporation (UTC: NASDAQ)
where he was CEO. He also serves as chairman of the board's executive
committee. He succeeds Thomas R. Casten who has resigned to pursue other
interests.
Michel Bleitrach, chairman and chief executive officer of ELYO, said, "We
appreciate the invaluable contribution that Tom Casten has made to Trigen's
success. Tom has built an experienced management team, which will now be led by
Rich Kessel. We have every confidence that Rich and his team possess the skills
and vision needed to address the energy outsourcing needs of customers in the
rapidly evolving energy markets of North America."
Tom Casten stated,"It has been an honor to lead Trigen employees in developing
energy systems that reduce costs and pollution. In this daunting pursuit, the
men and women of Trigen have continually exceeded my own expectations in
changing the way the world makes power. Society will benefit from Trigen's
continued success. I wish Trigen well as I address new challenges."
Christine Morin-Postel has been elected a Trigen director and appointed to the
post of non-executive chairman, replacing George Keane, who will remain a
director of Trigen. Ms. Morin-Postel co-founded Trigen with Mr. Casten in 1986
and currently serves as chief executive officer of Societe Generale de Belgique,
the parent company of ELYO and Tractebel. She also is a member of the executive
committee of the Suez Lyonnaise des Eaux Group.
Ms. Morin-Postel commented, "I am looking forward to my new role at Trigen,
working with Rich and all the employees of Trigen. I would also like to
acknowledge Tom Casten's leadership at Trigen for these many years."
Trigen is a leading developer, owner and operator of industrial, commercial and
institutional district energy and combined heat and power (CHP) systems in North
America. The company serves more than 1,500 customers with energy produced at 49
plants in 20 states, Canada and Mexico.
<PAGE>
Exh 99(a)(5)(vii)
[Trigen Logo] [Elyo logo]
February 28, 2000
Elyo: Acquisition of Trigen Energy Corporation
ELYO ANNOUNCES COMMENCEMENT OF TENDER OFFER FOR SHARES OF TRIGEN
NANTERRE, France, Feb. 28 -- ELYO, an energy subsidiary of the Suez Lyonnaise
des Eaux Group, announced today the commencement of a tender offer by T
Acquisition Corp., an indirect, wholly owned subsidiary of ELYO, to purchase
any and all the outstanding shares of Trigen Energy Corporation (NYSE Symbol:
TGN) that ELYO does not already own for $23.50 a share in cash. ELYO's
subsidiaries currently own approximately 53% of Trigen common stock. The
tender offer is being made pursuant to the terms of the previously announced
merger agreement between Elyo and Trigen. The tender offer is being made
pursuant to definitive tender offer materials that are being distributed to
Trigen's stockholders and have been filed with the Securities and Exchange
Commission. The tender offer is expected to remain open until March 24, 2000,
unless extended. It will be followed by a merger under which those shares not
tendered will be converted into the right to receive the same $23.50 per
share in cash. The closing of the tender offer is subject to certain
customary conditions.
Trigen is a leading developer, owner and operator of industrial, commercial and
institutional district energy and combined heat and power (CHP) systems in North
America. The company serves more than 1,500 customers with energy produced at 49
plants in 20 states, Canada and Mexico.
CONTACT: Susan Odiseos, Director of Corporate Communications of Trigen Energy
Corporation, 914-286-6628; or Gilles Alligner, Director of Communications of
ELYO, +1-33-1-41-20-1293; or Jeffrey Zack of Morgen-Walke Associates, Inc.,
212-850-5643.
<PAGE>
Exhibit 99(c)(i)
================================================================================
PROJECT TRUST
Presentation to the Board of Directors
================================================================================
LAZARD January 19, 2000
<PAGE>
PROJECT TRUST Table of Contents
- --------------------------------------------------------------------------------
Tab Page
- --- ----
I. Overview of Proposed Transaction................................... 1
II. Transaction Rationale.............................................. 2
III. Recent Events and Market Data...................................... 3
IV. Financial Projections.............................................. 12
V. Summary Valuation.................................................. 13
VI. Appendix........................................................... 18
A. Public Market Valuation
B. Comparable Transactions Valuation
C. Discounted Cash Flow Valuation
D. Minority Buy-out Transactions Valuation
<PAGE>
PROJECT TRUST I. Overview of Proposed Transaction
- --------------------------------------------------------------------------------
Overview of Proposed Transaction
Price Per Share $23.50
Offer Value $138.6 million(a)
$184.4 million(b)
Implied Premium 38.2% over current price of $17.00 (1/18/00)
36.2% over price of $17.25 (one month ago)
Implied Multiples(c) 2.7x 1999E Revenues ($286.0 million)
11.6x 1999E EBITDA ($66.4 million)
19.1x 1999E EBIT ($40.4 million)
25.5x 1999E EPS ($0.92)(d)
Form of Acquisition Cash Tender Offer Followed by a Merger
- ----------
(a) Based on 5,899,158 shares held by the public in the United States.
(b) Based on 5,899,158 shares held by the public in the United States plus
1,637,274 shares owned by CPCU plus options plus 25% of the value of
restricted shares.
(c) Based on 12.7 million fully diluted shares.
(d) After $4.9 million extraordinary charge, consistent with Street analysts'
presentation.
-1-
<PAGE>
PROJECT TRUST II. Transaction Rationale
- --------------------------------------------------------------------------------
Transaction Rationale
The complete integration of Trigen into ELYO will yield operating benefits,
reduce overall cost, and speed decision-making. The completion of this
transaction will result in greater simplification of ELYO's corporate structure,
further reduce operational and administrative costs, eliminate the expense
associated with running a separate publicly traded subsidiary, and enable ELYO
to more efficiently fund the capital needs of Trigen.
-2-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Trigen One-Year Price and Volume
(1/14/99 to 1/14/00)
[GRAPHIC OMITTED]
[The following table was depicted as a mountain graph in the printed material.]
Date Volume Close
1/14/99 500 13.3125
1/15/99 1400 13.1250
1/19/99 3400 12.7500
1/20/99 169400 12.6875
1/21/99 4900 12.6875
1/22/99 300 12.6250
1/25/99 1500 12.8125
1/26/99 29300 12.6875 1/26/99 Begin construction
1/27/99 18400 12.3125 of Georgia power system
1/28/99 5200 11.8125
1/29/99 4200 12.2500
2/01/99 6300 12.2500
2/02/99 1200 12.6250
2/03/99 #N/A 12.5000
2/04/99 2600 12.1875
2/05/99 1100 12.4375
2/08/99 4200 12.9375
2/09/99 8000 13.3750 2/9/99 Reports 1998 Net Income
2/10/99 800 13.2500
2/11/99 #N/A 13.3125
2/12/99 86200 12.8125
2/16/99 #N/A 12.8125
2/17/99 2800 12.8750
2/18/99 28600 12.8750
2/19/99 1200 12.5000
2/22/99 2200 12.8125
2/23/99 2000 13.0000
2/24/99 8300 13.6875
2/25/99 1200 13.9375
2/26/99 #N/A 13.6875
3/01/99 5500 14.0000
3/02/99 8900 13.8750
3/03/99 7500 13.8750
3/04/99 #N/A 13.8750
3/05/99 500 13.8125
3/08/99 2700 14.4375
3/09/99 200 14.3125
3/10/99 1700 14.2500
3/11/99 3000 14.1250
3/12/99 3000 14.1250
3/15/99 600 14.1875
3/16/99 7000 14.6250
3/17/99 500 14.4375
3/18/99 7600 14.8750
3/19/99 5900 15.2500
3/22/99 3500 15.8125
3/23/99 27600 16.3125
3/24/99 12800 16.0000
3/25/99 100 16.0000
3/26/99 300 15.8750
3/29/99 100 15.6875
3/30/99 1300 15.3125
3/31/99 13400 13.6875
4/01/99 2600 13.6875
4/05/99 33300 13.6875
4/06/99 2000 14.1250 4/6/99 PECO settles Gray's Ferry
4/07/99 2500 14.1250 contract lawsuit
4/08/99 2000 14.0000
4/09/99 4600 14.1250
4/12/99 1100 14.0000
4/13/99 6500 13.6875
4/14/99 2300 13.6875
4/15/99 3900 13.6250
4/16/99 34200 14.0000
4/19/99 2100 14.0000
4/20/99 19600 14.0000
4/21/99 34500 14.0000
4/22/99 1600 14.4375
4/23/99 300 14.5625
4/26/99 2800 14.8750
4/27/99 3100 14.9375
4/28/99 8400 14.9375 4/28/99 Reports 1st quarter EPS of
4/29/99 19800 15.6875 $0.51 vs. $0.45 in 1998
4/30/99 5600 15.8750
5/03/99 13500 15.8750
5/04/99 2500 15.8750
5/05/99 9200 15.7500
5/06/99 1200 15.6250
5/07/99 5800 15.5625
5/10/99 3100 15.9375
5/11/99 13300 16.0000
5/12/99 1300 15.6875
5/13/99 1200 15.6875
5/14/99 4400 15.5625
5/17/99 6600 15.5000
5/18/99 1400 15.7500
5/19/99 7000 15.9375
5/20/99 500 15.9375
5/21/99 1200 15.9375
5/24/99 11000 15.8750
5/25/99 1400 16.0000
5/26/99 1600 16.0000
5/27/99 6300 15.9375
5/28/99 1900 16.3125
6/01/99 600 15.9375
6/02/99 21700 14.6250
6/03/99 29500 14.5000 6/3/99 Trigen/Cinergy sign 20 year,
6/04/99 83100 14.1875 $1.0 billion contract with
6/07/99 7500 14.8750 Millenium Chemicals
6/08/99 5500 15.4375
6/09/99 4000 16.0625
6/10/99 11000 16.0000
6/11/99 12300 16.3750
6/14/99 22000 16.5000
6/15/99 19400 16.5625
6/16/99 168500 16.8750
6/17/99 25200 16.7500
6/18/99 2300 16.9375
6/21/99 5800 17.5625
6/22/99 5300 18.0000
6/23/99 14400 17.7500
6/24/99 5600 17.7500
6/25/99 8200 18.1250
6/28/99 10100 18.6250
6/29/99 3400 18.3125
6/30/99 51700 19.0000
7/01/99 7300 19.6250
7/02/99 7900 19.4375
7/06/99 3600 19.1875
7/07/99 3100 19.1250
7/08/99 6200 19.1250
7/09/99 4600 19.8750
7/12/99 5200 19.8750
7/13/99 8800 20.6875
7/14/99 2700 20.7500
7/15/99 4900 20.3750
7/16/99 2300 20.0000
7/19/99 11500 18.8125
7/20/99 6600 18.8125 7/20/99 Commissions St. Louis heat and
7/21/99 1500 18.7500 power plant
7/22/99 6400 19.0000
7/23/99 1400 18.6875
7/26/99 2900 18.5000
7/27/99 2900 18.6875
7/28/99 6900 19.1250 7/28/99 Reports 2nd quarter EPS of $0.78
7/29/99 4200 19.5625 vs. $0.00 in 1998
7/30/99 2700 19.9375
8/02/99 8800 20.5625
8/03/99 5000 20.1250
8/04/99 9200 20.7500
8/05/99 1300 20.4375
8/06/99 1100 20.0000
8/09/99 400 19.9375
8/10/99 2300 19.6250
8/11/99 100 19.7500
8/12/99 2000 19.5000
8/13/99 2000 19.0000
8/16/99 800 19.0000
8/17/99 900 18.9375
8/18/99 1300 18.8125
8/19/99 900 18.6875
8/20/99 2100 18.3750
8/23/99 1800 18.6250
8/24/99 1700 18.6250
8/25/99 6900 18.8125
8/26/99 12700 18.0000
8/27/99 1100 17.9375
8/30/99 1800 17.6875
8/31/99 2200 17.3750
9/01/99 1000 17.3125
9/02/99 1500 17.3750
9/03/99 2400 17.5000
9/07/99 700 17.6875
9/08/99 1600 17.7500
9/09/99 400 18.0000
9/10/99 2200 18.1250
9/13/99 5500 18.2500
9/14/99 1800 18.1250
9/15/99 500 18.2500
9/16/99 2700 18.5000
9/17/99 6800 19.2500
9/20/99 60100 22.1875 9/20/99 Trigen receives buyout offer
9/21/99 41100 22.5000 from Elyo at $22 per share
9/22/99 17400 22.6875
9/23/99 7200 23.5625
9/24/99 25900 23.1875
9/27/99 11200 22.5000
9/28/99 4800 22.3125
9/29/99 5200 22.7500
9/30/99 6600 22.9375
10/01/99 3100 22.4375
10/04/99 12900 22.6250
10/05/99 17000 22.7500
10/06/99 4700 22.7500
10/07/99 36100 22.8125
10/08/99 75200 22.7500
10/11/99 9500 23.7500
10/12/99 1000 23.5000
10/13/99 2300 23.6250
10/14/99 7500 23.4375
10/15/99 2500 23.3125
10/18/99 4200 23.3125
10/19/99 1500 23.0625
10/20/99 15700 22.8125
10/21/99 6400 22.6875
10/22/99 48400 22.5000
10/25/99 19900 22.6875
10/26/99 5700 23.1250 10/26/99 Reports 3rd quarter loss of
10/27/99 84300 23.3125 $0.09 vs. loss of $0.15 in 1998
10/28/99 21900 23.1250
10/29/99 400 23.3125
11/01/99 20600 23.2500
11/02/99 1800 23.0625
11/03/99 27400 23.5625 11/3/99 Trigen/Cinergy sign 20 year,
11/04/99 1400 23.3750 $130 million contract with
11/05/99 4000 23.3125 Sweetheart Cup
11/08/99 16300 23.4375
11/09/99 13200 23.4375
11/10/99 1500 23.3750
11/11/99 14700 23.2500
11/12/99 6000 23.3750 11/15/99 Trigen/Cinergy sign 20 year
11/15/99 19700 23.9375 contract with Eastman Kodak
11/16/99 37100 22.0000
11/17/99 63200 19.9375 11/16/99 Elyo withdraws $22 per share
11/18/99 13900 20.0000 offer to Trigen
11/19/99 8700 19.9375
11/22/99 6200 18.9375
11/23/99 11800 17.5625
11/24/99 21100 17.5000
11/26/99 1000 17.3750
11/29/99 15300 16.8750
11/30/99 48000 16.3125
12/01/99 12800 16.6875
12/02/99 13100 17.0000
12/03/99 7300 17.7500
12/06/99 9100 17.1875
12/07/99 15600 16.9375
12/08/99 7200 17.5625
12/09/99 1200 17.3750
12/10/99 7400 16.9375
12/13/99 30800 17.0000
12/14/99 17000 17.0000
12/15/99 4400 16.7500
12/16/99 11300 16.9375
12/17/99 15100 17.2500
12/20/99 19300 17.8750
12/21/99 22800 18.0000
12/22/99 2100 17.8125
12/23/99 3000 18.0000
12/27/99 8500 17.9375
12/28/99 2000 17.8125
12/29/99 6300 17.1250
12/30/99 20700 16.7500
12/31/99 8400 17.3750
1/03/00 8500 17.0000
1/04/00 1100 17.0000
1/05/00 4000 16.8750
1/06/00 6800 17.0000
1/07/00 8700 17.0000
1/10/00 8400 16.7500
1/11/00 19400 17.0000
1/12/00 23500 16.5000
1/13/00 15900 16.8125
1/14/00 71700 16.8750
-3-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
One-Year Comparative Indexed Share Price Performance
(1/14/99 to 1/14/00)
[GRAPHIC OMITTED]
[The following table was depicted as a mountain graph in the printed material.]
Date Trigen Composite(a) S&P 500
1/14/99 100.00 100.00 100.00
1/15/99 98.59 102.93 102.56
1/18/99 98.59 102.93 102.56
1/19/99 95.77 102.34 103.28
1/20/99 95.31 98.61 103.67
1/21/99 95.31 101.15 101.89
1/22/99 94.84 101.07 101.07
1/25/99 96.24 98.47 101.80
1/26/99 95.31 97.63 103.31
1/27/99 92.49 94.11 102.56
1/28/99 88.73 92.29 104.39
1/29/99 92.02 95.39 105.56
2/01/99 92.02 94.34 105.02
2/02/99 94.84 98.58 104.11
2/03/99 93.90 99.89 104.94
2/04/99 91.55 97.83 102.99
2/05/99 93.43 101.97 102.24
2/08/99 97.18 101.78 102.61
2/09/99 100.47 100.76 100.33
2/10/99 99.53 96.25 100.94
2/11/99 100.00 98.61 103.45
2/12/99 96.24 102.33 101.48
2/15/99 96.24 102.33 101.48
2/16/99 96.24 103.94 102.45
2/17/99 96.71 102.49 100.98
2/18/99 96.71 103.19 102.07
2/19/99 93.90 105.23 102.23
2/22/99 96.24 107.55 104.95
2/23/99 97.65 106.44 104.87
2/24/99 102.82 105.68 103.40
2/25/99 104.69 102.52 102.71
2/26/99 102.82 101.12 102.16
3/01/99 105.16 98.69 101.98
3/02/99 104.23 98.30 101.10
3/03/99 104.23 100.74 101.28
3/04/99 104.23 103.23 102.84
3/05/99 103.76 104.89 105.22
3/08/99 108.45 103.51 105.82
3/09/99 107.51 100.13 105.58
3/10/99 107.04 98.85 106.16
3/11/99 106.10 99.31 107.05
3/12/99 106.10 102.31 106.80
3/15/99 106.57 106.61 107.84
3/16/99 109.86 105.82 107.77
3/17/99 108.45 106.06 107.06
3/18/99 111.74 108.39 108.61
3/19/99 114.55 106.04 107.19
3/22/99 118.78 104.52 107.00
3/23/99 122.54 104.62 104.12
3/24/99 120.19 104.75 104.65
3/25/99 120.19 109.04 106.42
3/26/99 119.25 106.57 105.82
3/29/99 117.84 101.36 108.08
3/30/99 115.02 102.22 107.31
3/31/99 102.82 102.46 106.12
4/01/99 102.82 103.26 106.73
4/02/99 102.82 103.26 106.73
4/05/99 102.82 105.82 108.99
4/06/99 106.10 106.47 108.72
4/07/99 106.10 105.98 109.46
4/08/99 105.16 110.71 110.87
4/09/99 106.10 116.51 111.23
4/12/99 105.16 123.53 112.08
4/13/99 102.82 121.58 111.35
4/14/99 102.82 126.56 109.59
4/15/99 102.35 126.58 109.13
4/16/99 105.16 133.10 108.81
4/19/99 105.16 135.39 106.38
4/20/99 105.16 134.43 107.75
4/21/99 105.16 129.81 110.22
4/22/99 108.45 127.03 112.10
4/23/99 109.39 127.76 111.93
4/26/99 111.74 131.64 112.20
4/27/99 112.21 135.62 112.42
4/28/99 112.21 133.75 111.44
4/29/99 117.84 135.62 110.78
4/30/99 119.25 133.65 110.15
5/03/99 119.25 135.59 111.75
5/04/99 119.25 134.68 109.88
5/05/99 118.31 136.14 111.15
5/06/99 117.37 137.29 109.89
5/07/99 116.90 135.03 110.96
5/10/99 119.72 137.51 110.57
5/11/99 120.19 138.83 111.83
5/12/99 117.84 139.76 112.52
5/13/99 117.84 141.39 112.82
5/14/99 116.90 137.04 110.36
5/17/99 116.43 137.94 110.50
5/18/99 118.31 139.11 109.99
5/19/99 119.72 143.91 110.89
5/20/99 119.72 146.25 110.45
5/21/99 119.72 145.68 109.74
5/24/99 119.25 145.78 107.79
5/25/99 120.19 143.06 105.96
5/26/99 120.19 144.65 107.64
5/27/99 119.72 139.70 105.71
5/28/99 122.54 138.63 107.40
5/31/99 122.54 138.63 107.40
6/01/99 119.72 139.30 106.77
6/02/99 109.86 138.01 106.82
6/03/99 108.92 136.41 107.21
6/04/99 106.57 138.32 109.53
6/07/99 111.74 138.16 110.09
6/08/99 115.96 139.36 108.67
6/09/99 120.66 142.36 108.78
6/10/99 120.19 139.93 107.48
6/11/99 123.00 140.17 106.72
6/14/99 123.94 140.29 106.75
6/15/99 124.41 140.26 107.34
6/16/99 126.76 143.39 109.75
6/17/99 125.82 146.49 110.54
6/18/99 127.23 149.77 110.78
6/21/99 131.92 150.46 111.29
6/22/99 135.21 151.32 110.20
6/23/99 133.33 157.96 109.97
6/24/99 133.33 157.35 108.55
6/25/99 136.15 154.94 108.51
6/28/99 139.91 156.44 109.83
6/29/99 137.56 158.57 111.49
6/30/99 142.72 157.07 113.24
7/01/99 147.42 155.21 113.92
7/02/99 146.01 154.57 114.77
7/05/99 146.01 154.57 114.77
7/06/99 144.13 158.66 114.51
7/07/99 143.66 161.74 115.15
7/08/99 143.66 161.92 115.03
7/09/99 149.30 163.59 115.76
7/12/99 149.30 162.22 115.42
7/13/99 155.40 157.92 114.96
7/14/99 155.87 161.28 115.34
7/15/99 153.05 158.12 116.29
7/16/99 150.23 160.24 117.04
7/19/99 141.31 161.48 116.12
7/20/99 141.31 160.26 113.60
7/21/99 140.85 157.78 113.78
7/22/99 142.72 154.52 112.27
7/23/99 140.38 160.88 111.94
7/26/99 138.97 160.83 111.18
7/27/99 140.38 165.87 112.43
7/28/99 143.66 171.31 112.64
7/29/99 146.95 170.45 110.63
7/30/99 149.77 169.28 109.61
8/02/99 154.46 169.12 109.56
8/03/99 151.17 167.31 109.07
8/04/99 155.87 164.59 107.68
8/05/99 153.52 158.85 108.37
8/06/99 150.23 158.59 107.27
8/09/99 149.77 156.22 107.06
8/10/99 147.42 156.29 105.71
8/11/99 148.36 158.38 107.40
8/12/99 146.48 159.07 107.09
8/13/99 142.72 158.94 109.53
8/16/99 142.72 156.72 109.78
8/17/99 142.25 159.11 110.89
8/18/99 141.31 164.31 109.95
8/19/99 140.38 178.79 109.19
8/20/99 138.03 177.74 110.26
8/23/99 139.91 182.03 112.21
8/24/99 139.91 180.69 112.48
8/25/99 141.31 179.80 113.99
8/26/99 135.21 176.68 112.36
8/27/99 134.74 176.19 111.23
8/30/99 132.86 175.45 109.23
8/31/99 130.52 175.77 108.93
9/01/99 130.05 176.86 109.81
9/02/99 130.52 172.54 108.82
9/03/99 131.46 178.23 111.97
9/06/99 131.46 178.23 111.97
9/07/99 132.86 185.31 111.41
9/08/99 133.33 185.04 110.89
9/09/99 135.21 185.79 111.18
9/10/99 136.15 189.86 111.51
9/13/99 137.09 187.86 110.88
9/14/99 136.15 186.40 110.24
9/15/99 137.09 184.66 108.73
9/16/99 138.97 185.33 108.77
9/17/99 144.60 186.59 110.17
9/20/99 166.67 183.50 110.17
9/21/99 169.01 184.48 107.87
9/22/99 170.42 184.53 108.11
9/23/99 177.00 182.60 105.63
9/24/99 174.18 179.44 105.38
9/27/99 169.01 178.85 105.87
9/28/99 167.61 172.94 105.78
9/29/99 170.89 172.87 104.63
9/30/99 172.30 170.50 105.82
10/01/99 168.54 168.51 105.83
10/04/99 169.95 171.21 107.62
10/05/99 170.89 169.03 107.36
10/06/99 170.89 169.20 109.34
10/07/99 171.36 167.21 108.70
10/08/99 170.89 164.30 110.22
10/11/99 178.40 164.31 110.15
10/12/99 176.53 165.03 108.32
10/13/99 177.46 163.46 106.05
10/14/99 176.06 162.39 105.88
10/15/99 175.12 157.75 102.91
10/18/99 175.12 156.36 103.46
10/19/99 173.24 158.88 104.05
10/20/99 171.36 163.28 106.37
10/21/99 170.42 164.15 105.89
10/22/99 169.01 165.02 107.38
10/25/99 170.42 163.57 106.72
10/26/99 173.71 160.74 105.75
10/27/99 175.12 163.92 106.97
10/28/99 173.71 168.69 110.75
10/29/99 175.12 174.64 112.44
11/01/99 174.65 173.26 111.71
11/02/99 173.24 176.04 111.18
11/03/99 177.00 173.86 111.78
11/04/99 175.59 174.90 112.41
11/05/99 175.12 181.07 113.04
11/08/99 176.06 178.41 113.60
11/09/99 176.06 178.24 112.63
11/10/99 175.59 180.05 113.30
11/11/99 174.65 181.64 113.96
11/12/99 175.59 182.63 115.17
11/15/99 179.81 185.01 115.03
11/16/99 165.26 188.68 117.15
11/17/99 149.77 186.75 116.38
11/18/99 150.23 189.46 117.55
11/19/99 149.77 188.69 117.31
11/22/99 142.25 185.88 117.22
11/23/99 131.92 180.50 115.88
11/24/99 131.46 174.67 116.90
11/25/99 131.46 174.67 116.90
11/26/99 130.52 174.06 116.86
11/29/99 126.76 173.51 116.14
11/30/99 122.54 178.99 114.58
12/01/99 125.35 181.55 115.31
12/02/99 127.70 182.44 116.24
12/03/99 133.33 183.68 118.24
12/06/99 129.11 183.77 117.42
12/07/99 127.23 188.84 116.25
12/08/99 131.92 190.11 115.81
12/09/99 130.52 193.91 116.16
12/10/99 127.23 186.42 116.90
12/13/99 127.70 184.86 116.75
12/14/99 127.70 184.11 115.75
12/15/99 125.82 187.99 116.59
12/16/99 127.23 183.31 117.04
12/17/99 129.58 191.94 117.23
12/20/99 134.27 199.04 116.99
12/21/99 135.21 207.53 118.25
12/22/99 133.80 203.06 118.47
12/23/99 135.21 202.55 120.31
12/24/99 135.21 202.55 120.31
12/27/99 134.74 209.33 120.20
12/28/99 133.80 209.15 120.25
12/29/99 128.64 208.63 120.73
12/30/99 125.82 212.77 120.81
12/31/99 130.52 220.66 121.21
1/03/00 127.70 217.34 120.05
1/04/00 127.70 211.58 115.45
1/05/00 126.76 214.21 115.67
1/06/00 127.70 216.25 115.78
1/07/00 127.70 222.05 118.91
1/10/00 125.82 234.48 120.25
1/11/00 127.70 232.39 118.67
1/12/00 123.94 236.32 118.15
1/13/00 126.29 243.69 119.59
1/14/00 126.76 254.90 120.87
26.8% 154.9% 20.9%
- ----------
(a) Composite includes AES, Calpine and Thermo Ecotek.
-4-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Trigen Three-Year Price/Volume Histogram
(1/14/97 to 1/14/00)
Total Volume Traded: 7,793,800 Shares
[GRAPHIC OMITTED]
[The following table was depicted as a bar graph in the printed material.]
3 Year
<TABLE>
<CAPTION>
0 11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99
11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99 50 TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
374,600 1,281,300 917,200 2,010,600 825,200 318,100 1,485,600 519,000 60,400 1,800 7,793,800
Cumulative
Percent Traded 4.8% 21.2% 33.0% 58.8% 69.4% 73.5% 92.5% 99.2% 100.0% 100.0%
</TABLE>
-5-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Trigen Two-Year Price/Volume Histogram
(1/14/98 to 1/14/00)
Total Volume Traded: 5,787,700 Shares
[GRAPHIC OMITTED]
[The following table was depicted as a bar graph in the printed material.]
2 Year
<TABLE>
<CAPTION>
0 11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99
11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99 50 TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
374,600 1,281,300 917,200 1,998,900 434,300 58,000 723,400 0 0 0 5,787,700
Cumulative
Percent Traded 6.5% 28.6% 44.5% 79.0% 86.5% 87.5% 100.0%
</TABLE>
-6-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Trigen One-Year Price/Volume Histogram
(1/14/99 to 1/14/00)
Total Volume Traded: 2,835,800 Shares
[GRAPHIC OMITTED]
[The following table was depicted as a bar graph in the printed material.]
1 Year
<TABLE>
<CAPTION>
0 11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99
11.99 13.99 15.99 17.99 19.99 21.99 23.99 25.99 27.99 50 TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5,200 468,400 411,200 846,300 323,300 58,000 723,400 0 0 0 2,835,800
Cumulative
Percent Traded 0.2% 16.7% 31.2% 61.0% 72.4% 74.5% 100.0%
</TABLE>
-7-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Shareholder Profile
As Reported
----------------------------
Institutional Holders Shares Held % of Total
----------- ----------
Dimensional Fund Advisors 868,500 7.0%
Investment Counselors of Maryland 780,000 6.3
Benson Associates, LLC 411,381 3.3
Denver Investment Advisors 161,900 1.3
Martindale Andres & Co. 136,900 1.1
California Public Employees' Retirement System 134,100 1.1
Loomis Sayles & Co. 121,400 1.0
Accrued Equities 75,000 0.6
Westpeak Investment Advisors, L.P. 71,500 0.6
Barclays Global Investors 61,000 0.5
Other 363,336 2.9
---------- -----
Total Institutional Ownership 3,185,017 25.7%
Suez Lyonnaise des Eaux and Affiliates 6,507,944 52.5%
Insiders
Thomas R. Casten 1,094,457 8.8%
Eugene E. Murphy 243,493 2.0
Other Insiders 397,671 3.2
---------- -----
Total Insiders 1,735,621 14.0%
Retail 978,520 7.9%
---------- -----
Total Shares Outstanding 12,407,102 100.0%
========== =====
- ----------
Source: Trigen 10-Q dated 9/30/99 and Morrow & Co. as of November 1999.
-8-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Options and Restricted Stock Information
Options
<TABLE>
<CAPTION>
Outstanding Options(a)
- ---------------------------------------------------------------------- Diff. Between
Average Offer Price and Cost to
Range of Average Exercise Offer Avg. Exercise Exercise
Exercise Prices Options Life(b) Price Price Price Options(c)
- ------------------- ------- ------- -------- ----- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
$11.88 - $19.75 735,210 8.1 $16.40 $23.50 $7.10 $5,219,991
20.00 - 24.00 54,200 7.4 21.55 23.50 1.95 105,690
24.25 - 27.75 19,500 8.4 25.43 23.50 -- --
Total 808,910 8.0 $18.89 $5,325,681
</TABLE>
o The cost to exercise the options will be equal to the difference between
the offer price and the exercise price multiplied by the number of options
(vested and non-vested) or approximately $5.3 million.
o Note that if the offer price is less than or equal to the exercise price,
those options shall be cancelled.
Restricted Stock
Restricted Offer Payment
Stock Shares Price at Closing(d)
- ------------ ----- -------------
329,220 $23.50 $1,934,168
- ----------
(a) Information of outstanding options based on Trigen 10-K dated 12/31/98.
(b) Average contractual remaining life of options in years as of 12/31/98.
(c) Includes both vested and non-vested options.
(d) At closing, 25% of the restricted stock shares will be paid. The remaining
restricted shares shall be cancelled.
-9-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Selected Research Analyst Comments After Elyo Offer on September 20, 1999
<TABLE>
<CAPTION>
1999 Target
Report Date Research Firm/Analyst EPS Price Rating Selected Quotes
----------- --------------------- --- ----- ------ ---------------
<S> <C> <C> <C> <C> <C>
December 7, 1999 BancBoston Robertson Stephens $0.75 NA Buy "We are reducing our 4Q earnings estimate for
Hugh F. Holman Trigen from $0.49 to $0.25 per share. This
reduction is based on two factors. First, we
were just flat out too aggressive in setting
our target for the quarter, and, to hit it,
everything would have had to break right for
the company. Second, the weather thus far in
4Q has been great here in the East- which,
unfortunately, is bad news for a company that
makes money when the weather is cold."
"We are maintaining our Buy rating on this
stock. Despite our disappointment that Elyo
has declined to sweeten its $22/share bid, we
think the fundamentals here remain very
strong as the deregulation of the power
market in the U.S. picks up pace."
December 3, 1999 Salomon Smith Barney $0.80 $21.50 Neutral "We are lowering our rating to Neutral from
Bonnie Becker Outperform due to: 1) concerns about Trigen's
earnings cliff in 2001 caused by the
repricing of Grays Ferry contract, 2) the
withdrawal by majority shareholder Elyo of
its bid for Trigen, and 3) Trigen's premium
valuation to both AES Corp and Calpine Corp,
which we feel is unwarranted."
"We believe that the Elyo offer represented a
fair price for Trigen stock. The offer price
valued Trigen at 9.6x FV/EBITDA. This
compared favorably with the most recent
acquisition of an independent power producer
(IPP), Calpine's acquisition of CogenAmerica,
which valued CogenAmerica at 6.9x EBITDA."
November 18, 1999 DLJ Securities $0.80 $22.00- Market "We maintain that the near-term challenge for
Ali Agha $23.00 Perf. Trigen is the earnings cliff that the company
faces in 2001 arising from the repricing of
the Grays Ferry contract. In recent months,
management has exhibited increasing success
in securing new projects and contracts to
bolster earnings going forward. At this time,
however, we are maintaining our market
performance rating on the stock but will be
closely monitoring management's efforts to
build out a pipeline of future projects to
add to earnings visibility."
September 22, 1999 BancBoston Robertson Stephens $0.99 NA Buy "We suspect that Suez Lyonnaise des Eaux will
Hugh F. Holman end up sweetening its $22/share offer for
Trigen. We base this on several
considerations. First, the market seems to be
telling us that Suez's bid is low, as the
stock immediately traded above $22/share and
has held at a premium to the offer. Second,
the premium offered relative to Trigen's
closing price prior to the offer, 14.3%, is
low relative to what Suez has paid in its
recent buy-in of United Water Resources (54%)
and to what it has offered in two other
buy-ins, Tractebel (24.4%) and Sita (20.3%).
Third, in a comparable transaction now under
way, Calpine's offer to buy 80% of
Cogeneration Corporation of America, Calpine
has offered Cogen a 48.7% premium to its
prior closing price and what appears to us to
be a multiple of estimated forward EBITDA of
8.5-9.5x versus Suez's offer of 7.6x Trigen's
estimated forward EBITDA.
</TABLE>
-10-
<PAGE>
PROJECT TRUST III. Recent Events and Market Data
- --------------------------------------------------------------------------------
Selected Research Analyst Comments Before Elyo Offer on September 20, 1999
<TABLE>
<CAPTION>
1999 Target
Report Date Research Firm/Analyst EPS Price Rating Selected Quotes
----------- --------------------- --- ----- ------ ---------------
<S> <C> <C> <C> <C> <C>
July 29, 1999 Lazard Freres & Co. LLC $0.83 $30.00 Buy "Development and construction activity has
James F. McAree been significant and is expected to continue
growing. Our impression is that the level of
bidding activity continues to increase,
outsourcing contracts are being signed and
the selling-cycle now seems to be
significantly shorter than it was two years
ago. We believe that the company can move
forward with its many projects since the
parent company, ELYO, made a $50 million
subordinated loan at favorable terms to TGN
and Cinergy has committed $150 million to
TGN-Cinergy Solutions projects."
"The 2001 earnings profile is becoming
clearer. Investors should note that about
$0.50 to $0.60 of TGN's 2000 EPS from the
Gray's Ferry project is at risk in 2001 due
to a change in the pricing of electricity
from 4.5 cents per KW to 98% of the PJM
Index. We believe that the company has about
$0.25 of new EPS from the ramp-up of current
projects in 2001 and given the momentum in
the business today we are confident that
management can at least meet their internal
goal of replacing all of the anticipated EPS
decline at Gray's Ferry."
July 28, 1999 BancBoston Robertson Stephens $0.99 NA Buy "We believe the restructuring of the utility
Hugh F. Holman industry will open significant new
opportunities to Trigen in the development of
new industrial and district heating CHP
projects that free customers from the need to
rely on local utilities. By `going off the
grid', these customers will avoid transition
charges and transmission and distribution
charges that grid-connected customers will
incur. Further, we believe that the
environmental benefits of CHP will translate
into an increasingly attractive competitive
advantage as emissions trading places a
monetary value on emissions."
"Based on the current strong momentum in
Trigen's project development activity, we
believe there may yet be an upside to these
[earnings] estimates, possibly to $1.00 in
1999."
"The company also noted that it believes the
selling cycle on new industrial projects is
shortening as decision-making on energy
projects moves to higher echelons in its
client companies-partly as a result of the
energy `buzz' created by utility
deregulation."
"The company indicated that it has at least
three very significant project awards
pending, and management is anticipating an
`active' August (in terms of awards and
announcements)."
June 3, 1999 Lazard Freres & Co. LLC $0.76 $20.00 Buy "Trigen's bidding activity is robust and
James F. McAree contracts are being signed now that
uncertainty surrounding electricity
deregulation is over."
"Trigen and TCS are very well positioned to
win outsourcing contracts and the outsourcing
trend will continue to grow as companies
recognize the potential cost savings now
available."
June 3, 1999 BancBoston Robertson Stephens $0.78 $22.00- Buy "Trigen has scored a major project win with
Hugh F. Holman $29.00 Millenium Chemicals that potentially adds $1
billion in revenues over the next 15-20
years."
"We find ourselves reporting news that could
drive earnings above our current estimates of
$0.78 for 1999 and $1.10 for 2000. We
continue to believe that the upside potential
to earnings in 2000 could be as much as $0.35
per share."
</TABLE>
-11-
<PAGE>
PROJECT TRUST IV. Financial Projections
- --------------------------------------------------------------------------------
Selected Historical and Projected Financial Data(a)
($ in millions, except per share data)
<TABLE>
<CAPTION>
Projected
----------------------------------------------------------- CAGR
1998A 1999E 2000 2001 2002 2003 2004 2005 1999-2005
----- ----- ---- ---- ---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Income Statement Data
Revenues $ 242.4 $ 286.0 $375.5 $403.4 $421.6 $436.9 $446.4 $453.0 7.9%
% Growth 18.0% 31.3% 7.4% 4.5% 3.6% 2.2% 1.5%
EBITDA 57.0 66.4 99.0 100.0 107.4 111.2 112.6 112.9 9.2
% Margin 23.5% 23.2% 26.4% 24.8% 25.5% 25.4% 25.2% 24.9%
EBIT 31.8 40.4 66.3 63.2 67.9 70.8 71.5 71.2 9.9
% Margin 13.1% 14.1% 17.7% 15.7% 16.1% 16.2% 16.0% 15.7%
Net Income 6.3(b) 11.7(c) 16.1 11.5 13.5 16.7 18.8 20.0 9.4
% Margin 2.6% 4.1% 4.3% 2.8% 3.2% 3.8% 4.2% 4.4%
% Growth 58.2% 37.6 (28.5) 17.9 23.5 12.3 6.5
Earnings per Share (d) $ 0.52(b) $ 0.94(c) $ 1.30 $ 0.93 $ 1.09 $ 1.35 $ 1.52 $ 1.61 9.4%
% Growth 80.7% 37.6% (28.5)% 17.9% 23.5% 12.3% 6.5%
Selected Cash Flow Data
Depreciation and
Amortization $ 25.2 $ 26.0 $ 32.7 $ 36.7 $ 39.6 $ 40.4 $ 41.1 $ 41.7
Working Capital Decrease/
(Increase) 0.1 (17.0) 6.4 0.5 (1.9) (2.3) (2.7) (10.2)
Capital Expenditures (109.1) (137.1) (93.6) (69.0) (11.5) (10.9) (5.0) (4.1)
</TABLE>
- ----------
(a) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(b) Includes extraordinary loss of $0.3 million net of tax.
(c) Includes extraordinary loss of $4.9 million net of tax.
(d) EPS for 1999 and beyond based on 12.4 million basic shares outstanding as
of 10-Q dated 9/30/99.
-12-
<PAGE>
PROJECT TRUST V. Summary Valuation
- --------------------------------------------------------------------------------
Valuation Ranges
<TABLE>
<CAPTION>
Premium/(Discount) to
Implied Market Value ---------------------
Enterprise Value Per Share (a)(b) Current Price (c)
-------------------- -------------------- ---------------------
Low High Low High Low High
----- ------ ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
--------------------
A. Public Market Valuation $665 -- $730 $15.17 -- $20.28 (10.8%) -- 19.3%
B. Comparable Transactions Valuation $695 -- $765 $17.53 -- $23.03 3.1% -- 35.5%
C. Discounted Cash Flow Analysis $710 -- $775 $18.71 -- $23.82 10.0% -- 40.1%
D. Minority Buy-out Transaction Valuation $715 -- $750 $19.08 -- $21.99 12.3% -- 29.4%
--------------------
- ------------------
(a) Based on 12.7 million fully diluted shares.
(b) Market value defined as Enterprise Value less net debt of $472 million.
Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock less cash.
(c) Based on a share price of $17.00 as of 1/18/00.
</TABLE>
-13-
<PAGE>
PROJECT TRUST V. Summary Valuation
- --------------------------------------------------------------------------------
Valuation Ranges (cont'd)
[The following table was depicted as a bar graph in the printed material.]
<TABLE>
<CAPTION>
Public Market Comparable Transactions Discounted Cash Minority Buy-Out
Current Price(a) Valuation Valuation Flow Analysis Transaction Valuation
<S> <C> <C> <C> <C>
$17.00 $15.17 $17.53 $18.71 $19.08
$20.28 $23.03 $23.82 $21.99
</TABLE>
- ----------
(a) As of 1/18/00.
-14-
<PAGE>
PROJECT TRUST V. Summary Valuation
- --------------------------------------------------------------------------------
Analysis at Various Prices
($ in millions, except per share data)
<TABLE>
<CAPTION>
Premium to Market Value
-------------------------------------------------------------------------
0% 10% 20% 30% 40%
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stock Price $ 17.00 (g) $ 18.70 $ 20.40 $ 22.10 $ 23.80
Primary Shares Outstanding (a) 12.4 12.4 12.4 12.4 12.4
Options (b)(c) 0.7 0.7 0.7 0.8 0.8
Restricted Stock (f) 0.1 0.1 0.1 0.1 0.1
Fully Diluted Gross Shares 13.2 13.2 13.2 13.3 13.3
Options Proceeds (c) $ 12.1 $ 12.1 12.1 13.2 13.2
Market Value $ 212.8 $ 235.2 $ 257.7 $ 280.2 $ 302.8
Net Debt (d) 472.1 472.1 472.1 472.1 472.1
------- ------- ------- ------- -------
Enterprise Value $ 684.8 $ 707.3 $ 729.8 $ 752.3 $ 774.9
======= ======= ======= ======= =======
Enterprise Value as a Multiple of
Revenues (e)
1999 $ 286.0 2.4 x 2.5 x 2.6 x 2.6 x 2.7 x
2000 $ 375.5 1.8 1.9 1.9 2.0 2.1
EBITDA (e)
1999 $ 66.4 10.3 x 10.7 x 11.0 x 11.3 x 11.7 x
2000 $ 99.0 6.9 7.1 7.4 7.6 7.8
EBIT (e)
1999 $ 40.4 16.9 x 17.5 x 18.1 x 18.6 x 19.2 x
2000 $ 66.3 10.3 10.7 11.0 11.3 11.7
Market Value as a Multiple
of Net Income (e)
1999 $ 11.7 18.2 x 20.1 x 22.1 x 24.0 x 25.9 x
2000 $ 16.1 13.2 14.6 16.0 17.4 18.8
Book Value (e)
1999 $ 164.6 1.3 x 1.4 x 1.6 x 1.7 x 1.8 x
2000 $ 180.5 1.2 1.3 1.4 1.6 1.7
</TABLE>
- ----------
(a) Based on Trigen 10-Q dated September 30, 1999.
(b) Options based on outstanding "in-the-money" options as of Trigen's 10-K
dated 12/31/98.
(c) Outstanding options and their respective strike prices as of 12/31/98 10-K
are as follows: 735,210 at $16.40, 54,200 at $21.55, and 19,500 at $25.43.
(d) Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock, less cash, based on Trigen Medium Term Plan-
Committed Case dated January 8, 2000. Net Debt comprised of $49.8 million
of current debt, $417.8 million of long term debt, $19.4 million minority
interest, less $15.0 million of cash as of December 1999.
(e) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(f) Represents 25% of the 329,200 total shares of restricted stock.
(g) Closing price on 1/18/00.
-15-
<PAGE>
PROJECT TRUST V. Summary Valuation
- --------------------------------------------------------------------------------
Historical Share Price Information
- --------------------------------------------------------------------------------
Trigen Energy Corp.
================================================================================
Current Price (1/18/00) $17.00
1999 High (11/15/99) $23.94
1999 Low (1/4/99) $11.38
52 Week High (11/15/99) $23.94
52 Week Low (1/28/99) $11.81
Average for December 1999 $17.32
Average for November 1999 $21.13
Average for October 1999 $23.03
3 Month Average* $19.38
- ----------
* Based on average closing price from 10/18/99 to 1/18/00
-16-
<PAGE>
PROJECT TRUST V. Summary Valuation
- --------------------------------------------------------------------------------
Summary of Premiums Paid in Minority Buyout Transactions
(all numbers reflect medians)
<TABLE>
<CAPTION>
Premium of Initial Bid to: Premium of Final Bid to:
--------------------------------------- ---------------------------------------
One Day Prior One Month Prior One Day Prior One Month Prior
Stake Purchased # of Deals to Annnouncement to Annnouncement to Annnouncement to Annnouncement
- --------------- ---------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Less than 5% 1 6.3% 7.7% 14.8% 16.3%
5.0% to 9.9% 3 (5.9%) 5.5% 12.3% 91.6%
10.0% to 14.9% 5 15.5% 15.0% 25.0% 26.7%
15.0% to 19.9% 15 10.2% 23.8% 20.4% 30.9%
20.0% to 49.9% 37 14.3% 19.0% 18.2% 26.2%
----
- ------------------------------------------------------------------------------------------------------------------------------------
Overall 61 11.4% 19.0% 19.3% 29.2%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation
($ in millions)
Low High
------- -------
----------------------
Rounded Enterprise Value Range (a) $665 - $730
----------------------
Enterprise Value Range $664 - $730
Less: Net Debt (b) (472) - (472)
------- -------
Market Value (c) $193 - $258
Price Per Share (d) $15.17 $20.28
<TABLE>
<CAPTION>
Public Market Multiple Benchmarks
-----------------------------------------------
MidAmerican Thermo Group
Enterprise Value as a Multiple of Energy (f) Calpine Ecotek Median (g)
----------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA (e)
-----------------------
1999 $66.4 10.0 x - 11.0 x 8.1 x 26.9 x 4.5 x 13.7 x
-----------------------
2000 $99.0 6.7 - 7.4 7.2 17.6 4.1 9.6
EBIT (e)
1999 $40.4 16.4 x - 18.1 x 13.5 x 36.4 x 8.4 x 18.2 x
2000 $66.3 10.0 - 11.0 12.0 23.5 7.3 13.3
Market Value as a Multiple of
Net Income (e)
1999 $11.7 16.5 x - 22.1 x 12.7 x 53.1 x 12.9 x 12.9 x
2000 $16.1 12.0 - 16.0 10.9 42.5 11.3 11.3
Book Value (e)
1999 $164.6 1.2 x - 1.6 x 1.8 x 9.6 x 1.0 x 6.9 x
2000 $180.5 1.1 - 1.4
</TABLE>
- ----------
(a) Enterprise Value defined as Market Value of Common Equity plus short term
and long term debt, plus minority interest, plus preferred stock, less
cash.
(b) Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock, less cash, based on Trigen Medium Term Plan-
Committed Case dated January 8, 2000. Net Debt comprised of $49.8 million
of current debt, $417.8 million of long term debt, $19.4 million minority
interest, less $15.0 million of cash as of December 1999.
(c) Market Value defined as Enterprise Value less net debt.
(d) Based on 12.7 million fully diluted shares.
(e) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(f) Based on the price per share on 10/22/99, which was one day before the
company announced it would be acquired.
(g) Group median based on a larger set of companies on the following page.
-18-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation (cont'd)
($ in millions)
<TABLE>
<CAPTION>
Trigen Group Group MidAmerican
Energy Mean Median AES Energy Calpine
------ ---- ------ --- ------ -------
<S> <C> <C> <C> <C> <C> <C>
LTM Ended Sep-99 Sep-99 Sep-99 Sep-99
Fiscal Year Ended Dec-98 Dec-98 Dec-98 Dec-98
Current Market Information
------ -------
Ticker TGN AES MEC CPN
Price as of 01/18/2000 $17.00 $77.94 $27.25 (e) $85.00
52 Wk High 24.19 83.38 35.75 86.63
52 Wk Low 11.50 32.81 26.44 14.41
Current Price as a % of 52 Week High 70.3% 76.9% 76.2% 93.5% 76.2% 98.1%
Shares Outstanding 12.7 (f) 206.4 61.2 62.9
Indicated Dividend $0.14 $0.00 $0.00 $0.00
Payout Ratio 10.1% 0.0% 0.0% 0.0%
Dividend Yield 0.8% 0.0% 0.0% 0.0%
Market Value (a) $215 $16,085 $1,667 $5,346
Market Capitalization (b) 687 24,702 8,596 6,863
- ------------------------------------------------------------------------------------------------------------------------------------
Market Capitalization as a Multiple of:
LTM Net Sales 2.6 x 5.3 4.3 8.9 x 2.4 x 9.4 x
1999E 2.4 5.5 5.1 8.2 2.1 10.4
2000E 1.8 3.8 3.1 4.3 1.8 7.8
LTM EBITDA 10.2 x 14.3 x 9.9 x 22.4 x 9.4 x 24.3 x
1999E 10.4 14.7 13.7 19.4 8.1 26.9
2000E 6.9 10.2 9.6 12.0 7.2 17.6
LTM EBIT 16.8 x 20.9 x 16.2 x 28.2 x 16.2 x 34.0 x
1999E 17.0 20.3 18.2 23.0 13.5 36.4
2000E 10.4 14.3 13.3 14.5 12.0 23.5
- ------------------------------------------------------------------------------------------------------------------------------------
Price as a Multiple of: MGMT. I/B/E/S
LTM EPS 12.2 x 29.9 x 15.7 x 67.5 x 9.0 x 51.4 x
1999E (I/B/E/S) 18.1 (a) 21.3 x 26.1 12.9 41.0 12.7 53.1
2000E (I/B/E/S) 13.1 (a) 14.2 20.1 11.3 26.4 10.9 42.5
Book Value per Share 1.3 x 6.0 x 6.9 x 10.7 x 1.8 x 9.6 x
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Leverage Ratios:
ST + LT Debt/Total Book Cap 71.8% 70.7% 74.1% 72.1% 79.7% 74.1%
Net Debt/Market Cap 65.8% 44.4% 28.8% 28.8% 72.5% 21.8%
Total Debt/LTM EBITDA 7.0 x 5.8 x 7.0 x 7.1 x 7.0 x 5.9 x
- ------------------------------------------------------------------------------------------------------------------------------------
Summary Capitalization 12/31/1999 (g) 09/30/1999 09/30/1999 09/30/1999
-------------- ---------- ---------- ----------
Cash & Investments $ 15 $702 $167 $174
Short-Term Debt 50 8% 7% 8% 968 9% 100 1% 0 0%
Long-Term Debt 418 64% 53% 64% 6,837 63% 6,298 78% 1,667 74%
Minority Interest 19 3% 4% 4% 964 9% 0 0% 24 1%
Preferred Equity 0 0% 2% 0% 550 5% 699 9% 0 0%
Common Equity 165 25% 34% 25% 1,502 14% 933 12% 558 25%
----- ------- ------ ------
Capitalization $652 100% $10,821 100% $8,030 100% $2,249 100%
===== ------ ------- ======= ====== ======
<CAPTION>
Cogeneration Thermo
Corp of Amer. Ecotek
------------- ------
<S> <C> <C>
LTM Ended Sep-99 Oct-99
Fiscal Year Ended Dec-98 Oct-99
Current Market Information
Ticker CGCA TCK
Price as of 01/18/2000 $16.81 (b) $5.44
52 Wk High 25.13 10.88
52 Wk Low 7.94 5.00
Current Price as a % of 52 Week High 66.9% 50.0%
Shares Outstanding 6.9 36.0
Indicated Dividend $0.00 $0.00
Payout Ratio 0.0% 0.0%
Dividend Yield 0.0% 0.0%
Market Value (a) $115 $196
Market Capitalization (b) 411 285
- -------------------------------------------------------------------------
Market Capitalization as a Multiple of:
LTM Net Sales 4.3 x 1.4 x
1999E NA 1.3
2000E NA 1.2
LTM EBITDA 9.9 x 5.6 x
1999E NA 4.5
2000E NA 4.1
LTM EBIT 14.1 x 11.9 x
1999E NA 8.4
2000E NA 7.3
- -------------------------------------------------------------------------
Price as a Multiple of:
LTM EPS 15.7 x 6.0 x
1999E (I/B/E/S) 10.8 12.9
2000E (I/B/E/S) 9.6 11.3
Book Value per Share 6.9 x 1.0 x
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Leverage Ratios:
ST + LT Debt/Total Book Cap 94.8% 32.8%
Net Debt/Market Cap 72.0% 27.0%
Total Debt/LTM EBITDA 7.2 x 1.9 x
- -------------------------------------------------------------------------
Summary Capitalization 09/30/1999 10/02/1999
---------- ----------
Cash & Investments $5 $22
Short-Term Debt 29 9% 38 12%
Long-Term Debt 272 86% 61 20%
Minority Interest 0 0% 13 4%
Preferred Equity 0 0% 0 0%
Common Equity 17 5% 191 63%
---- ----
Capitalization $318 100% $302 100%
==== ====
</TABLE>
-19-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation (cont'd)
($ in millions)
<TABLE>
<CAPTION>
Trigen MidAmerican Cogeneration Thermo
Energy AES Energy Calpine Corp of Amer. Ecotek
------ --- ------ ------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Net Sales
2000E 375.5(a) 5,700.3 (a) 4,816.7 (a) 875.5 (a) NA 230.0 (a)
1999E 286.0(a) 3,006.9 (a) 4,136.1 (a)(b) 657.0 (a) NA 226.4 (a)
LTM 266.8 2,771.0 3,617.0 729.3 94.8 205.5
1998 242.4 2,398.0 2,566.2 (d) 528.1 74.0 209.0
1997 240.7 1,411.0 2,210.3 (d) 247.5 64.8 180.2
1996 243.6 835.0 NA 205.9 96.5 150.1
EBITDA
2000E 99.0(a) 2,057.9 (a) 1,191.5 (a) 390.5 (a) NA 69.1
1999E 66.4(a) 1,274.2 (a) 1,063.0 (a)(b) 255.5 (a) NA 63.6
LTM 67.1 1,101.5 (b) 911.7 (c) 282.0 41.6 50.8 (b)
1998 57.0 1,161.0 836.3 (d) 221.0 36.8 73.2
1997 44.8 608.0 756.6 (d) 144.0 24.3 68.7
1996 42.4(b) 392.0 NA 103.4 21.5 56.4
Depreciation & Amortization
2000E 32.7(a) 358.8 (a) 473.9 (a) 99.0 (a) NA 30.1 (c)
1999E 26.0(a) 198.2 (a) 426.4 (a) 67.0 (a) NA 29.6 (c)
LTM 26.1 226.5 (b) 382.0 80.0 12.5 26.9 (b)
1998 25.2 196.0 333.4 (d) 74.3 9.8 23.9
1997 16.0 114.0 276.0 (d) 46.8 7.8 21.6
1996 7.6 65.0 NA 36.6 9.4 20.4
</TABLE>
-20-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation (cont'd)
($ in millions)
<TABLE>
<CAPTION>
Trigen MidAmerican Cogeneration Thermo
Energy AES Energy Calpine Corp of Amer. Ecotek
------ --- ----------- ------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
EBIT (c)
2000E 66.3 (a) 1,699.1 (a) 717.5 (a) 291.5 (a) NA 39.0 (a)
1999E 40.4 (a) 1,076.0 (a) 636.6 (a)(b) 188.5 (a) NA 34.0 (a)
LTM 41.0 875.0 529.7 (c) 201.9 29.1 23.9 (b)
1998 31.8 965.0 502.8 (d) 146.7 27.0 49.3
1997 28.7 494.0 480.6 (d) 97.2 16.5 47.1
1996 34.8 (b) 327.0 NA 66.8 12.1 35.9
Net Income (d)
2000E 16.1 (a) 666.7 (a) 183.7 (a) 103.1 (a) NA 19.8 (a)
1999E 11.7 (a)(e) 379.1 (a) 138.5 (a)(b) 67.1 (a) NA 26.0 (a)
LTM 17.2 (c)(d) 208.0 180.7 (c) 79.0 (b) 7.3 (a) 13.9 (b)(d)
1998 6.3 (d) 307.0 (c) 137.5 (d) 46.3 (b) 8.0 35.3 (d)
1997 5.0 188.0 (c) 138.9 (d) 34.7 23.4 22.5
1996 8.7 (b) 125.0 NA 18.7 (17.7) 17.8
<CAPTION>
EPS (e) MGMT. I/B/E/S
----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
2000E (I/B/E/S) 1.30 (a) 1.20 2.95 2.49 2.00 1.76 0.48
1999E (I/B/E/S) 0.94 (a)(e) 0.80 1.90 2.15 1.60 1.55 0.42
LTM 1.39 (c)(d) 1.16 3.03 1.65 (b) 1.07 0.90 (b)(d)
1998 0.52 (d) 1.73 2.29 1.15 (b) 1.17 0.90 (d)
1997 0.41 1.13 2.06 0.87 3.59 0.58
1996 0.74 (b) 0.82 NA 0.72 (4.24) 0.49
</TABLE>
-21-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation (cont'd)
($ in millions)
<TABLE>
<CAPTION>
Trigen Group Group MidAmerican Cogeneration Thermo
Energy Mean Median AES Energy Calpine Corp of Amer. Ecotek
------ ---- ------ --- ------ ------- ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----- -----
I/B/E/S Est.5 Year Growth Rate (e) 12.0% 18.8% 19.5% 27.0% 12.0% 30.0% NA NA
Net Sales Growth
2000E 31.3% 28.6% 16.5% 89.6% 16.5% 33.3% NA 1.6%
1999E 7.2% 5.1% 8.5% 8.5% 14.4% (9.9%) NA 10.2%
LTM 10.1% 20.4% 21.8% 15.6% 40.9% 38.1% 28.1% (1.7%)
1998 0.7% 38.8% 16.0% 70.0% 16.1% 113.4% 14.2% 16.0%
1997 (1.2%) 15.9% 20.1% 69.0% NA 20.2% (32.9%) 20.1%
EBITDA Margin
2000E 26.4% 33.7% 33.0% 36.1% 24.7% 44.6% NA 30.0%
1999E 23.2% 33.4% 31.8% 42.4% 25.7% 38.9% NA 28.1%
LTM 25.2% 34.5% 36.7% 39.8% 25.2% 38.7% 43.9% 24.7%
1998 23.5% 40.4% 38.4% 48.4% 32.6% 41.8% 49.7% 35.0%
1997 18.6% 40.8% 37.8% 43.1% 34.2% 58.2% 37.5% 38.2%
1996 17.4% 38.4% 37.6% 46.9% NA 50.2% 22.3% 37.6%
EBIT Margin
2000E 17.7% 22.6% 18.1% 29.8% 14.9% 33.3% NA 17.0%
1999E 14.1% 22.4% 17.2% 35.8% 15.4% 28.7% NA 15.0%
LTM 15.4% 22.6% 23.6% 31.6% 14.6% 27.7% 30.7% 11.6%
1998 13.1% 27.9% 25.7% 40.2% 19.6% 27.8% 36.5% 23.6%
1997 11.9% 27.7% 25.8% 35.0% 21.7% 39.3% 25.4% 26.2%
1996 14.3% 25.7% 24.0% 39.2% NA 32.4% 12.5% 24.0%
Net Income Margin
2000E 4.3% 9.4% 11.3% 11.7% 3.8% 11.8% NA 8.6%
1999E 4.1% 9.6% 10.2% 12.6% 3.3% 10.2% NA 11.5%
LTM 6.4% 7.9% 7.6% 7.5% 5.0% 10.8% 7.7% 6.8%
1998 2.6% 10.7% 10.3% 12.8% 5.4% 8.8% 10.8% 16.9%
1997 2.1% 15.2% 12.9% 13.3% 6.3% 14.0% 36.0% 12.5%
1996 3.6% 11.4% 10.9% 15.0% NA 9.1% NM 11.8%
EPS Growth
LTM 167.2% 25.4% 32.6% NM 32.6% 43.8% NM 0.0%
LFY 25.8% 31.5% 32.3% 54.1% 10.8% 32.3% NM 54.9%
LFY-1 NM 25.3% 20.1% 36.9% NA 20.1% NM 18.8%
----- -----
</TABLE>
-22-
<PAGE>
PROJECT TRUST VI. Appendix A
- --------------------------------------------------------------------------------
Public Market Valuation (cont'd)
($ in millions)
Footnotes:
General:
(a) Market Value defined as shares outstanding multipled by current
stock price.
(b) Market Capitalization defined as Market Value of Common Equity plus
debt, plus minority interest, plus preferred, less cash.
(c) EBIT defined as Earnings Before Interest and Taxes excluding
nonrecurring income and including each company's share of equity in
earnings of unconsolidated affiliates.
(d) Net Income defined as net income from continuing operations
available to common shareholders.
(e) All EPS etimates are based on I/B/E/S median estimates as of January
18, 2000.
Trigen Energy
(a) Source: Trigen Medium Term Plan- Committed Case dated January 8,
2000.
(b) Excludes $6.4 million from a condemnation award and a $1.9 project
financing fee, tax effected at 35% when applicable.
(c) Excludes pre- tax gains of $14.5 million from the settlement of
Grey's Ferry litigation, tax-affected at 40%.
(d) Includes extraordinary loss of $0.3 million from extinguishment of
debt, net of tax.
(e) Includes cumulative effect of change in accounting principle of $4.9
million, net of tax.
(f) Represents fully diluted shares.
(g) Trigen capitalization based on estimated December 1999 figures as
per management.
AES
(a) Source: BancBoston Robertson Stephens research report dated October
20, 1999.
(b) D&A estimated as a percentage of historical sales * LFP and LFP-4
actual sales.
(c) Excludes loss/gain on extinguishment of debt, net of taxes.
MidAmerican Energy
(a) Source: Credit Suisse First Boston research report dated September
16, 1999.
(b) Excludes non-recurring gain on sale of assets, net of taxes when
appropriate.
(c) Excludes gain on sale of qualified facilities of $20.173 million and
gain on sale of McLeod of $78.223 million, tax affected at 35%.
(d) Proforma historical data from Credit Suisse First Boston research
dated July 30, 1999. Historical numbers reflect the recent sale of
assets (1999).
However, these historical numbers do not correspond to MidAmerican
Energy's actual financial statements.
(e) Represents the price per share on 10/22/99, which was one day before
the company announced it would be acquired.
Calpine
(a) Source: Donaldson, Lufkin & Jenrette research report dated August
30, 1999.
(b) Excludes charge for retirement of debt, net of tax.
Cogeneration Corp. of America
(a) Excludes gain from settlement of litigation of $14.5 million, tax
affected at 35%.
(b) Represents the price per share on 8/26/99, which was one day before
the company announced it would be acquired.
Thermo Ecotek
(a) Source: Barrington Research Associates, Inc. research report dated
May 10, 1999. Calendarized to 12/31 yearend, assuming I/B/E/S growth
rate in 2001E.
(b) Excludes restructuring and reorganization charges, tax effected at
35% where appropriate.
(c) Calculated as a percentage of historical sales * 1999E & 2000E sales
projected by Barrington Research Associates. (see footnote (a)).
(d) Excludes gain on issuance of stock by subsidiary, tax effected where
appropriate.
-23-
<PAGE>
PROJECT TRUST VI. Appendix B
- --------------------------------------------------------------------------------
Comparable Transactions Valuation(a)
($ in millions)
Low High
------ ------
------ ------
Rounded Enterprise Value Range (b) $ 695 - $ 765
------ ------
Enterprise Value Range $ 697 - $ 763
Less: Net Debt (c) (472) - (472)
Market Value (d) $ 223 - $ 293
------ ------
Price Per Share (e) $17.53 $23.03
<TABLE>
<CAPTION>
Comparable Transaction Benchmarks
------------------------------------------------------
Marubeni/ NGC-AES/ Calpine/ Industry
Enterprise Value as a Multiple of Sithe Destec (g) Cogen (g)(i) Median (h)
--------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA (f)
------------------------------
1999 $ 66.4 10.5 x - 11.5 x 9.1 x 19.0 x 11.1 x 11.1 x
------------------------------
2000 $ 99.0 7.0 - 7.7
EBIT (f)
1999 $ 40.4 17.2 x - 18.9 x 12.0 x 24.2 x 15.6 15.6 x
2000 $ 66.3 10.5 - 11.5
Market Value as a Multiple of
Net Income (f)
1999 $ 11.7 19.1 x - 25.1 x 25.8 x 33.9 x 23.2 25.8 x
2000 $ 16.1 13.9 - 18.2
Book Value (f)
1999 $164.6 1.4 x - 1.8 x 3.8 x 1.5 x 10.8 2.4 x
2000 $180.5 1.2 - 1.6
</TABLE>
- ----------
(a) It should be noted that none of the comparable transactions utilized as a
comparison is identical to the transaction contemplated.
(b) Enterprise Value defined as Market Value of Common Equity plus short term
and long term debt, plus minorty interest, plus preferred stock, less
cash.
(c) Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock, less cash, based on Trigen Medium Term Plan-
Committed Case dated January 8, 2000. Net Debt comprised of $49.8 million
of current debt, $417.8 million of long term debt, $19.4 million minority
interest, less $15.0 million of cash as of December 1999.
(d) Market Value defined as Enterprise Value less net debt.
(e) Based on 12.7 million fully diluted shares.
(f) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(g) Prices established in auctions.
(h) Industry median based on a larger set of transactions on the following
page.
(i) Salomon Smith Barney research dated 12/3/99 values this deal at 6.9x
EBITDA, and BancBoston Robertson Stephens research dated 9/22/99 values
this deal at 8.5 - 9.5x forward EBITDA. Data is not immediately available
to reconcile these figures.
-24-
<PAGE>
PROJECT TRUST VI. Appendix B
- --------------------------------------------------------------------------------
Comparable Transactions Valuation(a)
($ in millions)
<TABLE>
<CAPTION>
Announcement Equity Value/ Price/ Price/ Agg Value/
Date Buyer/Target Agg. Value LTM Earnings Book LTM EBIT
- ------------ ------------ ------------- ------------ ------ ----------
<S> <C> <C> <C> <C> <C>
8/27/1999 Calpine (b) $ 144 / 23.2 x 10.8 x 15.6 x
Cogeneration Corp. of America 380
2/18/1997 NGC-AES/ $1,229 / 33.9 x 1.5 x 24.2 x
Destec Energy 1,168
2/29/1996 Marubeni/ $ 831 / 25.8 x 3.8 x 12.0 x
Sithe Energies 2,017
5/17/1995 American Tractebel/ $ 191 / 41.9 x 2.3 x 15.7 x
CRSS 218
9/19/1994 CalEnergy/ $ 939 / 15.7 x 2.4 x 11.4 x
Magma Power 1,054
Mean: 28.1 x 4.2 x 15.8 x
Median: 25.8 x 2.4 x 15.6 x
High: 41.9 x 10.8 x 24.2 x
Low: 15.7 x 1.5 x 11.4 x
<CAPTION>
Premium Premium
Announcement Agg Value/ Agg Value/ One Month One Day
Date Buyer/Target LTM EBITDA LTM Revenues Prior Prior
<S> <C> <C> <C> <C> <C> <C>
8/27/1999 Calpine (b) 11.1 x (c) 5.0 x 41.8 % 48.7 %
Cogeneration Corp. of America
2/18/1997 NGC-AES/ 19.0 x 2.0 x 34.3 % 11.0 %
Destec Energy
2/29/1996 Marubeni/ 9.1 x 2.9 x 122.2 % 155.3 %
Sithe Energies
5/17/1995 American Tractebel/ 12.7 x 7.7 x 52.6 % 45.0 %
CRSS
9/19/1994 CalEnergy/ 9.1 x 5.7 x 38.4 % 37.2 %
Magma Power
Mean: 12.2 x 4.7 x 57.9 % 59.4 %
Median: 11.1 x 5.0 x 41.8 % 45.0 %
High: 19.0 x 7.7 x 122.2 % 155.3 %
Low: 9.1 x 2.0 x 34.3 % 11.0 %
</TABLE>
- ----------
(a) It should be noted that none of the comparable transactions utilized as a
comparison is identical to the transaction contemplated.
(b) Equity value and aggregate value represent the 80% of Cogeneration Corp.
of America which Calpine agreed to acquire.
(c) Salomon Smith Barney research dated 12/3/99 values this deal at 6.9x
EBITDA, and BancBoston Robertson Stephens research dated 9/22/99 values
this deal at 8.5 - 9.5x forward EBITDA. Data is not immediately available
to reconcile these figures.
-25-
<PAGE>
PROJECT TRUST VI. Appendix C
- --------------------------------------------------------------------------------
Discounted Cash Flow Valuation(a)
($ in millions)
Low High
------ ------
----------------------
Rounded Enterprise Value Range (b) $ 710 - $ 775
----------------------
Enterprise Value Range $ 708 $ 773
Less: Net Debt (c) (472) - (472)
------ ------
Market Value (d) $ 238 $ 303
Price Per Share (e) $18.71 $23.82
<TABLE>
<CAPTION>
Projections
-----------------------------------------------------------------------------
2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 375.5 $ 403.4 $ 421.6 $ 436.9 $ 446.4 $ 453.0
EBITDA 99.0 100.0 107.4 111.2 112.6 112.9
EBIT 66.3 63.2 67.9 70.8 71.5 71.2
Taxes at 41.4% (27.5) (26.2) (28.1) (29.3) (29.6) (29.5)
Net Income (Unlevered) 38.9 37.1 39.8 41.5 41.9 41.7
D&A 32.7 36.7 39.6 40.4 41.1 41.7
Capital Expenditures (93.6) (69.0) (11.5) (10.9) (5.0) (4.1)
Working Capital Decrease/(Increase) 6.4 0.5 (1.9) (2.3) (2.7) (10.2)
-----------------------------------------------------------------------------
Free Cash Flow ($ 15.6) $ 5.2 $ 66.0 $ 68.7 $ 75.2 $ 69.1
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NPV of Terminal Value NPV of Enterprise Value
NPV to Perpetuity Growth Rate Perpetuity Growth Rate
Discount 12/31/99 of ------------------------------------------ -----------------------------------------
Rate Cash Flows 0.30% 0.80% 1.30% 1.80% 0.30% 0.80% 1.30% 1.80%
- -------- ---------- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8.00% $187.6 $566.2 $605.5 $650.7 $703.3 $753.8 $793.2 $838.4 $890.9
8.25% 185.6 (+) $540.8 $577.1 $618.7 $666.7 726.4 762.8 804.3 852.3
------------------
8.50% 183.7 $517.1 $550.7 $589.0 $632.9 (=) 700.8 734.4 772.6 816.6
8.75% 181.7 $494.9 $526.0 $561.4 $601.8 676.6 707.8 743.1 783.5
------------------
9.00% 179.8 $474.1 $503.0 $535.7 $572.9 653.9 682.8 715.5 752.7
</TABLE>
- ----------
(a) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(b) Enterprise Value defined as Market Value of Common Equity plus short term
and long term debt, plus minorty interest, plus preferred stock, less
cash.
(c) Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock, less cash, based on Trigen Medium Term Plan-
Committed Case dated January 8, 2000. Net Debt comprised of $49.8 million
of current debt, $417.8 million of long term debt, $19.4 million minority
interest, less $15.0 million of cash as of December 1999.
(d) Market Value defined as Enterprise Value less net debt.
(e) Based on 12.7 million fully diluted shares.
-26-
<PAGE>
PROJECT TRUST VI. Appendix C
- --------------------------------------------------------------------------------
Weighted Average Cost of Capital
($ in millions)
<TABLE>
<CAPTION>
Levered Unlevered Debt / Mkt. Cap. Net Market Equity
Ticker Company Beta(a) Beta(b) Ratio Debt(c) Value
- ------ ------- ------- --------- ---------------- --- -------------
<S> <C> <C> <C> <C> <C> <C>
TGN Trigen Energy 0.54 0.24 68.7% $472 $215
AES AES 0.70 0.54 34.9% 8,617 16,085
CPN Calpine 0.71 0.61 22.1% 1,517 5,346
TCK Thermo Ecotek 0.21 0.17 31.5% 90 196
CGCA Cogeneration of America 0.59 0.29 63.4% 296 171
---- ---- ---- ----- -----
Median 0.64 0.41 33.2% 907 2,771
</TABLE>
Assumptions
- -----------------------------------------------
Marginal Tax Rate 41.4%
Risk Free Rate of Return (d) 6.74%
Equity Risk Premium (e) 8.00%
Pre-Tax/After-Tax Cost of Debt
- --------------------------------------------------------------------------
8.00% 8.50% 9.00% 9.50% 10.00% 10.50% 11.00%
4.69% 4.98% 5.27% 5.57% 5.86% 6.15% 6.45%
<TABLE>
<CAPTION>
Median
Debt/ Debt/ Unlevered Levering Levered Cost of ----------------------------------------------------------------
Cap. Equity Beta Factor(f) Beta Equity(g) Weighted Average Cost of Capital(h)
- ---- ------ ---- --------- ---- --------- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10.0% 11.1% 0.41 1.07 0.44 10.3% 9.7% 9.7% 9.8% 9.8% 9.8% 9.8% 9.9%
20.0% 25.0% 0.41 1.15 0.47 10.5% 9.4% 9.4% 9.5% 9.5% 9.6% 9.6% 9.7%
30.0% 42.9% 0.41 1.25 0.52 10.9% 9.0% 9.1% 9.2% 9.3% 9.4% 9.5% 9.5%
40.0% 66.7% 0.41 1.39 0.57 11.3% 8.7% 8.8% 8.9% 9.0% 9.1% 9.3% 9.4%
50.0% 100.0% 0.41 1.59 0.65 12.0% 8.3% 8.5% 8.6% 8.8% 8.9% 9.1% 9.2%
60.0% 150.0% 0.41 1.88 0.78 12.9% 8.0% 8.2% 8.3% 8.5% 8.7% 8.9% 9.0%
70.0% 233.3% 0.41 2.37 0.98 14.6% 7.6% 7.9% 8.1% 8.3% 8.5% 8.7% 8.9%
80.0% 400.0% 0.41 3.34 1.38 17.8% 7.3% 7.5% 7.8% 8.0% 8.2% 8.5% 8.7%
----------------------------------------------------------------
</TABLE>
- ----------
(a) BARRA Predicted Beta as of December 1999. Cogeneration of America beta as
of October 1999 because it was acquired in December 1999.
(b) Unlevered Beta = Levered Beta/[1+(1-Tax Rate)(Debt/Equity)]
(c) Net debt includes Short-Term Debt, Long-Term Debt, Preferred Stock, and
Minority Interest, less Cash and Marketable Securities.
(d) Risk Free Rate is 30-Year Treasury Bond Yield as of January 18, 2000.
(e) Represents the long-horizon expected equity risk premium based on simple
differences of historical arithmetic mean returns from 1926-1998 (Ibbotson
Associates' 1999 Yearbook).
(f) Levering Factor = [1 + (1-Tax Rate)(Debt/Equity)]
(g) Cost of Equity = (Risk Free Rate of Return)+(Levered Beta)(Equity Risk
Premium)
(h) Weighted Average Cost of Capital = (After-Tax Cost of
Debt)(Debt/Cap.)+(Cost of Equity)(Equity/Cap.)
-27-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation
($ in millions, except per share data)
Low High
---- ----
-----------------
Rounded Enterprise Value Range $715 - $750
-----------------
<TABLE>
<CAPTION>
Premium of Initial Bid to: Premium of Final Bid to:
------------------------------------ ------------------------------------
One Day Prior One Month Prior One Day Prior One Month Prior
to Announcement to Announcement to Announcement to Announcement
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Base Price (a) $17.00 $17.25 $17.00 $17.25
Median Premium
20.0% to 49.9% 14.3% 19.0% 18.2% 26.2%
Overall 11.4 19.0 19.3 29.2
Selected 12.3% 20.0% 20.0% 27.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Price Per Share $19.08 $20.70 $20.40 $21.99
- ------------------------------------------------------------------------------------------------------------------------------------
Fully Diluted Shares Outstanding 12.7 12.7 12.7 12.7
------ ------ ------ ------
Market Value (e) $242.7 $263.3 $259.5 $279.8
Net Debt (d) 472.1 472.1 472.1 472.1
------ ------ ------ ------
Enterprise Value (c) $714.8 $735.4 $731.5 $751.8
====== ====== ====== ======
Enterprise Value as a Multiple of
EBITDA (b)
1999 x $ 66.4 10.8 11.1 x 11.0 x 11.3 x
2000 $ 99.0 7.2 7.4 7.4 7.6
EBIT (b)
1999 x $ 40.4 17.7 18.2 x 18.1 x 18.6 x
2000 $ 66.3 10.8 11.1 11.0 11.3
Market Value as a Multiple of
Net Income (b)
1999 x $ 11.7 20.8 22.5 x 22.2 x 24.0 x
2000 $ 16.1 15.1 16.4 16.1 17.4
Book Value (b)
1999 x $164.6 1.5 1.6 x 1.6 x 1.7 x
2000 $180.5 1.3 1.5 1.4 1.6
</TABLE>
- ----------
(a) Represents Trigen's stock price on January 18, 2000 and December 17, 1999
respectively.
(b) Source: Trigen Medium Term Plan- Committed Case dated January 8, 2000.
(c) Enterprise Value defined as Market Value of Common Equity plus net debt.
(d) Net debt defined as short term and long term debt, plus minority interest,
plus preferred stock, less cash, based on Trigen Medium Term Plan-
Committed Case dated January 8, 2000. Net Debt comprised of $49.8 million
of current debt, $417.8 million of long term debt, $19.4 million minority
interest, less $15.0 million of cash as of December 1999.
(e) Market Value defined as fully diluted shares outstanding multipled by the
price per share.
-28-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Cash and Stock Offers
($ in millions, except per share data)
<TABLE>
<CAPTION>
Initital
Date of Stock Price Stock Price 52 Week Premium
Clos- Acquiring Company/Acquired One Month One Day High Prior to Over 52 Week
ing Offer Company Prior to Ann. Prior to Ann. Date of Ann. Ann. High
- ------- ----- -------------------------- ------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Boise Cascade/ $ 10.13 $ 14.69 12/02/1999 $ 15.38 (13.8%)
Boise Cascase Office Pr.
Cash Cordant Technologies/ $ 12.31 $ 14.06 11/12/1999 $ 20.31 (16.3%)
Howmet Intl.
Cash Citigroup/ $ 44.63 $ 40.38 10/21/1999 $ 49.06 (8.3%)
Student Loan Corp.
11/99 Cash Warburg, Pincus Ventures/ $ 19.13 $ 15.25 03/24/1999 $ 40.46 (38.2%)
Knoll (Warburg, Pincus)
8/99 Cash Vivendi/ $ 1.44 $ 2.25 04/01/1999 $ 3.31 (39.6%)
Aqua Alliance
7/99 Cash McDermott Intl./ $ 29.88 $ 30.50 05/07/1999 $ 47.00 (24.2%)
J Ray McDermott SA
7/99 Cash Viacom/ $ 6.31 $ 9.00 03/21/1999 $ 9.50 (5.3%)
Spelling Entertainment
5/99 Cash Global TeleSystems $208.87 $198.84 04/14/1999 $208.87 0.9%
Omnicom
4/99 Stock Fairchild $ 7.88 $ 8.75 12/03/1998 $ 13.00 (25.0%)
Banner Aerospace
2/99 Stock Inland Steel $ 19.44 $ 12.50 09/23/1998 $ 22.44 (51.9%)
Ryerson Tull
2/99 Cash Orion N.Z. $ 1.83 $ 2.38 10/29/1998 $ 4.06 (27.1%)
Qest N.Z.
2/99 Cash Affiliated Comp Svcs $ 16.94 $ 16.22 10/16/1998 $ 21.25 (10.6%)
BRC Holdings
2/99 Stock Anglo American $ 12.20 $ 15.33 10/15/1998 $ 38.18 (53.4%)
Anglo American Industrial
12/98 Cash Allmerica Financial/ $ 27.50 $ 27.56 10/27/1998 $ 34.63 (16.2%)
Citizens Corp (Hanover Ins)
12/98 Cash Usinor SA/ $ 5.06 $ 3.02 09/23/1998 $ 14.19 (59.5%)
J&L Specialty Steel
12/98 Cash Billington/Anglo American $ 4.98 $ 6.72 10/14/1998 $ 7.87 0.9%
Samancor
12/98 Cash Disco/Ahold/ $ 4.00 $ 5.22 11/13/1998 $ 15.20 (53.9%)
Disco
12/98 Stock Anglo American $ 48.33 $ 53.30 10/15/1998 $ 62.93 (10.0%)
Anglo American Coal
12/98 Cash Billington/Anglo American $ 0.41 $ 0.40 09/07/1998 $ 1.25 (57.7%)
QNI
11/98 Cash Dow AgroSciences/ $ 18.38 $ 19.75 04/30/1998 $ 25.00 (18.0%)
Mycogen Corp
11/98 Cash Dexter Corporation/ $ 32.81 $ 31.00 07/07/1998 $ 38.50 (3.9%)
Life Technologies
11/98 Stock Reno Dei Medici/ $ 4.55 $ 4.28 02/27/1998 $ 5.02 (20.1%)
Sarrio
10/98 Cash Fiat/Norsk Hydro/ $ 5.52 $ 5.39 05/29/1998 $ 6.17 22.6%
Meridian Technology
10/98 Stock Newmont Mining/ $ 15.69 $ 26.75 09/29/1998 $ 47.00 (48.3%)
Newmont Gold
9/98 Cash/Stock Buhrman/ $ 7.50 $ 10.38 01/20/1998 $ 12.31 (14.7%)
BT Office Products
9/98 Stock Liberty Media/ $ 16.56 $ 21.88 07/13/1998 $ 22.00 9.6%
Tele-Communications International
9/98 Cash Cable Michigan Inc./ $ 10.50 $ 11.00 04/30/1998 $ 11.00 0.0%
Mercom
7/98 Cash Texas Industries/ $ 12.00 $ 12.88 05/22/1997 $ 14.88 (4.2%)
Chaparral Steel
6/98 Cash Waste Management/ 242.0 247.5 06/29/1998 279.0 23.7%
Waste Mangagement Int'l
<CAPTION>
Aggregate Initial Premium
Date of Inside Ownership Consideration For Over One Month
Clos- Acquiring Company/Acquired Before the Amount Acquired Initial Bid Per Prior Market
ing Offer Company Transaction (000's) Share Price
- ------- ----- -------------------------- ---------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Cash Boise Cascade/ 81.2% $163,900 $ 13.25 30.9%
Boise Cascase Office Pr.
Cash Cordant Technologies/ 84.6% $261,400 $ 17.00 38.1%
Howmet Intl.
Cash Citigroup/ 80.0% $180,000 $ 45.00 0.8%
Student Loan Corp.
11/99 Cash Warburg, Pincus Ventures/ 58.2% $490,800 $ 25.00 30.7%
Knoll (Warburg, Pincus)
8/99 Cash Vivendi/ 77.8% $117,100 $ 2.00 39.1%
Aqua Alliance
7/99 Cash McDermott Intl./ 63.0% $514,500 $ 35.62 19.2%
J Ray McDermott SA
7/99 Cash Viacom/ 80.9% $191,600 $ 9.00 42.6%
Spelling Entertainment
5/99 Cash Global TeleSystems 52.5% $189,800 $210.82 0.9%
Omnicom
4/99 Stock Fairchild 85.0% $ 82,400 $ 9.75 23.8%
Banner Aerospace
2/99 Stock Inland Steel 86.4% $ 52,200 $ 10.80 (44.4%)
Ryerson Tull
2/99 Cash Orion N.Z. 69.0% $ 81,400 $ 2.96 61.4%
Qest N.Z.
2/99 Cash Affiliated Comp Svcs 51.0% $131,900 $ 19.00 12.2%
BRC Holdings
2/99 Stock Anglo American 52.3% $580,000 $ 17.80 45.9%
Anglo American Industrial
12/98 Cash Allmerica Financial/ 81.8% $212,400 $ 29.00 5.5%
Citizens Corp (Hanover Ins)
12/98 Cash Usinor SA/ 53.0% $104,075 $ 5.75 13.6%
J&L Specialty Steel
12/98 Cash Billington/Anglo American 86.6% $203,600 $ 7.94 59.4%
Samancor
12/98 Cash Disco/Ahold/ 52.0% $159,400 $ 7.00 75.0%
Disco
12/98 Stock Anglo American 57.0% $751,700 $ 56.64 17.2%
Anglo American Coal
12/98 Cash Billington/Anglo American 52.4% $268,100 $ 0.53 30.7%
QNI
11/98 Cash Dow AgroSciences/ 62.2% $379,300 $ 20.50 11.6%
Mycogen Corp
11/98 Cash Dexter Corporation/ 52.0% $419,491 $ 37.00 12.8%
Life Technologies
11/98 Stock Reno Dei Medici/ 63.0% $ 89,600 $ 4.01 (11.9%)
Sarrio
10/98 Cash Fiat/Norsk Hydro/ 55.7% $117,600 $ 7.57 37.2%
Meridian Technology
10/98 Stock Newmont Mining/ 93.8% $313,500 $ 24.28 54.8%
Newmont Gold
9/98 Cash/Stock Buhrman/ 70.0% $138,100 $ 10.50 40.0%
BT Office Products
9/98 Stock Liberty Media/ 83.0% $387,617 $ 24.11 45.5%
Tele-Communications International
9/98 Cash Cable Michigan Inc./ 62.0% $ 55,636 $ 11.00 4.8%
Mercom
7/98 Cash Texas Industries/ 81.3% $ 72,800 $ 14.25 18.8%
Chaparral Steel
6/98 Cash Waste Management/ 80.0% $258,888 345.0 42.6%
Waste Mangagement Int'l
<CAPTION>
Initial Final Premium Final Premium
Date of Premium Over Over One Over One Day Percent
Clos- Acquiring Company/Acquired One Day Prior Final Bid Per Month Prior Prior Marker Increase in
ing Offer Company Market Price Share Price Price Offer
- ------ ----- -------------------------- ------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Boise Cascade/ (9.8%) $ 13.25 30.9% (9.8%) 0.0%
Boise Cascase Office Pr.
Cash Cordant Technologies/ 20.9% $ 17.00 38.1% 20.9% 0.0%
Howmet Intl.
Cash Citigroup/ 11.5% $ 45.00 0.8% 11.5% 0.0%
Student Loan Corp.
11/99 Cash Warburg, Pincus Ventures/ 63.9% $ 28.00 46.4% 83.6% 12.0%
Knoll (Warburg, Pincus)
8/99 Cash Vivendi/ (11.1%) $ 2.90 101.7% 28.9% 45.0%
Aqua Alliance
7/99 Cash McDermott Intl./ 16.8% $ 35.62 19.2% 16.8% 0.0%
J Ray McDermott SA
7/99 Cash Viacom/ 0.0% $ 9.75 54.5% 8.3% 8.3%
Spelling Entertainment
5/99 Cash Global TeleSystems 6.0% $210.82 0.9% 6.0% 0.0%
Omnicom
4/99 Stock Fairchild 11.4% $ 11.00 39.7% 25.7% 12.8%
Banner Aerospace
2/99 Stock Inland Steel (13.6%) $ 9.76 (49.8%) (21.9%) (9.6%)
Ryerson Tull
2/99 Cash Orion N.Z. 24.4% $ 3.13 70.9% 31.7% 5.9%
Qest N.Z.
2/99 Cash Affiliated Comp Svcs 17.1% $ 19.00 12.2% 17.1% 0.0%
BRC Holdings
2/99 Stock Anglo American 16.1% $ 15.34 25.7% 0.0% (13.9%)
Anglo American Industrial
12/98 Cash Allmerica Financial/ 5.2% $ 33.25 20.9% 20.6% 14.7%
Citizens Corp (Hanover Ins)
12/98 Cash Usinor SA/ 90.5% $ 6.38 25.9% 111.2% 10.9%
J&L Specialty Steel
12/98 Cash Billington/Anglo American 18.0% NA NA NA NA
Samancor
12/98 Cash Disco/Ahold/ 34.1% $ 7.00 75.0% 34.1% 0.0%
Disco
12/98 Stock Anglo American 6.3% $ 48.80 1.0% (8.4%) (13.9%)
Anglo American Coal
12/98 Cash Billington/Anglo American 32.9% $ 0.66 63.8% 66.5% 25.3%
QNI
11/98 Cash Dow AgroSciences/ 3.8% $ 28.00 52.4% 41.8% 36.6%
Mycogen Corp
11/98 Cash Dexter Corporation/ 19.4% $ 39.25 19.6% 26.6% 6.1%
Life Technologies
11/98 Stock Reno Dei Medici/ (6.4%) $ 4.56 0.4% 6.6% 13.9%
Sarrio
10/98 Cash Fiat/Norsk Hydro/ 40.4% $ 7.11 28.9% 31.9% (6.0%)
Meridian Technology
10/98 Stock Newmont Mining/ (9.2%) $ 30.05 91.6% 12.3% 23.8%
Newmont Gold
9/98 Cash/Stock Buhrman/ 1.2% $ 13.75 83.3% 32.5% 31.0%
BT Office Products
9/98 Stock Liberty Media/ 10.2% $ 22.00 32.8% 0.6% (8.7%)
Tele-Communications International
9/98 Cash Cable Michigan Inc./ 0.0% $ 12.00 14.3% 9.1% 9.1%
Mercom
7/98 Cash Texas Industries/ 10.7% $ 15.50 29.2% 20.4% 8.8%
Chaparral Steel
6/98 Cash Waste Management/ 39.4% 345.0 42.6% 39.4% 0.0%
Waste Mangagement Int'l
</TABLE>
-29-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Cash and Stock Offers (cont'd)
($ in millions, except per share data)
<TABLE>
<CAPTION>
Initital
Date of Stock Price Stock Price 52 Week Premium
Clos- Acquiring Company/Acquired One Month One Day High Prior to Over 52 Week
ing Offer Company Prior to Ann. Prior to Ann. Date of Ann. Ann. High
- ------- ----- -------------------------- ------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
5/98 Cash Xerox Corp / $ 16.38 $ 17.25 03/05/1998 $ 22.50 (11.1%)
XL Connect
12/97 Cash/Stock Orion Capital/ $ 28.44 $ 32.50 09/18/1997 $ 34.56 (1.6%)
Guaranty National Corporation
12/97 Cash Waste Management Inc./ $ 12.63 $ 13.00 06/20/1997 $ 17.25 (13.0%)
Wheelabrator Technologies, Inc.
11/97 Stock Enron Corp/ $ 28.25 $ 30.25 05/14/1997 $ 32.38 (1.2%)
Enron Global Power & Pipe
9/97 Cash FH Faulding & Co $ 9.25 $ 10.75 06/30/1997 $ 12.19 (1.5%)
Faulding Inc.
8/97 Cash Texas Industries $ 12.00 $ 12.88 05/22/1997 $ 14.75 (3.4%)
Chaparral
6/97 Cash Anthem/ $ 31.63 $ 35.50 06/02/1997 $ 36.25 10.3%
Accordia
5/97 Cash Monsanto/ $ 5.06 $ 5.50 01/28/1997 $ 6.88 5.5%
Calgene
3/97 Cash/Stock Tembec Inc./ 6.25 7.00 01/23/1997 NA NA
Spruce Falls
2/97 Cash Hoechst AG/ 206.92 266.22 12/10/1996 273.78 NA
Roussel-Uclaf
9/96 Cash Chemed Corp./ 34.13 36.50 06/10/1996 41.50 NA
Roto-Rooter Inc. (Chemed Corp)
1/96 Cash Berkshire Hathaway Inc./ 55.63 55.75 08/25/1995 68.63 NA
GEICO Corp. (Berkshire Hathaway)
12/95 Cash COBE Laboratories/ 14.75 15.75 07/14/1995 19.38 (7.1%)
REN-Corp-USA (COBE Labs)
12/95 Cash BIC SA/ 31.13 35.75 05/19/1995 38.88 (6.1%)
Bic Corp (BIC SA)
10/95 Cash McCaw Cellular/ 128.25 109.88 04/07/1995 140.50 (9.3%)
LIN Bdcstg (McCaw Cellular)
9/95 Cash Pacific Corp/ 24.75 24.25 11/02/1994 29.50 (5.1%)
Pacific Telecom (Pacific Corp)
8/95 Cash Societe BIC/ 31.13 35.75 05/19/1995 37.50 (2.7%)
BIC Corp
6/95 Cash Club Mediterranee SA/ 22.25 22.63 04/05/1995 26.00 1.9%
Club Med
5/95 Cash GTE Corp/ 18.25 17.75 09/08/1994 21.25 5.9%
Contel Cellular Inc.
3/95 Cash Proventus AB/ 3.52 3.70 12/15/1994 4.30 NA
Aritmos AB
3/95 Cash Dole Food Co. Inc./ 10.50 11.63 08/24/1994 15.38 (9.0%)
Castle & Cooke Homes, Inc.
1/95 Conv. Note WMX Technologies Inc./ 8.63 8.00 07/28/1994 10.88 (27.7%)
Chemical Waste Management
1/95 Cash/Stock Adia SA/ 24.00 26.50 03/23/1994 33.25 5.3%
Adia Services Inc.
12/94 Stock Ogden Corp./ 15.25 17.38 06/06/1994 24.25 (29.2%)
Ogden Services
10/94 Stock National Intergroup Inc./ 13.00 13.50 03/01/1994 13.75 7.3%
FoxMeyer
9/94 Stock EW Scripps Co./ 75.00 78.50 02/17/1994 86.00 NA
Scripps Howard Broadcasting
6/94 Cash Colonia Konzern AG/ $1,133.16 $1,309.00 02/28/1994 $1,335.00 28.3%
Norsdtern Allgemeine
4/94 Stock Triarc Cos/ 15.50 15.50 04/26/1993 16.50 NA
Southeastern Public Services Co.
4/94 Cash Medco Containment Services/ 29.75 25.75 10/13/1993 36.50 (25.3%)
Medical Marketing Group
<CAPTION>
Aggregate Initial Premium
Date of Inside Ownership Consideration For Over One Month
Clos- Acquiring Company/Acquired Before the Amount Acquired Initial Bid Per Prior Market
ing Offer Company Transaction (000's) Share Price
- ------- ----- -------------------------- ---------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
5/98 Cash Xerox Corp / 80.0% $ 88,000 $ 20.00 22.1%
XL Connect
12/97 Cash/Stock Orion Capital/ 80.5% $ 106,926 $ 34.00 19.6%
Guaranty National Corporation
12/97 Cash Waste Management Inc./ 67.0% $ 874,500 $ 15.00 18.8%
Wheelabrator Technologies, Inc.
11/97 Stock Enron Corp/ 50.6% $ 428,000 $ 32.00 13.3%
Enron Global Power & Pipe
9/97 Cash FH Faulding & Co 62.0% $ 77,220 $ 12.00 29.7%
Faulding Inc.
8/97 Cash Texas Industries 84.6% $ 72,816 $ 14.25 18.8%
Chaparral
6/97 Cash Anthem/ 66.8% $ 193,155 $ 40.00 26.5%
Accordia
5/97 Cash Monsanto/ 54.5% $ 242,600 $ 7.25 43.2%
Calgene
3/97 Cash/Stock Tembec Inc./ 51.0% 175,000 10.00 60.0%
Spruce Falls
2/97 Cash Hoechst AG/ 56.5% 3,500,000 NA NA
Roussel-Uclaf
9/96 Cash Chemed Corp./ 58.1% 88,250 NA NA
Roto-Rooter Inc. (Chemed Corp)
1/96 Cash Berkshire Hathaway Inc./ 52.4% 2,347,000 NA NA
GEICO Corp. (Berkshire Hathaway)
12/95 Cash COBE Laboratories/ 53.0% 177,700 18.00 22.0%
REN-Corp-USA (COBE Labs)
12/95 Cash BIC SA/ 78.0% 212,600 36.50 17.3%
Bic Corp (BIC SA)
10/95 Cash McCaw Cellular/ 52.0% 3,323,400 127.50 (0.6%)
LIN Bdcstg (McCaw Cellular)
9/95 Cash Pacific Corp/ 86.6% 159,000 28.00 13.1%
Pacific Telecom (Pacific Corp)
8/95 Cash Societe BIC/ 78.0% 219,000 36.50 17.3%
BIC Corp
6/95 Cash Club Mediterranee SA/ 70.8% 135,600 26.50 19.1%
Club Med
5/95 Cash GTE Corp/ 90.0% 254,300 22.50 23.3%
Contel Cellular Inc.
3/95 Cash Proventus AB/ 78.2% 141,300 NA NA
Aritmos AB
3/95 Cash Dole Food Co. Inc./ 82.8% 81,500 14.00 33.3%
Castle & Cooke Homes, Inc.
1/95 Conv. Note WMX Technologies Inc./ 78.5% 397,400 7.86 (8.9%)
Chemical Waste Management
1/95 Cash/Stock Adia SA/ 81.0% 86,639 35.02 45.9%
Adia Services Inc.
12/94 Stock Ogden Corp./ 83.2% 119,000 17.16 12.5%
Ogden Services
10/94 Stock National Intergroup Inc./ 80.5% 84,028 14.75 13.5%
FoxMeyer
9/94 Stock EW Scripps Co./ 86.0% 125,386 3 shares 15.0%
Scripps Howard Broadcasting
6/94 Cash Colonia Konzern AG/ 57.9% $ 520,969 $1,713.00 51.2%
Norsdtern Allgemeine
4/94 Stock Triarc Cos/ 71.0% 86,140 .55 shares 9.2%
Southeastern Public Services Co. and $6 note
4/94 Cash Medco Containment Services/ 54.2% 122,510 27.25 (8.4%)
Medical Marketing Group
<CAPTION>
Initial Final Premium Final Premium
Date of Premium Over Over One Over One Day Percent
Clos- Acquiring Company/Acquired One Day Prior Final Bid Per Month Prior Prior Marker Increase in
ing Offer Company Market Price Share Price Price Offer
- ------ ----- -------------------------- ------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
5/98 Cash Xerox Corp / (11.1%) $ 20.00 22.1% 15.9% 0.0%
XL Connect
12/97 Cash/Stock Orion Capital/ 4.6% $ 36.00 26.6% 10.8% 5.9%
Guaranty National Corporation
12/97 Cash Waste Management Inc./ 15.4% $ 16.50 30.7% 26.9% 10.0%
Wheelabrator Technologies, Inc.
11/97 Stock Enron Corp/ 5.8% $ 33.83 19.8% 11.8% 5.7%
Enron Global Power & Pipe
9/97 Cash FH Faulding & Co 11.6% $ 13.50 45.9% 25.6% 12.5%
Faulding Inc.
8/97 Cash Texas Industries 10.7% $ 15.50 29.2% 20.4% 8.8%
Chaparral
6/97 Cash Anthem/ 12.7% $ 40.00 26.5% 12.7% 0.0%
Accordia
5/97 Cash Monsanto/ 31.8% $ 8.00 58.0% 45.5% 10.3%
Calgene
3/97 Cash/Stock Tembec Inc./ 42.9% 10.00 60.0% 42.9% 0.0%
Spruce Falls
2/97 Cash Hoechst AG/ NA 294.52 42.3% 10.6% NA
Roussel-Uclaf
9/96 Cash Chemed Corp./ NA 41.00 20.1% 12.3% NA
Roto-Rooter Inc. (Chemed Corp)
1/96 Cash Berkshire Hathaway Inc./ NA 70.00 25.8% 25.6% NA
GEICO Corp. (Berkshire Hathaway)
12/95 Cash COBE Laboratories/ 14.3% 20.00 35.6% 27.0% 11.1%
REN-Corp-USA (COBE Labs)
12/95 Cash BIC SA/ 2.1% 40.50 30.1% 13.3% 11.0%
Bic Corp (BIC SA)
10/95 Cash McCaw Cellular/ 16.0% 129.91 1.3% 18.2% 1.9%
LIN Bdcstg (McCaw Cellular)
9/95 Cash Pacific Corp/ 15.5% 30.00 21.2% 23.7% 7.1%
Pacific Telecom (Pacific Corp)
8/95 Cash Societe BIC/ 2.1% 40.50 30.1% 13.3% 11.0%
BIC Corp
6/95 Cash Club Mediterranee SA/ 17.1% 32.00 43.8% 41.4% 20.8%
Club Med
5/95 Cash GTE Corp/ 26.8% 25.50 39.7% 43.7% 13.3%
Contel Cellular Inc.
3/95 Cash Proventus AB/ NA 4.38 24.4% 18.1% NA
Aritmos AB
3/95 Cash Dole Food Co. Inc./ 20.4% 15.75 50.0% 35.5% 12.5%
Castle & Cooke Homes, Inc.
1/95 Conv. Note WMX Technologies Inc./ (1.8%) 8.86 2.7% 10.7% 12.7%
Chemical Waste Management
1/95 Cash/Stock Adia SA/ 32.2% NA NA NA NA
Adia Services Inc.
12/94 Stock Ogden Corp./ (1.2%) 18.48 21.2% 6.4% 7.7%
Ogden Services
10/94 Stock National Intergroup Inc./ 9.3% .90 shares NA 13.0% (3.4%)
FoxMeyer
9/94 Stock EW Scripps Co./ 9.9% 3.45 shares 32.3% 26.4% 15.0%
Scripps Howard Broadcasting
6/94 Cash Colonia Konzern AG/ 30.9% $1,713.00 51.2% 30.9% 0.0%
Norsdtern Allgemeine
4/94 Stock Triarc Cos/ 9.2% .80 shares 2.6% 2.6% (6.1%)
Southeastern Public Services Co.
4/94 Cash Medco Containment Services/ 5.8% 27.75 (6.7%) 7.8% 1.8%
Medical Marketing Group
</TABLE>
-30-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Cash and Stock Offers (cont'd)
($ in millions, except per share data)
<TABLE>
<CAPTION>
Initital
Date of Stock Price Stock Price 52 Week Premium
Clos- Acquiring Company/Acquired One Month One Day High Prior to Over 52 Week
ing Offer Company Prior to Ann. Prior to Ann. Date of Ann. Ann. High
- ------- ----- -------------------------- ------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
2/94 Cash Holderbank Financiere Glaros/ 7.25 6.75 01/07/1993 7.75 (1.3%)
Holnam Inc.
12/93 Cash Valley Fashions Corp./ 48.63 48.88 09/20/1993 51.13 (10.0%)
West Point-Perpperell Inc.
10/93 Cash Torchmark/ 27.38 26.88 02/22/1993 30.25 0.8%
United Investors Management
5/93 Cash/Stock Rust International Inc./ NA 7.88 11/13/1992 23.88 (25.1%)
Brand Cos Inc.
7/92 Cash W.R. Grace & Company 11.88 15.25 03/02/1992 19.00 (13.2%)
Grace Energy Company
5/92 Stock Unocal Corp./ 9.75 9.88 02/24/1992 12.00 NA
Unocal Exploration Corp.
1/92 Stock Arkla Inc./ NA 14.25 09/18/1991 20.88 NA
Arkla Exploration Co.
12/91 Cash Siemens AG/ 131.77 120.63 10/21/1991 209.36 (29.5%)
Siemens Nixdorf Information Systems
- ------------------------------------------------------------------------------------------------------------------------------------
Average
Median
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Aggregate Initial Premium
Date of Inside Ownership Consideration For Over One Month
Clos- Acquiring Company/Acquired Before the Amount Acquired Initial Bid Per Prior Market
ing Offer Company Transaction (000's) Share Price
- ------- ----- -------------------------- ---------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
2/94 Cash Holderbank Financiere Glaros/ 95.0% 51,700 7.65 5.5%
Holnam Inc.
12/93 Cash Valley Fashions Corp./ 95.0% 66,300 46.00 (5.4%)
West Point-Perpperell Inc.
10/93 Cash Torchmark/ 83.0% 216,591 30.50 11.4%
United Investors Management
5/93 Cash/Stock Rust International Inc./ 56.0% 185,000 17.88 NA
Brand Cos Inc.
7/92 Cash W.R. Grace & Company 83.4% 77,501 16.50 38.9%
Grace Energy Company
5/92 Stock Unocal Corp./ 95.3% 120,418 0.50 shares 7.7%
Unocal Exploration Corp.
1/92 Stock Arkla Inc./ 82.0% 92,640 0.90 shares NA
Arkla Exploration Co.
12/91 Cash Siemens AG/ 78.0% 1,302,423 147.52 12.0%
Siemens Nixdorf Information Systems
- ------------------------------------------------------------------------------------------------------------------------------------
Average 22.6%
Median 19.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Initial Final Premium Final Premium
Date of Premium Over Over One Over One Day Percent
Clos- Acquiring Company/Acquired One Day Prior Final Bid Per Month Prior Prior Marker Increase in
ing Offer Company Market Price Share Price Price Offer
- ------ ----- -------------------------- ------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
2/94 Cash Holderbank Financiere Glaros/ 13.3% NA NA NA NA
Holnam Inc.
12/93 Cash Valley Fashions Corp./ (5.9%) NA NA NA NA
West Point-Perpperell Inc.
10/93 Cash Torchmark/ 13.5% 31.25 14.2% 16.3% 2.5%
United Investors Management
5/93 Cash/Stock Rust International Inc./ 0.0% 18.75 NA 4.9% 4.9%
Brand Cos Inc.
7/92 Cash W.R. Grace & Company 8.2% 19.00 60.0% 24.6% 15.2%
Grace Energy Company
5/92 Stock Unocal Corp./ 6.3% 0.54 shares 16.3% 14.8% 8.0%
Unocal Exploration Corp.
1/92 Stock Arkla Inc./ NA 0.95 shares NA 35.6% 5.6%
Arkla Exploration Co.
12/91 Cash Siemens AG/ 22.3% 147.52 12.0% 22.3% (0.0%)
Siemens Nixdorf Information Systems
- ------------------------------------------------------------------------------------------------------------------------------------
Average 13.8% 31.6% 22.2% 7.2%
Median 11.4% 29.2% 19.3% 6.6%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-31-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Stock Offers Only
($ in millions, except per share data)
<TABLE>
<CAPTION>
Stock Price Initital
Date of Stock Price One Day 52 Week Premium
Clos- Acquiring Company/Acquired One Month Prior to High Prior to Over 52 Week
ing Company Prior to Ann. Ann. Date of Ann. Ann. High
- ------- -------------------------- ------------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
4/99 Fairchild $ 7.88 $ 8.75 12/03/1998 $13.00 (25.0%)
Banner Aerospace
2/99 Inland Steel $19.44 $12.50 09/23/1998 $22.44 (51.9%)
Ryerson Tull
2/99 Anglo American $12.20 $15.33 10/15/1998 $38.18 (53.4%)
Anglo American Industrial
12/98 Anglo American $48.33 $53.30 10/15/1998 $62.93 (10.0%)
Anglo American Coal
11/98 Reno Dei Medici/ $ 4.55 $ 4.28 02/27/1998 $ 5.02 (20.1%)
Sarrio
10/98 Newmont Mining/ $15.69 $26.75 09/29/1998 $47.00 (48.3%)
Newmont Gold
9/98 Liberty Media/ $16.56 $21.88 07/13/1998 $22.00 9.6%
International
11/97 Enron Corp/ $28.25 $30.25 05/14/1997 $32.38 (1.2%)
Enron Global Power & Pipe
12/94 Ogden Corp./ $15.25 $17.38 06/06/1994 $24.25 (29.2%)
Ogden Services
10/94 National Intergroup Inc./ $13.00 $13.50 03/01/1994 $13.75 7.3%
FoxMeyer
9/94 EW Scripps Co./ $75.00 $78.50 02/17/1994 $86.00 NA
Scripps Howard Broadcasting
4/94 Triarc Cos/ $15.50 $15.50 04/26/1993 $16.50 NA
Southeastern Public Services Co.
5/92 Unocal Corp./ $ 9.75 $ 9.88 02/24/1992 $12.00 NA
Unocal Exploration Corp.
1/92 Arkla Inc./ NA $14.25 09/18/1991 $20.88 NA
Arkla Exploration Co.
- --------------------------------------------------------------------------------------------------------------------
Average
Median
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Aggregate Initial Premium Initial
Date of Inside Ownership Consideration For Over One Month Premium Over
Clos- Acquiring Company/Acquired Before the Amount Acquired Initial Bid Prior Market One Day Prior
ing Company Transaction (000's) Per Share Price Market Price
- ------- -------------------------- ---------------- ----------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
4/99 Fairchild 85.0% $ 82,400 $ 9.75 23.8% 11.4%
Banner Aerospace
2/99 Inland Steel 86.4% $ 52,200 $ 10.80 (44.4%) (13.6%)
Ryerson Tull
2/99 Anglo American 52.3% $580,000 $ 17.80 45.9% 16.1%
Anglo American Industrial
12/98 Anglo American 57.0% $751,700 $ 56.64 17.2% 6.3%
Anglo American Coal
11/98 Reno Dei Medici/ 63.0% $ 89,600 $ 4.01 (11.9%) (6.4%)
Sarrio
10/98 Newmont Mining/ 93.8% $313,500 $ 24.28 54.8% (9.2%)
Newmont Gold
9/98 Liberty Media/ 83.0% $387,617 $ 24.11 45.5% 10.2%
International
11/97 Enron Corp/ 50.6% $428,000 $ 32.00 13.3% 5.8%
Enron Global Power & Pipe
12/94 Ogden Corp./ 83.2% $119,000 17.16 12.5% (1.2%)
Ogden Services
10/94 National Intergroup Inc./ 80.5% $ 84,028 14.75 13.5% 9.3%
FoxMeyer
9/94 EW Scripps Co./ 86.0% $125,386 3 shares 15.0% 9.9%
Scripps Howard Broadcasting
4/94 Triarc Cos/ 71.0% $ 86,140 .55 shares 9.2% 9.2%
Southeastern Public Services Co. and $6 note
5/92 Unocal Corp./ 95.3% $120,418 0.50 shares 7.7% 6.3%
Unocal Exploration Corp.
1/92 Arkla Inc./ 82.0% $ 92,640 0.90 shares NA NA
Arkla Exploration Co.
- ------------------------------------------------------------------------------------------------------------------------------
Average 15.5% 4.2%
Median 13.5% 6.3%
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Final Premium Final Premium
Date of Over One Over One Day Percent
Clos- Acquiring Company/Acquired Final Bid Per Month Prior Prior Marker Increase in
ing Company Share Price Price Offer
- ------- -------------------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
4/99 Fairchild $ 11.00 39.7% 25.7% 12.8%
Banner Aerospace
2/99 Inland Steel $ 9.76 (49.8%) (21.9%) (9.6%)
Ryerson Tull
2/99 Anglo American $ 15.34 25.7% 0.0% (13.9%)
Anglo American Industrial
12/98 Anglo American $ 48.80 1.0% (8.4%) (13.9%)
Anglo American Coal
11/98 Reno Dei Medici/ $ 4.56 0.4% 6.6% 13.9%
Sarrio
10/98 Newmont Mining/ $ 30.05 91.6% 12.3% 23.8%
Newmont Gold
9/98 Liberty Media/ $ 22.00 32.8% 0.6% (8.7%)
International
11/97 Enron Corp/ $ 33.83 19.8% 11.8% 5.7%
Enron Global Power & Pipe
12/94 Ogden Corp./ 18.48 21.2% 6.4% 7.7%
Ogden Services
10/94 National Intergroup Inc./ .90 shares NA 13.0% (3.4%)
FoxMeyer
9/94 EW Scripps Co./ 3.45 shares 32.3% 26.4% 15.0%
Scripps Howard Broadcasting
4/94 Triarc Cos/ .80 shares 2.6% 2.6% (6.1%)
Southeastern Public Services Co.
5/92 Unocal Corp./ 0.54 shares 16.3% 14.8% 8.0%
Unocal Exploration Corp.
1/92 Arkla Inc./ 0.95 shares NA 35.6% 5.6%
Arkla Exploration Co.
- -------------------------------------------------------------------------------------------------
Average 19.4% 9.0% 2.6%
Median 20.5% 9.2% 5.7%
- -------------------------------------------------------------------------------------------------
</TABLE>
-32-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Cash Offers Only
($ in millions, except per share data)
<TABLE>
<CAPTION>
Stock Price Initital Inside
Date of Stock Price One Day 52 Week Premium Ownership
Clos- Acquiring Company/Acquired One Month Prior to High Prior Over 52 Before the
ing Company Prior to Ann. Ann. Date of Ann. to Ann. Week High Transaction
- ------- -------------------------- ------------- ----------- ------------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Boise Cascade/ $ 10.13 $ 14.69 12/02/1999 $ 15.38 (13.8%) 81.2%
Boise Cascase Office Pr.
Cordant Technologies/ $ 12.31 $ 14.06 11/12/1999 $ 20.31 (16.3%) 84.6%
Howmet Intl.
Citigroup/ $ 44.63 $ 40.38 10/21/1999 $ 49.06 (8.3%) 80.0%
Student Loan Corp.
11/99 Warburg, Pincus Ventures/ $ 19.13 $ 15.25 03/24/1999 $ 40.46 (38.2%) 58.2%
Knoll (Warburg, Pincus)
8/99 Vivendi/ $ 1.44 $ 2.25 04/01/1999 $ 3.31 (39.6%) 77.8%
Aqua Alliance
7/99 McDermott Intl./ $ 29.88 $ 30.50 05/07/1999 $ 47.00 (24.2%) 63.0%
J Ray McDermott SA
7/99 Viacom/ $ 6.31 $ 9.00 03/21/1999 $ 9.50 (5.3%) 80.9%
Spelling Entertainment
5/99 Global TeleSystems/ $208.87 $198.84 04/14/1999 $208.87 0.9% 52.5%
Omnicom
2/99 Orion N.Z./ $ 1.83 $ 2.38 10/29/1998 $ 4.06 (27.1%) 69.0%
Qest N.Z
2/99 Affiliated Comp Svcs/ $ 16.94 $ 16.22 10/16/1998 $ 21.25 (10.6%) 51.0%
BRC Holdings
12/98 Allmerica Financial/ $ 27.50 $ 27.56 10/27/1998 $ 34.63 (16.2%) 81.8%
Citizens Corp (Hanover Ins)
12/98 Usinor SA/ $ 5.06 $ 3.02 09/23/1998 $ 14.19 (59.5%) 53.0%
J&L Specialty Steel
12/98 Billington/Anglo American $ 4.98 $ 6.72 10/14/1998 $ 7.87 0.9% 86.6%
Samancor
12/98 Disco/Ahold/ $ 4.00 $ 5.22 11/13/1998 $ 15.20 (53.9%) 52.0%
Disco
12/98 Billington/Anglo American $ 0.41 $ 0.40 09/07/1998 $ 1.25 (57.7%) 52.4%
QNI
11/98 Dow AgroSciences/ $ 18.38 $ 19.75 04/30/1998 $ 25.00 (18.0%) 62.2%
Mycogen Corp
11/98 Dexter Corporation/ $ 32.81 $ 31.00 07/07/1998 $ 38.50 (3.9%) 52.0%
Life Technologies
10/98 Fiat/Norsk Hydro/ $ 5.52 $ 5.39 05/29/1998 $ 6.17 22.6% 55.7%
Meridian Technology
9/98 Cable Michigan Inc./ $ 10.50 $ 11.00 04/30/1998 $ 11.00 0.0% 62.0%
Mercom
7/98 Texas Industries/ $ 12.00 $ 12.88 05/22/1997 $ 14.88 (4.2%) 81.3%
Chaparral Steel
6/98 Waste Management/ 242.0 247.5 06/29/1998 279.0 23.7% 80.0%
Waste Mangagement Int'l
5/98 Xerox Corp / $ 16.38 $ 17.25 03/05/1998 $ 22.50 (11.1%) 80.0%
XL Connect
12/97 Orion Capital/ $ 28.19 $ 32.50 09/18/1997 $ 34.56 (11.1%) 77.3%
Guaranty National Corp
12/97 Waste Management Inc./ $ 12.63 $ 13.00 06/20/1997 $ 17.25 (13.0%) 67.0%
Wheelabrator Technologies, Inc.
9/97 FH Faulding & Co $ 9.25 $ 10.75 06/30/1997 $ 12.19 (1.5%) 62.0%
Faulding Inc.
8/97 Texas Industries $ 12.00 $ 12.88 05/22/1997 $ 14.75 (3.4%) 84.6%
Chaparral
<CAPTION>
Initial
Initial Premium Final
Aggregate Premium Over One Premium
Date of Consideration Over One Day Prior Over One
Clos- Acquiring Company/Acquired For Amount Initial Bid Per Month Prior Market Final Bid Month Prior
ing Company Acquired (000's) Share Market Price Price Per Share Price
- ------- -------------------------- ---------------- --------------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Boise Cascade/ $ 163,900 $ 13.25 30.9% (9.8%) $ 13.25 30.9%
Boise Cascase Office Pr.
Cordant Technologies/ $ 261,400 $ 17.00 38.1% 20.9% $ 17.00 38.1%
Howmet Intl.
Citigroup/ $ 180,000 $ 45.00 0.8% 11.5% $ 45.00 0.8%
Student Loan Corp.
11/99 Warburg, Pincus Ventures/ $ 490,800 $ 25.00 30.7% 63.9% $ 28.00 46.4%
Knoll (Warburg, Pincus)
8/99 Vivendi/ $ 117,100 $ 2.00 39.1% (11.1%) $ 2.90 101.7%
Aqua Alliance
7/99 McDermott Intl./ $ 514,500 $ 35.62 19.2% 16.8% $ 35.62 19.2%
J Ray McDermott SA
7/99 Viacom/ $ 191,600 $ 9.00 42.6% 0.0% $ 9.75 54.5%
Spelling Entertainment
5/99 Global TeleSystems/ $ 189,800 $210.82 0.9% 6.0% $210.82 0.9%
Omnicom
2/99 Orion N.Z./ $ 81,400 $ 2.96 61.4% 24.4% $ 3.13 70.9%
Qest N.Z
2/99 Affiliated Comp Svcs/ $ 131,900 $ 19.00 12.2% 17.1% $ 19.00 12.2%
BRC Holdings
12/98 Allmerica Financial/ $ 212,400 $ 29.00 5.5% 5.2% $ 33.25 20.9%
Citizens Corp (Hanover Ins)
12/98 Usinor SA/ $ 104,075 $ 5.75 13.6% 90.5% $ 6.38 25.9%
J&L Specialty Steel
12/98 Billington/Anglo American $ 203,600 $ 7.94 59.4% 18.0% NA NA
Samancor
12/98 Disco/Ahold/ $ 159,400 $ 7.00 75.0% 34.1% $ 7.00 75.0%
Disco
12/98 Billington/Anglo American $ 268,100 $ 0.53 30.7% 32.9% $ 6.38 1472.2%
QNI
11/98 Dow AgroSciences/ $ 379,300 $ 20.50 11.6% 3.8% $ 28.00 52.4%
Mycogen Corp
11/98 Dexter Corporation/ $ 419,491 $ 37.00 12.8% 19.4% $ 39.25 19.6%
Life Technologies
10/98 Fiat/Norsk Hydro/ $ 117,600 $ 7.57 37.2% 40.4% $ 7.11 28.9%
Meridian Technology
9/98 Cable Michigan Inc./ $ 55,636 $ 11.00 4.8% 0.0% $ 12.00 14.3%
Mercom
7/98 Texas Industries/ $ 72,800 $ 14.25 18.8% 10.7% $ 15.50 29.2%
Chaparral Steel
6/98 Waste Management/ $ 258,888 345.0 42.6% 39.4% 345.0 42.6%
Waste Mangagement Int'l
5/98 Xerox Corp / $ 88,000 $ 20.00 22.1% (11.1%) $ 20.00 22.1%
XL Connect
12/97 Orion Capital/ $ 117,200 $ 34.00 22.1% (11.1%) $ 36.50 22.1%
Guaranty National Corp
12/97 Waste Management Inc./ $ 874,500 $ 15.00 18.8% 15.4% $ 16.50 30.7%
Wheelabrator Technologies, Inc.
9/97 FH Faulding & Co $ 77,220 $ 12.00 29.7% 11.6% $ 13.50 45.9%
Faulding Inc.
8/97 Texas Industries $ 72,816 $ 14.25 18.8% 10.7% $ 15.50 29.2%
Chapparral
<CAPTION>
Final
Premium
Date of Over One Percent
Clos- Acquiring Company/Acquired Day Prior Increase in
ing Company Marker Price Offer
- ------- -------------------------- ------------ -----------
<S> <C> <C> <C>
Boise Cascade/ (9.8%) 0.0%
Boise Cascase Office Pr.
Cordant Technologies/ 20.9% 0.0%
Howmet Intl.
Citigroup/ 11.5% 0.0%
Student Loan Corp.
11/99 Warburg, Pincus Ventures/ 83.6% 12.0%
Knoll (Warburg, Pincus)
8/99 Vivendi/ 28.9% 45.0%
Aqua Alliance
7/99 McDermott Intl./ 16.8% 0.0%
J Ray McDermott SA
7/99 Viacom/ 8.3% 8.3%
Spelling Entertainment
5/99 Global TeleSystems/ 6.0% 0.0%
Omnicom
2/99 Orion N.Z./ 31.7% 5.9%
Qest N.Z
2/99 Affiliated Comp Svcs/ 17.1% 0.0%
BRC Holdings
12/98 Allmerica Financial/ 20.6% 14.7%
Citizens Corp (Hanover Ins)
12/98 Usinor SA/ 111.2% 10.9%
J&L Specialty Steel
12/98 Billington/Anglo American NA NA
Samancor
12/98 Disco/Ahold/ 34.1% 0.0%
Disco
12/98 Billington/Anglo American 1498.5% 1102.8%
QNI
11/98 Dow AgroSciences/ 41.8% 36.6%
Mycogen Corp
11/98 Dexter Corporation/ 26.6% 6.1%
Life Technologies
10/98 Fiat/Norsk Hydro/ 31.9% (6.0%)
Meridian Technology
9/98 Cable Michigan Inc./ 9.1% 9.1%
Mercom
7/98 Texas Industries/ 20.4% 8.8%
Chaparral Steel
6/98 Waste Management/ 39.4% 0.0%
Waste Mangagement Int'l
5/98 Xerox Corp / 15.9% 0.0%
XL Connect
12/97 Orion Capital/ 12.3% 0.0%
Guaranty National Corp
12/97 Waste Management Inc./ 26.9% 10.0%
Wheelabrator Technologies, Inc.
9/97 FH Faulding & Co 25.6% 12.5%
Faulding Inc.
8/97 Texas Industries 20.4% 8.8%
Chapparral
</TABLE>
-33-
<PAGE>
PROJECT TRUST VI. Appendix D
- --------------------------------------------------------------------------------
Minority Buy-out Transactions Valuation - Cash Offers Only (cont'd)
($ in millions, except per share data)
<TABLE>
<CAPTION>
Stock Price Initital Inside
Date of Stock Price One Day 52 Week Premium Ownership
Clos- Acquiring Company/Acquired One Month Prior to High Prior Over 52 Before the
ing Company Prior to Ann. Ann. Date of Ann. to Ann. Week High Transaction
- ------- -------------------------- ------------- ----------- ------------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
6/97 Anthem/ $ 31.63 $ 35.50 06/02/1997 $ 36.25 10.3% 66.8%
Accordia
5/97 Monsanto/ $ 5.06 $ 5.50 01/28/1997 $ 6.88 5.5% 54.5%
Calgene
2/97 Hoechst AG/ $ 206.92 $ 266.22 12/10/1996 $ 273.78 NA 56.5%
Roussel-Uclaf
9/96 Chemed Corp./ $ 34.13 $ 36.50 06/10/1996 $ 41.50 NA 58.1%
Corp)
1/96 Berkshire Hathaway Inc./ $ 55.63 $ 55.75 08/25/1995 $ 68.63 NA 52.4%
Hathaway)
12/95 COBE Laboratories/ $ 14.75 $ 15.75 07/14/1995 $ 19.38 (7.1%) 53.0%
REN-Corp-USA (COBE Labs)
12/95 BIC SA/ $ 31.13 $ 35.75 05/19/1995 $ 38.88 (6.1%) 78.0%
Bic Corp (BIC SA)
10/95 McCaw Cellular/ $ 128.25 $ 109.88 04/07/1995 $ 140.50 (9.3%) 52.0%
LIN Bdcstg (McCaw Cellular)
9/95 Pacific Corp/ $ 24.75 $ 24.25 11/02/1994 $ 29.50 (5.1%) 86.6%
Pacific Telecom (Pacific Corp)
8/95 Societe BIC/ $ 31.13 $ 35.75 05/19/1995 $ 37.50 (2.7%) 78.0%
BIC Corp
6/95 Club Mediterranee SA/ $ 22.25 $ 22.63 04/05/1995 $ 26.00 1.9% 70.8%
Club Med
5/95 GTE Corp/ $ 18.25 $ 17.75 09/08/1994 $ 21.25 5.9% 90.0%
Contel Cellular Inc.
3/95 Proventus AB/ $ 3.52 $ 3.70 12/15/1994 $ 4.30 NA 78.2%
Aritmos AB
3/95 Dole Food Co. Inc./ $ 10.50 $ 11.63 08/24/1994 $ 15.38 (9.0%) 82.8%
Castle & Cooke Homes, Inc.
6/94 Colonia Konzern AG/ $1,133.16 $1,309.00 02/28/1994 $1,335.00 28.3% 57.9%
Norsdtern Allgemeine
4/94 Medco Containment Services/ $ 29.75 $ 25.75 10/13/1993 $ 36.50 (25.3%) 54.2%
Medical Marketing Group
2/94 Holderbank Financiere Glaros/ $ 7.25 $ 6.75 01/07/1993 $ 7.75 (1.3%) 95.0%
Holnam Inc.
12/93 Valley Fashions Corp./ $ 48.63 $ 48.88 09/20/1993 $ 51.13 (10.0%) 95.0%
West Point-Perpperell Inc.
10/93 Torchmark/ $ 27.38 $ 26.88 02/22/1993 $ 30.25 0.8% 83.0%
United Investors Management
7/92 W.R. Grace & Company $ 11.88 $ 15.25 03/02/1992 $ 19.00 (13.2%) 83.4%
Grace Energy Company
12/91 Siemens AG/ $ 131.77 $ 120.63 10/21/1991 $ 209.36 (29.5%) 78.0%
Systems
- ----------------------------------------------------------------------------------------------------------------------------------
Average
Median
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Initial
Initial Premium
Aggregate Premium Over One
Date of Consideration Over One Day Prior
Clos- Acquiring Company/Acquired For Amount Initial Bid Per Month Prior Market Final Bid
ing Company Acquired (000's) Share Market Price Price Per Share
- ------- -------------------------- ---------------- --------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
6/97 Anthem/ $ 193,155 $ 40.00 26.5% 12.7% $ 40.00
Accordia
5/97 Monsanto/ $ 242,600 $ 7.25 43.2% 31.8% $ 8.00
Calgene
2/97 Hoechst AG/ $3,500,000 NA NA NA $ 294.52
Roussel-Uclaf
9/96 Chemed Corp./ $ 88,250 NA NA NA $ 41.00
Corp)
1/96 Berkshire Hathaway Inc./ $2,347,000 NA NA NA $ 70.00
Hathaway)
12/95 COBE Laboratories/ $ 177,700 $ 18.00 22.0% 14.3% $ 20.00
REN-Corp-USA (COBE Labs)
12/95 BIC SA/ $ 212,600 $ 36.50 17.3% 2.1% $ 40.50
Bic Corp (BIC SA)
10/95 McCaw Cellular/ $3,323,400 $ 127.50 (0.6%) 16.0% $ 129.91
LIN Bdcstg (McCaw Cellular)
9/95 Pacific Corp/ $ 159,000 $ 28.00 13.1% 15.5% $ 30.00
Pacific Telecom (Pacific Corp)
8/95 Societe BIC/ $ 219,000 $ 36.50 17.3% 2.1% $ 40.50
BIC Corp
6/95 Club Mediterranee SA/ $ 135,600 $ 26.50 19.1% 17.1% $ 32.00
Club Med
5/95 GTE Corp/ $ 254,300 $ 22.50 23.3% 26.8% $ 25.50
Contel Cellular Inc.
3/95 Proventus AB/ $ 141,300 NA NA NA $ 4.38
Aritmos AB
3/95 Dole Food Co. Inc./ $ 81,500 $ 14.00 33.3% 20.4% $ 15.75
Castle & Cooke Homes, Inc.
6/94 Colonia Konzern AG/ $ 520,969 $1,713.00 51.2% 30.9% $1,713.00
Norsdtern Allgemeine
4/94 Medco Containment Services/ $ 122,510 $ 27.25 (8.4%) 5.8% $ 27.75
Medical Marketing Group
2/94 Holderbank Financiere Glaros/ $ 51,700 $ 7.65 5.5% 13.3% NA
Holnam Inc.
12/93 Valley Fashions Corp./ $ 66,300 $ 46.00 (5.4%) (5.9%) NA
West Point-Perpperell Inc.
10/93 Torchmark/ $ 216,591 $ 30.50 11.4% 13.5% $ 31.25
United Investors Management
7/92 W.R. Grace & Company $ 77,501 $ 16.50 38.9% 8.2% $ 19.00
Grace Energy Company
12/91 Siemens AG/ $1,302,423 $ 147.52 12.0% 22.3% $ 147.52
Systems
- -------------------------------------------------------------------------------------------------------------------------------
Average 23.7% 16.2%
Median 19.2% 14.3%
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Final Final
Premium Premium
Date of Over One Over One Percent
Clos- Acquiring Company/Acquired Month Prior Day Prior Increase in
ing Company Price Marker Price Offer
- ------- -------------------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
6/97 Anthem/ 26.5% 12.7% 0.0%
Accordia
5/97 Monsanto/ 58.0% 45.5% 10.3%
Calgene
2/97 Hoechst AG/ 42.3% 10.6% NA
Roussel-Uclaf
9/96 Chemed Corp./ 20.1% 12.3% NA
Corp)
1/96 Berkshire Hathaway Inc./ 25.8% 25.6% NA
Hathaway)
12/95 COBE Laboratories/ 35.6% 27.0% 11.1%
REN-Corp-USA (COBE Labs)
12/95 BIC SA/ 30.1% 13.3% 11.0%
Bic Corp (BIC SA)
10/95 McCaw Cellular/ 1.3% 18.2% 1.9%
LIN Bdcstg (McCaw Cellular)
9/95 Pacific Corp/ 21.2% 23.7% 7.1%
Pacific Telecom (Pacific Corp)
8/95 Societe BIC/ 30.1% 13.3% 11.0%
BIC Corp
6/95 Club Mediterranee SA/ 43.8% 41.4% 20.8%
Club Med
5/95 GTE Corp/ 39.7% 43.7% 13.3%
Contel Cellular Inc.
3/95 Proventus AB/ 24.4% 18.1% NA
Aritmos AB
3/95 Dole Food Co. Inc./ 50.0% 35.5% 12.5%
Castle & Cooke Homes, Inc.
6/94 Colonia Konzern AG/ 51.2% 30.9% 0.0%
Norsdtern Allgemeine
4/94 Medco Containment Services/ (6.7%) 7.8% 1.8%
Medical Marketing Group
2/94 Holderbank Financiere Glaros/ NA NA NA
Holnam Inc.
12/93 Valley Fashions Corp./ NA NA NA
West Point-Perpperell Inc.
10/93 Torchmark/ 14.2% 16.3% 2.5%
United Investors Management
7/92 W.R. Grace & Company 60.0% 24.6% 15.2%
Grace Energy Company
12/91 Siemens AG/ 12.0% 22.3% (0.0%)
Systems
- ---------------------------------------------------------------------------------------
Average 65.6% 58.9% 35.1%
Median 29.6% 21.6% 7.7%
- ---------------------------------------------------------------------------------------
</TABLE>
-34-
<PAGE>
Exhibit 99(c)(ii)
JANUARY 19, 2000 CONFIDENTIAL
MATERIALS PREPARED FOR DISCUSSION
PROJECT TRUST
<PAGE>
HIGHLY
CONFIDENTIAL 1
- --------------------------------------------------------------------------------
PROJECT TRUST
APPROACH TO THE ASSIGNMENT
- --------------------------------------------------------------------------------
METHODOLOGY KEY ISSUES
- ------------------------------- ------------------------------------------
Discounted Cash Flow Analysis o Financial projections/sensitivities
o Discount rate
o Terminal value
- ------------------------------- ------------------------------------------
- ------------------------------- ------------------------------------------
Comparable Acquisition Analysis o Appropriate comparables
o Undisclosed information
(eg: contract terms)
o Historical perspective
- ------------------------------- ------------------------------------------
- ------------------------------- ------------------------------------------
Comparable Company Analysis o Trust equity market valuation
o Appropriate comparables:
o Size and market position
o Projected financial performance
o Geographic location
o Liquidity and capital structure
o Business profile
- ------------------------------- ------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 2
- --------------------------------------------------------------------------------
PROJECT TRUST
TRANSACTION STATISTICS
- --------------------------------------------------------------------------------
(US$ IN MILLIONS, EXCEPT PER SHARE ITEMS)
--------------------------------------------------------------------
OFFER PRICE $23.50
--------------------------------------------------------------------
Transaction Premiums:
As of 01/18/00 $17.00 38.2%
Average 11/17/99 - 1/14/00 17.42 34.9%
Prior to Offer on 09/20/99:
One Day $19.25 22.1%
One Month 18.14 29.5%
Six Months 17.05 37.8%
One Year 15.17 54.9%
Company Equity Value $310
Company Enterprise Value $763
--------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 3
- --------------------------------------------------------------------------------
PROJECT TRUST
FORECAST OVERVIEW
- --------------------------------------------------------------------------------
THREE CASES WERE ANALYZED:
------------------------------------------------------------------------
I. ADJUSTED CASE: Management's projection of cash flows for the
signed development projects with revised probability
weights assigned to the portfolio of unsigned
contracts. Also includes potential cash flows from
the limited merchant electric power plant development
at existing Trigen facilities.
II. MANAGEMENT CASE: Management's projection of current
operational contracts and signed development
contracts. No unsigned contracts are included.
III. LIMITED
DEVELOPMENT
CASE: Management's projection of current operational
contracts under a limited probability case for
cash flows of signed backlogs.
------------------------------------------------------------------------
NOTE: All cases based on Trigen management forecasts.
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 4
- --------------------------------------------------------------------------------
PROJECT TRUST
DCF ANALYSIS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(US$ IN MILLIONS)
- -----------------------------------------------------------------------------------------
VALUATION METHODOLOGY ENTERPRISE AMV/1999E
VALUE -------------------- AMV/2000E
REFERENCE RANGE EBITDA EBIT EBITDA
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ENTERPRISE VALUE REFERENCE
RANGE
Adjusted Case $742 - $843 11.3x - 12.9x 18.6x - 21.2x 7.1x - 8.1x
Management $716 - $798 10.8x - 12.0x 17.7x - 19.7x 7.2x - 8.1x
Limited Development $630 - $703 9.5x - 10.6x 15.6x - 17.4x 6.0x - 6.6x
-----------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTE: All cases based on Trigen management forecasts. Multiples relative to
Adjusted Case financial projections based on discount rates of 8.5% -
9.0% and terminal value EBITDA multiples of 8.0x - 9.0x. Adjusted Case
includes Merchant Power project with applied equity discount rates of
14.0% - 15.0% and terminal value EBITDA multiples of 6.5x - 7.0x.
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 5
- --------------------------------------------------------------------------------
PROJECT TRUST
COMPARABLE ACQUISITIONS ANALYSIS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(US$ IN MILLIONS)
-----------------------------------------------------------------------------------------------------
ENTERPRISE VALUE
AS A MULTIPLE
OF EBITDA
EV VALUE CAPACITY ----------------
DATE TARGET ACQUIROR % BOUGHT (US$MM) (MW) LTM FORWARD
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8/27/99 Cogen Corp. of America Calpine 80% $383 463 13.0x 8.3x
2/23/99 CE Generation Electric El Paso Natural Gas 50% 861 410 4.7 6.8
10/30/98 Cogen Technologies Enron 100% 1,450 1,020 12.0 -
3/18/98 Bechtel/US Gen Cogentrix 15% 190 365 7.9 7.7
2/18/97 Destec Energy NGC Corp./AES 100% 1,207 2,970 16.5 12.2
7/8/96 Falcon Seaboard CalEnergy 88% 226 456 10.8 8.1
-----------------------------------------------------------------------------------------------------
</TABLE>
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 6
- --------------------------------------------------------------------------------
PROJECT TRUST
COMPARABLE ACQUISITIONS ENTERPRISE VALUE REFERENCE RANGE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(US$ IN MILLIONS, EXCEPT PER SHARE ITEMS)
- -------------------------------------------------------------------------------------------
MULTIPLE RANGE IMPLIED ENTERPRISE VALUE
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LTM EBITDA $65.6 10.0x - 12.0x $656 - $787
2000 FORWARD EBITDA 105.4 7.0x - 9.0x 738 - 949
- -------------------------------------------------------------------------------------------
ENTERPRISE VALUE REFERENCE RANGE $650 - $780
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTE: All cases based on Trigen management forecasts. Based on Adjusted Case.
LTM as of September 30, 1999.
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 7
- --------------------------------------------------------------------------------
PROJECT TRUST
COMPARABLE COMPANIES TRADING ANALYSIS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
ENTERPRISE VALUE AS A MULTIPLE OF
--------------------------------------------------- SHARE
LTM 1999E 2000E PRICE/EPS LT EPS
ENTERPRISE -------------- -------------- -------------- -------------- GROWTH
COMPANY VALUE EBITDA EBIT EBITDA EBIT EBITDA EBIT 1999E 2000E RATE (E)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TRIGEN $ 629 9.6X 15.3 8.4X 12.9 8.4X 12.4 21.4 14.4X 13.0%
Cogen Corp. of America(1) 415 11.3 17.1 7.2 9.5 6.5 8.2 10.8 7.4 NM
AES Corp. 18,686 24.4 31.5 20.5 24.6 13.2 16.3 28.2 23.2 26.0%
Calpine Corp. 5,816 26.3 36.9 27.4 35.8 20.5 26.7 53.5 42.3 27.1%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: As of January 14, 2000. All cases based on Trigen management forecasts.
Trigen estimates per the Adjusted Case. Other estimates from First Call
and selected equity analyst reports. LTM as of September 30, 1999.
(1) Cogen Corp. of America was acquired by Calpine Corp. on August 27,
1999; trading statistics as of August 26, 1999.
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 8
- --------------------------------------------------------------------------------
PROJECT TRUST
COMPARABLE COMPANIES TRADING ENTERPRISE VALUE REFERENCE RANGE
- --------------------------------------------------------------------------------
(US$ IN MILLIONS, EXCEPT PER SHARE ITEMS)
- -----------------------------------------------------------------------
AMV/EV MULTIPLE IMPLIED ENTERPRISE
RANGE VALUE
- -----------------------------------------------------------------------
EBITDA
1999E 66.4 10.0 -12.0 663 - 796
2000E 105.4 8.0 -10.0 843 -1,054
EBIT
1999E 40.4 16.0 -18.0 646 - 727
2000E 71.7 11.0 -12.0 788 - 860
NET INCOME
1999E 11.7 21.0 -24.0 699 - 734
2000E 17.0 17.0 -20.0 742 - 793
- -----------------------------------------------------------------------
ENTERPRISE VALUE REFERENCE RANGE $670 -$770
- -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Note: All cases based on Trigen management forecasts. Based on Adjusted Case.
LTM as of September 30,1999.
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
HIGHLY
CONFIDENTIAL 9
- --------------------------------------------------------------------------------
PROJECT TRUST
VALUATION SUMMARY
<TABLE>
<CAPTION>
(US$ in Millions)
-------------------------------------------------------------------------------------
VALUATION METHODOLOGY ENTERPRISE AMV/1999E
VALUE ------------------------- AMV/2000E
REFERENCE RANGE EBITDA EBIT EBITDA
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DCF Analysis(1)
Adjusted Case $742 -$843 11.3x-12.9x 18.6x-21.2x 7.1x- 8.1x
Management Case $716 -$798 10.8x-12.0x 17.7x-19.7x 7.2x- 8.1x
Limited Development $630 -$703 9.5x-10.6x 15.6x-17.4x 6.0x- 6.6x
Comparable Acquisitions $650 -$780 9.8x-11.7x 16.0x-19.3x 6.1x- 7.4x
Comparable Companies $670 -$770 10.1x-11.6x 16.5x-19.0x 6.3x- 7.3x
-------------------------------------------------------------------------------------
PROPOSED PURCHASE PRICE $763 11.5X 18.9X 7.2X
AT $23.50 PER SHARE
-------------------------------------------------------------------------------------
(1) All cases based on Trigen management forecasts.
</TABLE>
CREDIT | FIRST
SUISSE | BOSTON ---------------------------------------------------------------
<PAGE>
Exhibit 99(d)(i)
TENDER AND VOTING AGREEMENT
TENDER AND VOTING AGREEMENT, dated as of January 19, 2000 (this
"AGREEMENT"), between Elyo S.A., a societe anonyme organized under the laws of
France ("PARENT"), T Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("PURCHASER") and each of the persons listed on
Schedule A hereto (each a "STOCKHOLDER" and, collectively, the "STOCKHOLDERS").
RECITALS
WHEREAS, Parent, Purchaser and Trigen Energy Corporation, a Delaware
corporation (the "Company") propose to enter into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented,
the "MERGER AGREEMENT") providing for, among other things, the making of the
Offer by Purchaser for all of the issued and outstanding shares of common stock,
par value $0.01 per share, of the Company (referred to herein as either the
"SHARES" or "COMMON STOCK") and the merger of Purchaser with and into the
Company on the terms and conditions set forth in the Merger Agreement (the
"Merger");
WHEREAS, each Stockholder is the beneficial owner of the Shares and
Options set forth opposite such Stockholder's name on Schedule A hereto
(collectively referred to herein as the "Shares" of such Stockholder); such
Shares, as such Shares may be adjusted by stock dividend, stock split,
recapitalization, combination or exchange of shares, merger, consolidation,
reorganization or other change or transaction of or by the Company, together
with Shares issuable upon the exercise of Options; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that the Stockholders enter into
this Agreement;
NOW, THEREFORE, to induce Parent and Purchaser to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
Section 1. CERTAIN DEFINITIONS. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder, severally and not jointly, represents and warrants to Parent and
Purchaser, as of the date hereof, as follows:
<PAGE>
(a) The Shares (including the Options) constitute all of the
securities (as defined in Section 3(a)(10) of the Exchange Act), of the Company
beneficially owned, directly or indirectly, by the Stockholder.
(b) Except for the Shares (including the Options), such
Stockholder does not, directly or indirectly, beneficially own or have any
option, warrant or other right to acquire any securities of the Company that are
or may by their terms become entitled to vote or any securities that are
convertible or exchangeable into or exercisable for any securities of the
Company that are or may by their terms become entitled to vote, nor is such
Stockholder subject to any contract, commitment, arrangement, understanding,
restriction or relationship (whether or not legally enforceable), other than
this Agreement, that provides for such Stockholder to vote or acquire any
securities of the Company. Such Stockholder holds exclusive power to vote the
Shares and has not granted a proxy to any other Person to vote the Shares
(including those issuable upon exercise of the Options), subject to the
limitations set forth in this Agreement.
(c) This Agreement has been duly executed and delivered by such
Stockholder and, assuming due authorization, execution and delivery of this
Agreement by Parent and Purchaser, is a valid and binding obligation of the
Stockholder enforceable against such Stockholder in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(d) No investment banker, broker, finder or other intermediary is,
or will be, entitled to a fee or commission from Purchaser, Parent or the
Company in respect of this Agreement based on any arrangement or agreement made
by or on behalf of such Stockholder in his or her capacity as a stockholder of
the Company.
(e) Such Stockholder understands and acknowledges that Parent is
entering into, and causing Purchaser to enter into, the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser represent and warrant to the Stockholders as of the date
hereof:
(a) Each of Parent and Purchaser is a company duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, has the requisite company power and authority to
execute and deliver this Agreement and to consummate the transactions
2
<PAGE>
contemplated hereby, and has taken all necessary company action to authorize the
execution, delivery and performance of this Agreement.
(b) This Agreement has been duly executed and delivered by Parent
and Purchaser and, assuming the due authorization, execution and delivery of
this Agreement by the Company and the Stockholders, is a valid and binding
obligation of each of Parent and Purchaser, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 4. TRANSFER OF THE SHARES. During the term of this Agreement,
except as otherwise expressly provided herein, each Stockholder agrees that such
Stockholder will not (a) tender into any tender or exchange offer or otherwise
sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or encumber
with any Lien, any of the Shares, (b) acquire any shares of Common Stock or
other securities of the Company (otherwise than in connection with a transaction
of the type described in Section 5 or by exercising any of the Options), (c)
deposit the Shares into a voting trust, enter into a voting agreement or
arrangement with respect to the Shares or grant any proxy or power of attorney
with respect to the Shares, (d) enter into any contract, option or other
arrangement (including any profit sharing arrangement) or undertaking with
respect to the direct or indirect acquisition or sale, transfer, pledge,
assignment, hypothecation or other disposition of any interest in or the voting
of any Shares or any other securities of the Company, (e) exercise any rights
(including, without limitation, under Section 262 of the Delaware General
Corporation Law) to demand appraisal of any Shares which may arise with respect
to the Merger, or (f) take any other action that would in any way restrict,
limit or interfere with the performance of such Stockholder's obligations
hereunder or the transactions contemplated hereby or which would otherwise
diminish the benefits of this Agreement to Parent or Purchaser.
Section 5. ADJUSTMENTS. (a) In the event (i) of any stock dividend,
stock split, recapitalization, reclassification, combination or exchange of
shares of capital stock or other securities of the Company on, of or
affecting the Shares or the like or any other action that would have the
effect of changing a Stockholder's ownership of the Company's capital stock
or other securities or (ii) a Stockholder becomes the beneficial owner of any
additional Shares of or other securities of the Company, then the terms of
this Agreement will apply to the shares of capital stock held by such
Stockholder immediately following the effectiveness of the events described
in clause (i) or such Stockholder becoming the beneficial owner
3
<PAGE>
thereof, as described in clause (ii), as though they were Shares hereunder.
(b) Each Stockholder hereby agrees, while this Agreement is in
effect, to promptly notify Parent and Purchaser of the number of any new Shares
acquired by such Stockholder, if any, after the date hereof.
Section 6. TENDER OF SHARES. Each Stockholder hereby agrees that such
Stockholder will validly tender (or cause the record owner of such shares to
validly tender) and sell (and not withdraw) pursuant to and in accordance with
the terms of the Offer not later than the fifth business day after commencement
of the Offer (or if the Stockholder acquires Shares after the date hereof, the
earlier of the expiration date of the Offer and the fifth business day after
such Shares are acquired by such Stockholder), or, if the Stockholder has not
received the Offer Documents by such time, within two business days following
receipt of such documents, all of the then outstanding shares of Common Stock
beneficially owned by such Stockholder (including the shares of Common Stock
outstanding as of the date hereof and shares issued upon exercise (if any) of
the Options, in each case as set forth on Schedule A hereto opposite such
Stockholder's name). Upon the purchase by Parent of all of such then outstanding
shares of Common Stock beneficially owned by such Stockholder pursuant to the
Offer in accordance with this Section 6, this Agreement will terminate as it
relates to such Stockholder. In the event, notwithstanding the provisions of the
first sentence of this Section 6, any Shares beneficially owned by a Stockholder
are for any reason withdrawn from the Offer or are not purchased pursuant to the
Offer, such Shares will remain subject to the terms of this Agreement. Each
Stockholder acknowledges that Parent's obligation to accept for payment and pay
for the shares of Common Stock tendered in the Offer is subject to all the terms
and conditions of the Offer.
Section 7. VOTING AGREEMENT. Each Stockholder, by this Agreement, does
hereby (a) agree to appear (or not appear, if requested by Parent or Purchaser)
at any annual, special, postponed or adjourned meeting of the stockholders of
the Company or otherwise cause the Shares such Stockholder beneficially owns to
be counted as present (or absent, if requested by Parent or Purchaser) thereat
for purposes of establishing a quorum and to vote or consent, and (b) constitute
and appoint Parent and Purchaser, or any nominee thereof, with full power of
substitution, during and for the term of this Agreement, as his true and lawful
attorney and proxy for and in his name, place and stead, to vote all the Shares
such Stockholder beneficially owns at the time of such vote, at any annual,
special, postponed or adjourned meeting of the stockholders of the Company (and
this appointment will include the right to sign his or its name (as stockholder)
to any consent, certificate or other document relating to the Company that laws
of the State of Delaware may require or permit), in the case of both (a) and (b)
above, (x)
4
<PAGE>
in favor of approval and adoption of the Merger Agreement and approval and
adoption of the Merger and the other transactions contemplated thereby. This
proxy and power of attorney is a proxy and power coupled with an interest, and
each Stockholder declares that it is irrevocable until this Agreement shall
terminate in accordance with its terms. Each Stockholder hereby revokes all and
any other proxies with respect to the Shares that such Stockholder may have
heretofore made or granted. For Shares as to which a Stockholder is the
beneficial but not the record owner, such Stockholder shall use his or its best
efforts to cause any record owner of such Shares to grant to Parent a proxy to
the same effect as that contained herein. Each Stockholder hereby agrees to
permit Parent and Purchaser to publish and disclose in the Offer Documents and
the Proxy Statement and related filings under the securities laws such
Stockholder's identity and ownership of Shares and the nature of his or its
commitments, arrangements and understandings under this Agreement.
Section 8. TERMINATION. This Agreement will terminate (a) as to any
Stockholder upon the purchase of all the Shares beneficially owned by such
Stockholder pursuant to the Offer in accordance with Section 6, or (b) on the
earlier to occur of (i) the Effective Time or (ii) the date the Merger Agreement
is terminated in accordance with its terms.
Section 9. FEES AND EXPENSES. Except as otherwise expressly provided
herein or in the Merger Agreement, whether of not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
Section 10. FURTHER ASSURANCES. Each party hereto will execute and
deliver all such further documents and instruments and take all such further
action as may be reasonably necessary in order to consummate the transactions
contemplated hereby.
Section 11. PUBLICITY. A Stockholder shall not issue any press release
or otherwise make any public statements with respect to this Agreement or the
Merger Agreement or the other transactions contemplated hereby or thereby
without the consent of Parent and Purchaser, except as may be required by Law or
applicable stock exchange rules.
Section 12. STOCKHOLDER CAPACITY. No person executing this Agreement
makes any agreement or understanding herein in such Stockholder's capacity as a
director or officer of the Company or any subsidiary of the Company. Each
Stockholder signs solely in such Stockholder's capacity as the beneficial owner
of such Stockholder's Shares and nothing herein shall limit or affect any
actions taken
5
<PAGE>
by a Stockholder in such Stockholder's capacity as an officer or director of the
Company or any subsidiary of the Company to the extent specifically permitted by
the Merger Agreement.
Section 13. ENFORCEMENT. The parties hereto agree that irreparable
damage may occur in the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any New York Court, this being in addition to
any other remedy to which they are entitled at law or in equity for damages or
otherwise.
Section 14. MISCELLANEOUS.
(a) All representations and warranties contained herein will
survive for twelve months after the termination hereof. The covenants and
agreements made herein will survive in accordance with their respective terms.
(b) Any provision of this Agreement may be waived at any time by
the party that is entitled to the benefits thereof. No such waiver, amendment or
supplement will be effective unless in writing and signed by the party or
parties sought to be bound thereby. Any waiver by any party of a breach of any
provision of this Agreement will not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement or one or more sections hereof will not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules of
conflict of laws. Each of the Stockholders, Parent and Purchaser hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the United States District Court for the State of Delaware or any court of
the State of Delaware (the "DELAWARE COURTS") for any litigation arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any
6
<PAGE>
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Parent hereby
appoints The Corporation Trust Company as agent for service of process. The
address of such agent for service of process is Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
(e) The descriptive headings contained herein are for convenience
and reference only and will not affect in any way the meaning or interpretation
of this Agreement. In this Agreement, unless the context otherwise requires,
words describing the singular number shall include the plural and vice versa,
and words denoting any gender shall include all genders and words denoting
natural persons shall include corporations and partnerships and vice versa.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be understood to be followed by the words "without
limitation."
(f) All notices and other communications hereunder will be in
writing and will be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Parent or Purchaser to:
Elyo S.A.
235 Avenue Georges Clemenceau BP 4601
92746 Nanterre Cedex
France
Attention: Michel Caillard
Fax: (01 41 20 10 10)
with copies to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Jeffrey Bagner, Esq.
Telecopy: (212) 859-4000
If to a Stockholder, at the address set forth on Schedule A hereto or
to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(g) This Agreement may be executed by the parties hereto in
separate
7
<PAGE>
counterparts, each of which, when so executed and delivered, shall be an
original. All such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
(h) This Agreement is binding upon and is solely for the benefit
of the parties hereto and their respective successors, legal representatives and
assigns. Neither this Agreement nor any of the rights, interests or obligations
under this Agreement will be assigned by any of the parties hereto without the
prior written consent of the other parties, except that Parent and Purchaser
will have the right to assign to any direct or indirect wholly owned subsidiary
of Parent or Purchaser any and all rights and obligations of Parent or Parent
under this Agreement, provided that any such assignment will not relieve either
Parent or Purchaser from any of its obligations hereunder.
(i) Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
(j) All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity will be cumulative
and not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
8
<PAGE>
IN WITNESS WHEREOF, each of the Parent and Purchaser has caused
this Agreement to be signed by its officer or director thereunto duly authorized
and each Stockholder has signed this Agreement, all as of the date first written
above.
ELYO S.A.
By: /s/ Olivier Degos
-------------------------------
Name: Olivier Degos
Title: Corporate Vice President
T ACQUISITION CORP.
By: /s/ Olivier Degos
-------------------------------
Name: Olivier Degos
Title: Secretary
STOCKHOLDERS:
/s/ George F. Keane
-----------------------------------
GEORGE F. KEANE
/s/ Charles E. Bayless
-----------------------------------
CHARLES E. BAYLESS
/s/ Charles E. Bayless, Trustee
-----------------------------------
BAYLESS FAMILY TRUST
9
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
Number Number
Stockholder Address of Shares of Options
- ----------- ------- --------- ----------
<S> <C> <C> <C>
George F. Keane 237 Mayfield 27,200 30,000
Trumbull, CT 06611
Charles E. Bayless 7300 North Sunset 2,348.346* 10,000
Canyon Drive
Tucson, AR 85718
Bayless Family Trust 7300 North Sunset 9,149
Canyon Drive
Tucson, AR 85718
With copies to:
W. Brinkley Dickerson, Jr. Troutman Sanders LLP
600 Peachtree Street N.E.
Suite 5200
Atlanta, GE 30308
</TABLE>
- ----------
* Through October 13, 1999, plus additional deferred shares and reinvestments
granted to date.
<PAGE>
Exh 99(d)(ii)
ELYO
235 AVENUE GEORGES CLEMENCEAU BP 4601 92746 NANTERRE CEDEX
January 19, 2000
Thomas R. Casten
c/o Trigen Energy Corporation
One Water Street
White Plains, NY 10601
Dear Mr. Casten:
We hereby agree to purchase (or cause an affiliate to purchase) from you, and
you hereby agree to sell to us, 1,012,402 shares (the "Subject Shares") of
common stock, par value $.01 per share (the "Shares"), of Trigen Energy
Corporation (the "Company") at a purchase price of $23.50 per Share in cash. The
purchase and sale shall be consummated on the 31st calendar day (the "Closing
Date") following the filing of the Schedule TO (which will include a Schedule
13E-3, pursuant to Rule 13e-3 under the Securities Exchange Act of 1934, as
amended), by Elyo S.A. and certain of its affiliates in connection with the
offer by T Acquisition Corp., a Delaware corporation and an indirect, wholly
owned subsidiary of Elyo S.A., to purchase any and all of the outstanding Shares
(the "Offer" to be made pursuant to the terms of the Agreement and Plan of
Merger, dated as of January 19, 2000 between Elyo S.A., T Acquisition Corp. and
the Company). If Parent is legally barred from purchasing the Subject Shares by
reason of a court order or otherwise, Parent will buy the Subject Shares on the
date two business days following the date that such legal prohibition ceases.
On the Closing Date, you shall deliver to us at the principal offices of the
Company the certificate(s) representing the Subject Shares and we shall deliver
to you at the principal offices of the Company a check in an amount equal to the
number of Subject Shares times $23.50 (or, at your option specified in writing
at least 3 business days prior to the Closing Date, a wire transfer to an
account designated by you in such notice).
You hereby represent that you beneficially own 1,012,402 Subject Shares, and
that the Subject Shares constitute all of the Shares beneficially owned,
directly or indirectly, by you (other than Shares ("Plan Shares") that may be
acquired upon the exercise of options or shares of restricted stock, in each
case issued or issuable under the Trigen Energy Corporation 1994 Stock Incentive
Plan, and Shares held by you under the Company's Section 401(k) plan). The Plan
Shares are not Subject Shares and are not subject to the terms and conditions of
this Agreement. In consideration of our agreement to purchase the Subject
Shares, you hereby agree not to tender the Subject Shares pursuant to the Offer.
<PAGE>
Please indicate your agreement with the foregoing, effective
as of the date first above mentioned, by signing below. This letter may be
signed in any number of counterparts, each of which shall be deemed an original,
but all of which, when taken together, shall constitute one instrument.
Sincerely,
ELYO S.A.
By: /s/ Olivier Degos
--------------------------------
Name: Olivier Degos
Title: Corporate Vice President
AGREED AND ACCEPTED
THOMAS R. CASTEN
/s/ Thomas R. Casten
- -----------------------
Thomas R. Casten
<PAGE>
- 2 -
<PAGE>
Exhibit 99(d)(iii)
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (this "Agreement") is made
and entered into this 19th day of January, 2000, by Trigen Energy Corporation, a
Delaware corporation (the "Company"), and Thomas R. Casten (the "Employee").
WITNESSETH:
WHEREAS, the Employee and the Company are parties to an
Employment Agreement dated as of August 10, 1994 (the "Employment Agreement");
WHEREAS, the Employee desires to resign his employment with the
Company and the Company is willing to accept the Employee's resignation, subject
to the terms and conditions of this Agreement set forth below; and
WHEREAS, the Company has made certain awards to the Employee of
shares of restricted common stock (the "Common Stock") of the Company, par value
$.01 per share (the "Restricted Stock"), and options (the "Options") to acquire
the Common Stock, in each case, pursuant to the Trigen Energy Corporation 1994
Stock Incentive Plan (the "Plan") (the number of vested and unvested Options and
the number of shares of Restricted Stock are set forth on Exhibit A hereto).
NOW THEREFORE, the Company and Employee, in consideration of the
covenants and agreements herein expressed, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
agree as follows:
1. RESIGNATION. The Employee hereby resigns from all of his
positions as a director and officer of the Company and all of its subsidiaries
and affiliates effective as of the date hereof (the "Termination Date").
Notwithstanding the foregoing, the Employee shall be entitled to remain a
general partner of the Trenton District Energy Company ("TDEC") in accordance
with the terms of the governing instruments of TDEC; PROVIDED, HOWEVER, that the
Employee shall in no way interfere with or participate in the management or
day-to-day operations of TDEC. From and after the Termination Date, the Employee
shall not be authorized to incur or commit to any expenses, obligations or
liabilities on behalf of the Company, its subsidiaries or affiliates.
2. SEVERANCE PAYMENTS. For and in consideration of all of the
Employee's acknowledgments, releases and covenants set forth in this Agreement,
the Employee shall be entitled to the following compensation and benefits
(collectively, the "Severance Payments"):
a) INITIAL SALARY CONTINUATION. In accordance with the
terms of the Employment Agreement, the Company shall continue to pay the
Employee 1/12 of his annual base salary at the rate in effect on the Termination
Date for each completed month
<PAGE>
of service until August 10, 2000. Such payments shall be made in accordance with
the normal payroll procedures of the Company and be pro-rated for any partial
payroll period.
b) SUPPLEMENTARY SEVERANCE AND BENEFITS.
(i) ADDITIONAL SALARY CONTINUATION. The Company
shall continue to pay the Employee 1/12 of his annual base salary at the rate in
effect on the Termination Date for each completed month of service from August
11, 2000 until the expiration of the Severance Period (as defined below). Such
payments shall be made in accordance with the normal payroll procedures of the
Company and be pro-rated for any partial payroll period. "Severance Period"
shall mean the period ending on the earlier of (A) the second anniversary of the
Termination Date, (B) the date the Employee breaches any of his obligations
under this Agreement or (C) the date the Employee becomes a participant in a
proxy contest or solicits proxies to challenge actions recommended by the
Company's Board of Directors.
(ii) RESTRICTED STOCK. Subject to Section 2(f)
below, the shares of the Restricted Stock which are not vested as of the
Termination Date shall remain outstanding and become vested upon the earlier of
(A) the attainment by the Company of cumulative diluted earnings of $2.08 per
share on the Company's Common Stock in any four consecutive fiscal quarters, (B)
the second anniversary of the Termination Date or (C) such earlier time as
vesting occurs under the Plan. Notwithstanding the foregoing, immediately before
the "Effective Time" (as such term is defined in the Agreement and Plan of
Merger, dated as of January 19, 2000, among Elyo S.A., T Acquisition Corp. and
the Company (the "Merger Agreement")), 100% of the shares of Restricted Stock
shall be canceled and the Company shall, subject to Section 2(f) below, make a
cash payment to the Employee on the "Closing Date" (as such term is defined in
the Merger Agreement) equal to the product obtained by multiplying 9,550 by the
"Merger Consideration" (as such term is defined in the Merger Agreement), and on
the second anniversary of the Closing Date, the Company shall, subject to
Section 2(f) below, make a cash payment to the Employee equal to product
obtained by multiplying 28,649 by the Merger Consideration.
(iii) OPTIONS. Subject to Section 2(f) below, all
Options which are not vested as of the Termination Date shall remain outstanding
and continue to vest and become exercisable in accordance with the vesting
schedule in effect immediately prior to the Termination Date as if the Employee
had remained continuously employed by the Company following the Termination
Date, provided, however, that all Options to the extent not vested on the second
anniversary of the Termination Date shall become vested on such anniversary. All
Options shall remain exercisable for a period of thirty (30) days following the
second anniversary of the Termination Date, after which all such Options shall
be canceled. Notwithstanding the foregoing, all Options that remain outstanding
-2-
<PAGE>
immediately before the Effective Time, if any, shall be treated in accordance
with the terms of the Merger Agreement.
(iv) BENEFITS CONTINUATION. Subject to Section 2(f)
below, for a period of two years following the Termination Date or, if earlier,
until the Employee obtains new employment, the Company shall permit the Employee
to continue to participate in the insurance plans (including life, disability,
health and medical) provided by the Company to its employees from time to time
in accordance with the terms of such plans as if the Employee continued to be
employed by the Company for such period. Subject to Section 2(f) below, for a
period of two years following the Termination Date or, if earlier, until the
Employee obtains new employment, the Company will provide the Employee such
administrative support that he may reasonably request, including reasonable
access to the Company's information technology department for technical support
for his personal computer and the reasonable assistance of Mrs. Linda Prime or,
if at no additional cost to the Company, a different senior administrative
assistant if Mrs. Prime is no longer employed by the Company. Subject to Section
2(f), the Employee shall be entitled to retain the office furniture, laptop
computer and personal computer which the Company made available to the Employee
immediately prior to the Termination Date.
c) ACCRUED VACATION. Within ten (10) days of the date
hereof, the Company shall pay the Employee a lump sum cash payment of $31,976.92
in respect of the Employee's accrued vacation through the Termination Date.
d) OUTPLACEMENT/FINANCIAL ADVISOR SERVICES. For a period
of one (1) year following the Termination Date, the Company shall provide the
Employee outplacement and financial advisor services at a cost not to exceed
$25,000 on a pre-tax basis, through the outplacement service firm and financial
advisor selected by the Employee.
e) 1999 BONUS. The Employee shall be entitled to receive
an annual cash bonus in respect of the Company's 1999 fiscal year in accordance
with the terms of the Company's annual incentive plan in effect as of December
31, 1999. The Company shall disclose the bonus calculation to the Employee. If
as of the date hereof, the Employee had a good faith belief that certain
"extraordinary items" or "asset impairment" write-offs that are taken into
account in such calculation should not have been so accounted for and the
Employee can demonstrate that the treatment of such item or write-off was
inconsistent with the Company's past practices, the Company shall recalculate
the Employee's bonus; PROVIDED, HOWEVER, that the Employee acknowledges that the
Company included a reserve of $3 million in its latest 1999 forecast for the
write-off of certain assets located in London, Canada and agrees that, if such
write-down is taken into account in the Company's 1999 financial statements and
is used to compute the 1999 bonuses of the other incentive plan participants, it
shall be taken into account in
-3-
<PAGE>
computing the Employee's bonus. Such bonus shall be paid to the Employee at the
time the Company pays bonuses in respect of fiscal 1999 to all annual incentive
plan participants.
f) FORFEITURE OF THE SEVERANCE PAYMENTS. If the
Severance Period expires prior to the Second Anniversary of the Termination
Date, the Company's obligations to make any payments or to provide any benefits
under Section 2(b) shall immediately cease and all of the unexercised Options
shall be canceled and all of the shares of the Restricted Stock shall be
immediately forfeited.
g) NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit contemplated by this Section 2.
h) OTHER PLAN. The Company shall satisfy its obligations
to the Employee under the Omnibus Deferral Program in accordance with the terms
thereof.
3. WITHHOLDING. The Company shall have the right to deduct
from any amounts payable under this Agreement or otherwise any taxes or other
amounts required by law to be withheld.
4. EMPLOYEE RELEASE. In consideration of this Agreement, the
Employee agrees to release and forever discharge the Company, its stockholders,
subsidiaries, directors, officers and employees, and any affiliates, agents,
representatives, successors, and assigns of any of the foregoing, including Elyo
S.A., Suez Lyonnais des Eaux, Tractebel S.A./N.V., and Societe Generale de
Belgique, and their respective affiliates, stockholders, officers and directors
(collectively referred to as the "Releasees"), from and against any and all
obligations, liabilities, damages, costs, claims, complaints, charges, or causes
of actions in law or equity (collectively "Claims") that the Employee or his
heirs, administrators, successors, or assigns may now have or may ever have
against any Releasee, whether accrued, absolute, contingent, unliquidated or
otherwise, and whether known or unknown on the date hereof, and which have or
may have arisen out of any act or omission occurring, or state of facts
existing, prior to the date of execution of this Agreement, in any way related
to the Employee's employment with, and services as a director of, the Company
and its affiliates and the termination thereof, or in connection with the
Employee's ownership of any securities of the Company or any of its affiliates,
including, without limitation, (i) Claims arising under the Employment Agreement
or any arrangement, plan, program, or policy for employee benefits, with the
exception of any tax qualified plans under which the Employee has a vested
accrued interest, (ii) any other Claims related to the Employee's employment
with the Company or the termination of that employment and (iii) Claims based on
federal, state, or local law or regulation or the common law, including but not
limited to, Claims in any way related to Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Equal Pay Act, the Fair
Labor Standards Act, the Americans with Disabilities Act, the Employee
-4-
<PAGE>
Retirement Income Security Act of 1974, as amended, the New York Human Rights
Law, and all other applicable state and local labor and employment laws
(including all laws concerning unlawful and unfair labor and employment
practices), breach of contract, wrongful discharge, defamation or intentional
infliction of emotional distress. If and to the extent a court of competent
jurisdiction shall determine any part or portion of the foregoing release to be
invalid or unenforceable, the same shall not affect the remainder of the release
which shall be given full effect without regard to the invalid part or portion
of the release.
5. EMPLOYEE ACKNOWLEDGMENT. Employee acknowledges that he: (i)
has been given the opportunity to consider the terms of this Agreement for more
than twenty-one (21) days and has determined that it is in his best interest to
execute this Agreement on the date hereof; (ii) is waiving claims under the Age
Discrimination in Employment Act; (iii) has been advised to consult with legal
counsel of his own choosing prior to the execution of this Agreement; (iv) fully
understands the terms and conditions contained herein; (v) has entered into this
Agreement of his own free will and was not under any undue pressure or duress;
(vi) is not waiving rights or claims that may arise after the date this
Agreement is executed; (vii) has received as consideration for the waivers
contained herein money and other benefits in addition to that which he is
already entitled; (viii) understands that for a period of seven (7) days
following the execution of this Agreement that he may revoke his waiver and
release of any claims under the Age Discrimination in Employment Act. In the
event the Employee so revokes his waiver and release of claims under the Age
Discrimination in Employment Act, the Employee shall not be entitled to any of
the payments or benefits provided in Section 2(b) hereof and in all other
respects this Agreement shall remain in full force and effect.
6. ADDITIONAL COVENANTS.
a) NON DISPARAGEMENT. The Employee shall not make or
publish any negative or disparaging statements, comments or remarks (whether
written or oral) regarding (i) the Company, its subsidiaries, or their directors
or officers, Elyo S.A., Suez Lyonnais des Eaux, Tractebel S.A./N.V., or Societe
Generale de Belgique, and (ii), any person that the Employee knows to be a
director, officer, employee or affiliate of any of the persons or entities named
in clause (i). Except in furtherance of the Employee's employment after the date
hereof, which employment does not violate Section 6(c) hereof, the Employee
further agrees that he shall not discourage, or attempt to discourage, any
person, firm, corporation or business entity from doing business with, or
utilizing the services of, any of (iii) the Company, its subsidiaries, or their
directors, officers or employees, Elyo S.A., Suez Lyonnais des Eaux, Tractebel
S.A./N.V., or Societe Generale de Belgique and (iv) any person that the Employee
knows to be a director, officer, employee or affiliate of any of the persons or
entities named in clause (iii). The Company, its subsidiaries, their officers
and directors and Elyo S.A., Suez Lyonnais des
-5-
<PAGE>
Eaux, Tractebel S.A./N.V., and Societe Generale de Belgique and their officers
and directors shall not make or publish any negative or disparaging statements,
comments or remarks (whether written or oral) regarding the Employee.
b) UNAUTHORIZED DISCLOSURE. The Employee agrees and
understands that in the Employee's position with the Company, the Employee has
been exposed to and has received information relating to the confidential
affairs of the Company, its subsidiaries and affiliates, including but not
limited to technical information, intellectual property, business and marketing
plans, strategies, customer information, other information concerning the
products, promotions, development, financing, expansion plans, business policies
and practices of the Company, its subsidiaries and affiliates, and other forms
of information considered by the Company to be confidential and/or in the nature
of trade secrets ("Confidential Information"). The term Confidential Information
shall not include any information which is known, or becomes known, to the
general public through no wrongful act on the part of the Employee. The Employee
agrees that from and after the date of this Agreement, the Employee will not
disclose such Confidential Information, either directly or indirectly, to any
third person or entity without the prior written consent of the Company. In the
event that the Employee becomes legally required to disclose any Confidential
Information, he will provide the Company with prompt notice thereof so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 6(b) to permit a particular
disclosure. In the event that such protective order or other remedy is not
obtained, or that the Company waives compliance with the provisions of this
Section 6(b) to permit a particular disclosure, the Employee will furnish only
that portion of the Confidential Information which he is legally required to
disclose and, at the Company's expense, will cooperate with the efforts of the
Company to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information. This
confidentiality covenant has no temporal, geographical or territorial
restriction. The Employee will promptly supply to the Company all property,
keys, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical
data or any other tangible product or document which has been produced by,
received by or otherwise submitted to the Employee during the Employee's
employment with the Company.
c) NON-COMPETITION. By and in consideration of the
Company's entering into this Agreement and the payments to be made and benefits
to be provided by the Company hereunder, the Employee agrees that he will not
for a period of two years following the Termination Date, directly or
indirectly, own, manage, operate, join, control, be employed or retained as a
consultant by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including but not limited to holding any
position as a shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor in (other than in TDEC in a
-6-
<PAGE>
manner not prohibited by Section 1 hereof), any "Restricted Enterprise" (as
defined below) doing or proposing to do business in any of the territories in
which, as of the Termination Date, the Company or its subsidiaries have or are
developing operations; PROVIDED, that in no event shall the passive ownership as
an inactive investor of less than 5% of the outstanding equity securities of any
issuer (other than the Company, except for shares owned or subject to Options
held on the date hereof) whose securities are registered under the Securities
Exchange Act of 1934, as amended, standing alone, be prohibited by this Section
6(c). For purposes of this Section 6(c), the term "Restricted Enterprise" shall
mean any person, corporation, partnership or other entity that engages, directly
or indirectly, in the development, ownership or operation of commercial or
industrial energy systems, including, but not limited to, district heating or
cooling, cogeneration relating to industrial and district heating and cooling,
or the provision of building management services with respect to heating,
ventilating or air conditioning.
d) NON-SOLICITATION. The Employee shall not, and shall
not cause or encourage any other person to, interfere with or harm, or attempt
to interfere with or harm, the relationship of the Company or any of its
subsidiaries or affiliates with, or endeavor to entice away from the Company or
any of its subsidiaries or affiliates, or hire or retain as a consultant or
advisor, any person who was an employee of the Company, or any of its
subsidiaries or affiliates on or within six month prior to the Termination Date,
other than an individual who has not been employed by the Company, or any of its
subsidiaries or affiliates for more than one year following such individual's
termination.
e) COOPERATION. The Employee agrees to reasonably
cooperate with the Company, its subsidiaries and affiliates and to be reasonably
available to the Company, its subsidiaries and affiliates with respect to past,
continuing and/or future matters arising out of the Employee's employment or any
other relationship with the Company, its subsidiaries and affiliates, whether
such matters are business-related, legal (including litigation) or otherwise;
provided such cooperation does not materially interfere with his new full time
employment. The Company shall reimburse the Employee for all reasonable
out-of-pocket expenses incurred in connection with such cooperation.
f) NO EXISTING LITIGATION. The Employee represents that
with respect to any act or omission occurring, or state of facts existing, on or
prior to the date of execution of this Agreement, he has not filed any
complaints, charges or lawsuits against any Releasee with any government agency
or any court or other tribunal.
g) REMEDIES. The Employee agrees that any breach of the
terms of Section 6(a), (b), (c) or (d) would result in irreparable injury and
damage to the Company, its subsidiaries and/or affiliates for which the Company,
its subsidiaries and/or affiliates would have no adequate remedy at law; the
Employee therefore also agrees that in the event of said breach or any threat of
breach, the Company, its subsidiaries and/or
-7-
<PAGE>
affiliates, as applicable, shall, in addition to the remedies provided in
Section 2(f) above, be entitled to an immediate injunction and restraining order
to prevent such breach and/or threatened breach and/or continued breach by the
Employee and/or any and all persons and/or entities acting for and/or with the
Employee, without having to prove damages, in addition to any other remedies to
which the Company, its subsidiaries and/or affiliates may be entitled at law or
in equity. The terms of this Section 6(g) shall not prevent the Company, its
subsidiaries and/or affiliates from pursuing any other available remedies for
any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Employee and enforcing the provisions of Section
2(f) of this Agreement. The Employee and the Company further agree that the
provisions of the covenants contained in Section 6(a), (b), (c) and (d) are
reasonable and necessary to protect the businesses of the Company, its
subsidiaries and affiliates because of the Employee's access to Confidential
Information and his material participation in the operation of such businesses.
The Employee acknowledges that the Company would not have entered into this
Agreement absent the inclusion of Section 6(a), (b), (c) and (d). Should a court
or arbitrator determine, however, that any provision of the covenants contained
in this Section 6 are not reasonable or valid, either in period of time,
geographical area, or otherwise, the parties hereto agree that such covenants
should be interpreted and enforced to the maximum extent which such court or
arbitrator deems reasonable or valid.
The Company agrees that any breach of this Agreement by the
Company or its affiliates shall result in the immediate acceleration of all
amounts due the Employee. The terms of this Section 6(g) shall not prevent the
Employee from pursuing any other available remedies for any breach or threatened
breach hereof, including but not limited to the recovery of damages and
enforcing the provisions of Section 6(a) hereof.
The existence of any claim or cause of action by the Employee
against the Company, its subsidiaries and/or affiliates, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants contained in this Section 6.
h) TDEC. In the event TDEC refinances or restructures
its debt obligations, the Company shall use its good faith efforts to allocate
sufficient debt basis to the Employee so that the Employee does not recognize
income as a result of such refinancing or restructuring or offer the Employee
the opportunity to guaranty sufficient debt to avoid income recognition on such
refinancing or restructuring, but only if, in the sole discretion of the
Company, such efforts (i) could not adversely impact the Company or its
affiliates or TDEC, (ii) are consistent with the Company's and TDEC's
obligations to their securityholders, (iii) are permitted by all applicable laws
and regulations and (iv) are commercially reasonable; it being understood that
the foregoing shall in no way impose any obligations upon the Company or TDEC to
engage in or to refrain from
-8-
<PAGE>
engaging in any transaction, including, but not limited to, those impacting
TDEC's capital structure.
7. NO ADMISSIONS. Nothing in this Agreement shall be construed
as an admission by any Releasee of any liability on its part under any federal,
state, or local law or regulation or the common law. The Employee also
acknowledges that he has had the opportunity to consult with an attorney prior
to signing this Agreement, and that he has read and understood all of the
provisions of this Agreement.
8. ENTIRE AGREEMENT. This Agreement, the agreements governing
the Options and Restricted Stock as amended by this Agreement and the letter
agreement dated the date hereof between Elyo S.A. and the Employee, constitute
the entire agreement between the parties with respect of the subject matter
hereof and supersedes any and all other agreements either oral or in writing
between the parties hereto with respect to the subject matter hereof, including,
but not limited to, the Employment Agreement, and contain all of the covenants
and agreements between the parties with respect to said matters. Each party to
this Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any Releasee, or anyone
acting on behalf of any Releasee, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Agreement shall be
valid or binding.
9. BINDING EFFECT. This Agreement shall be binding upon any
and all successors and assigns of the Employee and the Company.
10. GOVERNING LAW. Except for issues or matters as to which
federal law is applicable, this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof.
11. SEVERABILITY. If and to the extent that any court of
competent jurisdiction holds any provision or part of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
12. HEADINGS. The headings contained herein are solely for the
purpose of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two
counterparts.
14. PRESS RELEASE; CONFIDENTIALITY. Subject to applicable law,
the Parties shall mutually agree on the form of any press release relating to
the Employee's resignation from the Company. Other than with respect to
information provided in any
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<PAGE>
such press release or required to be disclosed by court order, the Employee
agrees not to disclose the terms of this Agreement to any person or entity,
other than the Employee's immediate family and financial or legal advisors who
agree to be bound by this confidentiality provision.
15. ARBITRATION. Except as qualified below, any dispute arising
under, out of or in connection with this Agreement shall be submitted to binding
arbitration in the City of New York by and in accordance with the rules and
procedures of the American Arbitration Association. The decision of the
arbitrator(s) shall be final and binding on all parties and judgment may be
entered thereon in any court. The Employee acknowledges that the Company's
remedy at law for any breach or threatened breach by the Employee of Sections
6(a), (b), (c) or (d) will be inadequate. Therefore, the Company shall be
entitled to injunctive and other equitable relief from a court of law or other
tribunal restraining the Employee from violating those covenants until such time
as a final and binding determination is made by the arbitrator(s).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and date indicated below.
THOMAS R. CASTEN
/S/ THOMAS R. CASTEN
-------------------------------
Dated: JANUARY 19, 2000
------------------------
TRIGEN ENERGY CORPORATION
By: /S/ RICHARD E. KESSEL
---------------------------
Title: EXECUTIVE VICE PRESIDENT
------------------------
Dated: JANUARY 19, 2000
------------------------
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<PAGE>
Exhibit A
Separation Agreement and Release
<TABLE>
<S> <C>
Shares of Restricted Stock 38,199
Shares Underlying Vested and Unvested Options 75,900
</TABLE>
<PAGE>
Exhibit 99(i)
SUEZ LYONNAISE DES EAUX LETTERHEAD
DELEGATION DE POUVOIR
Je soussigne, Gerard MESTRALLET, President du Directoire, agissant en vertu
des decisions du Directoire en date du 30 juin 1997 et du 19 octobre 1998,
Delegue, avec faculte de sub-delegation, a :
Monsieur Philippe de MARGERIL, Secraetire General,
tous pouvoirs a l'effet de :
- signer la correspondance courante de la Societe,
- contracter toutes assurances de quelque nature que ce soit, payer les
primes, accepter et recevoir toutes indemnisations,
- representer la Societe dans toutes Assemblees des Societes, Associations,
Groupements ou Syndicats dont elle fait partie,
- deposer et enregistrer toutes marques, brevets et autres droits de
propriete intellectuelle, accepter et consentir tous accords de cession ou
de licence, avec faculte de subdelegation aux Avocats et Conseils pour
l'accomplissement des formalites,
- faire toutes acquisitions de biens meubles utiles a l'objet social,
- accepter et consentir tous baux et locations, faire toutes resiliations,
- souscrire, acquerir, ceder toutes actions, parts sociales, obligations,
bons, et autres valeurs mobilieres de toute nature,
- faire ouvrir et fonctionner au nom de la Societe tous comptes courants de
depots ou d'avance aupres de l'Administration de Cheques Postaux, de la
Banque de France et tout autre etablissement prive ou public,
- operer tous depots, retraits, transferts de fonds, rentes, creances ou
autres valeurs appartenant a la Societe,
- emettre, endosser, acquitter et signer, a quelque titre que ce soit, tous
billets, cheques et effets de commerce,
- etablir et signer tous memoires de sommes qui peuvent ou pourront etre
dues a la Societe pour quelque cause que ce soit par toutes
administrations publiques, communales departementales et de l'Etat ou par
toutes personnes,
- recevoir de toutes administrations publiques et de l'Etat, des
departements, villes et communes et, en general, de toutes collectivites
publiques ou privees et de toutes personnes, les sommes qui peuvent etre
dues a la Societe, a quelque titre et pour quelque cause que ce soit, en
donner quittances,
- payer toutes sommes dues par la Societe a quelque titre et pour quelque
cause que ce soit et en retirer quittances,
- en cas de difficultes quelconques et specialement a defaut de paiement,
engager toutes poursuites, faire tous commandements et sommations,
- en cas de redressement judiclaire de quelque debiteur, declarer toutes
creances, faire toutes affirmations, repondre a toutes consultations,
accorder tous delais et remises,
6
<PAGE>
- representer la Societe en justice, tant en demandant qu'en defendant,
elire domicile; engager toutes instances et actions et y defendre devant
toutes jurisdictions competentes; signer et deposer toutes requetes et
tous memoires; proposer et accepter toutes transactions ou tous compromis;
se desister de toutes instances et actions, acquiescer a tous jugements,
arrets et ordonnances; interjeter tous appels et former tous pourvois,
- faire toutes declarations aupres de toutes administrations fiscales,
presenter toutes demandes de degrevement et restitution d'impots,
contributions, taxes et droits generalement quelconques, signer et deposer
toutes requetes et tous memoires, engager toutes instances et y defendre
devant toutes juridictions competentes, proposer et accepter toutes
transactions, se desister de toutes instances et actions, acquiescer a
tous arrets et jugements, et former tous pourvois,
- remplir toutes formalites necessaires pour soumettre la Societe aux lois,
arretes et reglements de tous pays ou elle pourrait etre amenee a faire
des operations,
- formuler toutes demandes d'autorisation ou d'agrement et generalement
contracter tous engagements lies auxdites demandes,
- representer la Societe a l'egard de toutes administrations tant en France
qu'a l'etranger.
Aux effets ci-dessus, passer et signer tous actes et pieces, fournir toutes
justifications, elire domicile et generalement, faire le necessaire.
La presente delegation annule et remplace celle consentie en pareille
matiere en date du 1(er) Juillet 1997.
Fait a Nanterre, le 27 octobre 1998
/s/ Gerard Nestrallet
Gerard NESTRALLET
7
<PAGE>
SUEZ LYONNAISE DES EAUX LETTERHEAD
DELEGATION DE POUVOIR
Je soussigne, Philippe de MARGERIE, Secretaire General, agissant en vertu
d'une delegation consentie en date du 27 Octobre 1998 par Monsieur Gerard
MESTRALLET, President du Directoire.
DELEGUE A:
Monsieur Patrice HERBET, Directeur Juridique France et International,
tous pouvoirs a l'effet de:
- signer la correspondance courante de la Societe,
- deposer et enregistrer toutes marques, brevets et autres droits de
propriete intellectuelle, accepter et consentir tous accords de cession ou
de licence, avec faculte de subdelegation aux Avocats et Conseils pour
l'accomplissement des formalites,
- etablir et signer tous memoires de sommes qui peuvent ou pourront etre
dues a la Societe pour quelque cause que ce soit par toutes admistrations
publiques, communales, departementales et de l'Etat ou par toutes
personnes,
- en cas de difficultes quelconques et specialement a defaut de paiement,
engager toutes poursuites, faire tous commandements et sommations,
- en cas de redressement judiciaire de quelque debitieur, declarer toutes
creances,
- representer la Societe en justice, tant en demandant qu'en defendant,
elire domicile; engager toutes instances et actions et y defendre devant
toutes juridictions competentes; signer et deposer toutes requetes et tous
memoires; proposer et accepter toutes transactions ou tous compromis; se
desister de toutes instances et actions, acquiescer a tous jugements,
arrets et ordonnances; interjeter tous appels et former tous pourvois,
- remplir toutes formalites necessaires pour soumettre la Societe aux lois,
arretes et reglements de tous pays ou elle pourrait etre amenee a faire
des operations,
- formuler routes demandes d'autorisation ou d'agrement contracter tous
engagements lies auxdites demandes,
- repesenter la Societe a l'egard de toutes adminstrations tant en France
qu'a l'etranger.
Aux effets ci-dessus, passer et signer tous actes et pieces, fournir toutes
justifications, elire domicile et generalement, faire le necessaire.
Fait a Nanterre, le 27 octobre 1998
/s/ Philippe de Margerie
Philippe de MARGERIE
8
