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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
SUN COMPANY, INC
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(Name of Issuer and Person Filing Statement)
Common Stock, $1 par value
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(Title of Class of Securities)
866-762107
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(CUSIP Number of Class of Securities)
ROBERT M. AIKEN, JR.
Senior Vice President and
Chief Financial Officer
SUN COMPANY, INC.
Ten Penn Center
1801 Market Street
Philadelphia, PA 19103
Telephone: (215) 977-3000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person Filing Statement)
Copies to:
JONATHAN C. WALLER, ESQ. WILLIAM L. ROSOFF, ESQ.
Sun Company, Inc. Davis Polk & Wardwell
Ten Penn Center 450 Lexington Avenue
1801 Market Street New York, New York 10017
Philadelphia, PA 19103 (212) 450-4000
(215) 977-3000
June 13, 1995
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(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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$986,200,000 $197,240
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*Assumes (i) purchase of 6,400,000 shares of Common Stock at
$33 per share, and (ii) acceptance for exchange of
25,000,000 shares of Common Stock at a market value of $31
per share (being the average of the high and low prices of
the shares of Common Stock on the New York Stock Exchange
on June 12, 1995).
[ ] Check box if any part of the fee is offset as provided by Rule 0-11
(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number or the
Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable Filing Party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
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Item 1. Security and Issuer.
(a) The name of the issuer is Sun Company, Inc., a Pennsylvania
corporation (the "Company"), which has its principal executive offices at Ten
Penn Center, 1801 Market Street, Philadelphia, PA 19103 (telephone number
(215) 977-3000).
(b) This schedule relates to the offers by the Company to: (i) exchange,
upon the terms and subject to the conditions set forth in the Offer to
Purchase/Offering Circular (the "Offer to Purchase/Offering Circular") dated
June 13, 1995 and the related Letter of Transmittal (copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively, and which
together constitute the "Exchange Offer")), up to 25,000,000 shares of Common
Stock, $1 par value, of the Company (such shares, together with all other
issued and outstanding shares of Common Stock of the Company, are herein
referred to as the "Common Shares") for depositary shares (the "Depositary
Shares"), each Depositary Share representing one-half of a share of the
Company's Series A Cumulative Preference Stock, no par value, at a rate of one
Depositary Share for each Common Share exchanged; and (ii) purchase, upon the
terms and subject to the conditions set forth in the Offer to
Purchase/Offering Circular and the related Letter of Transmittal (a copy of
which is attached hereto as Exhibit (a)(3), and which together with the Offer
to Purchase/Offering Circular constitutes the "Cash Offer"), up to 6,400,000
Common Shares at a cash price not greater than $33 nor less than $30 per
Common Share. The information set forth in "The Offers -- Terms of Exchange
Offer," "The Offers -- Terms of Cash Offer," "The Offers -- 'Odd Lot'
Procedures Applicable to Tenders by Holders of Fewer than 100 Common Shares
Pursuant to the Cash Offer" and "Miscellaneous" in the Offer to
Purchase/Offering Circular, is incorporated herein by reference.
(c) The information set forth in "Price Range of Common Shares" in the
Offer to Purchase/Offering Circular is incorporated herein by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth under "Source and Amount of Funds" in
the Offer to Purchase/Offering Circular is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
(a)-(j) The information set forth in "Summary -- Background and Purpose
of the Offers", "The Offers -- Background and Purpose" and "-- Status of
Common Shares Acquired Pursuant to the Offers" in the Offer to
Purchase/Offering Circular, is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth under "Miscellaneous" in the Offer to
Purchase/Offering Circular, and the information set forth in Annex B to the
Offer to Purchase/Offering Circular, is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships With Respect
to the Issuer's Securities.
The information set forth under "Miscellaneous" in the Offer to
Purchase/Offering Circular is incorporated herein by reference.
Item 6. Persons Retained, Employed or to be Compensated.
The information set forth under "The Offers--Commissions and Fees" and
"Fees" in the Offer to Purchase/Offering Circular is incorporated herein by
reference.
Item 7. Financial Information.
(a) The financial information set forth under "Summary Historical
Financial Data" and "Historical and Pro Forma Capitalization" in the Offer to
Purchase/Offering Circular and in Exhibits (g)(1) and (g)(2) hereto, is
incorporated herein by reference.
(b) The pro forma financial information set forth under "Summary Pro
Forma Financial Data" and "Historical and Pro Forma Capitalization" in the
Offer to Purchase/Offering Circular and in Exhibit (g)(3) hereto, is
incorporated herein by reference.
Item 8. Additional Information.
(a)-(e)None or not applicable.
Item 9. Material to be Filed as Exhibits.
(a)(1) Form of Offer to Purchase/Offering Circular dated June 13, 1995.
(a)(2) Form of Letter of Transmittal relating to the Exchange Offer.
(a)(3) Form of Letter of Transmittal relating to the Cash Offer, together
with Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(4) Form of Notice of Guaranteed Delivery.
(a)(5) Form of letter from the Company to brokers, dealers,
commercial banks, trust companies and other nominees dated June
13, 1995.
(a)(6) Form of letter from brokers, dealers, commercial banks and trust
companies to their clients dated June 13, 1995.
(a)(7) Form of letter to shareholders from Robert H. Campbell,
Chairman of the Board, Chief Executive Officer and President of
the Company, dated June 13, 1995.
(a)(8) Form of Summary Advertisement dated June 13, 1995.
(a)(9) Form of Press Release dated June 13, 1995.
(b) Not applicable.
(c) Not applicable.
(d) Tax Opinion of Davis Polk & Wardwell dated June 13, 1995.
(e) Not applicable.
(f) Not applicable.
(g)(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended by the Company's report on Form
10-K/A dated April 12, 1995 (incorporated by reference to the Form
10-K filed March 3, 1995 and the Form 10-K/A amendment filed April
12, 1995).
(g)(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 (incorporated by reference to the Form 10-Q
filed May 4, 1995).
(g)(3) The Company's Current Report on Form 8-K dated June 13, 1995
(incorporated by reference to the Form 8-K filed June 13, 1995).
(g)(4) Deposit Agreement dated as of June 13, 1995 between the
Company and First Chicago Trust Company of New York, as
Depositary for the Company's Series A Cumulative Preference
Stock.
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.
SUN COMPANY, INC.
By:
/s/ Robert M. Aiken, Jr.
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Robert M. Aiken, Jr.
Senior Vice President and
Chief Financial Officer
Dated: June 13, 1995
Offer to Purchase/Offering Circular
Sun Company, Inc.
Offer to Exchange
Up to 25,000,000 Shares of its Common Stock,
$1 Par Value, for Depositary Shares,
Each Depositary Share Representing One-Half of a Share of
its Series A Cumulative Preference Stock, No Par Value
(Targeted Growth Enhanced Terms SecuritiesSM TARGETSSM)
Offer to Purchase for Cash
Up to 6,400,000 Shares of its Common Stock, $1 Par Value
THE OFFERS, THE PRORATION PERIODS AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 24, 1995, UNLESS THE OFFERS
ARE EXTENDED.
Sun Company, Inc., a Pennsylvania corporation (the "Company" or "Sun"),
hereby offers its shareholders the opportunity to: (i) exchange, upon the
terms and conditions contained herein and in the related BLUE Letter of
Transmittal (which together constitute the "Exchange Offer") up to 25,000,000
shares of its Common Stock, $1 par value per share (such shares, together with
all other outstanding shares of Common Stock of the Company, are referred to
herein as the "Common Shares"), for depositary shares (the "Depositary
Shares"), each Depositary Share representing one-half of a share of the
Company's Series A Cumulative Preference Stock, no par value (referred to
herein as the "Preference Stock"), at the rate of one Depositary Share for
each Common Share tendered; and (ii) tender, upon the terms and subject to the
conditions set forth herein and in the related YELLOW Letter of Transmittal
(which together constitute the "Cash Offer"), up to 6,400,000 Common Shares at
cash prices not greater than $33 nor less than $30 per Common Share specified
by such shareholders. The Exchange Offer and the Cash Offer are being made
simultaneously by the Company and are referred to collectively herein as the
"Offers." Holders of Common Shares may elect to tender all or a portion of
the Common Shares held by them in either the Exchange Offer or the Cash Offer
or a portion of their Common Shares in each Offer; provided, however, that no
holder of Common Shares may tender the same Common Shares in both the Exchange
Offer and the Cash Offer. If more than 25,000,000 Common Shares are validly
tendered prior to the Expiration Date (as defined below) and not withdrawn
pursuant to the Exchange Offer, or more than 6,400,000 Common Shares are
validly tendered at or below the Purchase Price (as defined below) prior to
the Expiration Date and not withdrawn pursuant to the Cash Offer, the Company
will accept such shares for exchange or payment, as the case may be, on a
substantially pro rata basis. See "The Offers--Proration." The procedures for
tender of Common Shares pursuant to the Offers is described in "The
Offers--Procedure for Tender."
Each Depositary Share represents ownership of one-half of a share of
Preference Stock to be deposited with First Chicago Trust Company of New York,
as Preference Stock Depositary, and entitles the owner to all of the
proportionate rights, preferences and privileges of the Preference Stock
represented thereby. Dividends on the Preference Stock are cumulative and will
accrue from June 12, 1995 at a rate of $3.60 per annum, payable quarterly in
arrears in cash on or before the 13th day of each March, June, September and
December, commencing on September 13, 1995. The proportionate annual dividend
rate for each Depositary Share is $1.80, and dividends will be payable on the
Depositary Shares as, when and if paid on the Preference Stock. Each share of
Preference Stock will have a liquidation preference equal to twice the fair
market value of a Depositary Share on its date of issuance, plus accrued and
unpaid dividends. The proportionate liquidation preference of each Depositary
Share will be half of this amount.
At any time and from time to time, the Company may call the outstanding
shares of Preference Stock (and thereby the Depositary Shares), in whole or in
part, for redemption. On the redemption date (the "Redemption Date") with
respect to any such redemption, the Company, in redeeming shares of Preference
Stock, shall cause to be delivered to the holders of Depositary Shares
representing such Preference Stock, in exchange for each such Depositary
Share, the following consideration:
(1) in the event such Redemption Date is prior to Friday June 12,
1998 (the "Specified Date"), (i) Common Shares having a value initially
equal to $42.39976, declining by $.002222 on each day following June 12,
1995 (the "Accrual Date") to $40.13332 on April 12, 1998, and equal to $40
thereafter through June 11, 1998 (the "Depositary Share Call Price"), plus
(ii) a cash amount equal to all proportionate accrued but unpaid dividends
thereon; and
(2) in the event such Redemption Date is on or after the Specified
Date, (i) one Common Share, subject to adjustment in certain events, and
(ii) a cash amount equal to all proportionate accrued but unpaid dividends
thereon.
The Company currently intends to redeem all the outstanding Preference Stock
(and thereby the Depositary Shares) on the Specified Date if not theretofore
redeemed.
Upon certain mergers, consolidations or other extraordinary transactions
of the Company at any time, each outstanding Depositary Share will be entitled
to receive consideration of the same type as is received by holders of the
Common Shares in such transaction and having a fair value equal to the value
of the Common Shares that such Depositary Share would receive if it were
redeemed by the Company at such time. For a description of the Preference
Stock and the Depositary Shares, see "Description of Preference Stock" and
"Description of Depositary Shares."
The opportunity for equity appreciation afforded by an investment in the
Depositary Shares (and the Preference Stock) is limited because the Company
may, at its option, call the Preference Stock (and thereby the Depositary
Shares) at any time prior to the Specified Date at the Preference Stock Call
Price (as defined below), and may be expected to do so prior to the Specified
Date if, among other things, the market price of the Common Shares has
theretofore exceeded the Depositary Share Call Price.
Pursuant to the Cash Offer, the Company will determine a single cash
price per Common Share (not greater than $33 nor less than $30 per Common
Share) that it will pay for the Common Shares validly tendered pursuant to the
Cash Offer (the "Purchase Price"), taking into account the number of Common
Shares so tendered and the prices specified by tendering shareholders. The
Company will select the Purchase Price that will allow it to purchase
6,400,000 Common Shares (or such lesser number as are validly tendered at
prices not greater than $33 nor less than $30 per Common Share) pursuant to
the Cash Offer. Upon the terms and subject to the conditions of the Cash
Offer, including the provisions thereof relating to proration, the Company
will purchase, at the Purchase Price, all Common Shares validly tendered at
prices at or below the Purchase Price prior to the Expiration Date and not
withdrawn.
June 13, 1995(Cover continued on next page)
The Common Shares are listed and principally traded on the New York Stock
Exchange, Inc. (the "NYSE") and are listed on the Philadelphia Stock
Exchange, Inc. under the symbol "SUN." On June 12, 1995, the last full day of
trading prior to the announcement of the Offers and of the reduction in the
dividend with respect to the Common Shares, the closing sale price of the
Common Shares on the NYSE as reported on the Composite Tape was $31 1/4 per
Common Share. Shareholders are urged to obtain a current market quotation for
the Common Shares.
Application will be made to list the Depositary Shares on the NYSE upon
official notice of issuance and subject to adequacy of distribution and other
listing requirements. If these conditions are not met, it is expected that
the Depositary Shares will trade in the over-the-counter market. There can be
no assurance that there will be an active trading market for the Depositary
Shares.
THE EXCHANGE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST
2,500,000 COMMON SHARES BEING VALIDLY TENDERED PURSUANT TO THE EXCHANGE OFFER
AND NOT WITHDRAWN. THE CASH OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER
OF COMMON SHARES BEING TENDERED. FOR A DISCUSSION OF CONDITIONS OF THE OFFERS,
SEE "THE OFFERS -- CONDITIONS OF THE OFFERS."
I M P O R T A N T
Any shareholder desiring to accept either Offer should either (1)
request his or her broker, dealer, commercial bank, trust company or nominee
to effect the transaction for him or her or (2) complete the appropriate
Letter of Transmittal or a facsimile thereof, sign it in the place required,
have his or her signature thereon guaranteed if required by such Letter of
Transmittal and forward it and any other required documents to First Chicago
Trust Company of New York (which is referred to herein with respect to the
Exchange Offer, as the "Exchange Agent," and with respect to the Cash Offer,
as the "Depositary," and is sometimes referred to herein as the "Exchange
Agent and Depositary") at the address set forth on such Letter of Transmittal,
and either deliver the certificates for such Common Shares to the Exchange
Agent and Depositary along with the appropriate Letter of Transmittal or
tender such Common Shares pursuant to the procedure for book-entry transfer
set forth herein. Shareholders having Common Shares registered in the name of
a broker, dealer, commercial bank, trust company or nominee must contact such
person if they desire to tender their Common Shares. Shareholders who wish to
tender Common Shares and whose certificates for such Common Shares are not
immediately available should tender such Common Shares by following the
procedures for guaranteed delivery set forth herein. Shareholders tendering
Common Shares pursuant to the Cash Offer must complete the section of the
YELLOW Letter of Transmittal relating to the price at which they are tendering
Common Shares in order to validly tender Common Shares in the Cash Offer.
Questions and requests for assistance or for additional copies of this
Offer to Purchase/Offering Circular and the applicable Letter of Transmittal
and Notice of Guaranteed Delivery may be directed to Morrow & Co., Inc. (the
"Information Agent") at the following address and telephone number:
Morrow & Co., Inc.
909 Third Avenue
New York, NY 10022
toll free (800) 566-9058.
Banks and Brokerage Firms please call: (800) 662-5200.
You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offers.
NEITHER THESE TRANSACTIONS NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The Offers are not being made to, nor will the Company accept tenders
from, holders of Common Shares in any state of the United States or any
foreign jurisdiction in which the Offers or the acceptance thereof would not
be in compliance with the laws of such state or foreign jurisdiction. The
Company is not aware of any state or foreign jurisdiction the laws of which
would prohibit the Offers or such acceptance.
Each shareholder should decide for himself or herself whether to tender
Common Shares pursuant to one or more of these Offers. Neither the Company
nor its Board of Directors make any recommendation that shareholders tender or
refrain from tendering their Common Shares pursuant to either Offer and no one
has been authorized to make such recommendations on behalf of the Company.
This is a matter for each shareholder to determine after consultation with his
or her advisors, including tax counsel, on the basis of his or her own
financial position and requirements.
The Exchange Offer is being made by the Company in reliance on an
exemption from the registration requirements of the Securities Act of 1933, as
amended, contained in Section 3(a)(9) thereof. The Company will not pay any
commission or other remuneration to any broker, dealer, salesman or other
person for soliciting tenders of Common Shares. However, regular employees of
the Company (who will not be additionally compensated therefor) will answer
inquiries concerning the Exchange Offer. In addition, Morrow & Co., Inc., the
Information Agent, and First Chicago Trust Company of New York, the Exchange
Agent and Depositary, will assist shareholders in obtaining copies of the
materials relating to the Offers.
The Company has no arrangement with any broker, dealer, salesman or other
person to solicit tenders of Common Shares. No person has been authorized to
give any information or to make any representation in connection with the
Offers other than those contained or incorporated by reference in this Offer
to Purchase/Offering Circular. If given or made, such information or
representations should not be relied upon as having been authorized by the
Company. These Offers do not constitute an offer to exchange or purchase or a
solicitation of an offer to exchange or purchase any securities, other than
the securities covered by these Offers, by the Company or any other person or
any offer of or solicitation to exchange or purchase the securities by the
Company or any such other person in any jurisdiction where, or to any person
to whom, it is unlawful to make any such offer or solicitation.
Neither the delivery of these Offers nor any exchange or purchase made
pursuant hereto shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the respective
dates as of which information is given herein.
TABLE OF CONTENTS
Available Information iii
Incorporation of Certain Documents by Reference iii
Summary 1
Sun Company, Inc 1
Background and Purpose of the Offers 1
The Exchange Offer 3
The Cash Offer 5
Terms of the Depositary Shares and Preference Stock 7
Summary Historical Financial Data 10
Summary Pro Forma Financial Data 11
Historical and Pro Forma Capitalization 14
Price Range of Common Shares 15
The Offers 15
Background and Purpose 15
Terms of Exchange Offer 16
Terms of Cash Offer 16
No Duplicate Tenders 17
Expiration of Offers; Extension of Offers 17
Proration 18
Procedure for Tender 19
Withdrawal of Tendered Common Shares 23
Acceptance; Delivery of Consideration 23
Conditions of the Offers 24
Commissions and Fees 26
Status of Common Shares Acquired Pursuant to the Offers 26
Exchange Agent and Depositary 26
Information Agent 27
Description of Depositary Shares 28
Description of Preference Stock 32
Source and Amount of Funds 36
Certain United States Federal Income Tax Consequences 36
United States Holders 37
Non-United States Holders 41
Fees 41
Miscellaneous 41
Annex A -- Statement of Designation for Series A Cumulative
Preference Stock
Annex B -- Recent Transactions in Securities
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Pursuant to
Rule 13e-4 of the General Rules and Regulations under the Exchange Act, the
Company has filed with the Commission an Issuer Tender Offer Statement on
Schedule 13E-4, together with exhibits (the "Schedule 13E-4"), furnishing
certain additional information with respect to the Offers. The Schedule 13E-4
and the other reports, proxy statements and information filed by the Company
with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at its regional offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the public reference section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Reports and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and
the Philadelphia Stock Exchange, Inc., 1900 Market Street, Philadelphia,
Pennsylvania, 19103.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Offer to Purchase/Offering Circular by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, as amended by the Company's report on Form 10-K/A
dated April 12, 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
3. The Company's Current Report on Form 8-K dated June 13, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Offer to Purchase/Offering
Circular and prior to the termination of the Offers made hereunder shall be
deemed to be incorporated by reference into this Offer to Purchase/Offering
Circular and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Offer to Purchase/Offering Circular to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Offer to Purchase/Offering Circular.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Offer to Purchase/Offering Circular is
delivered, upon written or oral request, a copy of any or all of the documents
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to: Sun Company, Inc., Ten Penn Center, 1801
Market Street, Philadelphia, Pennsylvania 19103-1699 Attention: Shareholder
Relations, Telephone: (215) 977-3000.
SUMMARY
The following is a summary of certain information included in this Offer to
Purchase/Offering Circular or in documents referred to herein. It is not
intended to be complete and is qualified in its entirety by the more detailed
information found in this Offer to Purchase/Offering Circular, which should be
read with care. Capitalized terms used in the following summary and not
defined therein have the meanings specified elsewhere in this Offer to
Purchase/Offering Circular.
SUN COMPANY, INC.
Business.......................... The Company is principally a petroleum
refiner and marketer with interests in
oil and gas production and coal mining
operations. The Company's petroleum
refining and marketing operations
include the manufacturing and
marketing of a full range of petroleum
products, including fuels, lubricants
and petrochemicals, and the
transportation of crude oil and
refined products. These operations
are conducted in the United States.
The Company's coal operations, which
consist of coal mining and coke
manufacturing, are conducted in the
eastern United States, while oil and
gas development and production
activities are conducted in the United
Kingdom sector of the North Sea. Sun
also has interests in real estate
operations in the United States which
are subject to a plan of disposition.
The Company was incorporated in
Pennsylvania in 1971 and it or its
predecessors have been active in the
petroleum industry since 1886.
BACKGROUND AND PURPOSE OF THE OFFERS
Recent Developments............... As part of a restructuring program to
strengthen the Company's financial
position and focus on its core
businesses, on June 8, 1995, the
Company completed the sale of its
remaining 55% interest in Suncor, a
Canadian integrated oil company, for
gross proceeds of US$855 million. On
June 13, 1995, the Company announced
that at least $335 million of the
US$635 million net cash proceeds to be
received in June 1995 from the sale of
Suncor would be used to reduce Company
indebtedness and that up to $300
million would be used to repurchase
Common Shares initially pursuant to
the Cash Offer and thereafter through
a program authorized by the Board of
Directors of the Company to purchase
up to $100 million of Common Shares in
the open market from time to time
depending on prevailing market
conditions and opportunities. The
Company also announced on June 13,
1995 that as part of its
restructuring, it had adopted a plan
to reduce its cost structure through a
reduction of approximately 800
primarily staff and support positions
in its core businesses and other
cost-reduction measures expected to
result in aggregate pretax cost
savings of $110 million annually. The
Company expects to record a provision
for the employee terminations and the
write-down to estimated net realizable
value of certain refining and
marketing and coal assets of
approximately $100 million after tax
during the second quarter of 1995.
The Company also announced that it
reduced the annual dividend to be paid
with respect to the Common Shares from
$1.80 to $1.00 per share, effective in
respect of the next quarterly dividend
payable on September 8, 1995 to
holders of record on August 10, 1995.
The reduced dividend and the
anticipated cost reductions will
enable the Company to utilize a
greater portion of its operating cash
flow for growth and other investment
opportunities in its core businesses.
In addition, the Company announced
that holders of Depositary Shares on
August 10, 1995 shall receive a cash
dividend payment of $.45 per share on
September 13, 1995.
Purpose........................... The purpose of the Exchange Offer is
to provide those shareholders whose
primary objective is current income
with an opportunity, subject to the
terms and conditions of the Exchange
Offer, to exchange all or a portion of
their Common Shares for an equal
number of yield-oriented Depositary
Shares entitled to receive an annual
cash dividend of $1.80 per share. The
Cash Offer allows shareholders,
subject to the terms and conditions of
the Cash Offer, to tender all or a
portion of their Common Shares for
cash while allowing them to retain, in
respect of their remaining Common
Shares, a continuing equity interest
in the Company.
No Duplicate Tenders.............. Holders of Common Shares may elect to
tender all or a portion of the Common
Shares held by them pursuant to either
the Exchange Offer or the Cash Offer,
or to allocate a portion of the Common
Shares held by them to the Exchange
Offer and a portion to the Cash Offer;
provided, however that no holder may
tender the same Common Shares pursuant
to both the Exchange Offer and the
Cash Offer.
THE EXCHANGE OFFER
Expiration........................ 12:00 Midnight, New York City time, on
Monday, July 24, 1995 unless extended
(the "Expiration Date").
Exchange Ratio.................... One Depositary Share, representing
ownership of one-half share of
Preference Stock, for each Common
Share validly tendered and not
withdrawn prior to the Expiration
Date.
Number of Shares.................. Subject to the terms and conditions of
the Exchange Offer, the Company will
accept for exchange up to 25,000,000
Common Shares validly tendered in the
Exchange Offer and not withdrawn prior
to the Expiration Date.
Minimum Tender Condition.......... The Exchange Offer is conditioned
upon, among other things, at least
2,500,000 Common Shares being validly
tendered pursuant to the Exchange
Offer and not withdrawn before the
Expiration Date.
Tender Procedures................. Holders of Common Shares desiring to
tender pursuant to the Exchange Offer
must use a BLUE Letter of Transmittal
to tender Common Shares in exchange
for Depositary Shares.
A shareholder may request his or her
broker, dealer, commercial bank, trust
company or other nominee to effect the
transaction for him or her. A
shareholder having shares registered
in the name of a broker, dealer,
commercial bank, trust company or
other nominee must contact that
broker, dealer, commercial bank, trust
company or other nominee if he or she
intends to tender Common Shares.
Shareholders whose Common Share
certificates are not immediately
available or who cannot deliver the
BLUE Letter of Transmittal or other
documents required to be delivered to
the Exchange Agent prior to the
Expiration Date may nevertheless
tender Common Shares in accordance
with the guaranteed delivery
procedures described herein. See "The
Offers -- Procedure for Tender."
Proration......................... If more than 25,000,000 Common Shares
have been validly tendered pursuant to
the Exchange Offer and not withdrawn
prior to the Expiration Date, the
Common Shares to be accepted for
exchange and the Depositary Shares to
be issued in exchange therefor will be
allotted on a pro rata basis. See
"The Offers -- Proration."
Tax Consequences.................. The Company has received an opinion
from Davis Polk & Wardwell, as tax
counsel, to the effect that the
receipt of Depositary Shares by
holders tendering Common Shares solely
pursuant to the Exchange Offer (and
not tendering Common Shares pursuant
to the Cash Offer) will be treated as
part of a tax-free recapitalization
under Section 368 of the Internal
Revenue Code of 1986, as amended, and
that such tendering holders will
therefore not incur income tax
liability in connection with the
Exchange Offer. See "Certain United
States Federal Income Tax
Consequences."
Withdrawal Rights................. Tenders may be withdrawn at any time
prior to the Expiration Date. To be
effective, a written, telegraphic or
facsimile notice of withdrawal must be
received in a timely manner by the
Exchange Agent. See "The Offers --
Withdrawal of Tendered Common Shares."
Exchange Agent.................... First Chicago Trust Company of New
York is the Exchange Agent for the
Exchange Offer.
Information Agent................. Morrow & Co., Inc. is the Information
Agent for the Offers.
Any questions regarding the Exchange Offer, including the procedure for
tendering shares in the Exchange Offer and/or surrendering stock certificates
in connection therewith, should be directed to the Information Agent as
follows:
Morrow & Co., Inc.
909 Third Avenue
New York, NY 10022
toll free (800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
THE CASH OFFER
Expiration........................ 12:00 Midnight, New York City time, on
Monday, July 24, 1995, unless extended
(the "Expiration Date").
Terms of Cash Offer............... The Company will determine a single
cash price per Common Share, not
greater than $33 nor less than $30,
that it will pay for Common Shares
validly tendered pursuant to the Cash
Offer (the "Purchase Price"), taking
into account the number of Common
Shares so tendered and the prices
specified by tendering shareholders.
The Company will select the Purchase
Price that will allow it to buy
6,400,000 Common Shares (or such
lesser number as are validly tendered
at prices not greater than $33 nor
less than $30 per Common Share)
pursuant to the Cash Offer. All
Common Shares purchased pursuant to
the Cash Offer will be purchased at
the Purchase Price in cash.
Number of Shares.................. Subject to the terms and conditions of
the Cash Offer, the Company will
accept up to 6,400,000 Common Shares
validly tendered pursuant to the Cash
Offer and not withdrawn prior to the
Expiration Date.
Tender Procedures.................. Holders of Common Shares desiring to
tender pursuant to the Cash Offer must
use a YELLOW Letter of Transmittal to
tender Common Shares pursuant to the
Cash Offer. Each shareholder must
specify the cash price (not greater
than $33 nor less than $30 per Common
Share) at which such shareholder is
willing to have the Company purchase
such Common Shares. Shareholders
wishing to maximize the possibility
that their Common Shares will be
purchased at the relevant Purchase
Price may check the box on the YELLOW
Letter of Transmittal marked "Shares
Tendered At Purchase Price Determined
by Dutch Auction." Checking this box
may result in a purchase price of the
Common Shares so tendered at the
minimum price of $30.
A shareholder may request his or her
broker, dealer, commercial bank, trust
company or other nominee to effect the
transaction for him or her. A
shareholder having Common Shares
registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee must contact that
broker, dealer, commercial bank, trust
company or other nominee if he or she
intends to tender Common Shares.
Shareholders whose certificates are
not immediately available or who
cannot deliver the YELLOW Letter of
Transmittal or other documents
required to be delivered to the
Depositary prior to the Expiration
Date may nevertheless tender Common
Shares in accordance with the
guaranteed delivery procedures
described herein. See "The Offers --
Procedure for Tender."
Proration......................... If more than 6,400,000 Common Shares
have been validly tendered at or below
the Purchase Price and not withdrawn
prior to the Expiration Date, the
Company will purchase 6,400,000 Common
Shares on a substantially pro rata
basis based on the number of Common
Shares validly tendered pursuant to
the Cash Offer at or below the
Purchase Price by the Expiration Date
and not withdrawn. See "The
Offers--Proration."
Tax Consequences.................. Sales of Common Shares pursuant to the
Cash Offer will generally be taxable
transactions for federal income tax
purposes, and may also be taxable
transactions under applicable state,
local and foreign tax laws. Cash
received by foreign shareholders will
generally be subject to withholding
tax at the rate of 30% or a lower
treaty rate. See "Certain United
States Federal Income Tax
Consequences."
Withdrawal Rights................. Tenders may be withdrawn at any time
prior to the Expiration Date. To be
effective, a written, telegraphic or
facsimile notice of withdrawal must be
received in a timely manner by the
Depositary. See "The Offers--
Withdrawal of Tendered Common Shares."
Depositary........................ First Chicago Trust Company of New
York is the Depositary for the Cash
Offer.
Information Agent................. Morrow & Co., Inc. is the Information
Agent for the Offers.
Any questions regarding the Cash Offer, including the procedures for tendering
Common Shares in the Cash Offer and/or surrendering stock certificates in
connection therewith, should be directed to the Information Agent as follows:
Morrow & Co., Inc.
909 Third Avenue
New York, NY 10022
toll free (800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKE ANY RECOMMENDATION
THAT SHAREHOLDERS TENDER OR REFRAIN FROM TENDERING THEIR COMMON SHARES
PURSUANT TO EITHER OFFER, AND NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH
RECOMMENDATION ON BEHALF OF THE COMPANY. THIS IS A MATTER FOR EACH
SHAREHOLDER TO DETERMINE AFTER CONSULTATION WITH HIS OR HER ADVISORS,
INCLUDING TAX COUNSEL, ON THE BASIS OF HIS OR HER OWN FINANCIAL POSITION AND
REQUIREMENTS.
TERMS OF THE DEPOSITARY SHARES AND PREFERENCE STOCK
Preference Stock.................. A new series of Series A Cumulative
Preference Stock, no par value, of the
Company.
Depositary Share.................. Each Depositary Share represents
ownership of one-half share of
Preference Stock.
Terms of Depositary Shares........ Each owner of a Depositary Share is
entitled, proportionately, to all the
rights, preferences and privileges of
the Preference Stock represented
thereby (including dividend, voting
and liquidation rights), and subject
proportionately, to all of the
limitations of the Preference Stock
represented thereby.
Ranking........................... The Preference Stock will rank prior
to the Common Shares with respect to
dividend rights and rights upon
liquidation, dissolution and winding
up of the Company.
Redemption........................ At any time and from time to time, the
Company may call the outstanding
shares of Preference Stock (and
thereby the Depositary Shares), in
whole or in part, for redemption. On
the Redemption Date with respect to
any such redemption, the Company, in
redeeming shares of Preference Stock,
shall cause to be delivered to the
holders of Depositary Shares
representing such Preference Stock, in
exchange for each such Depositary
Share, the following consideration:
(1) in the event such Redemption
Date is prior to the Specified
Date (i.e., prior to Friday,
June 12, 1998), (i) Common
Shares having a value initially
equal to $42.39976, declining
by $.002222 on each day
following the Accrual Date
(i.e., June 12, 1995)
(computed on the basis of a
360-day year of twelve 30-day
months) to $40.13332 on April
12, 1998, and equal to $40
thereafter through June 11,
1998 (the "Depositary Share
Call Price"), plus (ii) a cash
amount equal to all
proportionate accrued but
unpaid dividends thereon; and
(2) in the event such Redemption
Date is on or after the
Specified Date, (i) one Common
Share, subject to adjustment in
certain events, and (ii) a cash
amount equal to all
proportionate accrued but
unpaid dividends thereon.
The Company currently intends to
redeem all the outstanding
Preference Stock (and thereby the
Depositary Shares) on the Specified
Date if not theretofore redeemed.
Upon certain mergers,
consolidations or other
extraordinary transactions of the
Company at any time, each
outstanding Depositary Share will
be entitled to receive
consideration of the same type as
is received by holders of the
Common Shares in such transaction
and having a fair value equal to
the value of the Common Shares that
such Depositary Share would receive
if it were redeemed by the Company
at such time. For a description of
the Preference Stock and the
Depositary Shares, see "Description
of Preference Stock" and
"Description of Depositary Shares."
Limited Opportunity for Equity
Appreciation; Market
Appreciation.................... The opportunity for equity
appreciation afforded by an investment
in the Depositary Shares (and the
Preference Stock) is limited because
the Company may, at its option, call
the Preference Stock (and thereby the
Depositary Shares) at any time prior
to the Specified Date at the
Preference Stock Call Price, and may
be expected to do so prior to the
Specified Date if, among other things,
the market price of the Common Shares
has theretofore exceeded the
Depositary Share Call Price. Because
the price of the Common Shares is
subject to market fluctuations, the
value of the Common Shares received by
a holder of Depositary Shares upon
redemption thereof on or after the
Specified Date may be more or less
than the value of the Common Shares
tendered in exchange for such
Depositary Shares.
Liquidation Preference............ Each share of Preference Stock issued
pursuant to the Exchange Offer will
have a liquidation preference equal to
twice the fair market value, as
determined for United States federal
income tax purposes, of a Depositary
Share on the date of issuance thereof
(which generally will be the mean
between the highest and lowest quoted
selling prices of the Depositary
Shares on such date), plus accrued and
unpaid dividends. The proportionate
liquidation preference of each
Depositary Share will be half of this
amount.
Dividends......................... Dividends on the Preference Stock are
cumulative and will accrue from June
12, 1995 at the rate of $3.60 per
share per annum payable quarterly in
arrears in cash on or before the 13th
day of each March, June, September and
December, commencing on September 13,
1995. The proportionate annual
dividend rate on the Depositary Shares
is $1.80 per share (which amount
equates to the annual rate of
dividends heretofore paid by the
Company with respect to the Common
Shares tendered in exchange for
Depositary Shares), and dividends will
be payable on the Depositary Shares
as, when and if paid on the Preference
Stock.
Voting Rights..................... A holder of Depositary Shares will be
entitled to instruct the Preference
Stock Depositary as to the exercise of
voting rights with respect to the
number of shares of Preference Stock
represented by such holder's
Depositary Shares. The holders of
Preference Stock are entitled to vote,
one vote per share (and therefore a
holder of Depositary Shares will
effectively exercise one vote for each
two Depositary Shares owned by such
holder), subject to certain
adjustments, on all matters to be
voted upon by the shareholders of the
Company, voting together with the
Common Shares as a single class,
except as provided by law. Holders of
Preference Stock also have certain
additional voting rights as described
herein. See "Description of
Depositary Shares--Procedures for
Voting" and "Description of Preference
Stock -- Voting Rights."
Market for Depositary Shares...... The Depositary Shares will be newly
issued. There is currently no market
for Depositary Shares. Application
will be made to list the Depositary
Shares on the NYSE upon official
notice of issuance and subject to
adequacy of distribution and other
listing requirements. If these
conditions are not met, it is expected
that the Depositary Shares will trade
in the over-the-counter market. There
can be no assurance that there will be
an active trading market for the
Depositary Shares.
SUMMARY HISTORICAL FINANCIAL DATA
The following table presents summary historical financial data of Sun
for each of the five years in the period ended December 31, 1994 and for each
of the three-month periods ended March 31, 1995 and 1994. Reference is made
to the detailed information and financial statements available in the
documents described above under "Incorporation of Certain Documents by
Reference." The financial information set forth for the three months ended
March 31, 1995 and 1994 is unaudited; however, in the opinion of the Company,
all adjustments necessary for a fair presentation have been made. All such
adjustments are of a normal recurring nature except for the cumulative effect
of a change in accounting principle discussed below. Results of operations for
the three-month period ended March 31, 1995 are not necessarily indicative of
results which may be expected for the full year 1995.
Three Months Ended
Year Ended December 31 March 31
------------------------------------ ------------------
1994 1993 1992 1991 1990 1995 1994
---- ---- ---- ---- ---- ---- ----
(Millions of Dollars Except Per Share Amounts and Ratios)
Sales and other oper-
ating revenue
(including consumer
excise taxes) $9,818 $9,180 $10,445 $11,493 $12,573 $2,578 $2,056
Income (loss) from
continuing operations
before cumulative
effect of change in
accounting principle(1) 97 283 (317) (130) 190 (7) 34
Net income
(loss)(1)(2)(3) 90 288 (559) (387) 229 (7) 27
Income (loss) per Common
Share from continuing
operations before cumu-
lative effect of change
in accounting prin-
ciple(4) .91 2.65 (2.98) (1.23) 1.78 (.07) .32
Net income (loss) per
Common Share(4) .84 2.70 (5.26) (3.65) 2.14 (.07) .25
Cash dividends per
Common Share 1.80 1.80 1.80 1.80 1.80 .45 .45
Ratio of earnings to
fixed charges(5) 2.12 5.14 N/A N/A 3.91 1.13 2.73
At December 31 At March 31
------------------------------------ ------------
1994 1993 1992 1991 1990 1995 1994
---- ---- ---- ---- ---- ---- ----
(Millions of Dollars Except Per Share Amounts)
Total assets $6,465 $5,900 $6,071 $7,017 $7,852 $6,475 $5,859
Working capital(6) (407) (228) (415) (267) (228) (501) (145)
Short-term borrowings
and current portion
of long-term debt 320 136 260 197 246 424 217
Long-term debt 1,073 726 792 852 832 1,099 822
Stockholders' equity 1,863 1,984 1,896 2,696 3,274 1,810 1,948
Stockholders' equity
per Common Share(7) 17.42 18.60 17.82 25.41 30.81 16.92 18.23
(Footnotes appear on the following page)
(1) Includes after-tax income (loss) attributable to gain on divestments,
gain on Iranian litigation settlement, provision for write-down of assets
and other matters and provision for environmental remediation work at
various domestic refining and marketing sites totalling $7, $109, $(333)
and $(181) million for 1994, 1993, 1992 and 1991, respectively.
(2) Includes income (loss) from operations held for sale of $17, $3, $19,
$(257) and $9 million in 1994, 1993, 1992, 1991 and 1990, respectively,
and $4 million and $2 million in the three-month periods ended March 31,
1995 and 1994, respectively.
(3) Includes impact of the cumulative effect of a change: in the method of
accounting for postemployment benefits in the full year and first quarter
of 1994 ($7 million after-tax charge); in the method of accounting for
income taxes in 1993 ($5 million tax benefit); in the method of accounting
for postretirement health care and life insurance benefits in 1992 ($261
million after-tax charge); and in the method of accounting for refinery
turnaround costs in 1990 ($30 million after-tax benefit).
(4) Amounts represent both primary and fully diluted earnings per share.
(5) The ratio of earnings to fixed charges has been computed using
principally pretax earnings from continuing operations before the
cumulative effect of a change in accounting principle and before deducting
fixed charges. Fixed charges are comprised of interest cost and debt
expense of continuing operations (including amounts capitalized) and
one-third of rental expense applicable to operating leases (which is that
portion deemed to be interest). For 1992 and 1991, earnings were
inadequate to cover fixed charges by $454 million and $76 million,
respectively, as a result of a $745 million and $156 million provision for
write-down of assets and other matters.
(6) The working capital position is considerably stronger than indicated
because of the relatively low historical costs assigned under the LIFO
method of accounting to a significant portion of the inventories reflected
in the consolidated balance sheets.
(7) Stockholders' equity per Common Share is equal to stockholders' equity
divided by Common Shares outstanding.
SUMMARY PRO FORMA FINANCIAL DATA
The following table presents selected pro forma financial data for Sun.
The pro forma information assumes that the transactions for which pro forma
effects are shown occurred on March 31, 1995 for the pro forma balance sheet
information and January 1, 1994 for the pro forma income statement
information.
The pro forma information is based on the historical financial statements
of Sun adjusted to give effect to the:
(a) sale of Sun's remaining 55% ownership interest in Suncor for gross
proceeds of US $855 million (net proceeds of US $759 million after
commissions and discount) and the assumed use of the US $635 million of
cash proceeds to be received in June 1995 from this sale to:
(i) repay $335 million of Company indebtedness; and
(ii) repurchase at a weighted average price of $30 per
share initially up to 6,400,000 Common Shares pursuant to the Cash
Offer, and thereafter up to $100 million of Common Shares in open
market purchases from time to time;
(b) reduction in the annualized common stock dividend from $1.80 per share
($.45 per share each quarter) to $1.00 per share ($.25 per share each
quarter); and
(c) exchange of 25,000,000 Common Shares for 25,000,000 Depositary Shares
representing ownership of 12,500,000 shares of Preference Stock pursuant
to the Exchange Offer ((a), (b) and (c) being collectively referred to
herein as the "Recapitalization Transactions").
In accordance with pro forma reporting rules, the pro forma after-tax
gain of $163 million on the Suncor sale has been reflected in stockholders'
equity in the pro forma balance sheet information but has not been included in
the pro forma income statement information. In addition, the pro forma
consolidated balance sheet and income statement information does not include
an estimated after-tax charge of $100 million to be recognized in the second
quarter of 1995 related to employee terminations and the write-down to net
realizable value of certain refining and marketing and coal assets.
The pro forma information is not necessarily indicative of the results
which would actually have been achieved had the transactions been in effect on
the dates or for the periods indicated nor are they necessarily indicative of
future results. The pro forma consolidated balance sheet and income statement
data should be read in conjunction with the Company's historical consolidated
financial statements, including the notes thereto, incorporated by reference
herein.
Year Ended December 31, 1994
--------------------------------------------------
Pro Forma Adjustments
Increase (Decrease)
--------------------------------
Debt Dividend
Repayment/ Change/
Suncor Stock Exchange Pro
Historical Sale(1) Repurchase(1) Offer Forma
---------- ------- ------------- -------- ------
(In Millions Except Per Share Amounts and Ratios)
Sales and other operating
revenue (including
consumer excise taxes) $9,818 $(1,397) $ -- $ -- $8,421
Income (loss) from contin-
uing operations before
cumulative effect of
change in accounting
principle 97 (37) 14 -- 74
Net income (loss) 90 (37) 14 -- 67
Income (loss) per Common
Share from continuing
operations before cum-
ulative effect of change
in accounting
principle(2)(3) .91 (.35) .20 (.36) .40
Net income (loss) per
Common Share(2)(3) .84 (.35) .20 (.38) .31
Weighted average number of
Common Shares out-
standing(3) 107.0 -- (10.0) (25.0) 72.0
Cash dividends per share:
Common Share 1.80 -- -- (.80) 1.00
Depositary Share(4) -- -- -- 1.80 1.80
Ratio of earnings to combined
fixed charges and
preference stock dividends 2.12 (.77) .26 (.36) 1.25
Three Months Ended March 31, 1994
--------------------------------------------------
Pro Forma Adjustments
Increase (Decrease)
--------------------------------
Debt Dividend
Repayment/ Change/
Suncor Stock Exchange Pro
Historical Sale(1) Repurchase(1) Offer Forma
---------- ------- ------------- -------- ------
(In Millions Except Per Share Amounts and Ratios)
Sales and other operating
revenue (including
consumer excise taxes) $2,578 $(361) $ -- $ -- $2,217
Income (loss) from contin-
uing operations before
cumulative effect of
change in accounting
principle (7) (11) 3 -- (15)
Net income (loss) (7) (11) 3 -- (15)
Income (loss) per Common
Share from continuing
operations before cum-
ulative effect of change
in accounting
principle(2)(3) (.07) (.10) .02 (.21) (.36)
Net income (loss) per
Common Share(2)(3) (.07) (.10) .02 (.21) (.36)
Weighted average number of
Common Shares out-
standing(3) 107.1 -- (10.0) (25.0) 72.1
Cash dividends per share:
Common Share .45 -- -- (.20) .25
Depositary Share(4) -- -- -- .45 .45
Ratio of earnings to combined
fixed charges and
preference stock dividends 1.13 (.88) .04 (.11) .18
At March 31, 1995
--------------------------------------------------
Pro Forma Adjustments
Increase (Decrease)
--------------------------------
Debt Dividend
Repayment/ Change/
Suncor Stock Exchange Pro
Historical Sale(1) Repurchase(1) Offer Forma
---------- ------- ------------- -------- ------
(In Millions Except Per Share Amounts)
Total assets $6,475 $(832) $(635) $ -- $5,008
Working capital (501) 612 (346) -- (235)
Short-term borrowings and
current portion of
long-term debt 424 (4) (289) -- 131
Long-term debt 1,099 (175) (46) -- 878
Stockholders' equity 1,810 250 (300) -- 1,760
Stockholders' equity per
Common Share(6) 16.92 2.34 (1.11) (4.11) 14.04
- ------------
(1) For additional information concerning the sale of Sun's remaining
interest in Suncor and related debt repayment/stock repurchase
transactions, see the Company's Current Report on Form 8-K dated June
13, 1995, which is incorporated herein by reference.
(2) Amounts represent both primary and fully diluted earnings per share.
(3) The Depositary Shares representing ownership in Preference Stock are
not expected to be common stock equivalents. Accordingly, primary
earnings per share will be equal to earnings less Depositary Share
dividends divided by the weighted average number of only Common Shares
outstanding. Fully diluted earnings per share will be equal to the
lesser of primary earnings per share or the per share amount determined
by dividing earnings by the weighted average number of both Common and
Depositary Shares outstanding.
(4) A Depositary Share represents ownership of one-half share of Preference
Stock. Preference Stock will pay an annual dividend of $3.60 per share
($.90 per share each quarter).
(5) Pro forma earnings were inadequate to cover combined fixed charges and
preference stock dividends by $47 million.
(6) Stockholders' equity per Common Share is equal to stockholders' equity
less the carrying amount of the Preference Stock divided by Common
Shares outstanding.
HISTORICAL AND PRO FORMA CAPITALIZATION
The following table presents the historical consolidated capitalization
of Sun at March 31, 1995, and the pro forma capitalization of Sun after giving
effect to Sun's divestment of its remaining interest in Suncor and the
Recapitalization Transactions. See "Summary Pro Forma Financial Data" for
further discussion of these transactions.
At March 31, 1995
--------------------------------------------------
Pro Forma Adjustments
Increase (Decrease)
--------------------------------
Debt Dividend
Repayment/ Change/
Suncor Stock Exchange Pro
Historical Sale(1) Repurchase(1) Offer Forma
---------- ------- ------------- -------- ------
(Millions of Dollars)
Short-term borrowings $ 324 $ -- $(207) $ -- $ 117
Current portion of long-
term debt 100 (4) (82) -- 14
----- ---- ---- ---- -----
424 (4) (289) -- 131
Long-term debt 1,099 (175) (46) -- 878
----- ---- ---- ---- -----
Total borrowings 1,523 (179) (335) -- 1,009
----- ---- ---- ---- -----
Minority interest 376 (376) -- -- --
----- ---- ---- ---- -----
Stockholders' equity:
Preference stock, no par
value
Authorized--15,000,000
shares, Issued and out-
standing--12,500,000
shares on a pro forma
basis -- -- -- 750 750
Common stock, par value
$1 per share
Authorized--200,000,000
shares, issued--
129,523,419 shares actual
and pro forma 130 -- -- -- 130
Capital in excess of par
value 1,309 -- -- -- 1,309
Cumulative foreign currency
translation adjustment (87) 87 -- -- --
Earnings employed in the
business 1,479 163 -- -- 1,642
Less: common stock held in
treasury at cost--
22,580,261 shares actual
and 57,580,261 shares on
a pro forma basis (1,021) -- (300) (750) (2,071)
----- ---- ---- ---- -----
Total stockholders'
equity 1,810 250 (300) -- 1,760
----- ---- ---- ---- -----
Total capitalization $3,709 $(305) $(635) $ -- $2,769
===== ==== ==== ==== =====
- ---------------
(1) For additional information concerning the sale of Sun's remaining
interest in Suncor and related debt repayment/stock repurchase
transactions, see the Company's Current Report on Form 8-K dated June
13, 1995, which is incorporated herein by reference.
PRICE RANGE OF COMMON SHARES
The Common Shares are listed and principally traded on the NYSE and are
also listed on the Philadelphia Stock Exchange, Inc. The high and low closing
prices for the Common Shares on the NYSE and the quarterly cash dividend per
share declared and paid on all the Common Shares in 1993, 1994 and 1995 are
listed below.
Stock Price Cash Dividend
-------------- -----------------
High Low Declared and Paid
---- --- -----------------
1993
First Quarter $30 1/4 $24 1/2 $.45
Second Quarter 27 1/8 22 1/4 .45
Third Quarter 28 7/8 23 7/8 .45
Fourth Quarter 32 3/4 28 1/2 .45
1994
First Quarter $35 1/4 $29 3/8 $.45
Second Quarter 34 3/8 25 1/8 .45
Third Quarter 29 1/4 25 7/8 .45
Fourth Quarter 32 1/2 26 3/8 .45
1995
First Quarter $30 1/4 $27 1/8 $.45
Second Quarter (through June 9) 32 7/8 27 1/2 .45
The high and low sales prices per Common Share as reported on the NYSE
on June 12, 1995, the last full trading day prior to announcement of the
Offers, were $31 3/8 and $30 5/8, respectively.
On June 13, 1995, the Company announced that it reduced the quarterly
dividend paid with respect to the Common Shares from $.45 to $.25 per share,
effective with the next quarterly dividend payable on September 8, 1995.
THE OFFERS
Background and Purpose
As part of a restructuring program to strengthen the Company's financial
position and focus on its core businesses, on June 8, 1995, the Company
completed the sale of its remaining 55% interest in Suncor, a Canadian
integrated oil company, for gross proceeds of US$855 million. On June 13,
1995, the Company announced that at least $335 million of the US$635 million
net cash proceeds to be received in June 1995 from the sale of Suncor would be
used to reduce Company indebtedness and that up to $300 million would be used
to repurchase Common Shares initially pursuant to the Cash Offer and
thereafter through a program authorized by the Board of Directors of the
Company to purchase up to $100 million of Common Shares in the open market
from time to time depending on prevailing market conditions and opportunities.
The Company also announced on June 13, 1995 that as part of its
restructuring, it had adopted a plan to reduce its cost structure through a
reduction of approximately 800 primarily staff and support positions in its
core businesses and other cost-reduction measures expected to result in
aggregate pretax cost savings of $110 million annually. The Company expects
to record a provision for the employee terminations and the write-down to
estimated net realizable value of certain refining and marketing and coal
assets of approximately $100 million after tax during the second quarter of
1995. The Company also announced that it reduced the annual dividend to be
paid with respect to the Common Shares from $1.80 to $1.00 per share,
effective in respect of the next quarterly dividend payable on September 8,
1995 to holders of record on August 10, 1995. The reduced dividend and the
anticipated cost reductions will enable the Company to utilize a greater
portion of its operating cash flow for growth and other investment
opportunities in its core businesses.
On June 13, 1995, the Company also announced that it had declared a $.90
per share dividend on Preference Stock payable on September 13, 1995. Holders
of Depositary Shares on August 10, 1995 shall be entitled to receive a cash
dividend payment of $.45 per share on September 13, 1995, representing their
proportionate share of this Preference Stock dividend.
The Company is making the Exchange Offer to provide those shareholders
whose primary objective is current income with an opportunity, subject to the
terms and conditions of the Exchange Offer, to exchange all or a portion of
their Common Shares for an equal number of yield-oriented Depositary Shares
entitled to receive an annual cash dividend of $1.80 per share. The Exchange
Offer provides holders of Common Shares with the option of exchanging their
shares for Depositary Shares and receiving a higher and more certain dividend
than on Common Shares. However, because the Company may redeem the Depositary
Shares at any time at the Depositary Share Call Price (such Depositary Share
Call Price to be set initially equal to $42.39976 for each Depositary Share,
declining by $.002222 on each day following the Accrual Date (i.e., June 12,
1995) (computed on the basis of a 360-day year of twelve 30-day months) to
$40.13332 on April 12, 1998, and equal to $40 thereafter through June 11,
1998), which may, at the time of such redemption, be less than the then
existing market price of the Common Shares, an investment in the Depositary
Shares does not provide the holder with the same opportunity for equity
appreciation afforded by an investment in the Common Shares.
The purpose of the Cash Offer is to allow shareholders, subject to the
terms and conditions of the Cash Offer, to tender all or a portion of their
Common Shares for cash while allowing them to retain, in respect of their
remaining Common Shares, a continuing equity interest in the Company.
Terms of Exchange Offer
Upon the terms and subject to the conditions described herein and in the
related BLUE Letter of Transmittal (which together constitute the Exchange
Offer), the Company is offering to exchange up to 25,000,000 Common Shares for
Depositary Shares at a rate of one Depositary Share for each Common Share
validly tendered prior to the Expiration Date and not theretofore withdrawn as
described under "Withdrawal of Tendered Common Shares." If the Exchange Offer
is oversubscribed as described below, only Common Shares validly tendered
pursuant to the Exchange Offer and not withdrawn prior to the Expiration Date
will be eligible for proration. All Common Shares not acquired pursuant to the
Exchange Offer, including Common Shares not purchased because of proration,
will be returned to the tendering shareholders at the Company's expense as
promptly as practicable following the Expiration Date.
The Company's obligation to accept Common Shares for exchange pursuant to
the Exchange Offer is subject to certain conditions set forth under
"--Conditions of the Offers." Among other conditions, the Exchange Offer is
conditioned upon a minimum of 2,500,000 Common Shares being validly tendered
and not withdrawn prior to the Expiration Date (the "Minimum Condition"). If
the Minimum Condition is not satisfied prior to the Expiration Date, the
Company reserves the right (but shall not be obligated) to (i) decline to
accept for exchange and exchange any of the Common Shares tendered and
terminate the Exchange Offer, (ii) waive or reduce the Minimum Condition and,
subject to complying with the applicable rules and regulations of the
Commission, accept for exchange and exchange all Common Shares validly
tendered pursuant to the Exchange Offer, or (iii) extend the Exchange Offer
and, subject to the right of shareholders to withdraw Common Shares until the
Expiration Date, retain the Common Shares which have been tendered during the
period or periods for which the Exchange Offer is extended.
Terms of Cash Offer
Upon the terms and subject to the conditions described herein and in the
related YELLOW Letter of Transmittal (which together constitute the Cash
Offer), the Company is offering to purchase up to 6,400,000 Common Shares that
are validly tendered and not withdrawn prior to the Expiration Date at a cash
price (determined in the manner set forth below) not greater than $33 nor less
than $30 per Common Share. Only Common Shares validly tendered and not
withdrawn prior to the Expiration Date will be eligible for purchase pursuant
to the Cash Offer. If the Cash Offer is oversubscribed as described below,
only Common Shares validly tendered at or below the Purchase Price pursuant to
the Cash Offer and not withdrawn prior to the Expiration Date will be eligible
for proration.
The Company will determine the Purchase Price taking into account the number
of Common Shares so tendered and the prices specified by tendering
shareholders. The Company will select the Purchase Price that will allow it
to purchase 6,400,000 Common Shares (or such lesser number as are validly
tendered at prices not greater than $33 nor less than $30 per Common Share)
pursuant to the Cash Offer.
In accordance with Instruction 5 of the YELLOW Letter of Transmittal, each
shareholder who wishes to tender Common Shares pursuant to the Cash Offer must
specify the price (not greater than $33 nor less than $30 per Common Share) at
which such shareholder is willing to have the Company purchase such Common
Shares. As promptly as practicable following the Expiration Date, the Company
will determine the Purchase Price (not greater than $33 nor less than $30 per
Common Share) that it will pay for Common Shares validly tendered pursuant to
the Cash Offer, taking into account the number of Common Shares so tendered
and the prices specified by tendering shareholders. All Common Shares
purchased pursuant to the Cash Offer will be purchased at the Purchase Price
in cash.
No Duplicate Tenders
Holders of Common Shares may elect to tender all or a portion of the
Common Shares held by them pursuant to either the Exchange Offer or the Cash
Offer, or to allocate a portion of the Common Shares held by them to the
Exchange Offer and a portion to the Cash Offer; provided, however that no
holder may tender the same Common Shares pursuant to both the Exchange Offer
and the Cash Offer.
Expiration of Offers; Extension of Offers
Each of the Offers will expire on the Expiration Date, unless theretofore
extended. The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Monday, July 24, 1995, unless and until the Company shall have
extended the period of time for which the Offers are open, in which event
"Expiration Date" shall mean the latest time and date on which each of the
Offers, as so extended by the Company, shall expire. It is the Company's
intention that both Offers will expire at the same time. Therefore, the
Exchange Offer will not be extended without so extending the Cash Offer, and
the Cash Offer will not be extended without so extending the Exchange Offer.
The Company expressly reserves the right, in its sole discretion, at any time
or from time to time, to extend the period of time during which the Offers are
open by giving oral or written notice of such extension to the Exchange Agent
and Depositary. There can be no assurance, however, that the Company will
exercise its right to extend the Offers. If the Company decides, in its sole
discretion, to increase (except for any increase not in excess of 2% of the
outstanding Common Shares) or decrease the number of Common Shares being
sought, or to increase or decrease the consideration offered to holders of
Common Shares, in either Offer and, at the time that notice of such increase
or decrease is first published, sent or given to holders of Common Shares in
the manner specified below, the Offers are scheduled to expire at any time
earlier than the tenth business day from the date that such notice is first so
published, sent or given, the Offers will be extended until the expiration of
such ten-business-day period. As used herein, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
Proration
Exchange Offer
Upon the terms and subject to the conditions of the Exchange Offer
(including the Minimum Condition), if 25,000,000 or fewer Common Shares have
been validly tendered pursuant to the Exchange Offer and not withdrawn prior
to the Expiration Date, the Company will accept all such Common Shares for
exchange. Upon the terms and subject to the conditions of the Exchange Offer,
if more than 25,000,000 Common Shares have been validly tendered pursuant to
the Exchange Offer and not withdrawn prior to the Expiration Date, the Company
will accept for exchange all Common Shares validly tendered pursuant to the
Exchange Offer and not withdrawn prior to the Expiration Date on a pro rata
basis, if necessary (with appropriate adjustments to avoid purchases of
fractional Common Shares).
Cash Offer
Upon the terms and subject to the conditions of the Cash Offer, if
6,400,000 or fewer Common Shares have been validly tendered at or below the
Purchase Price pursuant to the Cash Offer and not withdrawn prior to the
Expiration Date, the Company will purchase all such Common Shares at the
Purchase Price. Upon the terms and subject to the conditions of the Cash
Offer, if more than 6,400,000 Common Shares have been validly tendered at or
below the Purchase Price pursuant to the Cash Offer and not withdrawn prior to
the Expiration Date, the Company will purchase Common Shares at the Purchase
Price in the following order of priority:
(a) all Common Shares validly tendered at or below the Purchase Price
pursuant to the Cash Offer and not withdrawn prior to the Expiration Date by
any shareholder who owned beneficially an aggregate of fewer than 100 Common
Shares as of the close of business on June 12, 1995 and who validly tenders
all of such Common Shares pursuant to the Cash Offer (partial tenders will not
qualify for this preference) and completes the box captioned "Odd Lots" on the
YELLOW Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery, up to a maximum of 6,400,000 Common Shares in aggregate tendered by
such shareholders pursuant to the Cash Offer; and
(b) after purchase of all of the foregoing Common Shares, all other
Common Shares validly tendered at or below the Purchase Price pursuant to the
Cash Offer and not withdrawn prior to the Expiration Date on a pro rata basis,
if necessary (with appropriate adjustments to avoid purchases of fractional
Common Shares).
General
The Company does not expect that it would be able to announce the final
proration factor or to commence delivery of Depositary Shares for, or payment
for, any Common Shares purchased pursuant to either Offer until approximately
seven NYSE trading days after the Expiration Date if proration of tendered
Common Shares is required, because of the difficulty in determining the number
of Common Shares validly tendered (including Common Shares tendered pursuant
to the guaranteed delivery procedure described below) and not withdrawn prior
to the Expiration Date and as a result of the "odd lot" procedure described
below. Preliminary results of proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of Common Shares
may obtain such preliminary information from the Information Agent and may
also be able to obtain such information from their brokers.
"Odd Lot" Procedures Applicable to Tenders by Holders of Fewer Than 100
Common Shares Pursuant to the Cash Offer
All Common Shares (up to a maximum of 6,400,000 Common Shares in
aggregate) validly tendered pursuant to the Cash Offer at or below the
Purchase Price and not withdrawn prior to the Expiration Date by or on behalf
of any shareholder who beneficially owned an aggregate of fewer than 100
Common Shares (including any Common Shares held in the Company's Dividend
Reinvestment Plan) on June 12, 1995 and who tenders all such Common Shares
pursuant to the Cash Offer, will be accepted for purchase before proration, if
any, of the purchase of other Common Shares tendered pursuant to the Cash
Offer. Partial tenders will not qualify for this preference, and it is not
available to beneficial holders of 100 or more Common Shares, even if such
holders have separate stock certificates for fewer than 100 Common Shares. By
tendering pursuant to the Cash Offer, a shareholder so owning beneficially
fewer than 100 Common Shares will avoid the payment of brokerage commissions
and any applicable odd lot discount payable on a sale of Common Shares in a
transaction effected on a securities exchange.
As of June 9, 1995, there were 47,023 holders of record of Common Shares
and there were an aggregate of 107,117,903 Common Shares outstanding, of which
16,866 holders, holding in the aggregate 490,357 Common Shares, held fewer
than 100 Common Shares. Because of the large number of Common Shares held in
the names of brokers and nominees, the Company is unable to estimate the
number of beneficial owners of fewer than 100 Common Shares or the aggregate
number of Common Shares they own. Any shareholder wishing to tender all of
his or her Common Shares pursuant to such "odd lot" procedures in connection
with the Cash Offer should complete the box captioned "Odd Lots" on the YELLOW
Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery.
Procedure for Tender
Exchange Offer
To tender Common Shares pursuant to the Exchange Offer, either (a) a
properly completed and duly executed BLUE Letter of Transmittal (or facsimile
thereof) and any other documents required by the BLUE Letter of Transmittal
must be received by the Exchange Agent at one of its addresses set forth on
the back cover of this Offer to Purchase/Offering Circular and either (i)
certificates for the Common Shares to be tendered must be received by the
Exchange Agent at one of such addresses or (ii) such Common Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Exchange Agent), in each
case by the Expiration Date, or (b) the guaranteed delivery procedure
described below must be complied with.
The Exchange Agent will establish accounts with respect to the Common
Shares at The Depository Trust Company ("DTC"), the Midwest Securities Trust
Company ("MSTC"), and the Philadelphia Depository Trust Company ("PDTC", and,
together with DTC and MSTC, collectively referred to as the "Book-Entry
Transfer Facilities") for purposes of the Exchange Offer within two business
days after the date of this Offer to Purchase/Offering Circular, and any
financial institution that is a participant in the system of any Book-Entry
Transfer Facility may make delivery of Common Shares by causing such
Book-Entry Transfer Facility to transfer such Common Shares into the Exchange
Agent's account in accordance with the procedures of such Book-Entry Transfer
Facility. Although delivery of Common Shares may be effected through
book-entry transfer, the BLUE Letter of Transmittal (or facsimile thereof) and
any other required documents must, in any case, be received by the Exchange
Agent at one of its addresses set forth on the back cover of this Offer to
Purchase/Offering Circular by the Expiration Date, or the guaranteed delivery
procedure described below must be complied with. Delivery of the BLUE Letter
of Transmittal and any other required documents to a Book-Entry Transfer
Facility does not constitute delivery to the Exchange Agent.
Except as otherwise provided below, all signatures on a BLUE Letter of
Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities
Dealers, Inc., or by a commercial bank or trust company having an office,
branch or agency in the United States each of which participates in a
Medallion Program approved by the Securities Transfer Association, Inc. (each
being an "Eligible Institution"). Signatures on a BLUE Letter of Transmittal
need not be guaranteed if (a) the BLUE Letter of Transmittal is signed by the
registered holder of the Common Shares tendered therewith and such holder has
not completed the boxes entitled "Special Issue Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (b) such Common Shares
are tendered for the account of an Eligible Institution. See Instructions 1
and 5 of the BLUE Letter of Transmittal.
If a shareholder desires to tender Common Shares pursuant to the Exchange
Offer and cannot deliver such Common Shares and all other required documents
to the Exchange Agent by the Expiration Date, such Common Shares may
nevertheless be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Company is received by the Exchange
Agent (as provided below) by the Expiration Date; and
(iii) the certificates for such Common Shares (or a confirmation of a
book-entry transfer of such Common Shares into the Exchange Agent's account at
one of the Book-Entry Transfer Facilities), together with a properly completed
and duly executed BLUE Letter of Transmittal (or facsimile thereof) and any
other documents required by the BLUE Letter of Transmittal, are received by
the Exchange Agent within five NYSE trading days after the date of execution
of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
Shareholders who are participants in the Company's Dividend Reinvestment
Plan and who wish to tender Common Shares held in their account under the Plan
along with other Common Shares they are tendering pursuant to the Exchange
Offer should so indicate by checking the box captioned "Tender Dividend
Reinvestment Plan Shares" in the section of the BLUE Letter of Transmittal
captioned "Description of Common Shares Tendered" and returning the properly
completed and duly executed BLUE Letter of Transmittal or facsimile thereof
with any required signature guarantees and any other documents required by the
BLUE Letter of Transmittal to the Exchange Agent. If a participant authorizes
the tender of his or her Common Shares held in the Plan pursuant to the
Exchange Offer, all Common Shares held in the Plan, except fractional Common
Shares, will be tendered pursuant to the Exchange Offer. Any Plan account
Common Shares tendered but not accepted for payment will be returned to the
shareholder's Plan account.
Cash Offer
To tender Common Shares pursuant to the Cash Offer, either (a) a properly
completed and duly executed YELLOW Letter of Transmittal (or facsimile
thereof) and any other documents required by the YELLOW Letter of Transmittal
must be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase/Offering Circular and either (i)
certificates for the Common Shares to be tendered must be received by the
Depositary at one of such addresses or (ii) such Common Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Depositary), in each case
by the Expiration Date, or (b) the guaranteed delivery procedure described
below must be complied with.
In accordance with Instruction 5 of the YELLOW Letter of Transmittal, in
order to tender Common Shares pursuant to the Cash Offer, a shareholder must
indicate in the section captioned "Price (In Dollars) Per Share At Which
Common Shares Are Being Tendered" on the YELLOW Letter of Transmittal the
price (in multiples of $0.125) at which such Common Shares are being tendered.
Shareholders wishing to tender Common Shares at more than one price must
complete separate Letters of Transmittal for each price at which such Common
Shares are being tendered; the same Common Shares cannot be tendered at more
than one price. For a tender of Common Shares to be valid, a price box, but
only one price box, on each YELLOW Letter of Transmittal must be checked.
The Depositary will establish accounts with respect to the Common Shares
at the Book-Entry Transfer Facilities for purposes of the Cash Offer within
two business days after the date of this Offer to Purchase/Offering Circular,
and any financial institution that is a participant in the system of any
Book-Entry Transfer Facility may make delivery of Common Shares by causing
such Book-Entry Transfer Facility to transfer such Common Shares into the
Depositary's account in accordance with the procedures of such Book-Entry
Transfer Facility. Although delivery of Common Shares may be effected through
book-entry transfer, the YELLOW Letter of Transmittal (or facsimile thereof)
and any other required documents must, in any case, be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase/Offering Circular by the Expiration Date, or the guaranteed
delivery procedure described below must be complied with. Delivery of the
YELLOW Letter of Transmittal and any other required documents to a Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
Except as otherwise provided below, all signatures on a YELLOW Letter of
Transmittal must be guaranteed by a firm that is an Eligible Institution.
Signatures on a YELLOW Letter of Transmittal need not be guaranteed if (a) the
YELLOW Letter of Transmittal is signed by the registered holder of the Common
Shares tendered therewith and such holder has not completed the boxes entitled
"Special Payment Instructions" or "Special Delivery Instructions" on the
Letter of Transmittal or (b) such Common Shares are tendered for the account
of an Eligible Institution. See Instructions 1 and 6 of the YELLOW Letter of
Transmittal.
If a shareholder desires to tender Common Shares pursuant to the Cash
Offer and cannot deliver such Common Shares and all other required documents
to the Depositary by the Expiration Date, such Common Shares may nevertheless
be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Company is received by the
Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Common Shares (or a confirmation of a
book-entry transfer of such Common Shares into the Depositary's account at one
of the Book-Entry Transfer Facilities), together with a properly completed and
duly executed YELLOW Letter of Transmittal (or facsimile thereof) and any
other documents required by the YELLOW Letter of Transmittal, are received by
the Depositary within five NYSE trading days after the date of execution of
the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
Shareholders who are participants in the Company's Dividend Reinvestment
Plan and who wish to tender Common Shares held in their account under the Plan
along with other Common Shares they are tendering pursuant to the Cash Offer
should so indicate by checking the box captioned "Tender Dividend Reinvestment
Plan Shares" in the section of the YELLOW Letter of Transmittal captioned
"Description of Common Shares Tendered" and returning the properly completed
and duly executed YELLOW Letter of Transmittal or facsimile thereof with any
required signature guarantees and any other documents required by the YELLOW
Letter of Transmittal to the Depositary. If a participant authorizes the
tender of his or her Common Shares held in the Plan pursuant to the Cash
Offer, all Common Shares held in the Plan will be tendered pursuant to the
Cash Offer. Any Plan account Common Shares tendered but not accepted for
payment will be returned to the shareholder's Plan account.
Under federal income tax laws with respect to backup withholding, the
Depositary may be required to withhold 31% of the amount of any payments made
to certain shareholders pursuant to the Cash Offer. In order to avoid such
backup withholding, each tendering shareholder and, if applicable, each other
payee, should complete and sign the Substitute Form W-9 included as part of
the YELLOW Letter of Transmittal so as to provide the information and
certification necessary to avoid backup withholding. Certain shareholders
(including, among others, all corporations and certain foreign individuals)
are exempt from this backup withholding requirement. In order for a foreign
individual to qualify for an exemption from backup withholding, that
shareholder must submit a statement, signed under penalties of perjury,
attesting to his exempt status. Such statements can be obtained from the
Depositary. See Instruction 9 of the YELLOW Letter of Transmittal.
Payments made pursuant to the Cash Offer to a foreign shareholder or his
agent will be subject to withholding of federal income tax at the rate of 30%,
unless the Company determines that a reduced rate of withholding is applicable
pursuant to a tax treaty or that an exemption from withholding is applicable
because such payments are effectively connected with the conduct of a trade or
business within the United States. See Instruction 10 of the YELLOW Letter of
Transmittal. Foreign shareholders are urged to consult their own tax advisors
regarding the application of federal income tax withholding, including
eligibility for a withholding tax reduction or exemption or for a refund of
all or a portion of the tax withheld. See "Certain United States Federal
Income Tax Consequences -- Non-United States Holders."
General
The tender of Common Shares pursuant to any of the Offers in accordance
with the procedures described above will constitute an agreement between the
tendering shareholder and the Company upon the terms and subject to the
conditions of the applicable Offer, including the tendering shareholder's
representation and warranty that (i) such shareholder owns the Common Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act and
(ii) the tender of such Common Shares complies with Rule 14e-4.
It is a violation of Rule 14e-4 under the Exchange Act for a person,
directly or indirectly, to tender Common Shares for his own account unless the
person so tendering (i) has a net long position equal to or greater than the
number of (x) Common Shares tendered or (y) other securities immediately
convertible into, or exercisable or exchangeable for, the number of Common
Shares tendered and will acquire such Common Shares for tender by conversion,
exercise or exchange of such other securities and (ii) will cause such Common
Shares to be delivered in accordance with the terms of the Offers. Rule 14e-4
provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. The tender of Common Shares pursuant to
any one of the procedures described above will constitute the tendering
shareholder's representation and warranty that (i) such shareholder has a net
long position in the Common Shares being tendered within the meaning of Rule
14e-4 under the Exchange Act and (ii) the tender of such Common Shares
complies with Rule 14e-4.
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment or exchange of any
tender of Common Shares (and, in the case of the Cash Offer, of the Purchase
Price) will be determined by the Company, in its sole discretion, which
determination shall be final and binding. The Company reserves the absolute
right to reject any or all tenders of Common Shares determined by it not to be
in proper form or the acceptance for payment or exchange of or payment for or
exchange of, Common Shares that may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any defect
or irregularity in any tender of Common Shares. None of the Company, the
Exchange Act and Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity in tenders
or incur any liability for failure to give any such notification.
The method of delivery of all documents, including certificates for
Common Shares, in connection with tendering pursuant to either Offer is at the
election and risk of the tendering shareholder and, except as otherwise
provided in the applicable Letter of Transmittal, delivery will be deemed made
only when actually received by the Exchange Agent and Depositary. If delivery
is by mail, registered mail with return receipt requested, properly insured,
is recommended and sufficient time should be allowed to assure timely
delivery.
Withdrawal of Tendered Common Shares
Tenders of Common Shares made pursuant to either the Exchange Offer or
the Cash Offer may be withdrawn at any time prior to the Expiration Date.
Thereafter, such tenders are irrevocable, except that they may be withdrawn
after August 7, 1995 unless theretofore accepted for payment or exchange as
provided in this Offer to Purchase/Offering Circular. If the Company extends
the period of time during which the Offers are open, is delayed in accepting
for exchange or payment or exchanging or paying for Common Shares or is unable
to accept for exchange or payment or exchange or pay for Common Shares
pursuant to the Offers for any reason, then, without prejudice to the
Company's rights under the Offers, the Exchange Agent or the Depositary, as
the case may be, may, on behalf of the Company, retain all Common Shares
tendered, and such Common Shares may not be withdrawn except as otherwise
provided herein, subject to Rule 13e-4(f)(5) under the Exchange Act, which
provides that the issuer making the tender offer shall either pay the
consideration offered, or return the tendered securities, promptly after the
termination or withdrawal of the tender offer.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Exchange Agent or the
Depositary, as the case may be, at one of its addresses set forth on the back
cover of this Offer to Purchase/Offering Circular and must specify the name of
the person who tendered the Common Shares to be withdrawn and the number of
Common Shares to be withdrawn with respect to the applicable Offer. If the
Common Shares to be withdrawn have been delivered to the Exchange Agent or the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Common Shares tendered by an
Eligible Institution) must be submitted prior to the release of such Common
Shares. In addition, such notice must specify, in the case of Common Shares
tendered by delivery of certificates, the name of the registered holder (if
different from that of the tendering shareholder) and the serial numbers shown
on the particular certificates evidencing the Common Shares to be withdrawn
or, in the case of Common Shares tendered by book-entry transfer, the name and
number of the account at one of the Book-Entry Transfer Facilities to be
credited with the withdrawn Common Shares. Withdrawals may not be rescinded
and Common Shares withdrawn will thereafter be deemed not validly tendered for
purposes of either Offer. However, withdrawn Common Shares may be retendered
by again following one of the procedures described in "--Procedure for Tender"
at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding. None of the
Company, the Exchange Agent and Depositary, the Information Agent or any other
person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
Acceptance; Delivery of Consideration
Exchange Offer
Upon the terms and subject to the conditions of the Exchange Offer, and
as promptly as practicable after the Expiration Date, the Company will
(subject to the proration provisions of the Exchange Offer) accept for
exchange (and thereby acquire) and exchange for Depositary Shares the Common
Shares validly tendered pursuant to the Exchange Offer by the Expiration Date
and not withdrawn as permitted under "Withdrawal of Tendered Common Shares".
In all cases, delivery of the Depositary Shares to exchanging holders of
Common Shares will be made as soon as practicable after the Expiration Date
(subject to possible delay in the event of proration) but only after timely
receipt by the Exchange Agent of certificates for Common Shares (or of a
confirmation of a book-entry transfer of such Common Shares into the Exchange
Agent's account at one of the Book-Entry Transfer Facilities), a properly
completed and duly executed BLUE Letter of Transmittal (or facsimile thereof)
and any other required documents.
Cash Offer
Upon the terms and subject to the conditions of the Cash Offer, and as
promptly as practicable after the Expiration Date, the Company will determine
the Purchase Price, taking into account the number of Common Shares tendered
pursuant to the Cash Offer and the prices specified by tendering shareholders,
and will (subject to the proration provisions of the Cash Offer) accept for
payment (and thereby purchase) and pay for Common Shares validly tendered at
or below the Purchase Price pursuant to the Cash Offer by the Expiration Date
and not withdrawn as permitted under "Withdrawal of Tendered Common Shares".
As soon as practicable following the determination of the Purchase Price, the
Company will announce the Purchase Price it will pay for Common Shares
tendered pursuant to the Cash Offer. In all cases, payment for Common Shares
accepted for payment pursuant to the Cash Offer will be made promptly (subject
to possible delay in the event of proration) but only after timely receipt by
the Depositary of certificates for Common Shares (or of a confirmation of a
book-entry transfer of such Common Shares into the Depositary's account at one
of the Book-Entry Transfer Facilities), a properly completed and duly executed
YELLOW Letter of Transmittal (or facsimile thereof) and any other required
documents.
General
For purposes of each Offer, the Company will be deemed to have accepted
for exchange or payment (and thereby acquired), subject to the proration
provisions of the applicable Offer, Common Shares that are validly tendered
pursuant to the applicable Offer prior to the Expiration Date and not
withdrawn as, if and when it gives oral or written notice (i) to the Exchange
Agent of its acceptance for exchange of Common Shares tendered pursuant to the
Exchange Offer and (ii) to the Depositary of its acceptance for purchase of
Common Shares tendered pursuant to the Cash Offer. The Exchange Agent and
Depositary will act as agent for tendering shareholders for the purpose of (i)
receiving Depositary Shares from the Company in exchange for Common Shares
tendered pursuant to the Exchange Offer, (ii) receiving payment from the
Company for Common Shares tendered pursuant to the Cash Offer, and (iii)
transmitting Depositary Shares or cash, as the case may be, to tendering
shareholders. Under no circumstances will interest be paid on Depositary
Shares to be delivered or cash amounts to be paid to tendering shareholders by
the Company by reason of any delay in making such delivery or payment.
Certificates for all Common Shares not acquired by the Company pursuant
to the Offers for any reason (including Common Shares tendered in the Cash
Offer at prices greater than the Purchase Price) will be returned (or, in the
case of Common Shares tendered by book-entry transfer, such Common Shares will
be credited to an account maintained with a Book-Entry Transfer Facility) as
soon as practicable (subject to possible delay in the event of proration)
without expense to the tendering shareholder. The Company will pay all stock
transfer taxes, if any, payable on the transfer to it of Common Shares
purchased pursuant to any Offer, except as set forth in Instruction 7 of the
applicable Letter of Transmittal.
Delivery of Depositary Shares in exchange for, or payment of cash for,
Common Shares may be delayed in the event of difficulty in determining the
number of Common Shares validly tendered or if proration is required. See
"--Proration" above. In addition, if certain conditions are not satisfied,
the Company may not be obligated to purchase Common Shares pursuant to the
Offers. See "--Conditions of the Offers" below. As provided in Rules
13e-4(f)(4) and (8)(ii) under the Exchange Act, with respect to each Offer,
the Company will deliver the same consideration per Common Share for each
Common Share accepted pursuant to such Offer.
Conditions of the Offers
It is a condition of the Exchange Offer that a minimum of 2,500,000
Common Shares be validly tendered pursuant to the Exchange Offer by the
Expiration Date and not withdrawn. The Cash Offer is not conditioned upon any
minimum number of Common Shares being tendered.
Notwithstanding any other provision of the Offers, the Company shall not
be required to accept for exchange or payment or exchange or pay for any
Common Shares tendered pursuant to the applicable Offer, and may terminate or
amend either or both the Offers or may postpone (subject to the requirements
of the Exchange Act for prompt exchange or payment for or return of Common
Shares) the acceptance for exchange or payment of, and exchange of or payment
for, Common Shares tendered, if at any time on or after June 13, 1995 and
before acceptance for exchange of or payment for or exchange of or payment for
any such Common Shares any of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency or authority or tribunal or any other person, domestic or foreign,
before any court, authority, agency or tribunal which (i) challenges the
making of the Offers, the acquisition of some or all of the Common Shares
pursuant to the Offers or otherwise relates in any manner to the Offers; or
(ii) in the Company's sole judgment, could materially affect the business,
condition (financial or other), income, operations or prospects of the Company
and its subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or any of
its subsidiaries or materially impair the contemplated benefits of the Offers
to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offers or the Company or
any of its subsidiaries, by any court or any authority, agency or tribunal
which, in the Company's sole judgment, would or might directly or indirectly
(i) make the acceptance for exchange of or payment for, or exchange of or
payment for, some or all of the Common Shares illegal or otherwise restrict or
prohibit consummation of the Offers; (ii) delay or restrict the ability of
the Company, or render the Company unable, to accept for exchange or payment
or exchange or pay for some or all of the Common Shares; (iii) materially
impair the contemplated benefits of the Offers to the Company; or (iv)
materially affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a whole,
or otherwise materially impair in any way the contemplated future conduct of
the business of the Company or any of its subsidiaries;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
in the over-the-counter market, (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States, (iii)
the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States, (iv) any
limitation (whether or not mandatory) by any governmental, regulatory or
administrative agency or authority on, or any event which, in the Company's
sole judgment, might affect, the extension of credit by banks or other lending
institutions in the United States, (v) any significant decrease in the market
price of the Common Shares or any change in the general political, market,
economic or financial conditions in the United States or abroad that could, in
the sole judgment of the Company, have a material adverse effect on the
Company's business, operations or prospects or the trading in the Common
Shares, (vi) in the case of any of the foregoing existing at the time of the
commencement of the Offers, a material acceleration or worsening thereof or
(vii) any decline in either the Dow Jones Industrial Average (4446.46 at the
close of business on June 12, 1995) or the Standard and Poor's 500 Index
(530.88 at the close of business on June 12, 1995) by an amount in excess of
15 percent measured from the close of business on June 12, 1995;
(d) any tender or exchange offer with respect to some or all of the
Common Shares (other than the Offers), or a merger, acquisition or other
business combination proposal for the Company, shall have been proposed,
announced or made by any person or entity;
(e) any change shall occur or be threatened in the business, condition
(financial or other), income, operations, Common Share ownership or prospects
of the Company and its subsidiaries, taken as a whole, which, in the sole
judgment of the Company, is or may be material to the Company; or
(f) (i) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have acquired, or proposed to acquire,
beneficial ownership of more than 5% of the outstanding Common Shares (other
than a person, entity or group which had publicly disclosed such ownership in
a Schedule 13D or 13G (or an amendment thereto) on file with the Commission
prior to June 13, 1995), (ii) any such person, entity or group which had
publicly disclosed such ownership prior to such date shall have acquired, or
proposed to acquire, beneficial ownership of additional Common Shares
constituting more than 2% of the outstanding Common Shares (options for and
other rights to acquire Common Shares which are so acquired or proposed to be
acquired being deemed for this purpose to be immediately exercisable) or (iii)
any new group shall have been formed which beneficially owns more than 5% of
the outstanding Common Shares;
and, in the sole opinion of the Company, in any such case and regardless of
the circumstances (including any action or omission to act by the Company)
giving rise to such condition, such event makes it inadvisable to proceed with
one or both of the Offers or with such acceptance for exchange or payment or
such exchange or payment.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances (including any
action or inaction by the Company) giving rise to any such condition, and any
such condition may be waived by the Company, in whole or in part, at any time
and from time to time in its sole discretion, with respect to either or both
Offers. The Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts or circumstances; and each such right
shall be deemed an ongoing right which may be asserted at any time and from
time to time. Any determination by the Company concerning the events
described above will be final and binding on all parties.
Consummation of the Exchange Offer is not a condition to consummation of
the Cash Offer. Consummation of the Cash Offer is not a condition to
consummation of the Exchange Offer.
Commissions and Fees
Tendering shareholders will not be obligated to pay brokerage
commissions, solicitation fees, or, subject to Instruction 7 of each Letter of
Transmittal, stock transfer taxes on the acquisition of Common Shares by the
Company in connection with either of the Offers. The Company will pay all
charges and expenses of First Chicago Trust Company of New York, as Exchange
Agent and Depositary, and Morrow & Co., Inc., as Information Agent, in
connection with the Offers. The Company will not pay any commission or other
remuneration to any broker, dealer, salesman or other person for soliciting
tenders of Common Shares in connection with the Offers.
Status of Common Shares Acquired Pursuant to the Offers
Any Common Shares acquired by the Company pursuant to the Offers will be
held as treasury shares. Such shares would be available for use by the
Company, without, in most cases, the need for further shareholder
authorization, for general or other corporate purposes, including redemption
of Depositary Shares, stock splits or dividends, acquisitions, employee
incentive, savings and compensation plans, sales to a third party or parties,
or issuance of rights or warrants to purchase Common Shares. Except for use in
employee benefit plans and redemption of Depositary Shares, the Company has no
present plan to use any authorized but unissued Common Shares or shares held
as treasury shares for any purpose.
Exchange Agent and Depositary
First Chicago Trust Company of New York is the Exchange Agent for the
Exchange Offer and the Depositary for the Cash Offer. All Letters of
Transmittal and other documents required in connection with tenders of Common
Shares pursuant to any Offer should be transmitted to the Exchange Agent and
Depositary in the manner specified under "--Procedure for Tender" above and in
the applicable Letter of Transmittal to its address set forth below:
By Mail: By Hand or Overnight Delivery:
First Chicago Trust Company of First Chicago Trust Company of
New York New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660-SUN Suite 4680-SUN
P.O. Box 2559-SUN 14 Wall Street
Jersey City 8th Floor
New Jersey 07303-2559 New York, NY 10005
Information Agent
Morrow & Co., Inc. is the Information Agent for the Offers. Questions
and requests for assistance or for additional copies of this Offer to
Purchase/Offering Circular and the applicable Letter of Transmittal and Notice
of Guaranteed Delivery may be directed to the Information Agent at the
following address and telephone number:
Morrow & Co., Inc.
909 Third Avenue
New York, NY 10022
toll free (800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offers.
DESCRIPTION OF DEPOSITARY SHARES
Each Depositary Share represents ownership of one-half share of
Preference Stock deposited under the Deposit Agreement dated as of June 13,
1995 (the "Deposit Agreement") between the Company and First Chicago Trust
Company of New York, as depositary (the "Preference Stock Depositary").
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share is entitled, proportionately, to all the rights, preferences and
privileges of the Preference Stock represented thereby (including dividend,
voting and liquidation rights), and subject proportionately, to all of the
limitations of the Preference Stock represented thereby contained in the
Statement of Designation for the Preference Stock, summarized under
"Description of Preference Stock."
The Depositary Shares are evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). The following
summary of the terms and provisions of the Depositary Shares does not purport
to be complete and is subject to, and qualified in its entirety by, the
Deposit Agreement (which contains the form of Depositary Receipt). Copies of
the Deposit Agreement are available for inspection at the corporate office of
the Preference Stock Depositary located at First Chicago Trust Company of New
York, 14 Wall Street, 8th Floor, New York, New York 10005.
Issuance of Depositary Receipts
Upon issuance of the Preference Stock by the Company, the Company will
deposit the Preference Stock with the Preference Stock Depositary, which will
execute and deliver the Depositary Receipts to the Company. The Company will,
in turn, deliver the Depositary Receipts to the Exchange Agent. Depositary
Receipts will only be issued evidencing whole Depositary Shares.
Withdrawal of Preference Stock
Upon surrender of Depositary Receipts at the principal office of the
Preference Stock Depositary, upon payment of a sum sufficient for the payment
of any tax or other governmental charge with respect thereto, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares
evidenced thereby is entitled to delivery of the number of whole shares of
Preference Stock represented by such Depositary Shares. Fractional shares of
Preference Stock will not be issued. If the Depositary Receipts delivered by
the holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of Preference Stock
to be withdrawn, the Preference Stock Depositary will deliver to such holder
at the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares. Holders of Preference Stock thus withdrawn will not
thereafter be entitled to deposit such shares under the Deposit Agreement or
to receive Depositary Receipts evidencing Depositary Shares therefor. There
is currently no market for Preference Stock and it is not expected that an
active trading market for Preference Stock will develop.
Call or Redemption of Depositary Shares
As described under "Description of Preference Stock--Redemption," the
Preference Stock is subject to the right of the Company to call the Preference
Stock at any time, at the Company's option, for redemption. The Depositary
Shares are subject to call or redemption upon the same terms and conditions
(including as to notice to the owners of Depositary Shares and as to selection
of Depositary Shares to be called if fewer than all the outstanding Depositary
Shares are to be called) as the Preference Stock held by the Preference Stock
Depositary in exchange for Common Shares delivered by the Company to the
Preference Stock Depositary, except that the number of Common Shares received
upon call or redemption of each Depositary Share will be equal to one-half of
the number of Common Shares received upon call or redemption of each share of
Preference Stock. To the extent that Depositary Shares are redeemed for Common
Shares and all of such Common Shares cannot be distributed to the record
holders of Depositary Receipts without creating fractional interests in such
shares, the Preference Stock Depositary may, with the consent of the Company,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the public or private sale of such
shares representing in the aggregate such fractional interests at such places
and upon such terms as it may deem proper, and the net proceeds of any such
sale shall be distributed or made available for distribution to such record
holders that would otherwise have received fractional interests in such
shares. The amount distributed in the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preference Stock
Depositary on account of taxes or otherwise required pursuant to law,
regulation or court process.
Dividends and Other Distributions
The Company, on behalf of the Preference Stock Depositary (or if the
Company determines otherwise, the Preference Stock Depositary), will
distribute all cash dividends or other cash distributions in respect of the
Preference Stock represented by the Depositary Shares to the record holders of
Depositary Receipts in proportion to the number of Depositary Shares owned by
such holders on the relevant record date, which will be the same date as the
relevant record date fixed by the Company for the Preference Stock. In each
case where a holder of Depositary Share would otherwise be entitled to receive
a fraction of a cent, the Company, on behalf of the Preference Stock
Depositary (or if the Company determines otherwise, the Preference Stock
Depositary), will round the amount of the distribution up to the next whole
cent.
In the event of a distribution other than in cash, the Company, on behalf
of the Preference Stock Depositary (or, if the Company determines otherwise,
the Preference Stock Depositary), will distribute property to the record
holders of Depositary Receipts entitled thereto, in proportion, as nearly as
may be practicable, to the number of Depositary Shares owned by such holders
on the relevant record date, unless the Company determines that it is not
feasible to make such distribution, in which case the Company on behalf of the
Preference Stock Depositary (or, if the Company determines otherwise, the
Preference Stock Depositary), may adopt any other method for such distribution
as it deems appropriate, including the sale of such property and distribution
of the net proceeds from such sale to such holders.
Procedures for Voting
Promptly upon receipt of notice of any meeting at which the holders of
Preference Stock represented by such holders' Depositary Shares are entitled
to vote, the Preference Stock Depositary (unless another arrangement for
allowing holders of Series A Depositary Shares to exercise the voting rights
associated with the Series A Depositary Shares is agreed by the Company and
the Depositary) will cause the information contained in such notice of meeting
to be mailed to the record holders of Depositary Receipts as of the record
date for such meeting. Each such record holder of Depositary Receipts will be
entitled to instruct the Preference Stock Depositary as to the exercise of
voting rights with respect to the number of shares of Preference Stock
represented by such holder's Depositary Shares. The Preference Stock
Depositary will endeavor, insofar as practicable, to vote with respect to the
number of shares of Preference Stock represented by such Depositary Shares in
accordance with such instructions, and the Company intends to take all action
which may be deemed necessary by the Preference Stock Depositary in order to
enable the Preference Stock Depositary to do so. The Preference Stock
Depository will abstain from voting with respect to the Preference Stock to
the extent that it does not receive specific written instructions from the
holders of Depositary Receipts.
Amendment and Termination of Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Preference Stock Depositary.
However, any amendment which imposes or increases any fees, taxes, or charges
upon holders of Depositary Shares (other than taxes and other governmental
charges, fees and other expenses payable by such holders as provided for in
the Deposit Agreement or Depositary Receipt and as stated under "--Charges of
Preference Stock Depositary"), or which otherwise prejudices any substantial
existing right of holders of Depositary Shares, will not take effect as to
outstanding Depositary Shares until the expiration of 30 days after notice of
such amendment has been mailed to the record holders of outstanding Depositary
Shares. Every holder of an outstanding Depositary Share at the time any such
amendment becomes effective will be deemed, by continuing to hold such
Depositary Share, to consent and agree to such amendment and to be bound by
the Deposit Agreement as amended thereby. No such amendment may impair the
right, subject to the terms of the Deposit Agreement, of any owner of any
Depositary Shares to surrender the Depositary Receipt evidencing such
Depositary Shares with instructions to the Preference Stock Depositary to
deliver to the holder the Preference Stock represented thereby, except in
order to comply with mandatory provisions of applicable law.
The Deposit Agreement may be terminated by the Company or the Preference
Stock Depositary only if (i) all outstanding Depositary Shares have been
redeemed or (ii) there has been a final distribution in respect of the
Preference Stock in connection with any liquidation, dissolution or winding up
of the Company and such distribution has been made to all the holders of
Depositary Shares. In the event the Deposit Agreement is terminated, the
Company will use its best efforts to list the Preference Stock on the NYSE or
any other national securities exchange on which the Common Shares are listed.
Charges of Preference Stock Depositary
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay charges of the Preference Stock Depositary in connection with
the initial deposit of the Preference Stock and the initial issuance of the
Depositary Shares, any redemption of the Preference Stock and all withdrawals
of the Preference Stock by owners of Depositary Shares. Holders of Depositary
Receipts will pay transfer, income and other taxes and governmental charges
and charges incurred by the Depositary at the election of a holder, as
provided in the Deposit Agreement to be for their accounts. In certain
circumstances, the Preference Stock Depositary and the Company may refuse to
transfer Depositary Shares, may withhold dividends and distributions and may
sell the Depositary Shares evidenced by such Depositary Receipt if such
charges are not paid.
Other Rights
As to any alleged breach of a fiduciary or contractual duty owed to a
holder of Depositary Shares by either the Company or its directors, such
holder has the same right to bring a cause of action as would any owner of
Preference Stock whose shares were held of record by a nominee, including
so-called "street name" shares. Such a cause of action could be brought
either directly or derivatively on behalf of the Company, depending on the
nature of the underlying claim; provided that in bringing any such cause of
action, a holder of Depositary Shares must otherwise comply with applicable
statutory or common law requirements. In addition, holders of Depositary
Shares may request the Preference Stock Depositary to bring such causes of
action provided indemnities satisfactory to the Preference Stock Depositary
are given.
Miscellaneous
Application will be made to list the Depositary Shares on the NYSE upon
official notice of issuance and subject to adequacy of distribution and other
listing requirements. If these conditions are not met, it is expected that
the Depositary Shares will trade in the over-the-counter market.
The Company will deliver to the Preference Stock Depositary all reports
to shareholders and other communications which the Company is required to
furnish to the holders of Preference Stock by law, by the rules of the NYSE or
by the Articles of Incorporation of the Company or Statement of Designation
relating to the Preference Stock. The Preference Stock Depositary will forward
to the holders of Depositary Shares and will make available for inspection by
holders of such Depositary Shares at the principal office of the Preference
Stock Depositary, and at such other places as it may from time to time deem
advisable, any such reports and communications received from the Company.
Neither the Preference Stock Depositary nor the Company will be subject
to any liability under the Deposit Agreement to holders of Depositary Receipts
other than for its negligence, bad faith or willful misconduct. Neither the
Preference Stock Depositary nor the Company will be liable if it is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Preference Stock Depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder, and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or shares of Preference Stock unless satisfactory indemnity
is furnished. The Company and the Preference Stock Depositary may rely on
written advice of counsel or accountants, on information provided by holders
of Depositary Shares or other persons believed in good faith to be competent
to give such information and on documents believed to be genuine and to have
been signed or presented by the proper party or parties.
Resignation and Removal of Preference Stock Depositary
The Preference Stock Depositary may resign at any time by delivering to
the Company notice of its election to do so. The Company may at any time, by
notice, remove the Preference Stock Depositary or may terminate the engagement
of the Preference Stock Depositary with respect to any or all of its duties
and obligations under the Deposit Agreement. Any such resignation, removal or
termination will take effect upon the appointment of a successor Preference
Stock Depositary and such successor's acceptance of such appointment with
respect to all the predecessor's duties and obligations so terminated. Such
successor Preference Stock Depositary must be appointed within 45 days after
delivery of the notice for resignation, removal or termination and, if the
predecessor is to acquire title to Preferred Stock, must be a bank or trust
company having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF PREFERENCE STOCK
The following description of the Preference Stock is summarized from,
and is qualified in its entirety by reference to, the Statement of Designation
to be filed by the Company with the Commonwealth of Pennsylvania attached
hereto as Annex A. Such Annex A sets forth the terms of the Preference Stock
and should be read with care.
General
The Board of Directors of the Company is authorized without further
shareholder action to provide for the issuance of up to 15,000,000 shares of
Cumulative Preference Stock of the Company ("Cumulative Preference Stock") in
one or more series and to determine the designations, preferences,
qualifications, privileges, limitations and other special rights of each
series, including the number of shares issuable in each series, dividend
rates, liquidation rights, voting rights, conversion rights, redemption
rights, sinking funds, stated value and such other provisions as may be
determined by the Board of Directors in accordance with Pennsylvania law.
Rank
The Preference Stock will rank, with respect to dividend rights and
rights upon liquidation, dissolution or winding up, prior to the Common Shares
and to any other capital stock of the Company (collectively, the "Junior
Stock"), other than capital stock which shall by its terms rank prior to or on
a parity with ("Parity Stock") Cumulative Preference Stock and which shall be
authorized by a vote of the holders of at least two-thirds of the
then-outstanding Cumulative Preference Stock of all series.
Dividend Rights
Holders of Preference Stock will be entitled to receive, when, as and if
declared by the Board of Directors of the Company, cumulative cash dividends,
accruing at the rate per share (the "Dividend Rate") of $3.60 per annum and no
more, payable in cash quarterly, each such quarterly payment to be in respect
of the quarterly period ending with the day next preceding the date of such
payment (except in the case of the first dividend which shall be in respect of
the period beginning on the Accrual Date (i.e., June 12, 1995) and ending with
the day next preceding the date of such payment), to holders of Preference
Stock of record on the respective dates, not exceeding forty (40) days
preceding such quarterly dividend payment dates, fixed for that purpose by the
Board of Directors. Such dividends shall be cumulative from the Accrual Date
and shall accrue daily. Accruals of dividends shall not bear interest.
Dividends will be payable on or before each March 13, June 13, September 13
and December 13 (or, if any such day is not a business day, on the next
succeeding business day).
Dividends will cease to accrue in respect of any shares of Preference
Stock redeemed on the redemption date with respect to such redemption.
Dividends on the Preference Stock will accrue whether or not such
dividends are declared and will accumulate to the extent they are not paid on
the dividend payment date for the quarter for which they accrue. Holders of
the Preference Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of full cumulative accrued dividends as
described herein.
Before any dividends (other than dividends payable in Junior Stock) on
any Junior Stock shall be declared and set apart for payments or paid, the
holders of shares of Preference Stock shall be entitled to receive cash
dividends, when and as declared by the Board of Directors at the Dividend
Rate, and no more. No dividends shall be declared or paid or set apart for
payment on the Preference Stock in respect of any quarterly dividend period
unless there shall likewise be or have been declared and paid or set apart for
payment on all shares of Cumulative Preference Stock of each other series at
the time outstanding like dividends in proportion to the respective annual
dividend rates fixed therefor for all quarterly dividend periods coinciding
with or ending before such quarterly dividend period.
So long as any shares of Preference Stock are outstanding, the Company
shall not declare or set apart for payment or pay any dividends (other than
stock dividends payable on shares of Junior Stock) or make any distribution
on any Junior Stock and shall not redeem, purchase or otherwise acquire, or
permit any subsidiary to purchase or otherwise acquire, any shares of any such
Junior Stock if at the time of making such declaration, payment, distribution,
redemption, purchase or acquisition the Company shall be in default with
respect to any dividend payable on, or any obligation to purchase, shares of
Preference Stock; provided, however, that, notwithstanding the foregoing, the
Company may at any time redeem, purchase or otherwise acquire shares of stock
of any such Junior Stock in exchange for, or out of the net cash proceeds from
the sale of, other shares of stock of any Junior Stock.
Liquidation Preference
Upon the voluntary or involuntary liquidation, dissolution or winding up
of the Company, the Preference Stock shall be preferred as to assets over
Junior Stock so that the holder of each share of the Preference Stock shall be
entitled to be paid or to have set apart for payment in respect of each such
share, before any distribution is made to the holders of any Junior Stock, a
liquidation preference equal to twice the fair market value (as determined by
the Board of Directors of the Company, based on advice of tax counsel in
accordance with United States federal income tax principles, which
determination shall be conclusive), of a Depositary Share on the date of
issuance thereof (which generally will be the mean between the highest and
lowest quoted selling prices of the Depositary Shares on such date), plus an
amount equal to all dividends accrued and unpaid up to and including the date
fixed for such payment, and such holder of a share of the Preference Stock
shall not be entitled to any other payment. If upon any such liquidation,
dissolution or winding up of the Company, its net assets shall be insufficient
to permit the payment in full of the respective amounts to which the holders
of all outstanding shares of the Preference Stock and any outstanding
Preference Stock that is Parity Stock are entitled, the entire remaining net
assets of the Company shall be distributed among the holders of the Preference
Stock and any outstanding Preference Stock that is Parity Stock, in amounts
proportionate to the full preferential amounts to which they are respectively
entitled.
The voluntary sale, lease, exchange or transfer for cash, shares of stock
(securities or other consideration) of all or substantially all the Company's
property or assets to, or its consolidation or merger with, one or more
corporations shall not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Company.
The liquidation preference of the Preference Stock is not indicative of
the price at which the Depositary Shares may actually trade at or after the
date of issuance.
Voting Rights
The holders of shares of Preference Stock shall be entitled to vote on
all matters submitted to a vote of the holders of the Common Shares, voting
together with the holders of the Common Shares (and any other class or series
of capital stock of the Company entitled to vote together with the Common
Shares) as one class. Each share of the Preference Stock shall be entitled to
one vote.
In addition, if the Company shall have failed to pay, or declare and set
apart for payment, dividends on Preference Stock in an aggregate amount
equivalent to six (6) full quarterly dividends on all shares of Preference
Stock at the time outstanding, the number of Directors of the Company shall be
increased by two (2) at the first annual meeting of the shareholders of the
Company held thereafter, and at such meeting and at each subsequent annual
meeting until dividends payable for all past quarterly dividend periods on all
outstanding shares of Preference Stock shall have been paid, or declared and
set apart for payment, in full, the holders of the shares of Cumulative
Preference Stock of each series shall have, in addition to any other voting
rights which they otherwise may have, the exclusive and special right, voting
separately as a class without regard to series, each share of Cumulative
Preference Stock entitling the holder thereof to one (1) vote per share, to
elect two (2) additional members of the Board of Directors to hold office for
a term of one (1) year; provided, however, that the right to vote as a class
upon the election of such two (2) additional Directors shall not limit the
right of holders of the Preference Stock to vote upon the election of all
other Directors and upon other matters set forth in the immediately preceding
paragraph above. Upon such payment, or declaration and setting apart for
payment, in full, the terms of the two (2) additional Directors so elected
shall forthwith terminate, and the number of Directors of the Company shall be
reduced by two (2) and such special voting right of the holders of shares of
Preference Stock shall cease, subject to increase in the number of Directors
as aforesaid and to revesting of such voting right in the event of each and
every additional failure in the payment of dividends in an aggregate amount
equivalent to six (6) full quarterly dividends as aforesaid.
The Company shall not, without the affirmative vote or consent of the
holders of at least 66 2/3% of the number of shares of Cumulative Preference
Stock of all series at the time outstanding, voting or consenting (as the case
may be) separately as a class without regard to series, given in person or by
proxy, either in writing or by resolution adopted at a meeting:
(i) create any class of stock ranking prior to or on a parity with
Cumulative Preference Stock as to dividends or upon liquidation or
increase the authorized number of shares of any such previously authorized
class of stock;
(ii) alter or change any of the provisions of the Articles of
Incorporation so as to adversely affect the preferences, special rights or
powers given to the Cumulative Preference Stock;
(iii) increase the number of shares of Cumulative Preference Stock
which the Company is authorized to issue; or
(iv) alter or change any of the provisions of the Articles of
Incorporation or hereof so as to adversely affect the preferences, special
rights or powers given to the Preference Stock.
Redemption
At any time and from time to time, the Company shall have the right to
call, in whole or in part, the outstanding shares of Preference Stock for
redemption. On the Redemption Date with respect to any such redemption, the
Company shall deliver to the holders thereof, in exchange for each such share
called for redemption, the following consideration:
(1) in the event such Redemption Date is prior to the Specified Date
(i.e, prior to June 12, 1998),
(i) a number of Common Shares equal to the Preference Stock Call
Price (as defined below) in effect on the Redemption Date divided by the
Current Market Price of the Common Shares as of the end of the second
trading day immediately preceding the date on which the Company gives
notice regarding the redemption to the holders of the Preference Stock,
and
(ii) an amount in cash equal to all accrued and unpaid dividends on
such share of Preference Stock to and including the Redemption Date,
whether or not declared, out of funds legally available therefor (and
dividends shall cease to accrue on such share as of such date); and
(2) in the event such Redemption Date is on or after the Specified Date,
(i) Common Shares at the Common Equivalent Rate (as defined below) in
effect on the Redemption Date; and
(ii) an amount in cash equal to all accrued and unpaid dividends on
such share of Preference Stock to and including the Redemption Date,
whether or not declared, out of funds legally available for the payment of
dividends (and dividends shall cease to accrue on such share as of the
Redemption Date).
The Company currently intends to redeem all the outstanding Preference
Stock (and Depositary Shares represented thereby) on the Specified Date if not
theretofore redeemed.
If at any time less than all of the shares of Preference Stock then
outstanding are to be called for redemption, the shares to be redeemed may be
selected by lot or such other equitable method as the Board of Directors of
the Company in its discretion may determine.
The opportunity for equity appreciation afforded by an investment in the
Preference Stock (and the Depositary Shares) is limited because the Company
may, at its option, call the Preference Stock (and thereby the Depositary
Shares) at any time prior to the Specified Date at the Preference Stock Call
Price, and may be expected to do so prior to the Specified Date if, among
other things, the market price of the Common Shares has theretofore exceeded
the Depositary Share Call Price.
Because the price of the Common Shares is subject to market fluctuations,
the value of the Common Shares received by a holder of Depositary Shares upon
redemption thereof on or after the Specified Date may be more or less than the
value of the Common Shares tendered in exchange for such Depositary Shares.
The shares of Preference Stock are not redeemable for Common Shares or
cash at the option of the holders thereof.
Upon the effectiveness at any time of a merger, consolidation or similar
extraordinary transaction involving the Company that results in the conversion
or exchange of the Common Shares into, or results in the holders of Common
Shares having the right to receive, other securities or other property (a
"Fundamental Transaction"), each share of Preference Stock will be entitled to
receive consideration in such transaction of the same type as is received by
holders of the Common Shares in such transaction and having a fair value equal
to the value of the Common Shares that the holder of such share of Preference
Stock would receive if such share of Preference Stock were redeemed by the
Company at such time.
The "Common Equivalent Rate" initially will be two Common Shares for each
share of Preference Stock, subject to adjustment in the event of certain stock
dividends or distributions, subdivisions, splits, combinations, issuances of
certain rights or warrants, distributions of certain assets, or certain other
dilutive events with respect to the Common Shares.
The term "Current Market Price" on any date of determination means the
average closing price of a Common Share on the NYSE for the five consecutive
trading days ending on and including such date of determination; provided,
however, that if the closing price of the Common Shares on the NYSE on the
trading day next following such five-day period (the "next-day closing price")
is less than 95% of such average closing price, then the Current Market Price
per Common Share on such date of determination will be the next-day closing
price; and provided further that, with respect to any redemption of the
Preference Stock, if any adjustment of the Common Equivalent Rate becomes
effective during the period beginning on the first day of such five-day period
and ending on the applicable redemption date, the Current Market Price as
determined pursuant to the foregoing will be appropriately adjusted to reflect
such adjustment.
The "Preference Stock Call Price" will initially be $84.79952 for each
share of Preference Stock, declining by $.004444 on each day following the
Accrual Date (i.e. June 12, 1995)(computed on the basis of a 360-day year of
twelve 30-day months) to $80.26664 on April 12, 1998, and equal to $80 per
share thereafter through June 11, 1998. The Preference Stock Call Price in
effect at any time is equal to the sum of (i) $80 plus (ii) the Dividend
Premium (as defined below) then in effect. The term "Dividend Premium" with
respect to a share of the Preference Stock means an amount initially equal to
$4.79952 for each share of Preference Stock, declining by $.004444 on each day
following the Accrual Date (i.e. June 12, 1995) to $.26664 on April 12, 1998,
and equal to $0 per share thereafter through June 11, 1998.
Notice of a redemption must be given to the holders of Preference Stock
at least 30 but not more than 60 days prior to the redemption date.
No fractional Common Shares or scrip representing fractional Common
Shares shall be issued upon the redemption of any shares of Preference Stock.
Instead of any fractional interest in a Common Share which would otherwise be
deliverable upon the redemption of a share of Preference Stock, the Company
shall pay to the holder of such share an amount in cash (computed to the
nearest cent) equal to the same fraction of the Current Market Price of the
Common Shares determined as of the second trading day immediately preceding
the relevant notice date.
Miscellaneous
The Preference Stock will not have any conversion rights to convert into
Common Shares. The Preference Stock will have no preemptive rights.
SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 6,400,000 Common Shares pursuant to
the Cash Offer at a price of $33 per Common Share, the Company estimates that
the total amount in cash required by the Company to purchase such Common
Shares pursuant to the Cash Offer and to pay fees and expenses related to the
Offers will be approximately $215 million. The Company expects to pay such
amounts from cash proceeds received from the sale of the Company's remaining
55% interest in Suncor, a Canadian integrated oil company. See "The Offers--
Background and Purpose."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences of (i) an exchange of Common Shares pursuant to the Exchange
Offer, the Cash Offer or both and (ii) the ownership and disposition of
Depositary Shares and Preference Stock. The discussion contained in this
summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), existing and proposed Treasury Regulations, judicial decisions and
administrative pronouncements, changes to which could materially affect the
tax consequences described herein and could be made on a retroactive basis.
In addition, stock having terms closely resembling those of the Preference
Stock have not been the subject of any regulation, ruling or judicial decision
currently in effect and there can be no assurance that the Internal Revenue
Service will take the positions set forth below.
This summary discusses only Common Shares, Depositary Shares and
Preference Stock held as capital assets within the meaning of Section 1212 of
the Code and does not deal with all tax consequences that may be relevant to
all categories of holders (such as dealers in securities or commodities,
insurance companies, tax-exempt organizations or persons who hold Common
Shares, Depositary Shares or Preference Stock as a position in a straddle). In
particular, the summary may not be applicable to holders who received their
Common Shares pursuant to the exercise of employee stock options or otherwise
as compensation or to Common Shares held by the Company's employee benefit
plans. The summary does not address the state, local or foreign tax
consequences of participating in the Cash Offer or the Exchange Offer or of
holding Preference Stock. Holders of Common Shares should consult their tax
advisors as to the particular consequences to them of participation in the
Cash Offer or the Exchange Offer or both and of the ownership and disposition
of Depositary Shares and Preference Stock.
As used herein, a "United States Holder" means a beneficial owner of
Common Shares, Depositary Shares or Preference Stock, as the case may be, that
is a citizen or resident of the United States, a corporation or partnership
created or organized under the laws of the United States or any State thereof,
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source, or a person or entity that is
otherwise subject to United States federal income taxation on a net income
basis in respect of income derived from the Common Shares, Depositary Shares
or Preference Stock, as the case may be. A "Non-United States Holder" means a
beneficial owner of Common Shares, Depositary Shares or Preference Stock, as
the case may be, that is not a United States Holder.
UNITED STATES HOLDERS
Non-Participation in the Cash Offer and the Exchange Offer
Holders of Common Stock who do not participate in either the Cash Offer
or the Exchange Offer will not incur any tax liability as a result of the
consummation of the Offers.
Exchange of Common Shares Pursuant to the Cash Offer or the Exchange Offer or
Both
Exchange of Common Shares for Cash
An exchange of Common Shares for cash in the Cash Offer by a United
States Holder that does not exchange any Common Shares for Depositary Shares
pursuant to the Exchange Offer will be a taxable transaction for United States
federal income tax purposes (and may also be taxable under applicable state,
local and foreign tax laws.) As a consequence of the exchange, the United
States Holder will, depending of such Holder's particular circumstances, be
treated either as recognizing gain or loss from the disposition of the Common
Shares or as receiving a dividend distribution from the Company.
Under Section 302 of the Code, a United States Holder will recognize gain
or loss on an exchange of Common Shares for cash if the exchange (i) results
in a "complete termination" of all such Holder's equity interest in the
Company, (ii) results in a "substantially disproportionate" redemption with
respect to such Holder or (iii) is "not essentially equivalent to a dividend"
with respect to the Holder. In applying the Section 302 tests, a United
States Holder must take account of stock that such Holder constructively owns
under attribution rules, pursuant to which the Holder will be treated as
owning stock of the Company owned by certain family members and related
entities and stock of the Company that the Holder has the right to acquire by
exercise of an option. An exchange of Common Shares for cash will be a
substantially disproportionate redemption with respect to a United States
Holder if the percentage of the then outstanding voting stock of the Company
owned by such Holder immediately after the exchange is less than 80% of the
percentage of the voting stock of the Company owned by such Holder immediately
before the exchange. If an exchange of Common Shares for cash fails to
satisfy the "substantially disproportionate" test, the United States Holder
may nonetheless satisfy the "not essentially equivalent to a dividend" test.
An exchange of Common Shares for cash will be "not essentially equivalent to a
dividend" if it results in a "meaningful reduction" of the United States
Holder's equity interest in the Company. An exchange of Common Shares for
cash that results in a reduction of the proportionate equity interest in the
Company of a United States Holder whose relative equity interest in the
Company is minimal (an interest of less than one percent should satisfy this
requirement) and who exercises no control over the Company's corporate affairs
should be treated as "not essentially equivalent to a dividend." United States
Holders should consult their own tax advisors about the application of the
rules of Section 302 in their particular circumstances.
If a United States Holder recognizes gain or loss as a consequence of an
exchange of Common Shares for cash, such gain or loss will be equal to the
difference between the amount of cash received and such Holder's tax basis in
the Common Shares exchanged therefor. Any such gain or loss will be capital
gain or loss and will be long-term capital gain or loss if the holding period
of the Common Shares exceeds one year as of the date of the exchange. Gain or
loss must be determined separately for each block of Common Shares (that is,
Common Shares acquired at the same cost in a single transaction) that is
exchanged for cash. A United States Holder may be able to designate
(generally through its broker) which blocks of Common Shares are tendered
pursuant to the Cash Offer, if less than all of such Holder's Common Shares
are tendered, and the order in which blocks are exchanged for cash, in case of
proration pursuant to the Cash Offer. Each United States Holder should
consult its tax advisor concerning the mechanics and desirability of such a
designation.
If a United States Holder is not treated under the Section 302 tests as
recognizing gain or loss on an exchange of Common Shares for cash, the cash
received by such United States Holder will be treated as a dividend to the
extent of the Holder's allocable portion of the Company's current and
accumulated earnings and profits. Such a dividend will be includible in the
United States Holder's gross income as ordinary income in its entirety,
without reduction for the tax basis of the Common Shares exchanged; no loss
will be recognized; and the United States Holder's tax basis in the Common
Shares exchanged will be added to such Holder's tax basis in the remaining
Common Shares that it owns. To the extent that cash received in exchange for
Common Shares is treated as a dividend to a corporate United States Holder,
(i) it will be eligible for a dividends-received deduction (subject to
applicable limitations) and (ii) it will be subject to the "extraordinary
dividend" provisions of the Code unless the payment of cash pursuant to the
Cash Offer is pro rata as to all holders of Common Shares, which is not likely
to be the case. Under proposed legislation, corporate United States Holders
that exchange Common Shares for cash would generally be treated as recognizing
gain, if any, on the exchange, rather than as receiving a dividend, and might
not be permitted to recognize a loss on the exchange. Corporate United States
Holders should consult their tax advisors concerning this proposed
legislation.
The Company cannot predict the extent to which the Cash Offer will be
oversubscribed. If the Cash Offer is oversubscribed, proration of tenders
pursuant to the Cash Offer will cause the Company to accept fewer shares than
are tendered. Therefore, a United States Holder can be given no assurance
that a sufficient number of such Holder's Common Shares will be purchased
pursuant to the Cash Offer to ensure that such purchase will be treated as a
sale or exchange, rather than as a dividend, for federal income tax purposes
pursuant to the rules discussed above.
Exchange of Common Shares for Depositary Shares
The Company has received an opinion of Davis Polk & Wardwell, as tax
counsel, to the effect that the receipt of Depositary Shares by holders
tendering Common Shares solely pursuant to the Exchange Offer (and not
tendering Common Shares pursuant to the Cash Offer) will be treated as part
of a tax-free recapitalization under Section 368(a)(1)(E) of the Code and
that such tendering holders will therefore not incur income tax liability
in connection with the Exchange Offer. Accordingly, a holder's tax basis
in the Depositary Shares received in the exchange will be equal to such
holder's tax basis in the Common Shares exchanged therefor, and the holding
period of such Depositary Shares will include the holding period of such
Common Shares.
Exchange of Common Shares for Cash and Depositary Shares
If a United States Holder exchanges some Common Shares for cash pursuant
to the Cash Offer and some Common Shares for Depositary Shares pursuant to the
Exchange Offer, such Holder will be treated as participating in a single
recapitalization of Common Shares for a combination of Depositary Shares and
cash. The United States Holder will realize gain equal to the difference
between (i) the sum of the amount of cash and the fair market value of the
Depositary Shares received and (ii) such Holder's tax basis in the Common
Shares exchanged in both the Cash Offer and the Exchange Offer; however, the
amount of gain subject to tax will be limited to the amount of cash received.
Such taxable gain will be treated either as a dividend under the Section 302
tests described above in "Exchange of Common Shares for Cash" or as capital
gain. No loss will be recognized on an exchange of Common Shares for both
Depositary Shares and cash.
The United States Holder's tax basis in the Depositary Shares received in
such an exchange will be equal to such Holder's tax basis in the Common Shares
exchanged both in the Exchange Offer and in the Cash Offer, decreased by the
cash received and increased by the amount of gain recognized. The holding
period of such Depositary Shares will include the period during which the
United States Holder held such Common Shares.
Ownership and Disposition of Depositary Shares and Preference Stock
Depositary Shares
The tax treatment of United States Holders of Depositary Shares will be
the same as the tax treatment of United States Holders of Preference Stock as
described below. In addition, a United States Holder will recognize no gain
or loss on the withdrawal of Preference Stock in exchange for Depositary
Shares pursuant to the Deposit Agreement; the United States Holder's tax basis
in the withdrawn Preference Stock will be the same as such Holder's tax basis
in the Depositary Shares surrendered therefor; and the United States Holder's
holding period for the withdrawn Preference Stock will include the period
during which such Holder held the surrendered Depositary Shares.
Dividends
Dividends paid on the Preference Stock out of the Company's current or
accumulated earnings and profits will be taxable as ordinary income and will
qualify for the 70% intercorporate dividends-received deduction, subject to
the minimum holding period requirement (generally at least 46 days) and other
applicable requirements. The dividends-received deduction will not be allowed
for purposes of calculating a corporate United States Holder's adjusted
current earnings under the alternative minimum tax rules. To the extent, if
any, that the amount of any dividend paid on the Preference Stock exceeds the
Company's current and accumulated earnings and profits, it will be treated
first as a return of the United States Holder's tax basis in the Preference
Stock and thereafter as a capital gain.
Under certain circumstances, a corporation that receives an
"extraordinary dividend," as defined in Section 1059(c) of the Code, is
required to reduce the tax basis of its stock by the non-taxed portion of such
dividend. A corporate United States Holder must consider its holding period
for, its tax basis in, and the fair market value of, the Preference Stock in
determining whether dividends paid on the Preference Stock will constitute
"extraordinary dividends." In addition, under Section 1059(f), any dividend
with respect to "disqualified preferred stock" is treated as an "extraordinary
dividend." However, while the issue is not free from doubt due to the lack of
authority directly on point, the Preference Stock should not constitute
"disqualified preferred stock."
Redemption Premium
Under certain circumstances, Section 305(c) of the Code requires that any
excess of the redemption price of preferred stock over its issue price be
includible in income, prior to receipt, as a constructive dividend. However,
Section 305(c) does not currently apply to stock with terms such as those of
the Preference Stock.
Call of Preference Stock for Common Shares
Gain or loss generally will not be recognized by a United States Holder
upon the call of the Preference Stock for Common Shares. Cash received in
payment of dividends in arrears is likely to be treated as dividend income. In
addition, a United States Holder that receives cash in lieu of a fractional
share will be treated as having received such fractional share and exchanged
it for cash in a transaction generally giving rise to capital gain or loss. A
United States Holder's tax basis in the Common Shares, including any
fractional share, received on the call of the Preference Stock will equal the
tax basis of the called or redeemed Preference Stock. The holding period of
such Common Shares will include the holding period of the called or redeemed
Preference Stock.
It is possible that the Internal Revenue Service would assert that a call
of the Preference Stock by the Company prior to the Specified Date increases
the proportionate interests of the holders of Common Shares in the assets or
earnings and profits of the Company and should therefore, pursuant to Section
305(c) of the Code, give rise to a constructive dividend to such holders at
the time of the call. However, such an assertion should not prevail because a
call of Preference Stock should be treated as an isolated recapitalization and
not as part of a plan periodically to increase the proportionate interest of
holders of Common Shares in the Company's assets or earnings and profits.
Other Dispositions of Preference Stock
A United States Holder will generally recognize gain or loss on a sale,
exchange or other disposition of Preference Stock in an amount equal to the
difference between the amount realized on the disposition and such Holder's
tax basis in the Preference Stock. Any such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if the holding period of
the Preference Stock exceeds one year as of the date of the disposition.
Under certain circumstances, upon the taxable disposition or taxable
redemption of "section 306 stock," the holder of such stock is required to
recognize as ordinary income, in the case of a disposition, or as dividend
income, in the case of a redemption, all or a portion of the proceeds received
by such holder, without regard to such holder's tax basis in the "section 306
stock," and cannot recognize any loss. To the extent that a United States
Holder that exchanges Common Shares for Preference Stock would have been
treated, under the rules of Section 302 of the Code, as receiving a dividend
distribution from the Company if such Holder had tendered such Common Shares
for cash, the Preference Stock owned by such United States Holder may be
treated as "section 306 stock." For a description of the rules of Section
302, see "Exchange of Common Shares Pursuant to the Cash Offer or the Exchange
Offer or Both -- Exchange of Common Shares for Cash" above. United States
Holders should consult their tax advisors concerning the consequences of the
Exchange Offer under Section 306 of the Code.
Adjustment of Common Equivalent Rate
Certain adjustments to the Common Equivalent Rate to reflect the
Company's issuance of certain rights, warrants, evidences of indebtedness,
securities or other assets to holders of Common Shares may result in
constructive distributions taxable as dividends to the United States Holders
of the Preference Stock. Any such constructive dividend may constitute, and
may cause other dividends to constitute, "extraordinary dividends" to
corporate United States Holders. See "Dividends" above.
Backup Withholding
Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on cash received in exchange for Common Shares,
on dividends received on the Preference Stock and on certain consideration
received on a call of the Preference Stock. Generally, backup withholding
applies only when the taxpayer fails to furnish or certify a proper taxpayer
identification number or when the taxpayer is notified by the Internal Revenue
Service that the taxpayer has failed to report payments of interest and
dividends properly. United States Holders should consult their own tax
advisors regarding their qualification for exemption from backup withholding
and the procedure for obtaining any applicable exemption.
NON-UNITED STATES HOLDERS
The Company will withhold United States federal income tax at the rate of
30% from cash received by a Non-United States Holder in exchange for Common
Shares pursuant to the Cash Offer, unless the Company determines that a
reduced rate of withholding is applicable pursuant to a tax treaty or that an
exemption from withholding is applicable because such cash is effectively
connected with the conduct of a trade or business in the United States. A
Non-United States Holder may be able to obtain a refund of such tax from the
Internal Revenue Service if such Holder establishes that the exchange did not
give rise to dividend income or if such Holder is entitled to a reduced rate
of withholding tax pursuant to a tax treaty and the Company withheld at a
higher rate. For information regarding the United States withholding tax in
respect of Non-United States Holders, see Instruction 10 of the YELLOW Letter
of Transmittal. Dividends paid on the Preference Stock to a Non-United States
Holder will also be subject to United States withholding tax at the rate of
30% or, if applicable, a lower treaty rate unless such Non-United States
Holder establishes that the dividends are effectively connected with the
conduct of a trade or business in the United States. The Company may be a
United States real property holding company and, as a consequence, a
Non-United States Holder may, in certain circumstances, be subject to United
States federal income tax on a sale or other taxable disposition of the
Preference Stock. Non-United States Holders are urged to consult their United
States tax advisors concerning the United States federal tax consequences, as
well as other tax consequences, of participation in the Cash Offer or the
Exchange Offer or both and of the ownership and disposition of Depositary
Shares and Preference Stock.
FEES
Other than as described below, no fees will be paid to brokers, dealers
or others by the Company in connection with the Offers.
The Exchange Agent and Depositary, the Preference Stock Depositary and
the Information Agent will receive reasonable and customary compensation for
their services and will also be reimbursed for certain out-of-pocket expenses.
The Company has agreed to indemnify the Exchange Agent and Depositary and the
Information Agent against certain liabilities in connection with the Offers,
including certain liabilities under the federal securities laws. Neither the
Exchange Agent and Depositary nor the Information Agent has been retained to
make solicitations or recommendations in their respective roles as Exchange
Agent and Depositary and Information Agent.
MISCELLANEOUS
Except as set forth in Annex B hereto, neither the Company nor, to its
knowledge, any of its subsidiaries, executive officers or directors or any
associate of any such officer or director has engaged in any transactions
involving the Common Shares during the 40 business days preceding the date
hereof. Neither the Company nor, to its knowledge, any of its executive
officers or directors is a party to any contract, arrangement, understanding
or relationship relating directly or indirectly to the Offers with any other
person with respect to the Common Shares.
ANNEX A
SUN COMPANY, INC.
Statement of Designation for the Issuance of Preference Stock
Pursuant to Section 1522 of the Pennsylvania Business Corporation Law
Pursuant to section 1522 of the Pennsylvania Business Corporation Law
of 1988, as amended, Sun Company, Inc., a Pennsylvania corporation
("Corporation"), does hereby file this Statement of Designation for the
Issuance of Preference Stock in such series as designated by the Board of
Directors of the Corporation by resolutions duly adopted at its meeting held
Monday, June 12, 1995, and the Corporation, acting through its duly authorized
officers, does hereby certify as follows:
FIRST: That the Articles of Incorporation of the Corporation
("Articles of Incorporation") at Article Fourth provide that,
The total number of shares of capital stock which this Corporation
shall have authority to issue is Two Hundred Fifteen Million
(215,000,000) to be divided into two classes consisting of Fifteen
Million (15,000,000) shares designated as "Cumulative Preference
Stock" (hereinafter called "Preference Stock"), without par value,
and Two Hundred Million (200,000,000) shares designated as "Common
Stock" (hereinafter called "Common Stock"), $1 par value.
SECOND: That Article Fourth of the Articles of Incorporation further
provides that authority is vested in the Board of Directors, by resolution, to
divide any or all of the authorized shares of Preference Stock into series and
to fix and determine the designations, preferences, qualifications,
privileges, limitations, options, conversion rights, and other special rights
of each such series.
THIRD: That, pursuant to the authority so vested in the Board of
Directors by the Articles of Incorporation, the Board of Directors duly
approved the following actions and adopted the following resolutions:
RESOLVED, That pursuant to the authority vested in the Board of
Directors pursuant to the Articles of Incorporation of this
Corporation, Twelve Million Five Hundred Thousand (12,500,000) shares
of Preference Stock are hereby approved for issuance in such series
as shall be hereinafter designated as the "Series A Cumulative
Preference Stock," and each share of such Series A Cumulative
Preference Stock shall be imposed upon and granted the preferences,
qualifications, privileges, limitations and other special rights set
forth in the attached Exhibit A, which is incorporated into this
resolution by reference; and
FURTHER RESOLVED, That pursuant to the authority vested in the
Board of Directors pursuant to section 1522 of the Pennsylvania
Business Corporation Law of 1988, as amended, the Corporation is
hereby authorized to amend and restate the Articles of Incorporation
to reflect the terms and provisions of the Series A Cumulative
Preference Stock set forth in Exhibit A attached hereto.
FOURTH: That said resolutions were duly adopted by the Board of
Directors at its meeting held on Monday, June 12, 1995 and such resolutions
remain in full force and effect, without amendment.
IN WITNESS WHEREOF, the Corporation, acting through the undersigned
duly authorized officers has executed this Statement and caused the corporate
seal of the Corporation to be affixed as of this 12th day of June 1995.
_______________________________
R. M. Aiken, Jr.
Senior Vice President and
Chief Financial Officer
ATTEST:
__________________________
Ann C. Mule
Secretary
Exhibit A
SERIES A CUMULATIVE PREFERENCE STOCK
1. Designation. The designation of the series of Preference
Stock authorized by this resolution shall be Series A Cumulative Preference
Stock (the "Series A Preference Stock") consisting of 12,500,000 shares.
2. Rank. The Series A Preference Stock shall rank, as to
dividends and upon liquidation, dissolution or winding up, prior to the Common
Stock and to any other capital stock of the Corporation hereafter authorized,
other than capital stock which shall by its terms rank prior to or on a parity
with the Series A Preference Stock and which shall be authorized pursuant to
paragraph 6(d) hereof. Any class or classes of stock of the Corporation shall
be deemed to rank:
(i) prior to Series A Preference Stock, either as to
dividends or upon liquidation, if the holders of such class or
classes shall be entitled to the receipt of dividends or amounts
distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series A
Preference Stock;
(ii) on a parity with Series A Preference Stock, either as
to dividends or upon liquidation, whether or not the dividend rates
or dividend payment dates or the redemption or liquidation prices per
share thereof be different from those of Series A Preference Stock,
if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference
or priority one (1) over the other as between the holder of such
class or classes and the holders of Series A Preference Stock
("Parity Stock"); and
(iii) junior to Series A Preference Stock, either as to
dividends or upon liquidation, if the rights of the holders of such
class or classes shall be subject or subordinate to the rights of the
holders of Series A Preference Stock in respect of the receipt of
dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be ("Junior Stock").
3. Dividends.
(a) The holders of outstanding shares of the Series A
Preference Stock shall be entitled to receive, when and as declared by the
Board of Directors, cash dividends accruing at the per share rate of $3.60 per
annum (the "Dividend Rate") and no more, payable in cash quarterly, each such
quarterly payment to be in respect of the quarterly period ending with the day
next preceding the date of such payment (except in the case of the first
dividend which shall be in respect of the period beginning with June 12, 1995
and ending with the day next preceding the date of such payment), to holders
of Series A Preference Stock of record on the respective dates, not exceeding
forty (40) days preceding such quarterly dividend payment dates, fixed for
that purpose by the Board of Directors. Such dividends shall be cumulative
from June 12, 1995 and shall accrue daily. Accruals of dividends shall not
bear interest. Dividends will be payable on or before each March 13, June 13,
September 13 and December 13 (or, if any such day is not a business day, on
the next succeeding business day).
(b) Before any dividends (other than dividends payable in
Junior Stock) on any class or classes of stock of the Corporation ranking
junior to Series A Preference Stock as to dividends or upon liquidation shall
be declared and set apart for payments or paid, the holders of shares of
Series A Preference Stock shall be entitled to receive cash dividends, when
and as declared by the Board of Directors at the Dividend Rate, and no more.
No dividends shall be declared or paid or set apart for payment on the Series
A Preference Stock in respect of any quarterly dividend period unless there
shall likewise be or have been declared and paid or set apart for payment on
all shares of Preference Stock of each other series at the time outstanding
like dividends in proportion to the respective annual dividend rates fixed
therefor for all quarterly dividend periods coinciding with or ending before
such quarterly dividend period.
(c) So long as any shares of Series A Preference Stock are
outstanding, the Corporation shall not declare or set apart for payment or pay
any dividends (other than stock dividends payable on shares of Junior Stock)
or make any distribution on any other class or classes of stock of the
Corporation ranking junior to Series A Preference Stock as to dividends or
upon liquidation and shall not redeem, purchase or otherwise acquire, or
permit any subsidiary to purchase or otherwise acquire, any shares of any such
Junior Stock if at the time of making such declaration, payment, distribution,
redemption, purchase or acquisition the Corporation shall be in default with
respect to any dividend payable on, or any obligation to purchase, shares of
Series A Preference Stock; provided, however, that, notwithstanding the
foregoing, the Corporation may at any time redeem, purchase or otherwise
acquire shares of stock of any such Junior Stock in exchange for, or out of
the net cash proceeds from the sale of, other shares of stock of any Junior
Stock.
4. Redemptions.
(a) Right to Call for Redemption. At any time and from time
to time, the Corporation shall have the right to call, in whole or in part,
the outstanding shares of the Series A Preference Stock for redemption,
subject to the notice provisions set forth in paragraph (4)(h). On the
redemption date (the "Redemption Date") with respect to any such redemption,
the Corporation shall deliver to the holders thereof, in exchange for each
such share called for redemption, the following consideration:
(1) in the event such Redemption Date is prior to June 12, 1998
(the "Specified Date"),
(i) a number of shares of Common Stock equal to the
Call Price (as defined in paragraph (4)(g)(ii)) in effect
on the Redemption Date divided by the Current Market
Price of the Common Stock determined as of the second
Trading Date immediately preceding the Notice Date, plus
(ii) an amount in cash equal to all accrued and
unpaid dividends on such share of Series A Preference
Stock to and including the Redemption Date, whether or
not declared, out of funds legally available therefor
(and dividends shall cease to accrue on such share as of
such Redemption Date); and
(2) in the event such Redemption Date is on or after the
Specified Date,
(i) shares of Common Stock at the Common Equivalent
Rate (determined as provided in this paragraph (4)) in
effect on the Redemption Date; plus
(ii) an amount in cash equal to all accrued and
unpaid dividends on such share of Series A Preference
Stock to and including the Redemption Date, whether or
not declared, out of funds legally available for the
payment of dividends (and dividends shall cease to accrue
on such share as of such Redemption Date).
If at any time less than all of the shares of Series A Preference Stock then
outstanding are to be called for redemption, the shares to be redeemed may be
selected by lot or such other equitable method as the Board of Directors of
the Corporation in its discretion may determine.
(b) Redemption or Acquisition of Series A Preference Stock
During Default in Payment of Dividends. If at any time the Corporation shall
have failed to pay dividends in full on Preference Stock, thereafter and until
dividends in full including all accrued and unpaid dividends on shares of all
series of Preference Stock at the time outstanding, shall have been declared
and set apart for payment or paid, (i) the Corporation, without the
affirmative vote or consent of the holders of at least a majority of the
shares of Preference Stock at the time outstanding, voting or consenting
separately as a class without regard to series, given in person or by proxy,
either in writing or by resolution adopted at a meeting, shall not redeem less
than all the shares of Preference Stock at such time outstanding, regardless
of series, other than in accordance with paragraph 4(f) hereof and (ii)
neither the Corporation nor any subsidiary shall purchase any shares of
Preference Stock except in accordance with a purchase offer made in writing or
by publication, as determined by the Board of Directors, in their sole
discretion after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series, shall
determine (which determination shall be final and conclusive) will result
in fair and equitable treatment among the respective series; provided,
however, that (iii) unless prohibited by the provisions applicable to any
series, the Corporation, to meet the requirements of any sinking fund
provision with respect to any series, may use shares of such series
acquired by it prior to such failure and then held by it as treasury stock,
and (iv) nothing shall prevent the Corporation from completing the purchase
or redemption of shares of Preference Stock for which a purchase contract
was entered into for any sinking fund purposes or the notice of redemption
of which was mailed to the holders thereof, prior to such default.
(c) Common Equivalent Rate; Adjustments. The Common
Equivalent Rate to be used to determine the number of shares of Common Stock
to be delivered on the redemption of the Series A Preference Stock in exchange
for shares of Common Stock pursuant to paragraph (4)(a)(2) (a "Specified
Redemption") shall be initially two shares of Common Stock for each share of
Series A Preference Stock; provided, however, that such Common Equivalent Rate
shall be subject to adjustment from time to time as provided below in this
paragraph (4)(c). All adjustments to the Common Equivalent Rate shall be
calculated to the nearest 1/100th of a share of Common Stock. Such rate as
adjusted and in effect at any time is herein called the "Common Equivalent
Rate."
(i) If the Corporation shall do any of the following (an
"Adjustment Event"):
(A) pay a dividend or make a distribution with respect
to Common Stock in shares of Common Stock,
(B) subdivide, reclassify or split its outstanding
shares of Common Stock into a greater number of shares,
(C) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares, or
(D) issue by reclassification of its shares of Common
Stock any shares of Common Stock other than in a Fundamental
Transaction (as defined in paragraph 4(g)(iv)),
then the Common Equivalent Rate in effect immediately prior to such
Adjustment Event shall be adjusted so that the holder of a share of
the Series A Preference Stock shall be entitled to receive on the
redemption of such share of the Series A Preference Stock, the number
of shares of Common Stock that such holder would have owned or been
entitled to receive after the happening of the Adjustment Event had
such share of the Series A Preference Stock been redeemed pursuant to
paragraph 4(a) immediately prior to the record date for such
Adjustment Event, if any, or such Adjustment Event. Where the
Adjustment Event is a dividend or distribution, the adjustment to the
Common Equivalent Rate shall become effective as of the close of
business on the record date for determination of stockholders
entitled to receive such dividend or distribution; where the
Adjustment Event is a subdivision, split, combination or
reclassification, the adjustment to the Common Equivalent Rate shall
become effective immediately after the effective date of such
subdivision, split, combination or reclassification; and any shares
of Common Stock issuable in payment of a dividend shall be deemed to
have been issued immediately prior to the close of business on the
record date for such dividend for purposes of calculating the number
of outstanding shares of Common Stock under clauses (ii) and (iii)
below. Such adjustment shall be made successively.
(ii) If the Corporation shall, after the date hereof,
issue rights or warrants to all holders of its Common Stock entitling
them (for a period not exceeding 45 days from the date of such
issuance) to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price of the Common
Stock (determined pursuant to paragraph (4)(c)(v)), on the record
date for the determination of stockholders entitled to receive such
rights or warrants, then in each case the Common Equivalent Rate
shall be adjusted by multiplying the Common Equivalent Rate in effect
immediately prior to the date of issuance of such rights or warrants
by a fraction (A) the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such
rights or warrants, immediately prior to such issuance, plus the
number of additional shares of Common Stock offered for subscription
or purchase pursuant to such rights or warrants, and (B) the
denominator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of shares of
Common Stock which the aggregate offering price of the total number
of shares of Common Stock so offered for subscription or purchase
pursuant to such rights or warrants would purchase at such Current
Market Price (determined by multiplying such total number of shares
by the exercise price of such rights or warrants and dividing the
product so obtained by such Current Market Price). Such adjustment
shall become effective as of the close of business on the record date
for the determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Common
Equivalent Rate shall be readjusted to the Common Equivalent Rate
which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock actually
delivered. Such adjustment shall be made successively.
(iii) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock of evidences of
its indebtedness or other assets (including shares of capital
stock of the Corporation (other than Common Stock) but excluding
any distributions and dividends referred to in clause (i) above or
any cash dividends), or shall issue to all holders of its Common
Stock rights or warrants to subscribe for or purchase any of its
securities (other than those referred to in clause (ii) above),
then in each such case, the Common Equivalent Rate shall be
adjusted by multiplying the Common Equivalent Rate in effect on
the record date mentioned below by a fraction (A) the numerator of
which shall be the Current Market Price of the Common Stock
(determined pursuant to paragraph (4)(c)(v)) on the record date
for the determination of stockholders entitled to receive such
dividend or distribution, and (B) the denominator of which shall
be such Current Market Price per share of Common Stock less the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of such
record date of the portion of the assets or evidences of
indebtedness so distributed, or of such subscription rights or
warrants, applicable to one share of Common Stock. Such
adjustment shall become effective on the opening of business on
the business day next following the record date for the
determination of stockholders entitled to receive such dividend or
distribution.
(iv) Anything in this paragraph (4) notwithstanding, the
Corporation shall be entitled to make such upward adjustment in the
Common Equivalent Rate, in addition to those required by this
paragraph (4), as the Corporation in its sole discretion may
determine to be advisable, in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or
exchangeable for stock (or any transaction that could be treated as
any of the foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended) hereafter made by the
Corporation to its stockholders shall not be taxable. If the
Corporation determines that an adjustment to the Common Equivalent
Rate should be made pursuant to this paragraph (4)(c)(iv), such
adjustment shall be made effective as of such date as the Board of
Directors of the Corporation determines. The determination of the
Board of Directors of the Corporation as to whether an adjustment to
the Common Equivalent Rate should be made pursuant to the foregoing
provisions of this paragraph (4)(c)(iv), and, if so, as to what
adjustment should be made and when, shall be conclusive, final and
binding on the Corporation and all stockholders of the Corporation.
(v) As used in this paragraph (4), the "Current Market
Price" of a share of Common Stock on any date shall be, except as
otherwise specifically provided, the average of the daily Closing
Prices (as defined in paragraph (4)(g)(iii)) for the five consecutive
Trading Dates ending on and including the date of determination of
the Current Market Price; provided that if the Closing Price of the
Common Stock on the Trading Date next following such five-day period
(the "next-day closing price") is less than 95% of such average
Closing Price, then the Current Market Price per share of Common
Stock on such date of determination will be the next-day closing
price; provided, further, that, with respect to any redemption or
antidilution adjustment, if any event that results in an adjustment
of the Common Equivalent Rate occurs during the period beginning on
the first day of the applicable determination period and ending on
the applicable redemption date, the Current Market Price as
determined pursuant to the foregoing will be appropriately adjusted
to reflect the occurrence of such event.
(vi) In any case in which paragraph (4)(c) shall require
that an adjustment as a result of any event become effective as of
the close of business on the record date and the date fixed for
Specified Redemption pursuant to paragraph (4)(a)(2) occurs after
such record date, but before the occurrence of such event, the
Corporation may in its sole discretion elect to defer the following
until after the occurrence of such event: (A) issuing to the holder
of any redeemed shares of the Series A Preference Stock the
additional shares of Common Stock issuable upon such redemption as a
result of such adjustment and (B) paying to such holder any amount in
cash in lieu of a fractional share of Common Stock pursuant to
paragraph (4)(e).
(vii) Before taking any action which would cause an
adjustment to the Common Equivalent Rate that would cause the
Corporation to issue shares of Common Stock for consideration below
the then par value (if any) of the Common Stock upon redemption of
the Series A Preference Stock, the Corporation will take any
corporate action that may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue
fully paid and nonassessable shares of such Common Stock at such
adjusted Common Equivalent Rate.
(d) Notice of Adjustments. Whenever the Common Equivalent
Rate is adjusted as herein provided, the Corporation shall:
(i) forthwith compute the adjusted Common Equivalent Rate
in accordance with this paragraph (4) and prepare a certificate
signed by the Chief Executive Officer, the Chief Financial Officer,
any Vice President, or the Treasurer of the Corporation setting forth
the adjusted Common Equivalent Rate, the method of calculation
thereof in reasonable detail and the facts requiring such adjustment
and upon which such adjustment is based, which certificate shall be
conclusive, final and binding evidence of the correctness of the
adjustment, and file such certificate forthwith with the transfer
agent or agents for the Series A Preference Stock and the Common
Stock; and
(ii) mail a notice stating that the Common Equivalent Rate
has been adjusted, the facts requiring such adjustment and upon which
such adjustment is based and setting forth the adjusted Common
Equivalent Rate to the holders of record of the outstanding shares of
the Series A Preference Stock at or prior to the time the Corporation
mails an interim statement to its stockholders covering the fiscal
quarter during which the facts requiring such adjustment occurred,
but in any event within 45 days of the end of such fiscal quarter.
(e) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon the
redemption of any shares of Series A Preference Stock. Instead of any
fractional interest in a share of Common Stock which would otherwise be
deliverable upon the redemption of a share of Series A Preference Stock, the
Corporation shall pay to the holder of such share an amount in cash (computed
to the nearest cent) equal to the same fraction of the Current Market Price of
the Common Stock determined as of the second Trading Date immediately
preceding the relevant Notice Date. If more than one share shall be
surrendered for redemption at one time by the same holder, the number of full
shares of Common Stock issuable upon redemption thereof shall be computed on
the basis of the aggregate number of shares of Series A Preference Stock so
surrendered.
(f) Retirement. Shares of Series A Preference Stock which
have been redeemed, purchased or acquired by the Corporation (whether through
the operation of a sinking fund or otherwise) shall have the status of
authorized and unissued shares of Preference Stock and may be reissued as a
part of the series of which they were originally a part or may be reclassified
and reissued as part of a new series of Preference Stock to be created by
resolution of the Board of Directors or as part of any other series of
Preference Stock. If in any case the amounts payable with respect to any
obligations to retire shares of Series A Preference Stock and any other series
of Preference Stock are not paid in full in the case of all series with
respect to which such obligations exist, the number of shares of the various
series to be retired shall be in proportion to the respective amounts which
would be payable on account of such obligations if all amounts payable were
discharged in full.
(g) Definitions. As used in this paragraph 4 or elsewhere
herein:
(i) the term "business day" shall mean any day other than
a Saturday, Sunday, or a day on which banking institutions in the
State of New York or the Commonwealth of Pennsylvania are authorized
or obligated by law or executive order to close or are closed because
of a banking moratorium or otherwise;
(ii) the term "Call Price" shall mean the per share price
(payable in shares of Common Stock) at which the Corporation may
redeem shares of Series A Preference Stock pursuant to paragraph
4(a)(1)), which shall be initially equal to $84.79952, declining by
$.004444 on each day following June 12, 1995 (computed on the basis
of a 360-day year of twelve 30-day months) to $80.26664 on April 12,
1998 and equal to $80 thereafter through June 11, 1998, if not sooner
redeemed;
(iii) the term "Closing Price" on any day shall mean the
closing sale price regular way (with any relevant due bills
attached) on such day, or in case no such sale takes place on such
day, the average of the reported closing bid and asked prices
regular way (with any relevant due bills attached), in each case
on the New York Stock Exchange Consolidated Tape (or any successor
composite tape reporting transactions on national securities
exchanges), or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities
exchange on which the Common Stock is listed or admitted to
trading (which shall be the national securities exchange on which
the greatest number of shares of Common Stock has been traded
during the five consecutive Trading Dates ending on and including
the date of determination of the Current Market Price), or, if not
listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices regular way (with
any relevant due bills attached) of the Common Stock on the over-
the-counter market on the day in question as reported by the
National Association of Securities Dealers Automated Quotation
System, or a similarly generally accepted reporting service, or if
not so available, as determined in good faith by the Board of
Directors on the basis of such relevant factors as the Board of
Directors in good faith considers appropriate;
(iv) the term "Fundamental Transaction" shall mean a
merger or consolidation of the Corporation, a share exchange,
division or conversion of the Corporation's capital stock or an
amendment of the Corporation's Articles of Incorporation that
results in the conversion or exchange of Common Stock into, or the
right of the holders thereof to receive, in lieu of or in addition
to their shares of Common Stock, other securities or other
property (whether of the Corporation or any other entity);
(v) the term "Notice Date" with respect to any notice
given by the Corporation in connection with a redemption of any of
the Series A Preference Stock shall be the commencement of the
mailing of such notice to the holders of the Series A Preference
Stock in accordance with paragraph (4)(h);
(vi) the term "outstanding," when used in reference to
shares of stock, shall mean issued shares excluding:
(A) shares held by the Corporation or a subsidiary; and
(B) shares called for redemption if funds for the
redemption thereof have been deposited in trust;
(vii) the term "subsidiary" as used herein shall mean any
corporation 51% or more of the outstanding stock having voting rights
of which is at the time owned or controlled directly or indirectly by
the Corporation; and
(viii) the term "Trading Date" shall mean a date on which
the New York Stock Exchange (or any successor to such Exchange) is
open for the transaction of business.
(h) Method of Redemption. Notice of every redemption,
stating the redemption date, the redemption price, and the placement of
payment thereof, shall be given by mailing a copy of such notice at least
thirty (30) days and not more than sixty (60) days prior to the date fixed for
redemption to the holders of record of the shares of Series A Preference Stock
to be redeemed at their addresses as the same shall appear on the books of the
Corporation. The Corporation, upon mailing notice of redemption as aforesaid
or upon irrevocably authorizing the bank or trust company hereinafter
mentioned to mail such notice, may deposit or cause to be deposited in trust
with a bank or trust company in the City of Philadelphia, Commonwealth of
Pennsylvania, or in the Borough of Manhattan, City and State of New York, an
amount equal to the redemption price of the shares to be redeemed plus any
accrued and unpaid dividends thereon, which amount shall be payable to the
holders of the shares to be redeemed upon surrender of certificates therefor
on or after the date fixed for redemption or prior thereto if so directed by
the Board of Directors. Upon such deposit, or if no such deposit is made,
then from and after the date fixed for redemption unless the Board of
Directors shall default in making payment of the redemption price plus accrued
and unpaid dividends upon surrender of certificates as aforesaid, the shares
called for redemption shall cease to be outstanding and the holders thereof
shall cease to be stockholders with respect to such shares and shall have no
interest in or claim against the Corporation with respect to such shares other
than the right to receive the redemption price plus accrued and unpaid
dividends from such bank or trust company or from the Corporation, as the case
may be, without interest thereon, upon surrender of certificates as aforesaid.
In case any holder of shares of Series A Preference Stock which have been
called for redemption shall not, within six (6) years after the date of such
deposit, have claimed the amount deposited with respect to the redemption
thereof, such bank or trust company, upon demand, shall pay over to the
Corporation such unclaimed amount and shall thereupon be relieved of all
responsibility in respect thereof to such holder, and thereafter such holder
shall look only to the Corporation for payment thereof. Any interest which
may accrue on funds so deposited shall be paid to the Corporation from time to
time.
(i) Surrender of Certificates; Status. Each holder of shares
of Series A Preference Stock to be redeemed shall surrender the certificates
evidencing such shares (properly endorsed or assigned for transfer, if the
Board of Directors of the Corporation shall so require and the notice shall so
state) to the Corporation at the place designated in the notice of such
redemption and shall thereupon be entitled to receive certificates evidencing
shares of Common Stock and to receive any other funds payable pursuant to this
paragraph (4) following such surrender and following the date of such
redemption. In case fewer than all the shares represented by any such
surrendered certificate are called for redemption, a new certificate shall be
issued at the expense of the Corporation representing the unredeemed shares.
If such notice of redemption shall have been given, and if on the date fixed
for redemption shares of Common Stock and other funds necessary for the
redemption shall have been either set aside by the Corporation separate and
apart from its other funds or assets in trust for the account of the holders
of the shares to be redeemed (and so as to be and continue to be available
therefor) or deposited with a bank or trust company as provided in paragraph
(4)(h), then, notwithstanding that the certificates evidencing any shares of
Series A Preference Stock so called for redemption shall not have been
surrendered, the shares represented thereby so called for redemption shall be
deemed no longer outstanding, dividends with respect to the shares so called
for redemption shall cease to accrue after the date fixed for redemption, and
all rights with respect to the shares so called for redemption shall forthwith
after such date cease and terminate, except for the right of the holders to
receive the shares of Common Stock and other funds, if any, payable pursuant
to this paragraph (4) without interest upon surrender of their certificates
therefor.
(j) Dividend Payments. The holders of shares of Series A
Preference Stock at the close of business on a dividend payment record date
shall be entitled to receive the dividend payable on such shares on the
corresponding dividend payment date notwithstanding the call for redemption
thereof (except that holders of shares called for redemption on a date
occurring between such record date and the dividend payment date or on such
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will receive accrued and unpaid dividends to
such redemption date.
(k) Payment of Taxes. The Corporation will pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of Common Stock on the redemption of shares of
Series A Preference Stock pursuant to this paragraph (4); provided, however,
that the Corporation shall not be required to pay any tax which may be payable
in respect of any registration of transfer involved in the issue or delivery
of shares of Common Stock in a name other than that of the registered holder
of Series A Preference Stock redeemed or to be redeemed, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
5. Liquidation Preference.
(a) Upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Series A Preference Stock
shall be preferred as to assets over Common Stock and any other Junior Stock
so that the holder of each share of the Series A Preference Stock shall be
entitled to be paid or to have set apart for payment in respect of each such
share, before any distribution is made to the holders of Common Stock and any
other Junior Stock, a liquidation preference equal to twice the fair market
value (as determined by the Board of Directors of the Corporation based on
advice of tax counsel in accordance with United States federal income tax
principles, which determination shall be conclusive) of a Series A Depositary
Share (as defined in the Deposit Agreement dated as of June 13, 1995 between
the Corporation and First Chicago Trust Company of New York, as Depositary) on
the date of issuance thereof, plus an amount equal to all dividends accrued
and unpaid up to and including the date fixed for such payment, and such
holder of a share of the Series A Preference Stock shall not be entitled to
any other payment. If upon any such liquidation, dissolution or winding up of
the Corporation, its net assets shall be insufficient to permit the payment in
full of the respective amounts to which the holders of all outstanding shares
of the Series A Preference Stock and any outstanding Preference Stock that is
Parity Stock are entitled, the entire remaining net assets of the Corporation
shall be distributed among the holders of the Series A Preference Stock and
any outstanding Preference Stock that is Parity Stock, in amounts
proportionate to the full preferential amounts to which they are respectively
entitled.
(b) The voluntary sale, lease, exchange or transfer for cash,
shares of stock (securities or other consideration) of all or substantially
all the Corporation's property or assets to, or its consolidation or merger
with, one or more corporations shall not be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation.
6. Voting Rights.
(a) The holders of record of shares of Series A Preference
Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (6) or as otherwise provided in the Articles of
Incorporation or by statute.
(b) The holders of shares of Series A Preference Stock shall
be entitled to vote on all matters submitted to a vote of the holders of the
Common Stock, voting together with the holders of the Common Stock (and any
other class or series of capital stock of the Corporation entitled to vote
together with the Common Stock) as one class. Each share of the Series A
Preference Stock shall be entitled to one vote.
(c) (i) If the Corporation shall have failed to pay, or
declare and set apart for payment, dividends on Preference Stock in an
aggregate amount equivalent to six (6) full quarterly dividends on all shares
of Preference Stock at the time outstanding, the number of Directors of the
Corporation shall be increased by two (2) at the first annual meeting of the
shareholders of the Corporation held thereafter, and at such meeting and at
each subsequent annual meeting until dividends payable for all past quarterly
dividend periods on all outstanding shares of Preference Stock shall have been
paid, or declared and set apart for payment, in full, the holders of the
shares of Preference Stock shall have, in addition to any other voting rights
which they otherwise may have, the exclusive and special right, voting
separately as a class without regard to series, each share of Preference Stock
entitling the holder thereof to one (1) vote per share, to elect two (2)
additional members of the Board of Directors to hold office for a term of one
(1) year; provided, that the right to vote as a class upon the election of
such two (2) additional Directors shall not limit the right of holders of the
Series A Preference Stock to vote upon the election of all other Directors and
upon other matters set forth in paragraph 6(b) above.
(ii) Upon such payment, or declaration and setting apart for
payment, in full, the terms of the two (2) additional Directors so elected
shall forthwith terminate, and the number of Directors of the Corporation
shall be reduced by two (2) and such voting right of the holders of shares of
Preference Stock shall cease, subject to increase in the number of Directors
as aforesaid and to revesting of such voting right in the event of each and
every additional failure in the payment of dividends in an aggregate amount
equivalent to six (6) full quarterly dividends as aforesaid.
(d) The Corporation shall not, without the affirmative vote or
consent of the holders of at least 66 2/3% of the number of shares of
Preference Stock at the time outstanding, voting or consenting (as the case
may be) separately as a class without regard to series, given in person or by
proxy, either in writing or by resolution adopted at a meeting:
(i) create any class of stock ranking prior to or on a parity
with Preference Stock as to dividends or upon liquidation or increase
the authorized number of shares of any such previously authorized
class of stock;
(ii) alter or change any of the provisions of the Articles of
Incorporation so as to adversely affect the preferences, special
rights or powers given to the Preference Stock;
(iii) increase the number of shares of Preference Stock which
the Corporation is authorized to issue; or
(iv) alter or change any of the provisions of the Articles of
Incorporation or hereof so as to adversely affect the preferences,
special rights or powers given to the Series A Preference Stock.
7. Conversion. The Series A Preference Stock shall not have
any conversion rights to convert into Common Stock.
8. Fundamental Transactions. Upon the effectiveness of a
Fundamental Transaction at any time, each share of Series A Preference
Stock shall be entitled to receive consideration per share (i) of the same
type as is offered to or to be received by holders of Common Stock pursuant
to or in connection with such Fundamental Transaction and (ii) having a
fair value equal to the fair value of the Common Stock that each share of
Series A Preference Stock would receive if such share of Series A
Preference Stock were redeemed by the Company immediately prior to such
time in accordance with paragraph 4 hereof.
ANNEX B
TRANSACTIONS CONCERNING THE SHARES OF
SUN COMPANY, INC. (the "Company")
The following transactions were effected during the 40 business-day
period preceding June 12, 1995:
On May 4, 1995, the Company issued 655 shares of Company Common Stock at
a per share price of $30.375 to the following Company directors, pursuant to
the Retainer Stock Plan for Outside Directors.
Raymond Cartledge
Robert Cawthorn
May J. Evans
Thomas P. Gerrity
James G. Kaiser
Robert D. Kennedy
Thomas W. Langfitt
R. Anderson Pew
Albert E. Piscopo
William F. Pounds
Alexander Trowbridge
Two directors (Cawthorn and Pounds) elected to defer this compensation and in
place of Company Common Stock, they received Phantom Stock Units.
On April 27, 1995, Harwood S. Roe, Jr., a former executive officer of the
Company, sold 1,235 shares of Company Common Stock at a price of $30.125 per
share in an open market transaction.
Facsimile copies of the Letter of Transmittal, properly completed and
duly executed, will be accepted. Letters of Transmittal, certificates for the
Common Shares and any other required documents should be sent by each holder
or his or her broker, dealer, commercial bank, trust company or other nominee
to the Exchange Agent and Depositary at one of the addresses set forth below.
The Exchange Agent for the Exchange Offer
and the Depositary for the Cash Offer is:
First Chicago Trust Company of New York
By Mail: By Facsimile By Hand or Overnight Delivery:
Transmission:
(for Eligible Institutions only):
First Chicago Trust First Chicago Trust
Company of New York Company of New York
Tenders & Exchanges Fax: (201) 222-472 Tenders & Exchanges
Suite 4660-SUN or Suite 4680-SUN
P.O. Box 2559-SUN 4721 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2559 Confirm Receipt of New York, New York 10005
Notice of Guaranteed
Delivery:
(201) 222-4707
Questions and requests for assistance or for additional copies of this
Offer to Purchase/Offering Circular and the applicable Letter of Transmittal
and Notice of Guaranteed Delivery may be directed to Morrow & Co., Inc., as
Information Agent. You may also contact your broker, dealer, commercial bank
or trust company or other nominee for assistance concerning the Offers.
The Information Agent is:
Morrow & Co., Inc.
909 Third Avenue
New York, New York 10022
Toll Free (800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
SUN COMPANY, INC.
Pursuant to its offer to exchange
Up to 25,000,000 shares of its
Common Stock, $1.00 Par Value
For Depositary Shares, each representing one-half of a share
of Series A Cumulative Preference Stock, No Par Value
on the terms and conditions set forth herein and in its
Offer to Purchase/Offering Circular
dated June 13, 1995.
DESCRIPTION OF COMMON SHARES TENDERED IN THE EXCHANGE OFFER
Name(s) and Address(es) of Common Shares Tendered
Registered Holder(s) (Attach additional signed
(Please fill in, if blank) list if necessary)
- ---------------------------------------------------------------------------
Total Number of Number of
Certificate Shares Represented Shares
Number(s)* by Certificate(s)* Tendered**
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Total Shares
- -----------------------------------------------------------------------------
TENDER DIVIDEND REINVESTMENT PLAN SHARES
If you elect to tender all your Dividend Reinvestment Plan Shares in the
Exchange Offer, please check this box [ ]
- -----------------------------------------------------------------------------
LOST CERTIFICATES
Check here if you cannot locate any of your certificates and require
assistance in replacing the same. The Exchange Agent will contact you
directly with replacement intructions. [ ]
- -----------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, the holder will be deemed to have tendered
the full number of Common Shares represented by the tendered
certificates. See Instruction 4.
- -----------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, July 24, 1995, UNLESS THE OFFER IS
EXTENDED.
The Exchange Agent for the Exchange Offer (as defined below) is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile By Hand or Overnight
(registered or certified Transmission: Courier:
mail recommended) (For Eligible Institutions
Only)
(201) 222-4720 or
Tenders & Exchanges (201) 222-4721 Tender & Exchanges
Suite 4660-SUN Suite 4680-SUN
P.O. Box 2559-SUN 14 Wall Street
Jersey City, New Jersey 07303-2559 8th Floor
New York, New York 10005
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE
TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of outstanding
shares of Common Stock of Sun Company, Inc., $1.00 par value (the "Common
Shares"), either (i) if certificates for Common Shares are to be forwarded
herewith or (ii) if tenders of Common Shares are to be made by book-entry
transfer into the account of First Chicago Trust Company of New York, as
Exchange Agent for the Exchange Offer (the "Exchange Agent"), at The
Depository Trust Company ("DTC"), Midwest Securities Trust Company ("MSTC") or
Philadelphia Depository Trust Company ("PDTC", which together with DTC and
MSTC are hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures described in the accompanying Offer to
Purchase/Offering Circular dated June 13, 1995 (the "Offer to
Purchase/Offering Circular") under "The Offers -- Procedure for Tender --
Exchange Offer." Holders of Common Shares who tender Common Shares by
book-entry transfer are referred to herein as "Book-Entry Shareholders."
Shareholders who cannot deliver their Common Shares, this Letter of
Transmittal and all other documents required hereby to the Exchange Agent by
the Expiration Date (as defined in the Offer to Purchase/Offering Circular)
must tender their Common Shares pursuant to the guaranteed delivery procedure
set forth in the Offer to Purchase/Offering Circular under "The Offers --
Procedure for Tender -- Exchange Offer." See Instruction 2.
[ ] CHECK HERE IF COMMON SHARES TENDERED PURSUANT TO THE EXCHANGE OFFER ARE
BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-----------------------------------------
[ ] DTC [ ] MSTC [ ] PDTC (check one) Account No.
---------------------
Transaction Code No.
--------------------------------------------------
[ ] CHECK HERE IF COMMON SHARES TENDERED PURSUANT TO THE EXCHANGE OFFER ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY
SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Shareholder(s)
-----------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------
Name of Institution which Guaranteed Delivery
-------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
-----------------------------------------
[ ] DTC [ ] MSTC [ ] PDTC (check one) Account No.
---------------------
Transaction Code No.
--------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Sun Company, Inc., a Pennsylvania
corporation (the "Company"), the above-described Common Shares pursuant to the
offer by the Company to exchange up to 25,000,000 Common Shares for Depositary
Shares each representing one-half of a share of the Company's Series A
Cumulative Preference Stock (the "Depositary Shares"), upon the terms and
subject to the conditions set forth in the Offer to Purchase/Offering Circular
dated June 13, 1995 (the "Offer to Purchase/Offering Circular"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which
together constitute the "Exchange Offer"). Common Shares not accepted for
exchange because of proration will be returned.
Subject to and effective upon acceptance for exchange of the Common
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Company all right, title and interest in and to
all the Common Shares that are being tendered hereby and appoints the Exchange
Agent the true and lawful agent and attorney-in-fact of the undersigned with
respect to such Common Shares, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Common Shares or transfer ownership of such
Common Shares on the account books maintained by any of the Book-Entry
Transfer Facilities, together, in any such case, with all accompanying
evidences of transfer and authenticity, to the Exchange Agent for the account
of the Company, (b) present such Common Shares for transfer on the books of
the Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Common Shares, all in accordance with the terms
of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Common
Shares tendered hereby and to acquire Depositary Shares issuable upon the
exchange of such tendered Common Shares and that, when the undersigned's
Common Shares are accepted for exchange, the Company will acquire good and
unencumbered title to such Common Shares, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
exchange, assignment and transfer of tendered Common Shares or transfer
ownership of such Common Shares.
All authority herein conferred or agreed to be conferred shall survive
the death, bankruptcy or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of the
undersigned. Except as stated in the Exchange Offer, this tender is
irrevocable. Any tender of Common Shares hereunder may be withdrawn only in
accordance with the procedures set forth in the Offer to Purchase/Offering
Circular under "The Offers -- Withdrawal of Tendered Common Shares."
The undersigned understands that tenders of Common Shares pursuant to any
one of the procedures described in the Offer to Purchase/Offering Circular
(see "The Offers -- Procedure for Tender -- Exchange Offer") and in the
instructions hereto will constitute an agreement between the undersigned and
the Company upon the terms and subject to the conditions of the Exchange
Offer, including the tendering holder's representation and warranty that (i)
such holder owns the Common Shares being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and
(ii) the tender of such Common Shares complies with Rule 14e-4.
The undersigned understands and agrees that (i) Depositary Shares to be
delivered in exchange for Common Shares tendered by the undersigned and
accepted for exchange pursuant to the Exchange Offer will be deposited under
the Deposit Agreement (the "Deposit Agreement") dated as of June 13, 1995
between the Company and First Chicago Trust Company of New York, as
Depositary, (ii) such Depositary Shares will be subject to the terms and
conditions of the Deposit Agreement, and (iii) the Depositary Shares will be
evidenced by receipts ("Depositary Receipts") issued pursuant to the Deposit
Agreement.
Unless otherwise indicated under "Special Issue Instructions" below,
please cause Depositary Receipts to be issued, and return any Common Shares
not tendered or not accepted for exchange, in the name(s) of the undersigned
(and, in the case of Common Shares tendered by book-entry transfer and
Depositary Receipts to be issued into a Book-Entry Transfer Facility, by
credit to the account at the Book-Entry Transfer Facility designated above).
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail any certificates for Common Shares not tendered or not accepted
for exchange (and accompanying documents, as appropriate), and any Depositary
Receipts issued pursuant to the Exchange Offer, to the undersigned at the
address shown below the undersigned's signature(s). If both "Special Issue
Instructions" and "Special Delivery Instructions" are completed, please cause
Depositary Receipts to be issued, and return any Common Shares not tendered or
not accepted for exchange, in the name(s) of, and deliver any certificates for
such Common Shares and such Depositary Receipts to, the person(s) so
indicated. The undersigned recognizes that the Company has no obligation,
pursuant to the "Special Issue Instructions," to transfer any Common Shares
from the name of the registered holder(s) thereof if the Company does not
accept for exchange any of the Common Shares so tendered.
SPECIAL ISSUE INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if Depositary Receipts are to be issued, or
certificates for Common Shares not tendered or not accepted for exchange are
to be returned, in the name of someone other than the undersigned.
Issue [ ] Depositary Receipts in the name of:
Return [ ] certificates for Common Shares in the name of:
Name
-----------------------------------------------------------------
(Please Print)
Address
-----------------------------------------------------------------
- -------------------------------------------------------------------------
(Zip Code)
- -------------------------------------------------------------------------
(Tax Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if certificates for Common Shares not tendered or not
accepted for exchange, or Depositary Receipts issued pursuant to the Exchange
Offer, are to be mailed to someone other than the undersigned, or to the
undersigned at an address other than that shown below the undersigned's
signature(s).
Mail [ ] certificates for Common Shares to:
[ ] Depositary Receipts to:
Name
-----------------------------------------------------------------
(Please Print)
Address
-----------------------------------------------------------------
------------------------------------------------------------------------
(Zip Code)
SIGN HERE
- ------> <------
-----------------------------------------------------------
- ------> <------
-----------------------------------------------------------
Signature(s) of Owner(s)
Dated 1995
-------------------------------------------------
Name(s)
---------------------------------------------------
(Please Print)
Capacity (full title)
-------------------------------------
Address
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
-----------------------------
(Must be signed by registered holder(s) exactly as name(s)
appear(s) on certificate(s) for Common Shares or on a security
position listing or by person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please set forth full
title and see Instruction 5.)
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized Signature
--------------------------------------
Name
------------------------------------------------------
Title
------------------------------------------------------
Address
---------------------------------------------------
Name of Firm
-----------------------------------------------
Area Code and Telephone Number
-----------------------------
Dated 1995
-------------------------------------------------
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office, branch or agency in the United States each of which
participates in a Medallion Program approved by the Securities Transfer
Association, Inc. (each being an "Eligible Institution"). Signatures on this
Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal
is signed by the registered holder(s) of the Common Shares (which term, for
purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position
listing as the owner of Common Shares) tendered herewith and such holder(s)
have not completed either of the boxes entitled "Special Issue Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal or (b) such
Common Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. Delivery of Letter of Transmittal and Common Shares. This Letter of
Transmittal is to be completed by holders of Common Shares either if
certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedure for tender by book-entry transfer set forth in the
Offer to Purchase/Offering Circular. See "The Offers -- Procedure for Tender
- -- Exchange Offer." Certificates for Common Shares, or timely confirmation of
a book-entry transfer of such Common Shares into the Exchange Agent's account
at one of the Book-Entry Transfer Facilities, as well as this Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at one of
its addresses set forth on the front page hereof prior to the Expiration Date.
If a holder of Common Shares desires to participate in the Exchange Offer
and time will not permit this Letter of Transmittal or Common Shares to reach
the Exchange Agent before the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if
the Exchange Agent has received at its office prior to the Expiration Date,
from or through an Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form provided by the
Company, setting forth the name and address of the tendering holder, the
name(s) in which the Common Shares are registered and, if the Common Shares
are held in certificated form, the certificate numbers of the Common Shares to
be tendered, and stating that the tender is being made thereby and
guaranteeing that within five New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of such Notice of Guaranteed Delivery by the
Eligible Institution, the Common Shares in proper form for transfer or a
confirmation of book-entry transfer of such Common Shares into the Exchange
Agent's account at one of the Book-Entry Transfer Facilities, together with a
properly completed and duly executed Letter of Transmittal (and any other
required documents), will be delivered by such Eligible Institution. Unless
the Common Shares being tendered by the above-described method are deposited
with the Exchange Agent within the time period set forth above or a
confirmation of book-entry transfer of such Common Shares into the Exchange
Agent's account at one of the Book-Entry Transfer Facilities is received
(accompanied or preceded by a properly completed Letter of Transmittal and any
other required documents), the Company may, at its option, reject the tender.
The method of delivery of Common Shares and all other required documents,
including delivery through a Book-Entry Transfer Facility, is at the option
and risk of the tendering shareholder. If certificates for shares of Common
Shares are sent by mail, registered mail with return receipt requested,
properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted, and
no fractional shares of Common Shares will be accepted for exchange. By
executing this Letter of Transmittal (or facsimile hereof), the tendering
holder waives any right to receive any notice of the acceptance of the Common
Shares for exchange.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Common Shares should be listed on a
separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Book-Entry Shareholders) If
fewer than all Common Shares represented by any certificate delivered to the
Exchange Agent are to be tendered, fill in the number of Common 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 Common Shares represented by
the old certificate 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 following the Expiration Date. All
Common shares represented by certificates delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Common Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the certificates or on the security position
listing of a Book-Entry Transfer Facility without alteration, enlargement or
any change whatsoever.
If any of the Common 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 Common 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 Common Shares tendered hereby, no endorsements of certificates or separate
stock powers are required unless Depositary Receipts issued in exchange
therefor are to be issued, or Common Shares not tendered or not exchanged are
to be returned, in the name of any person other than the registered holder(s).
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 Common Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Common 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 the Company of the authority of such person so to act must be
submitted.
6. Special Issue and Delivery Instructions. If Depositary Receipts are
to be issued, or any Common Shares not tendered or not accepted for exchange
are to be returned, in the name of a person other than the person(s) signing
this Letter of Transmittal, or any Depositary Receipts issued, or certificates
for Common Shares not tendered or not accepted for exchange, 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. Common Shares not accepted for exchange will be returned and
Depositary Receipts will be issued to a Book-Entry Shareholder by crediting
the account at the Book-Entry Transfer Facility designated above.
7. Stock Transfer Taxes. The Company will pay all stock transfer taxes,
if any, applicable to the exchange of Common Shares pursuant to the Exchange
Offer. If, however, Depositary Shares or Receipts are to be issued pursuant
to the Exchange Offer, or Common Shares not tendered or accepted for exchange
are to be returned, in the name of, any person other than the registered
holder of the Common Shares tendered, or if a transfer tax is imposed for any
reason other than the exchange of Common Shares pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of the payment of such taxes, or exemption
therefrom, is not submitted with this Letter of Transmittal, the amount of
such transfer taxes will be billed directly to such tendering holder.
8. Waiver of Conditions. The conditions of the Exchange Offer may be
waived by the Company from time to time in accordance with, and subject to the
limitations described in, the Offer to Purchase/Offering Circular.
9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase/Offering Circular and
this Letter of Transmittal may be obtained from the Information Agent at its
address or telephone number set forth below.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10022
Call Toll-Free:
(800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock,
of
SUN COMPANY, INC.
Pursuant to its offer to purchase for cash up to 6,400,000
shares of its Common Stock,
$1.00 Par Value
on the terms and conditions set forth herein and in its
Offer to Purchase/Offering Circular
dated June 13, 1995.
DESCRIPTION OF COMMON SHARES TENDERED IN THE CASH OFFER
- ---------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Common Shares Tendered
(Please fill in, if blank) (Attach additional signed list if necessary)
- ---------------------------------------------------------------------------
Total Number of Number of
Certificate Shares Represented Shares
Number(s)* by Certificate(s)* Tendered**
- ---------------------------------------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Total Shares
- ---------------------------------------------------------------------------
TENDER DIVIDEND REINVESTMENT PLAN SHARES
If you elect to tender all your Dividend Reinvestment Plan Shares in the
Cash Offer, please check this box [ ]
- ---------------------------------------------------------------------------
LOST CERTIFICATES
Check here if you cannot locate any of your certificates and require
assistance in replacing the same. The Depositary will contact you directly
with replacement intructions. [ ]
- ---------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, the holder will be deemed to have tendered
the full number of Common Shares represented by the tendered
certificates. See Instruction 4.
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 24, 1995, UNLESS THE OFFER IS
EXTENDED.
- ---------------------------------------------------------------------------
The Depositary for the Cash Offer (as defined below) is: FIRST CHICAGO
TRUST COMPANY OF NEW YORK
By Mail: By Facsimile By Hand or
(registered or certified Transmission: Overnight Courier:
mail recommended) (For Eligible
Tenders & Exchanges Institutions Only) Tender & Exchanges
Suite 4660-SUN (201) 222-4720 or Suite 4680-SUN
P.O. Box 2559-SUN (201) 222-4721 14 Wall Street
Jersey City, New Jersey 8th Floor
07303-2559 New York,
New York 10005
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE
TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of outstanding
shares of Common Stock of Sun Company, Inc., $1.00 par value (the "Common
Shares"), either (i) if certificates for Common Shares are to be forwarded
herewith or (ii) if tenders of Common Shares are to be made by book-entry
transfer to the account of First Chicago Trust Company of New York as
Depositary for the Cash Offer (the "Depositary") at The Depository Trust
Company ("DTC"), Midwest Securities Trust Company ("MSTC") or Philadelphia
Depository Trust Company ("PDTC", which together with DTC and MSTC are
hereinafter collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedures described in the accompanying Offer to
Purchase/Offering Circular dated June 13, 1995 (the "Offer to
Purchase/Offering Circular") under "The Offers--Procedure for Tender -- Cash
Offer." Holders of Common Shares who tender Common Shares by book-entry
transfer are referred to herein as "Book-Entry Shareholders."
Shareholders who cannot deliver their Common Shares, this Letter of
Transmittal and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase/Offering Circular) must
tender their Common Shares pursuant to the guaranteed delivery procedure set
forth in the Offer to Purchase/Offering Circular under "The Offers--Procedure
for Tender -- Cash Offer." See Instruction 2.
[ ] CHECK HERE IF COMMON SHARES TENDERED PURSUANT TO THE CASH OFFER ARE
BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
[ ] DTC [ ] MSTC [ ] PDTC (check one) Account No.
------------
Transaction Code No.
-------------------------------------------------
[ ] CHECK HERE IF COMMON SHARES TENDERED PURSUANT TO THE CASH OFFER ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY
SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Shareholder(s)
----------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------
Name of Institution which Guaranteed Delivery
------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
----------------------------------------
[ ] DTC [ ] MSTC [ ] PDTC (check one) Account No.
--------------
Transaction Code No.
-------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Sun Company, Inc., a Pennsylvania
corporation (the "Company"), the above-described Common Shares, pursuant to
the offer by the Company to purchase up to 6,400,000 Common Shares at a price
per Common Share hereinafter set forth, upon the terms and subject to the
conditions set forth in the Offer to Purchase/Offering Circular dated June 13,
1995 (the "Offer to Purchase/Offering Circular"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Cash Offer"). Common Shares not accepted for purchase because of proration
will be returned.
Subject to and effective upon acceptance for payment of and payment for
the Common Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of the Company all right, title and interest in
and to all the Common Shares that are being tendered hereby and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Common Shares, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Common Shares, or transfer
ownership of such Common Shares on the account books maintained by any of the
Book-Entry Transfer Facilities, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
the Company, (b) present such Common Shares for transfer on the books of the
Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Common Shares, all in accordance with the terms
of the Cash Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Common
Shares tendered hereby and that, when the undersigned's Common Shares are
accepted for payment by the Company, the Company will acquire good and
unencumbered title to such Common Shares, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of tendered Common Shares or transfer ownership
of such Common Shares.
All authority herein conferred or agreed to be conferred shall survive
the death, bankruptcy or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of the
undersigned. Except as stated in the Cash Offer, this tender is irrevocable.
Any tender of Common Shares hereunder may be withdrawn only in accordance with
the procedures set forth in the Offer to Purchase/Offering Circular under "The
Offers -- Withdrawal of Tendered Common Shares."
The undersigned understands that the Company will determine the per
Common Share cash price (not greater than $33 nor less than $30 per Common
Share) (the "Purchase Price") that it will pay for Common Shares validly
tendered and not withdrawn pursuant to the Cash Offer, taking into account the
number of Common Shares so tendered and the prices specified by tendering
shareholders. The undersigned understands that the Company will select the
Purchase Price that will enable it to purchase 6,400,000 Common Shares (or
such lesser number of Common Shares as are validly tendered at prices not
greater than $33 nor less than $30 per Common Share) pursuant to the Cash
Offer. The undersigned understands that tenders of Common Shares pursuant to
any one of the procedures described in the Offer to Purchase/Offering Circular
(See "The Offers--Procedure for Tender -- Cash Offer") and in the instructions
hereto will constitute an agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Cash Offer including the
tendering holder's representation and warranty that (i) such holder owns the
Common Shares being tendered within the meaning of Rule 14e-4 promulgated
under the Securities Exchange Act of 1934, as amended, and (ii) the tender of
such Common Shares complies with Rule 14e-4.
Unless otherwise indicated under "Special Payment Instructions" below,
please issue the check for the Purchase Price of any Common Shares purchased
(less the amount of any federal income or backup withholding tax required to
be withheld) and return any Common Shares not tendered or not purchased, in
the name(s) of the undersigned (and, in the case of Common Shares tendered by
book-entry transfer, by credit to the account at the Book-Entry Transfer
Facility designated above). Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the Purchase Price
of any Common Shares purchased (less the amount of any federal income or
backup withholding tax required to be withheld) and any certificates for
Common Shares 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 of any Common Shares purchased (less the amount of any federal
income or backup withholding tax required to be withheld) and return any
Common Shares not tendered or not purchased in the name(s) of, and mail said
check and any certificates to, the person(s) so indicated. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special
Payment Instructions," to transfer any Common Shares from the name of the
registered holder(s) thereof if the Company does not accept for purchase any
of the Common Shares so tendered.
PRICE (IN DOLLARS) PER COMMON SHARE AT
WHICH COMMON SHARES ARE BEING TENDERED
(See Instruction 5)
-------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THERE IS NO VALID
TENDER OF SHARES.
COMMON SHARES TENDERED AT PRICE
DETERMINED BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having
the Company purchase all the Common Shares the
undersigned is tendering (subject to the possibility
of proration). Accordingly, by checking this one box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the
undersigned hereby tenders Common Shares and is
willing to accept the Purchase Price resulting from
the Dutch Auction tender process. This action could
result in the undersigned receiving a price per Common
Share as low as $30 or as high as $33.
OR
COMMON SHARES TENDERED AT PRICE
DETERMINED BY SHAREHOLDER
$30.000 [ ] $31.000 [ ] $32.000 [ ]
$30.125 [ ] $31.125 [ ] $32.125 [ ]
$30.250 [ ] $31.250 [ ] $32.250 [ ]
$30.375 [ ] $31.375 [ ] $32.375 [ ]
$30.500 [ ] $31.500 [ ] $32.500 [ ]
$30.625 [ ] $31.625 [ ] $32.625 [ ]
$30.750 [ ] $31.750 [ ] $32.750 [ ]
$30.875 [ ] $31.875 [ ] $32.875 [ ]
$33.000 [ ]
- ---------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 6 and 8)
To be completed ONLY if the check for the Purchase Price of Common Shares
purchased (less the amount of any federal income backup withholding tax
required to be withheld) is to be issued, or certificates for Common Shares
not tendered or not accepted for purchase are to be returned, in the name of
someone other than the undersigned.
Issue [ ] check in name of:
Return[ ] certificates for Common Shares in the name of:
Name
---------------------------------------------------------------------
(Please Print)
Address
------------------------------------------------------------------
--------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------
(Tax Identification or Social Security Number)
- ---------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6 and 8)
To be completed ONLY if the check for the Purchase Price of Common Shares
purchased (less the amount of any federal income backup withholding tax
required to be withheld), or certificates for Common Shares not tendered or
not accepted for purchase, are to be mailed to someone other than the
undersigned, or to the undersigned at an address other than that shown below
the undersigned's signature(s).
Mail [ ] certificates for Common Shares to:
[ ] check to:
Name
------------------------------------------------------------------
(Please Print)
Address
------------------------------------------------------------------
(Zip Code)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
ODD LOTS
(See Instruction 12)
This section is to be completed ONLY if Common Shares are being tendered by
or on behalf of a person owning beneficially as of the close of business on
June 12, 1995 an aggregate of fewer than 100 Common Shares.
The undersigned either (check one box):
[ ] was the beneficial owner as of the close of business on June 12, 1995 of
an aggregate of fewer than 100 Common Shares, all of which are being
tendered pursuant to the Cash Offer,
or
[ ] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Common Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially as of the close of business on June
12, 1995 an aggregate of fewer than 100 Common Shares and is tendering all
of such Common Shares pursuant to the Cash Offer.
- -----> <-----
--------------------------------------------------------------
- -----> <-----
--------------------------------------------------------------
SIGN HERE
(Please complete Substitute Form W-9 below)
.........................................
.........................................
Signature(s) of Owner(s)
Dated ............................. 1995
Name(s).................................
(Please Print)
Capacity (full title)..................
Address................................
........................................
(Include Zip Code)
Area Code and Telephone Number.........
(Must be signed by registered holder(s) exactly as
name(s) appear(s) on certificate(s) for Common Shares
or on a security position listing or by person(s)
authorized to become registered holder(s) by
certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation
or other person acting in a fiduciary or
representative capacity, please set forth full title
and see Instruction 6.)
Guarantee of Signature(s)
(See Instructions 1 and 6)
Authorized Signature...................
Name...................................
Title..................................
Address................................
Name of Firm...........................
Area Code and Telephone Number.........
Dated..............................1995
- ---------------------------------------------------------------------------
PAYER'S NAME: SUN COMPANY, INC.
- ---------------------------------------------------------------------------
Name(s) as shown above on certificate(s) for Common Shares (if joint
ownership, list first and circle the name of the person or entity whose
number you enter in Part I below).
- ---------------------------------------------------------------------------
Address (if holder does not complete, signature in Part III below will
constitute a certification that the address on the reverse hereof is
correct).
- ---------------------------------------------------------------------------
City, State, and Zip Code
- ---------------------------------------------------------------------------
SUBSTITUTE Part I
FORM W-9
PLEASE PROVIDE YOUR ----------------------
Department of the Treasury TIN IN THE Social security number
Internal Revenue Service APPROPRIATE BOX AT
RIGHT. FOR MOST OR
Payer's Request for INDIVIDUALS, THIS IS
Taxpayer Identification YOUR SOCIAL SECURITY
Number (TIN) and NUMBER. IF YOU DO NOT ----------------------
Certification HAVE ONE, SEE HOW TO Employer identification
OBTAIN A TIN IN THE number
ENCLOSED GUIDELINES.
IF THE ACCOUNT IS IN TIN Applied for [ ]
MORE THAN ONE NAME,
SEE THE CHART ON
PAGE 2 OF THE GUIDELINES
TO DETERMINE WHAT
NUMBER TO ENTER.
Part II
For Payees Exempt From Backup Withholding, write "Exempt" here. (See enclosed
Guidelines)
Part III
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
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, (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.
(3) Any other information provided on this form is true, correct and
complete.
Certification Instructions. -- You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have been notified by the IRS that you are no longer subject to backup
withholding, do not cross out item (2).
- ---------------------------------------------------------------------------
SIGNATURE....................................... DATE..............., 1995
- ---------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE CASH OFFER.
PLEASE REVIEW 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 I OF SUBSTITUTE FORM W-9
- ---------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number within
60 days, thirty-one (31) percent of all reportable payments made to me will
be withheld until I provide a properly-certified Taxpayer Identification
Number to the Depositary.
SIGNATURE....................................... DATE..............., 1995
- ---------------------------------------------------------------------------
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Cash Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office, branch or agency in the United States each of which
participates in a Medallion Program approved by the Securities Transfer
Association, Inc. (each being an "Eligible Institution"). Signatures on this
Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal
is signed by the registered holder(s) of the Common Shares (which term, for
purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position
listing as the owner of Common Shares) tendered herewith and such holder(s)
have not completed either of the boxes entitled "Special Payment Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal or (b) such
Common Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
2. Delivery of Letter of Transmittal and Common Shares. This Letter of
Transmittal is to be completed by holders of Common Shares either if
certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedure for tender by book-entry transfer set forth in the
Offer to Purchase/Offering Circular. See "The Offers--Procedure for Tender --
Cash Offer." Certificates for Common Shares, or timely confirmation of a
book-entry transfer of such Common Shares into the Depositary's account at one
of the Book-Entry Transfer Facilities, as well as this Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed, with any
required signature guarantees, and any other documents required by this Letter
of Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page hereof prior to the Expiration Date.
If a holder of Common Shares desires to participate in the Cash Offer and
time will not permit this Letter of Transmittal or Common Shares to reach the
Depositary before the Expiration Date or the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected if the
Depositary has received at its office prior to the Expiration Date, from or
through an Eligible Institution a properly completed and duly executed Notice
of Guaranteed Delivery substantially in the form provided by the Company,
setting forth the name and address of the tendering holder, the name(s) in
which the Common Shares are registered and, if the Common Shares are held in
certificated form, the certificate numbers of the Common Shares to be
tendered, and stating that the tender is being made thereby and guaranteeing
that within five New York Stock Exchange, Inc. ("NYSE") trading days after
the date of execution of such Notice of Guaranteed Delivery by the Eligible
Institution, the Common Shares in proper form for transfer or a confirmation
of book-entry transfer of such Common Shares into the Depositary's account at
one of the Book-Entry Transfer Facilities, together with a properly completed
and duly executed Letter of Transmittal (and any other required documents),
will be delivered by such Eligible Institution. Unless the Common Shares
being tendered by the above-described method are deposited with the Depositary
within the time period set forth above or a confirmation of book-entry
transfer of such Common Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities procedures is received (accompanied or preceded
by a properly completed Letter of Transmittal and any other required
documents), the Company may, at its option, reject the tender.
The method of delivery of Common Shares and all other required documents,
including delivery through a Book-Entry Transfer Facility, is at the option
and risk of the tendering shareholder. If certificates for Common Shares are
sent by mail, registered mail with return receipt requested, properly insured,
is recommended. In all cases, sufficient time should be allowed to ensure
timely delivery.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Common Shares will be accepted for purchase. By executing this
Letter of Transmittal (or facsimile hereof), the tendering holder waives any
right to receive any notice of the acceptance of the Common Shares for
purchase.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Common Shares should be listed on a
separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Book-Entry Shareholders) If fewer
than all the Common Shares represented by any certificate delivered to the
Depositary are to be tendered, fill in the number of Common 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 Common Shares represented by the
old certificate 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 following the Expiration Date. All
Common Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. Indication of Price at Which Common Shares Are Being Tendered. For
Common Shares to be properly tendered pursuant to the Cash Offer, the
tendering shareholder must either check the box indicating the price per
Common Share at which Common Shares are tendered under "Common Shares Tendered
at Price Determined by Shareholder" or the box under "Common Shares Tendered
at Price Determined by Dutch Auction." By checking the box under "Common
Shares Tendered at Price Determined by Dutch Auction," the shareholder agrees
to accept the Purchase Price that results from the Dutch Auction tender
process, which may be as low as $30 or as high as $33 per Common Share.
Checking the box under "Common Shares Tendered at Price Determined by
Shareholder" can result in none of the Common Shares tendered being purchased
if the Purchase Price for the Common Shares is less than the price checked.
Only one box may be checked. If more than one box is checked, or if no box is
checked, there is no valid tender of Common Shares. A shareholder wishing to
tender portions of his Common Share holdings at different prices must complete
a separate Letter of Transmittal for each price at which he wishes to tender
each such portion of his Common Shares. The same Common Shares cannot be
tendered (unless previously validly withdrawn as provided in the Offer to
Purchase/Offering Circular under "The Offers--Withdrawal of Tendered Common
Shares") at more than one price.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Common Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the certificates or on the security position
listing of a Book-Entry Transfer Facility without alteration, enlargement or
any change whatsoever.
If any of the Common 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 Common 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 Common Shares tendered hereby, no endorsements of certificates or separate
stock powers are required unless payment of the Purchase Price is to be made,
or Common Shares not tendered or not purchased are to be returned, in the name
of, any person other than the registered holder(s). 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 Common Shares tendered hereby, certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Common 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 the Company of the authority of such person so to act must be
submitted.
7. Stock Transfer Taxes. The Company will pay any stock transfer taxes
with respect to the sale and transfer of any Common Shares to it or its order
pursuant to the Cash Offer. If, however, payment of the Purchase Price is to
be made to, or Common Shares not tendered or not purchased are to be returned
in the name of, any person other than the registered holder(s), 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.
8. Special Payment and Delivery Instructions. If the check for the
Purchase Price of any Common Shares purchased is to be issued, or any Common
Shares not tendered or not accepted for purchase are to be returned, in the
name of a person other than the person(s) signing this Letter of Transmittal,
or any certificates for Common Shares not tendered or not accepted for
purchase 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. Common Shares not accepted for
purchase will be returned to a Book-Entry Shareholder by crediting the account
at the Book-Entry Transfer Facility designated above.
9. Substitute Form W-9. Under the federal income tax laws, the
Depositary may be required to withhold 31% of the amount of any payments made
to certain shareholders pursuant to the Cash Offer. In order to avoid such
backup withholding, each tendering shareholder, and, if applicable, each other
payee, must provide such shareholder's or payee's correct taxpayer
identification number and certify that such shareholder or payee is not
subject to such backup withholding by completing the Substitute Form W-9 set
forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. Certain shareholders or payees (including, among others, all
corporations and certain foreign individual(s)) are not subject to these
backup withholding and reporting requirements. In order to satisfy the
Depositary that a foreign individual qualifies as an exempt recipient, such
shareholder or payee must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Depositary. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a taxpayer identification number if you do not have one and how
to complete the Substitute Form W-9 if Common Shares are held in more than one
name), consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Common Shares to be deemed invalidly tendered, but may require the Depositary
to withhold 31% of the amount of any payments made pursuant to the Cash Offer.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. Withholding on Payments to Foreign Shareholders. The Company will
withhold federal income tax at a rate of 30% from any payment made pursuant to
the Cash Offer to a foreign shareholder or his agent, unless the Company
determines that a reduced rate of withholding is applicable pursuant to a tax
treaty or that an exemption from withholding is applicable because such
payment is effectively connected with the conduct of a trade or business
within the United States. For this purpose, a foreign shareholder is any
shareholder that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source. The
Company will determine the applicable rate of withholding by reference to a
shareholder's address, unless the facts and circumstances indicate such
reliance is not warranted or if applicable law (for example, an applicable tax
treaty or Treasury regulations thereunder) requires some other method for
determining a shareholder's residence. A foreign stockholder may be eligible
to file for a refund of such tax or a portion of such tax, if such
shareholder's receipt of any payment made pursuant to the Cash Offer meets the
"complete termination," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described in the Offer to Purchase/Offering
Circular under "Certain United States Federal Income Tax Consequences--United
States Holders--Exchange of Common Shares pursuant to the Cash Offer or the
Exchange Offer or Both --Exchange of Common Shares for Cash," or if such
shareholder is entitled to a reduced rate of withholding pursuant to a tax
treaty and the Company withheld at a higher rate. In order to claim an
exemption from withholding on the grounds that payments made pursuant to the
Cash Offer are effectively connected with the conduct of a trade or business
within the United States, a foreign shareholder must deliver to the Depositary
a properly executed Form 4224 claiming exemption. Such Forms can be obtained
from the Depositary. Foreign shareholders are urged to consult their own
United States tax advisors regarding the application of federal income tax
withholding, including eligibility for a withholding tax reduction or
exemption and the refund procedure.
11. Waiver of Conditions. The conditions of the Cash Offer may be
waived by the Company from time to time in accordance with, and subject to the
limitations described in, the Offer to Purchase/Offering Circular.
12. Odd Lots. As described in the Offer to Purchase/Offering Circular
under "The Offers--Odd Lot Procedures Applicable to Tenders by Holders of
Fewer than 100 Common Shares Pursuant to the Cash Offer," if fewer than all
Common Shares validly tendered pursuant to the Cash Offer and not withdrawn
prior to the Expiration Date are to be purchased, the Common Shares purchased
first will consist of all Common Shares tendered by any shareholder who owned
beneficially an aggregate of fewer than 100 Common Shares as of the close of
business on June 12, 1995, who validly tendered all such Common Shares at or
below the Purchase Price pursuant to the Cash Offer (partial tenders of Common
Shares will not qualify for this preference) and completes the box captioned
"Odd Lots" in this Letter of Transmittal and, if applicable, the Notice of
Guaranteed Delivery.
13. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase/Offering Circular and
this Letter of Transmittal may be obtained from the Information Agent at its
address or telephone number set forth below.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, NY 10022
Call Toll-Free:
(800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
NOTICE OF GUARANTEED DELIVERY
(Not to be used for Signature Guarantee)
To Tender Shares of Common Stock
of
SUN COMPANY, INC.
Pursuant to the Exchange Offer or
Cash Offer made pursuant to the
Offer to Purchase/Offering Circular
dated June 13, 1995
and related Letters of Transmittal
This form, or a form substantially equivalent to this form, must be used
to accept the Exchange Offer or the Cash Offer (each as defined below) if (i)
certificates for shares (the "Common Shares") of Common Stock, $1 par value of
Sun Company, Inc. (the "Company"), cannot be delivered to First Chicago Trust
Company of New York, as Exchange Agent and Depositary, by the Expiration Date
(as defined in the Offer to Purchase/Offering Circular of the Company dated
June 13, 1995 (the "Offer to Purchase/Offering Circular")), (ii) the procedure
for book-entry transfer of Common Shares (as described in the Offer to
Purchase/Offering Circular) cannot be completed by the Expiration Date or
(iii) the applicable Letter of Transmittal (or a facsimile thereof) and all
other required documents cannot be delivered to the Exchange Agent and
Depositary prior to the Expiration Date. This form, properly completed and
duly executed, may be delivered by hand or facsimile transmission or mailed to
the Exchange Agent and Depositary.
To: First Chicago Trust Company of New York, Exchange Agent and Depositary
By Hand or Overnight Courier:
Tenders & Exchanges
Suite 4680-SUN
14 Wall Street
8th Floor
New York, New York 10005
By Mail:
(registered or certified mail recommended)
Tenders & Exchanges
Suite 4660-SUN
P.O. Box 2559-SUN
Jersey City, New Jersey 07303-2559
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 222-4720 or (201) 222-4721
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(201) 222-4707
Delivery of this Notice of Guaranteed Delivery to an address other
than as set forth above or transmission hereof via facsimile transmission
to a number other than as set forth above will not constitute a valid
delivery.
This form is not to be used to guarantee signatures. If a signature
on a Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter
of Transmittal.
I. EXCHANGE OFFER
IF TENDERING PURSUANT TO THE EXCHANGE OFFER
PLEASE COMPLETE THIS EXCHANGE OFFER SECTION
Ladies and Gentlemen:
The undersigned hereby tenders to the Company upon the terms and subject
to the conditions set forth in the Offer to Purchase/Offering Circular and the
related BLUE Letter of Transmittal (which together constitute the "Exchange
Offer"), receipt of which are hereby acknowledged, the Common Shares specified
below, pursuant to the guaranteed delivery procedure set forth in the Offer to
Purchase/Offering Circular under "The Offers--Procedure for Tender - Exchange
Offer."
SIGN HERE FOR EXCHANGE OFFER
Number of Common Shares tendered
pursuant to Exchange Offer:.......
Certificate Nos. (if available).... ...................................
..................................
.................................. ...................................
(Signature(s))
..................................
If Common Shares will be tendered
pursuant to Exchange Offer by
book-entry transfer: .............
...................................
Name of Tendering Institution:..... (Name(s)) (Please Print)
.................................. ...................................
(Address)
Account No...................... at ...................................
(Zip Code)
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company ...................................
[ ] Philadelphia Depository Trust Company (Area Code and Telephone No.)
II. CASH OFFER
IF TENDERING PURSUANT TO THE CASH OFFER
PLEASE COMPLETE THIS CASH OFFER SECTION
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, at the cash price per
Common Share indicated below, upon the terms and subject to the conditions set
forth in the Offer to Purchase/Offering Circular and the YELLOW Letter of
Transmittal (which together constitute the "Cash Offer"), receipt of which are
hereby acknowledged, the Common Shares specified below, pursuant to the
guaranteed delivery procedure set forth in the Offer to Purchase/Offer
Circular under "The Offers--Procedure for Tender - Cash Offer."
PRICE (IN DOLLARS) PER COMMON SHARE AT
WHICH COMMON SHARES ARE BEING TENDERED PURSUANT TO THE CASH OFFER
(See Instruction 5 of the YELLOW Letter of Transmittal)
__________________________
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THERE IS NO VALID
TENDER OF COMMON SHARES.
COMMON SHARES TENDERED AT PRICE
DETERMINED BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having the Company
purchase all the Common Shares the undersigned is tendering pursuant to
the Cash Offer (subject to the possibility of proration). Accordingly, by
checking this one box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the
undersigned hereby tenders all Common Shares tendered by the undersigned,
and is willing to accept the Purchase Price resulting from, the Dutch
Auction tender process. This action could result in the undersigned
receiving a price per Common Share as low as $30 or as high as $33.
OR
COMMON SHARES TENDERED PURSUANT TO THE CASH OFFER
AT PRICE DETERMINED BY SHAREHOLDER
$30.000 [ ] $31.000 [ ] $32.000 [ ]
$30.125 [ ] $31.125 [ ] $32.125 [ ]
$30.250 [ ] $31.250 [ ] $32.250 [ ]
$30.375 [ ] $31.375 [ ] $32.375 [ ]
$30.500 [ ] $31.500 [ ] $32.500 [ ]
$30.625 [ ] $31.625 [ ] $32.625 [ ]
$30.750 [ ] $31.750 [ ] $32.750 [ ]
$30.875 [ ] $31.875 [ ] $32.875 [ ]
$33.000 [ ]
CASH OFFER (continued)
ODD LOTS
(See Instruction 12 on the YELLOW Letter of Transmittal)
The undersigned either (check one box):
[ ] was the beneficial owner as of the close of business on June 12, 1995
of an aggregate of fewer than 100 Common Shares, all of which are being
tendered pursuant to the Cash Offer,
or
[ ] is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owners thereof, Common Shares
with respect to which it is the record owner, and (ii) believes, based
upon representations, made to it by each such beneficial owner, that
such beneficial owner owned beneficially as of the close of business on
June 12, 1995 an aggregate of fewer than 100 Common Shares, and is
tendering all of such Common Shares pursuant to the Cash Offer.
SIGN HERE FOR CASH OFFER
Number of Common Shares tendered
pursuant to Exchange Offer:.......
Certificate Nos. (if available).... ...................................
..................................
.................................. ...................................
(Signature(s))
..................................
If Common Shares will be tendered
pursuant to Exchange Offer by
book-entry transfer: .............
...................................
Name of Tendering Institution:..... (Name(s)) (Please Print)
.................................. ...................................
(Address)
Account No...................... at ...................................
(Zip Code)
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company ...................................
[ ] Philadelphia Depository Trust Company (Area Code and Telephone No.)
TO BE USED FOR EITHER OFFER
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office branch or agency in the
United States, guarantees (a) that the above named person(s) "own(s)" the
Common Shares tendered hereby within the meaning of Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, (b) that such tender of Common
Shares complies with Rule 14e-4 and (c) to deliver to the Exchange Agent and
Depositary either the Common Shares so tendered hereby pursuant to the
applicable Offer or Offers, in proper form for transfer, or confirmation of
the book-entry transfer of the Common Shares tendered hereby into the account
of the Exchange Agent and Depositary at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depositary Trust Company,
in each case together with the applicable properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents within five New York Stock
Exchange trading days after the date of execution of this Notice.
...................................
(Name of Firm)
...................................
(Authorized Signature)
...................................
(Title)
...................................
(Address)
Name:............................. ...................................
(Zip Code)
Dated:............................ ...................................
(Area Code and Telephone No.)
DO NOT SEND CERTIFICATES FOR COMMON SHARES WITH THIS FORM. CERTIFICATES
FOR COMMON SHARES MUST BE SENT WITH THE APPLICABLE LETTER OF TRANSMITTAL.
SUN COMPANY, INC.
OFFER TO EXCHANGE
Up to 25,000,000 Shares of its Common
Stock, $1 Par Value, for Depositary Shares,
Each Depositary Share Representing One-Half of
a Share of its Series A Cumulative Preference Stock
No Par Value
OFFER TO PURCHASE FOR CASH
Up to 6,400,000 Shares of Its Common Stock,
$1 Par Value
June 13, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees
Sun Company, Inc., a Pennsylvania corporation (the "Company"), is
offering to:
(1) Upon the terms and subject to the conditions set forth in the
Offer to Purchase/Offering Circular dated June 13, 1995 (the "Offer to
Purchase/Offering Circular") and the related BLUE Letter of Transmittal
enclosed herewith (which together with the Offer to Purchase/Offering Circular
constitutes the "Exchange Offer"), exchange up to 25,000,000 shares of its
Common Stock, par value $1 (such shares, together with all other outstanding
shares of Common Stock of the Company, being the "Common Shares") for
depositary shares (the "Depositary Shares"), each Depositary Share
representing one-half of a share of Series A Cumulative Preference Stock, no
par value, of the Company on the basis of one Depositary Share for each Common
Share; and
(2) Upon the terms and subject to the conditions set forth in the
Offer to Purchase/Offering Circular and the related YELLOW Letter of
Transmittal enclosed herewith (which together with the Offer to
Purchase/Offering Circular constitutes the "Cash Offer"), purchase up to
6,400,000 of the Common Shares, at a cash price not greater than $33 nor less
than $30 per Common Share. The Company will determine the single per Common
Share price (not greater than $33 nor less than $30 per Common Share in cash)
that it will pay for the Common Shares validly tendered pursuant to the Cash
Offer (the "Purchase Price") taking into account the number of Common Shares
so tendered and the price specified by tendering shareholders. The Company
will select the Purchase Price that will allow it to purchase 6,400,000 Common
Shares (or such lesser number as are validly tendered at prices not greater
than $33 nor less than $30 per Common Share) pursuant to the Cash Offer.
The Exchange Offer and the Cash Offer are being made simultaneously by
the Company and are referred to collectively herein as the "Offers." Holders
of Common Shares may elect to tender all or a portion of the Common Shares
held by them in either the Exchange Offer or the Cash Offer or a portion of
their Common Shares in each Offer; provided, however, that no holder of Common
Shares may tender the same Common Shares in both the Exchange Offer and the
Cash Offer.
Consummation of the Exchange Offer is not a condition to consummation of
the Cash Offer. Consummation of the Cash Offer is not a condition to
consummation of the Exchange Offer. The Exchange Offer is conditioned upon
2,500,000 Common Shares being validly tendered and not withdrawn. The Cash
Offer is not conditional on any minimum number of Common Shares being tendered
pursuant thereto.
Upon the terms and subject to the conditions of the Exchange Offer, if
25,000,000 or fewer Common Shares have been validly tendered pursuant to the
Exchange Offer and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase/Offering Circular), the Company will accept for exchange
all such Common Shares, and if more than 25,000,000 Common Shares have been
validly tendered pursuant to the Exchange Offer and not withdrawn prior to the
Expiration Date, the Company will accept for exchange all Common Shares
validly tendered and not withdrawn prior to the Expiration Date on a pro rata
basis, if necessary (with appropriate adjustments to avoid acquisitions of
fractional Common Shares).
Upon the terms and subject to the conditions of the Cash Offer, if
6,400,000 or fewer Common Shares have been validly tendered at or below the
Purchase Price pursuant to the Cash Offer and not withdrawn prior to the
Expiration Date, the Company will purchase all such Common Shares. If more
than 6,400,000 Common Shares have been validly tendered at or below the
Purchase Price pursuant to the Cash Offer and not withdrawn prior to the
Expiration Date, the Company will purchase Common Shares in the following
order of priority:
(a) all Common Shares validly tendered at or below the Purchase
Price pursuant to the Cash Offer and not withdrawn prior to the Expiration
Date by any shareholder who owned beneficially an aggregate of fewer than
100 Common Shares as of the close of business on June 12, 1995 and who
validly tenders all of such Common Shares pursuant to the Cash Offer
(partial tenders will not qualify for this preference) and completes the
box captioned "Odd Lots" on the YELLOW Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery; and
(b) after purchase of all of the foregoing Common Shares, all other
Common Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date on a pro rata basis, if necessary
(with appropriate adjustments to avoid purchases of fractional Common
Shares).
For your information and for forwarding to your clients for whom you hold
Common Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase/Offering Circular dated June 13, 1995;
2. BLUE Letter of Transmittal for your use and for the information of your
clients in relation to the EXCHANGE OFFER;
3. YELLOW Letter of Transmittal for your use and for the information of your
clients in relation to the CASH OFFER, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9
providing information relating to backup federal income tax withholding;
4. Notice of Guaranteed Delivery to be used to accept the Exchange Offer or
the Cash Offer if the Common Shares cannot be delivered to the Exchange
Agent or Depositary, as the case may be, by the Expiration Date, or the
book-entry transfer of the Common Shares cannot be completed by the
Expiration Date, or all required documents cannot be delivered to the
Exchange Agent/Depositary by the Expiration Date;
5. A form of letter that may be sent to your clients for whose accounts you
hold Common Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions;
and
6. Return envelope addressed to First Chicago Trust Company of New York, the
Exchange Agent and Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFERS, THE PRORATION PERIODS AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 24, 1995, UNLESS THE
OFFERS ARE EXTENDED.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKE ANY RECOMMENDATION
THAT SHAREHOLDERS TENDER OR REFRAIN FROM TENDERING THEIR COMMON SHARES
PURSUANT TO EITHER OFFER, AND NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH
RECOMMENDATION ON BEHALF OF THE COMPANY. THIS IS A MATTER FOR EACH
SHAREHOLDER TO DETERMINE AFTER CONSULTATION WITH HIS OR HER ADVISORS,
INCLUDING TAX COUNSEL, ON THE BASIS OF HIS OR HER OWN FINANCIAL POSITION AND
REQUIREMENTS.
The Company will upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their clients. The Company will
pay all stock transfer taxes applicable to the acceptance of Common Shares
pursuant to the Offers, subject to Instruction 7 of each Letter of
Transmittal.
Any inquiries you may have with respect to the Offers should be addressed
to, and additional copies of the enclosed materials may be obtained from
Morrow & Co., Inc., as Information Agent, at the addresses and telephone
numbers set forth on the back cover of the Offer to Purchase/Offering
Circular.
Very truly yours,
SUN COMPANY, INC.
SUN COMPANY, INC.
OFFER TO EXCHANGE
Up to 25,000,000 Shares of its Common
Stock, $1 Par Value, for Depositary Shares,
Each Depositary Share Representing One-Half of
a Share of Series A Cumulative Preference
Stock, No Par Value
OFFER TO PURCHASE FOR CASH
Up to 6,400,000 Shares of its Common
Stock, $1 Par Value
June 13, 1995
To Our Clients:
Enclosed for your consideration is the Offer to Purchase/Offering
Circular dated June 13, 1995 (the "Offer to Purchase/Offering Circular") of
Sun Company, Inc., a Pennsylvania corporation (the "Company"), and: (i) the
related BLUE Letter of Transmittal (which together with the Offer to
Purchase/Offering Circular constitutes the "Exchange Offer") in connection
with the offer by the Company to exchange up to 25,000,000 shares of its
Common Stock, $1 par value (such shares, together with all other outstanding
shares of Common Stock of the Company, being the "Common Shares"), for
depositary shares (the "Depositary Shares"), each Depositary Share
representing one-half of a share of Series A Cumulative Preference Stock, no
par value, of the Company and (ii) the related YELLOW Letter of Transmittal
(which, together with the Offer to Purchase/Offering Circular constitutes the
"Cash Offer") in connection with the offer by the Company to purchase up to
6,400,000 Common Shares, at a cash price not greater than $33 nor less than
$30 per Common Share. The Exchange Offer and the Cash Offer are being made
simultaneously by the Company and are referred to collectively herein as the
"Offers."
We are the holder of record of Common Shares held for your account. A
tender of such Common Shares pursuant to either of the Offers can be made only
by us as the holder of record pursuant to your instructions. The Letters of
Transmittal are furnished to you for your information only and cannot be used
by you to tender Common Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Common Shares held by us for your account pursuant to the Exchange Offer
or the Cash Offer, upon the terms and subject to the conditions set forth in
the Offer to Purchase/Offering Circular and the applicable Letter of
Transmittal.
Your attention is drawn to the following:
General
1. The Offers, the proration periods and withdrawal rights expire at
12:00 Midnight, New York City time, on Monday July 24, 1995, unless the Offers
are extended (the "Expiration Date").
2. The Company expressly reserves the right to extend, amend or modify
the terms of the Offers, and not accept any Common Shares tendered, at any
time prior to the Expiration Date for any reason.
3. Any stock transfer taxes applicable to the exchange of Common Shares
pursuant to the Exchange Offer, or sale of Common Shares pursuant to the Cash
Offer, will be paid by the Company, except as otherwise provided in
Instruction 7 to the applicable Letter of Transmittal.
4. Consummation of the Exchange Offer is not a condition to consummation
of the Cash Offer, and consummation of the Cash Offer is not a condition to
consummation of the Exchange Offer.
5. Holders of Common Shares may elect to tender all or a portion of the
Common Shares held by them pursuant to either the Exchange Offer or the Cash
Offer, or to allocate a portion of the Common Shares held by them to the
Exchange Offer and a portion to the Cash Offer; provided, however that no
holder may tender the same Common Shares pursuant to both the Exchange Offer
and the Cash Offer.
Exchange Offer
6. The exchange ratio is one Depositary Share for each Common Share
accepted for exchange.
7. The Exchange Offer is being made for up to 25,000,000 Common Shares.
Upon the terms and subject to the conditions of the Exchange Offer, if
25,000,000 or fewer Common Shares are validly tendered and not withdrawn prior
to the Expiration Date, the Company will accept for exchange all such Common
Shares, and if more than 25,000,000 Common Shares have been validly tendered
and not withdrawn prior to the Expiration Date, the Company will accept for
exchange all Common Shares validly tendered and not withdrawn prior to the
Expiration Date on a pro rata basis, if necessary (with appropriate
adjustments to avoid acquisitions of fractional Common Shares).
8. The Exchange Offer is conditioned upon 2,500,000 Common Shares being
validly tendered and not withdrawn prior to the Expiration Date.
Cash Offer
9. You may tender Common Shares pursuant to the Cash Offer at a cash
price not greater than $33 nor less than $30 per Common Share, as indicated in
the attached instruction form.
10. The Company will determine the per Common Share price (not greater
than $33 nor less than $30 per Common Share) in cash that it will pay for the
Common Shares validly tendered pursuant to the Cash Offer (the "Purchase
Price") taking into account the number of Common Shares so tendered and the
prices specified by tendering shareholders. The Company will select the
Purchase Price that will allow it to purchase 6,400,000 Common Shares (or such
lesser number as are validly tendered at prices not greater than $33 nor less
than $30 per Common Share) pursuant to the Cash Offer.
11. The Cash Offer is not conditioned upon any minimum number of Common
Shares being tendered.
12. If you owned beneficially as of the close of business on June 12,
1995, an aggregate of fewer than 100 Common Shares and you instruct us to
tender on your behalf all such Common Shares prior to the expiration of the
Cash Offer and check the box captioned "Odd Lots" in the instruction form, on
the terms and subject to the conditions of the Cash Offer, all such Common
Shares validly tendered at or below the Purchase Price will be accepted for
purchase before proration, if any, of the purchase of other Common Shares
properly tendered at or below the Purchase Price.
13. The Cash Offer is being made for up to 6,400,000 Common Shares.
Upon the terms and subject to the conditions of the Cash Offer, if 6,400,000
or fewer Common Shares have been validly tendered at or below the Purchase
Price pursuant to the Cash Offer and not withdrawn prior to the Expiration
Date, the Company will purchase all such Common Shares, and if more than
6,400,000 Common Shares have been validly tendered at or below the Purchase
Price pursuant to the Cash Offer and not withdrawn prior to the Expiration
Date, the Company will first accept for purchase all Common Shares tendered in
accordance with the preceding paragraph, and will then accept all other Common
Shares validly tendered at or below the Purchase Price pursuant to the Cash
Offer and not withdrawn prior to the Expiration Date on a pro rata basis, if
necessary (with appropriate adjustments to avoid purchases of fractional
Common Shares).
SUN COMPANY, INC.
OFFER TO EXCHANGE
Up to 25,000,000 Shares of its Common
Stock, $1 Par Value, for Depositary Shares,
Each Depositary Share Representing One-Half of
a Share of Series A Cumulative Preference
Stock, No Par Value
OFFER TO PURCHASE FOR CASH
Up to 6,400,000 Shares of its Common
Stock, $1 Par Value
INSTRUCTION FORM
If you wish to have us tender any or all of your Common Shares pursuant
to either Offer, please so instruct us by completing, executing, detaching and
returning to us this Instruction Form.
An envelope to return your instructions to us is enclosed. If you
authorize tender of your Common Shares pursuant to one Offer (but not both
Offers), all such Common Shares will be tendered will be tendered pursuant
to the Offer indicated unless otherwise specified below. Holders of Common
Shares may elect to tender all or a portion of the Common Shares held by
them pursuant to either the Exchange Offer or the Cash Offer, or to
allocate a portion of the Common Shares held by them to the Exchange Offer
and a portion to the Cash Offer; provided, however that no holder may
tender the same Common Shares pursuant to both the Exchange Offer and the
Cash Offer. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf by the Expiration Date.
THE OFFERS ARE NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF, HOLDERS OF COMMON SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF
THE OFFERS OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION. IN THOSE JURISDICTIONS THE LAWS OF WHICH REQUIRE THAT THE
OFFERS BE MADE BY A LICENSED BROKER OR DEALER, THE OFFERS SHALL BE DEEMED TO
BE MADE ON BEHALF OF THE COMPANY BY ONE OR MORE REGISTERED BROKERS OR DEALERS
LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
INSTRUCTIONS WITH RESPECT TO THE OFFERS
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase/Offering Circular (the "Offer to Purchase/Offering
Circular") dated June 13, 1995 and the related Letters of Transmittal in
connection with the offers by Sun Company, Inc. to (i) exchange up to
25,000,000 shares of its Common Stock, $1 par value (such shares, together
with all other outstanding shares of Common Stock of the Company, being the
"Common Shares"), for depositary shares (the "Depositary Shares"), each
Depositary Share representing one-half of a share of Series A Cumulative
Preference Stock, no par value, of the Company, at a rate of one Depositary
Share for each Common Share tendered, and (ii) purchase up to 6,400,000 Common
Shares at a cash price not greater than $33 nor less than $30 per Common
Share.
EXCHANGE OFFER
This will instruct you to tender pursuant to the Exchange Offer the
number of Common Shares indicated below held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer to Purchase/Offering Circular and the related BLUE Letter of
Transmittal.
[ ] By checking this box, all Common Shares held by you for our account,
including fractional shares, will be tendered in the Exchange Offer. If
fewer than all Common Shares are to be so tendered, we have checked the
box and indicated below the aggregate number of Common Shares to be
tendered by you.
shares
----------
Unless otherwise indicated, if you have indicated your intent to tender
pursuant to only one Offer (but not both Offers), it will be assumed that all
Common Shares held by us for your account are to be tendered pursuant to such
Offer indicated.
CASH OFFER
This will instruct you to tender pursuant to the Cash Offer the number
of Common Shares indicated below held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer to Purchase/Offering Circular and the related YELLOW Letter of
Transmittal, and at the price indicated below.
[ ] By checking this box, all Common Shares held by you for our account,
including fractional shares, will be tendered in the Cash Offer. If fewer
than all Common Shares are to be tendered, we have checked the box and
indicated below the aggregate number of Common Shares to be tendered by
you.
shares
----------
Unless otherwise indicated, if you have indicated your intent to tender
pursuant to only one Offer (but not both Offers), it will be assumed that all
Common Shares held by us for your account are to be tendered pursuant to such
Offer indicated.
[ ] By checking this box, the undersigned represents that the undersigned
owned beneficially as of the close of business on June 12, 1995 an
aggregate of fewer than 100 Common Shares and is tendering all of such
Common Shares pursuant to the Cash Offer.
PRICE (IN DOLLARS) PER COMMON SHARE AT
WHICH COMMON SHARES ARE TO BE TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THE COMMON SHARES
CANNOT BE TENDERED PURSUANT TO THE CASH OFFER
COMMON SHARES TO BE TENDERED
PURSUANT TO THE CASH OFFER
AT PRICE DETERMINED BY DUTCH AUCTION
[ ] By checking this one box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the
Common Shares to be tendered pursuant to the Cash Offer will be tendered
at the Purchase Price resulting from the Dutch Auction tender process.
The undersigned understand(s) that this action could result in the
undersigned receiving a price per Common Share as low as $30 or as high as
$33.
OR
COMMON SHARES TO BE TENDERED PURSUANT TO THE
CASH OFFER AT THE FOLLOWING PRICE
$30.000 [ ] $31.000 [ ] $32.000 [ ]
$30.125 [ ] $31.125 [ ] $32.125 [ ]
$30.250 [ ] $31.250 [ ] $32.250 [ ]
$30.375 [ ] $31.375 [ ] $32.375 [ ]
$30.500 [ ] $31.500 [ ] $32.500 [ ]
$30.625 [ ] $31.625 [ ] $32.625 [ ]
$30.750 [ ] $31.750 [ ] $32.750 [ ]
$30.875 [ ] $31.875 [ ] $32.875 [ ]
$33.000 [ ]
SIGN HERE FOR EITHER OR BOTH OFFERS
................................. .................................
................................. .................................
Signature(s) Please print name(s) and
address(es) here
Dated............................
June 13, 1995
TO SUN SHAREHOLDERS:
With Sun's long-term financial success clearly at the top of the
agenda, on June 12 the company's Board of Directors approved a
comprehensive series of changes in the organizational and financial
structure of the company.
These changes are in response to a continuing 1990's business
environment that has featured a combination of unfavorable market conditions,
high environmental costs and an influx of aggressive independent
competitors---all of which have put our company under increased pressure.
The actions we are announcing today will greatly strengthen our
competitive position, improve our operating results and build long-range value
for our shareholders.
Organizationally, we will dramatically sharpen our focus on results
by providing our operating units with a structure that will encourage
entrepreneurial spirit, maximize income and tailor each business more directly
to its market.
The decisions we are making will generate annual cost savings in
excess of $100 million. Included is a reduction of 800 jobs. An unpleasant
choice, yes, but it is an unavoidable part of the competitive reality of this
business. As you have undoubtedly read in the newspapers, many other
companies in this industry have been faced with making the same decision.
So, the internal story is one of a lean, purposeful organizational
structure and a major cost reduction initiative.
The next part, of course, affects every shareholder. That is the
decision to lower Sun's dividend payment from $1.80 per share to $1.00. (From
45 cents to 25 cents a quarter)
Given Sun's long history of "finding a way" to meet the dividend,
this was a difficult decision to make. Given the reality of our industry
right now, I believe it was the responsible and prudent course to follow.
The fact is that for some time our dividend payment has been nearly
double that of our competition.
We have maintained that dividend level for an extended period of time
even when downstream profitability has been weak. We did so in anticipation
that market conditions would right themselves shortly and financial
performance would improve. We can no longer wait for that to happen. We must
make the choices, and the sacrifices, that will establish a solid foundation
for improved financial performance.
Reducing the dividend is a very significant step. However, even at
the lower level, our yield will still be higher than our competition or the
average of the S&P 500. By having a dividend level comparable to our
competitors, we will have sufficient funds to make sound investments in our
value-added businesses and to improve our basic refining capability.
The information that is enclosed has been sent to all Sun
shareholders. As a Sun shareholder, you will have some choices to make. I
urge you to study closely the information that accompanies this letter. It
explains those choices, and also points out that further help is available to
you should you need it.
Sun has never been a stand-still company. The Sun family of
employees and shareholders has been through some good times and some
challenging ones, and has tried to make decisions that were in the best
interests of the total company. And that's what's happening here, as well.
Understanding today's unusual business environment and having
confidence in our future potential as a top competitor in this
industry---those are the characteristics that guide this action.
Sincerely,
Robert H. Campbell
RHC/alw
This advertisement is neither an offer to purchase, exchange or sell nor a
solicitation of an offer to purchase, exchange or sell any of the securities
referred to in this advertisement. The Offers are made solely by the Offer to
Purchase/Offering Circular dated June 13, 1995, and the related Letters of
Transmittal and are not being made to, nor will offers be accepted from, or on
behalf of, holders of these securities in any jurisdiction in which the making
or acceptance of the Offers would not be in compliance with the laws of such
jurisdiction. In those jurisdictions whose laws require that the Offers be
made by a licensed broker or dealer, the Offers shall be deemed to be made on
behalf of the Company by one or more registered brokers or dealers licensed
under the laws of such jurisdictions.
Notice of Offer to Holders of Shares of Common Stock
SUN COMPANY, INC.
Offer to Exchange
Up to 25,000,000 Shares of its Common Stock, $1 par value
for Depositary Shares,
Each Depositary Share Representing One-Half of a Share of
Series A Cumulative Preference Stock, no par value
(Targeted Growth Enhanced Terms Security(SM) TARGETS(SM))
Offer to Purchase for Cash
Up to 6,400,000 Shares of its Common Stock, $1 par value
THE OFFERS, THE PRORATION PERIODS AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, July 24,
1995, UNLESS THE OFFERS ARE EXTENDED.
SUN COMPANY, INC., a Pennsylvania corporation (the "Company"), is
offering its shareholders the opportunity to: (i) exchange, upon the terms and
conditions contained in the Offer to Purchase/Offering Circular dated June 13,
1995 (the "Offer to Purchase/Offering Circular") and in the related BLUE
Letter of Transmittal (which together constitute the "Exchange Offer") up to
25,000,000 shares of its Common Stock, $1 par value (such shares, together
with all other outstanding shares of Common Stock of the Company, are referred
to herein as the "Common Shares"), for depositary shares (the "Depositary
Shares"), each Depositary Share representing one-half of a share of the
Company's Series A Cumulative Preference Stock, no par value (the "Preference
Stock"), at the rate of one Depositary Share for each Common Share tendered;
and (ii) tender, upon the terms and subject to the conditions set forth in the
Offer to Purchase/Offering Circular and in the related YELLOW Letter of
Transmittal (which together constitute the "Cash Offer"), up to 6,400,000
Common Shares at cash prices not greater than $33 nor less than $30 per Common
Share specified by such shareholders. The Exchange Offer and the Cash Offer
are being made simultaneously by the Company and are referred to collectively
herein as the "Offers." Holders of Common Shares may elect to tender all or a
portion of the Common Shares held by them in either the Exchange Offer or the
Cash Offer or a portion of their Common Shares in each Offer; provided,
however, that no holder of Common Shares may tender the same Common Shares in
both the Exchange Offer and the Cash Offer.
The Exchange Offer is conditioned upon, among other things, at least
2,500,000 Common Shares being validly tendered and not withdrawn prior to
12:00 midnight, New York City time, on Monday, July 24, 1995, unless extended
(the "Expiration Date"). The Cash Offer is not conditioned upon any minimum
number of shares being tendered. See "The Offers-Conditions of the Offers" in
the Offer to Purchase/Offering Circular.
Pursuant to the Cash Offer, the Company will determine a single cash
price per Common Share (not greater than $33 nor less than $30 per Common
Share) that it will pay for the Common Shares validly tendered pursuant to the
Cash Offer (the "Purchase Price"), taking into account the number of Common
Shares so tendered and the prices specified by tendering shareholders. The
Company will select the Purchase Price that will allow it to purchase
6,400,000 Common Shares (or such lesser number as are validly tendered at
prices not greater than $33 nor less than $30 per Common Share) pursuant to
the Cash Offer. Upon the terms and subject to the conditions of the Cash
Offer, including the provisions thereof relating to proration, the Company
will purchase, at the Purchase Price, all Common Shares validly tendered at
prices at or below the Purchase Price prior to the Expiration Date and not
withdrawn.
Upon the terms and subject to the conditions of the Exchange Offer,
if 25,000,000 or fewer Common Shares have been validly tendered pursuant to
the Exchange Offer and not withdrawn prior to the Expiration Date, the Company
will accept all such Common Shares for exchange. Upon the terms and subject
to the conditions of the Exchange Offer, if more than 25,000,000 Common Shares
have been validly tendered pursuant to the Exchange Offer and not withdrawn
prior to the Expiration Date, the Company will accept for exchange all Common
Shares validly tendered pursuant to the Exchange Offer and not withdrawn prior
to the Expiration Date on a pro rata basis, if necessary (with appropriate
adjustments to avoid purchases of fractional Common Shares).
Upon the terms and subject to the conditions of the Cash Offer, if
6,400,000 or fewer Common Shares have been validly tendered at or below the
Purchase Price pursuant to the Cash Offer and not withdrawn prior to the
Expiration Date, the Company will purchase all such Common Shares at the
Purchase Price. Upon the terms and subject to the conditions of the Cash
Offer, if more than 6,400,000 Common Shares have been validly tendered at or
below the Purchase Price pursuant to the Cash Offer and not withdrawn prior to
the Expiration Date, the Company will purchase Common Shares at the Purchase
Price in the following order of priority:
(a) all Common Shares validly tendered at or below the
Purchase Price pursuant to the Cash Offer and not withdrawn prior to
the Expiration Date by any shareholder who owned beneficially an
aggregate of fewer than 100 Common Shares as of the close of business
on June 12, 1995 and who validly tenders all of such Common Shares
pursuant to the Cash Offer (partial tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" on the YELLOW
Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery, up to a maximum of 6,400,000 Common Shares in aggregate
tendered by such shareholders pursuant to the Cash Offer; and
(b) after purchase of all of the foregoing Common Shares, all
other Common Shares validly tendered at or below the Purchase Price
pursuant to the Cash Offer and not withdrawn prior to the Expiration
Date on a pro rata basis, if necessary (with appropriate adjustments
to avoid purchases of fractional Common Shares).
Tenders of Common Shares made pursuant to either the Exchange Offer
or the Cash Offer may be withdrawn at any time prior to the Expiration Date.
Thereafter, such tenders are irrevocable, except that they may be withdrawn
after August 7, 1995, unless theretofore accepted for exchange or payment as
provided in the Offer to Purchase/Offering Cicular. To be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal
must be timely received by First Chicago Trust Company of New York, as
Exchange Agent for the Exchange Offer and as Depositary for the Cash Offer,
at one of its addresses set forth on the back cover of the Offer to
Purchase/Offering Circular and must specify the name of the person who
tendered the Common Shares to be withdrawn and the number of Common Shares
to be withdrawn with respect to the applicable Offer. If the Common Shares
to be withdrawn have been delivered to the Exchange Agent or the
Depositary, as the case may be, a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution, as defined in the Offer
to Purchase/Offering Circular (except in the case of Shares tendered by an
Eligible Institution), must be submitted prior to the release of such
Common Shares. In addition, such notice must specify, in the case of
Common Shares tendered by delivery of certificates, the name of the
registered holder (if different from that of the tendering shareholder) and
the serial numbers shown on the particular certificates evidencing the
Common Shares to be withdrawn or, in the case of Common Shares tendered by
book-entry transfer, the name and number of the account at one of the Book-
Entry Transfer Facilities (as defined in the Offer to Purchase/Offering
Circular) to be credited with the withdrawn Common Shares. Withdrawals may
not be rescinded and Common Shares withdrawn will thereafter be deemed not
validly tendered for purposes of either Offer. However, withdrawn Common
Shares may be retendered by again following one of the procedures described
in the Offer to Purchase/Offering Circular at any time prior to the
Expiration Date.
For the purposes of each Offer, the Company will be deemed to have
accepted for exchange or purchase (and thereby acquired), subject to the
proration provisions of the applicable Offer, Common Shares that are validly
tendered pursuant to the applicable Offer prior to the Expiration Date and not
withdrawn as, if and when it gives oral or written notice (i) to the Exchange
Agent of its acceptance for exchange of Common Shares tendered pursuant to the
Exchange Offer or (ii) to the Depositary of its acceptance for purchase of
Common Shares tendered pursuant to the Cash Offer.
The purpose of the Exchange Offer is to provide those shareholders
whose primary objective is current income with an opportunity to exchange,
subject to the terms and conditions of the Exchange Offer, all or a portion of
their Common Shares for yield-oriented Depositary Shares entitled to receive
an annual cash dividend of $1.80 per share. The purpose of the Cash Offer is
to allow shareholders to tender, subject to the terms and conditions of the
Cash Offer, all or a portion of their Common Shares for cash while allowing
them to retain, in respect of their remaining Common Shares, a continuing
equity interest in the Company.
Each shareholder should decide for himself or herself whether to
tender Common Shares pursuant to one or more of these Offers. Neither the
Company nor its Board of Directors makes any recommendation that shareholders
tender or refrain from tendering their Common Shares pursuant to either Offer
and no one has been authorized to make such recommendations on behalf of the
Company. This is a matter for each shareholder to determine after
consultation with his or her advisors, including tax counsel, on the basis of
his or her own financial position and requirements.
The Company reserves the right, in its sole discretion, at any time
or from time to time, to extend the period of time during which the Offers are
open by giving oral or written notice of such extension to First Chicago Trust
Company of New York, as Exchange Agent and Depositary.
The information required by Rule 13e-4(d)(1) under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to
Purchase/Offering Circular and is incorporated herein by reference.
The Offer to Purchase/Offering Circular and the related Letters of
Transmittal contain important information that should be read before any
decision is made with respect to the Offers. Copies of the Offer to
Purchase/Offering Circular, the related Letters of Transmittal and other
tender offer materials may be obtained at the expense of the Company from the
Information Agent as set forth below:
The Information Agent is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage Firms please call:
(800) 662-5200
PR NEWSWIRE: Please send to Northeast Newsline, plus IRW/First Call and the
following trades: Business/Finance, Oil/Energy and Chemicals/Plastics. For
release at 8:00 a.m. on June 13, 1995.
SUN COMPANY TO IMPLEMENT
BROAD OPERATIONAL AND FINANCIAL CHANGES;
DECLARES DIVIDEND ON COMMON STOCK
AND NEW DEPOSITARY SHARES
PHILADELPHIA, June 13, 1995 -- Sun Company, Inc. (NYSE: SUN) today
announced details of an extensive operational and financial restructuring that
Sun Chairman/CEO Robert H. Campbell said "will significantly improve our
competitive position and establish a solid foundation for improved financial
performance."
Sun is the largest independent U.S. refiner-marketer, with five
domestic refineries and more than 4,000 Sunoco retail outlets in 17 states
from Maine to Indiana and the District of Columbia.
"The changes we are making will enable us to focus on our core
businesses and significantly strengthen our financial position so we can
invest in growth projects," Campbell said. "We believe this will enhance the
value of Sun Company to our shareholders and the many other groups who have a
stake in the company, including our customers, suppliers, employees and the
communities where we operate."
He said there are seven elements in the operational and financial
restructuring. They are:
OPERATIONAL ELEMENTS
* cost reductions of $110 million a year, principally by a reduction
of 800 primarily staff and support positions;
* the restructuring of Sun Company into eight "separate and discrete,
but not autonomous, business units" plus a holding company and a service
company;
FINANCIAL ELEMENTS
* the already-completed sale of the company's 55-percent interest in
Suncor, its former Canadian subsidiary, for net cash proceeds of U.S.$770
million, of which $635 million will be received in mid-June, with the
remainder due in 1996;
* the reduction of Sun's debt by more than $500 million through the
use of at least $335 million of Suncor proceeds to repay company debt and the
elimination of approximately $180 million of debt as part of the Suncor sale;
* the reduction of Sun's quarterly common stock dividend from 45
cents a share ($1.80 per year) to 25 cents a share ($1.00 per year);
* the use of some Suncor proceeds to make a cash tender offer for up
to 6.4 million shares of Sun common stock via a "Dutch auction" at a price
between $30 and $33 per share, followed by an open market purchase program of
up to $100 million in Sun common stock after the conclusion of the tender
offer. (Sun stock closed yesterday at $31.25 per share. The tender offer to
shareholders will be made on June 13 and will remain open until July 24.)
* an offer to shareholders to exchange their common shares tax free
for an equal number of "depositary shares" that will pay an annual dividend of
$1.80 per share for three years. The company will exchange up to 25 million
shares in total. (Each depositary share represents one-half of a preference
share -- a new series of cumulative preferred stock -- and will have half the
voting rights of a common share. Their value will be capped at $40 per share
plus any remaining "excess" dividend, and they are subject to redemption for
common stock.)
The exchange offer will be made at the same time as the cash tender
offer and will also expire on July 24, 1995. If more than 6.4 million shares
are tendered in the Dutch auction or more than 25 million shares in the
exchange offer, submissions will be subject to proration.
Campbell said that Sun's board of directors declared dividends
payable on both common stock and the new depositary shares for the third
quarter of 1995. The common stock dividend will be $.25 per share, and the
dividend on depositary shares will be $.45 per share. Payment date for the
common stock dividend is September 8, 1995, payable to shareholders of record
on August 10. The dividend on depositary shares is payable September 13,
1995, to shareholders of record on August 10.
Campbell said the multi-faceted plan was the result of a competitive
assessment of all aspects of the refining and marketing business. "Refining
margins for gasoline and distillate fuel, the principal products made from
crude oil, have narrowed significantly in the past four years, requiring us to
continually reduce our cost structure," he said.
He pointed out that the financial aspects of the restructuring are
directly linked with the operational changes. "The proceeds of the Suncor
sale enable us to repay a large portion of our debt and buy back some of our
stock, while the reduced dividend and annual cost reductions provide ongoing
cash for growth projects that will increase shareholder value over time," he
stated.
Commenting on the operational changes, Campbell said that organizing
into eight business units would "increase accountability for bottom line
performance, allow each unit to focus on different ways of operating in
different business environments, better integrate oil flow decision-making,
and provide tighter cost controls." The eight units are:
* Northeast Sunoco Branded Fuels -- primarily sales of Sunoco
gasoline through service stations in New England and the Mid-Atlantic states,
but also including branded sales of other fuels;
* Northeast Refining and Wholesale, composed of the Philadelphia and
Marcus Hook, Pa., refineries, and the wholesale marketing of fuels made there;
* Toledo Refining & Marketing, including the Toledo (Ohio) Refinery,
sales of products made there, and the retail marketing of Sunoco gasoline in
the areas supplied from the refinery;
* Chemicals, consisting of the manufacture and sale of chemicals;
* Lubricants Refining & Marketing, consisting of the manufacture and
sale of lubricants and related fuels produced at Sun's Tulsa (Okla.) and
Puerto Rico refineries, including blending, packaging and customer service;
* Logistics, composed of Sun's crude oil and products pipelines,
domestic crude oil lease acquisition, marketing terminals, and the company's
rail, tank car, transport and marine operations;
* International Production, principally crude oil and natural gas
produced in the U.K. North Sea; and
* Coal, consisting of several Eastern coal mines and a coke producing
facility;
Campbell said a service company would be created from existing
support groups to provide services to these eight units. "This service
company will be compared with external providers to determine the most cost
effective way of providing needed services," Campbell noted.
Commenting on the dividend reduction, Campbell said that, based on
Monday's share price of $31.25, Sun's previous $1.80 per share dividend
represented a yield of 5.8 percent, more than double that of its competitors.
"We maintained that dividend level in anticipation that market conditions
would right themselves shortly and financial performance would improve, but we
can no longer wait for that to happen," he said. "It is tempting to speculate
that the downward pressure on our refining margins has peaked and will soon
subside, but at Sun we think that to count on that would be a risky strategy
indeed."
"The new annual dividend on common stock of $1.00 per share is still
an attractive yield compared to our competition and the average S&P 500
company," Campbell said. "By having a dividend level comparable to our
competitors, we will have sufficient funds to make sound investments in our
value-added businesses and to improve our basic refining capability." The new
dividend will take effect with the third quarter payment scheduled for
September 1995, Campbell noted.
He added that Sun will record an estimated after-tax charge in the
1995 second quarter of $100 million related to employee terminations and the
write-down to net realizable value of certain refining-marketing and coal
assets. He said the Suncor sale will result in a second quarter after-tax
gain of approximately $150 million.
Sun Company, Inc. (NYSE: SUN), headquartered in Philadelphia,
operates five domestic refineries and markets gasoline under the Sunoco brand
through more than 4,000 service stations in 17 states from Maine to Indiana
and the District of Columbia. These outlets include more than 600 Sunoco
A-Plus convenience stores and 350 Sunoco Ultra Service Centers. Sun sells
lubricants and petrochemicals worldwide, operates domestic pipelines and
terminals, and produces crude oil and natural gas internationally. Sun
recently sold its 55 percent interest in Suncor, a fully-integrated Canadian
oil company.
-END-
June 13, 1995
For further information contact:
Bud Davis (media):
after 10:00 a.m. on June 13:
(212) 223-0527 or (212) 644-5927
on June 14 and thereafter:
(215) 977-3485
Katie Nichols (investors): (215) 977-6106
[LETTERHEAD OF DAVIS POLK & WARDWELL]
June 13, 1995
Board of Directors
Sun Company, Inc.
Ten Penn Center
1801 Market Street
Philadelphia, PA 19103-1699
Ladies and Gentlemen:
You have requested our opinion with respect to certain Federal
income tax consequences of the proposed exchange of up to 25,000,000 shares of
Common Stock of Sun Company, Inc. (the "Company") for Depositary Shares, each
of which represents one-half of a share of the Company's Series A Cumulative
Preference Stock, pursuant to an offer made by the Company (the "Exchange
Offer") in an Offer to Purchase/Offering Circular of the Company dated June 13,
1995, and the related BLUE Letter of Transmittal. The Company has also made
an offer (the "Cash Offer") to purchase up to 6,400,000 Common Shares pursuant
to the terms specified in the Offer to Purchase/Offering Circular and the
related YELLOW Letter of Transmittal. Unless otherwise specified, terms used
herein are defined in the Offer to Purchase/Offering Circular.
For purposes of rendering this opinion, we have reviewed the
Issuer Tender Offer Statement on Schedule 13E-4, dated June 13, 1995, filed by
the Company with the Securities and Exchange Commission, which contains the
form of Offer to Purchase/Offering Circular as Exhibit (a)(1) thereto, and
such other documents, and have conducted such other investigations of fact, as
we have deemed necessary or appropriate.
This opinion is based on the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed Treasury Regulations, judicial
decisions and administrative pronouncements in effect as of the date hereof,
which authority is subject to change, possibly on a retroactive basis, that
could adversely affect this opinion. Our opinion is not binding on the
Internal Revenue Service and should not be taken as an assurance of the
ultimate tax treatment of an exchange of Common Shares for Depositary Shares
pursuant to the Exchange Offer.
Based on the foregoing, we are of the opinion that the receipt
of Depositary Shares by holders tendering Common Shares solely pursuant to the
Exchange Offer (and not tendering Common Shares pursuant to the Cash Offer)
will be treated as part of a tax-free recapitalization under Section
368(a)(1)(E) of the Code and that such tendering holders will therefore not
incur income tax liability in connection with the Exchange Offer.
Accordingly, a holder's tax basis in the Depositary Shares received in the
exchange will be equal to such holder's tax basis in the Common Shares
exchanged therefor, and the holding period of such Depositary Shares will
include the holding period of such Common Shares.
This opinion is addressed only to Sun Company, Inc. No opinion
is expressed with respect to state, local, foreign or other tax laws other
than Federal income tax law.
Very truly yours,
DAVIS, POLK & WARDWELL
SUN COMPANY, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
As Depositary
________________
DEPOSIT AGREEMENT
for
SERIES A CUMULATIVE PREFERENCE STOCK
________________
Dated as of June 13, 1995
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
"Articles of Incorporation"............................ 1
"Certificate of Designation"........................... 1
"Common Stock"......................................... 1
"Company".............................................. 1
"Corporate Office"..................................... 2
"Deposit Agreement".................................... 2
"Depositary"........................................... 2
"Depositary's Agent"................................... 2
"Depositary Successor"................................. 2
"Operating Guidelines"................................. 2
"Person"............................................... 2
"Receipt".............................................. 2
"Record holder"........................................ 2
"Registrar"............................................ 2
"Securities Act"....................................... 2
"Series A Depositary Share"............................ 2
"Stock"................................................ 3
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transferability of Receipts................... 3
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof..................................... 4
SECTION 2.03. Redemptions of Stock................................... 6
SECTION 2.04. Transfer of Receipts................................... 8
SECTION 2.05. Combination and Split-ups of Receipts.................. 9
SECTION 2.06. Surrender of Receipts and Withdrawal of
Stock............................................... 9
SECTION 2.07. Limitations on Execution and Delivery, Transfer, Split-
up, Combination, Surrender and Exchange of Receipts. 10
SECTION 2.08. Lost Receipts, etc..................................... 11
SECTION 2.09. Cancellation and Destruction of Surrendered
Receipts............................................ 11
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other
Information......................................... 11
SECTION 3.02. Payment of Taxes or Other Governmental
Charges............................................. 11
SECTION 3.03. Representations and Warranties as to Stock............. 12
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions..................................... 12
SECTION 4.02. Distributions Other Than Cash.......................... 13
SECTION 4.03. Subscription Rights, Preferences or
Privileges.......................................... 14
SECTION 4.04. Notice of Dividends, Fixing of Record Date for Holders
of Receipts......................................... 15
SECTION 4.05. Voting Rights.......................................... 15
SECTION 4.06. Changes Affecting Stock and Reclassifications,
Recapitalizations, etc.............................. 16
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the
Depositary; the Registrar........................... 17
SECTION 5.02. Liability of the Depositary, the Depositary's Agents or
the Company......................................... 18
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents
and the Company..................................... 18
SECTION 5.04. Resignation and Removal of the Depositary, Appointment
of Successor Depositary............................. 20
SECTION 5.05. Corporate Notices and Reports.......................... 22
SECTION 5.06. Deposit of Stock by the Company........................ 22
SECTION 5.07. Indemnification by the Company......................... 22
SECTION 5.08. Fees, Charges and Expenses............................. 22
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment.............................................. 23
SECTION 6.02. Termination............................................ 23
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts........................................... 24
SECTION 7.02. Exclusive Benefits of Parties.......................... 25
SECTION 7.03. Invalidity of Provisions............................... 25
SECTION 7.04. Notices................................................ 25
SECTION 7.05. Depositary's Agents.................................... 26
SECTION 7.06. Holders of Receipts Are Parties........................ 26
SECTION 7.07. Governing Law.......................................... 26
SECTION 7.08. Headings............................................... 26
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of June 13, 1995, between SUN
COMPANY, INC., a Pennsylvania corporation, and First Chicago Trust Company of
New York, as Depositary.
W I T N E S S E T H
WHEREAS, it is desired to provide, as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of Series A Cumulative
Preference Stock, no par value, of the Company (the "Stock") with the
Depositary, as agent for the beneficial owners of the Stock, for the purposes
set forth in this Deposit Agreement and for the issuance hereunder of the
Receipts evidencing Series A Depositary Shares representing an interest in the
Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of
the Depositary Receipt annexed as Exhibit A to this Deposit Agreement, with
appropriate insertions, modifications and omissions, as hereinafter provided
in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained
herein, it is agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms
(in the singular and plural forms of such terms) used in this Deposit
Agreement and the Depositary Receipts:
"Articles of Incorporation" shall mean the Articles of
Incorporation, as amended from time to time, of the Company.
"Certificate of Designation" shall mean the Statement of
Designation annexed as Exhibit B to this Deposit Agreement, as amended from
time to time, establishing and setting forth the rights, preferences,
privileges and limitations of the Stock.
"Common Stock" shall mean the Company's Common Stock, par value
$1 per share.
"Company" shall mean Sun Company, Inc., a Pennsylvania
corporation, and its successors.
"Corporate Office" shall mean the office of the Depositary at
which at any particular time its depositary receipt business shall be
administered, which at the date of this Deposit Agreement is located at 14
Wall Street, Suite 4680, New York, New York 10005.
"Deposit Agreement" shall mean this agreement, as the same may
be amended, modified or supplemented from time to time.
"Depositary" shall mean First Chicago Trust Company of New
York, and any successor as depositary hereunder.
"Depositary's Agent" shall mean an agent appointed by the
Depositary as provided, and for the purposes specified, in Section 7.05.
"Depositary Successor" means a successor to the Depositary
taking title to the Stock in accordance with Section 5.04.
"Operating Guidelines" means the operating and administrative
procedures relating to the functions of the Depositary pursuant to this
Deposit Agreement, as agreed between the Company and the Depositary from time
to time.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, a government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Receipt" shall mean a Depositary Receipt issued hereunder to
evidence one or more Series A Depositary Shares, whether in temporary or
definitive form.
"Record holder" as applied to a Receipt shall mean the person
in whose name a Receipt is registered on the books maintained by the
Depositary for such purpose.
"Registrar" shall mean any qualified Person appointed by the
Company to register ownership of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series A Depositary Share" shall mean an interest in one-half
of a share of Stock deposited with the Depositary hereunder, as evidenced by
the Receipts issued hereunder. Subject to the terms of this Deposit
Agreement, each owner of a Series A Depositary Share is entitled,
proportionately, to all the rights and preferences of the Stock represented by
such Series A Depositary Share, including the dividend, voting, redemption and
liquidation rights contained in the Certificate of Designation.
"Stock" shall mean shares of the Company's Series A Cumulative
Preference Stock, no par value, heretofore validly issued, fully paid and
nonassessable.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transferability of Receipts.
Receipts shall be engraved or printed or lithographed with steel-engraved
borders and underlying tint and shall be substantially in the form set
forth in Exhibit A annexed to this Deposit Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided. Pending
the preparation of definitive Receipts, the Depositary, upon the written
order of the Company or any holder of Stock, as the case may be, delivered
for deposit in compliance with Section 2.02, shall execute and deliver
temporary Receipts that are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive
Receipts in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the persons
executing such Receipts may determine, as evidenced by their execution of
such Receipts. If temporary Receipts are issued, the Company and the
Depositary will cause definitive Receipts to be prepared without
unreasonable delay. After the preparation of definitive Receipts, the
temporary Receipts shall be exchangeable for definitive Receipts upon
surrender of the temporary Receipts at an office described in the second to
last paragraph of Section 2.02, without charge to the holder. Upon
surrender for cancellation of any one or more temporary Receipts, the
Depositary shall execute and deliver in exchange therefor definitive
Receipts representing the same number of Series A Depositary Shares as
represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge to
the holder thereof. Until so exchanged, the temporary Receipts shall in
all respects be entitled to the same benefits under this Agreement, and
with respect to the Stock deposited hereunder, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual
signature of a duly authorized signatory of the Depositary, provided,
however, that such signature may be a facsimile if a Registrar (other than
the Depositary) shall have countersigned the Receipts by manual signature
of a duly authorized signatory of the Registrar. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed as provided
in the preceding sentence. The Depositary shall record on its books each
Receipt executed as provided above and delivered as hereinafter provided.
Except as the Depositary may otherwise determine, Receipts
shall be in denominations of any number of whole Series A Depositary Shares.
All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Deposit Agreement as may be required by the Depositary or
required to comply with any applicable law or regulation or with the rules and
regulations of any securities exchange upon which the Stock, the Series A
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions
to which any particular Receipts are subject by reason of the date of issuance
of the Stock or otherwise.
Title to any Receipt (and to the Series A Depositary Shares
evidenced by such Receipt) that is properly endorsed or accompanied by a
properly executed instrument of transfer or endorsement shall be transferable
by delivery with the same effect as in the case of a negotiable instrument;
provided, however, that until a Receipt shall be transferred on the books of
the Depositary as provided in Section 2.04, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder thereof at
such time as the absolute owner thereof for the purpose of determining the
person entitled to distribution of dividends or other distributions or to any
notice provided for in this Deposit Agreement and for all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of
Receipts in Respect Thereof. On the date any Stock is initially issued by the
Company, the Depositary, upon receipt of a written order from the Company and
a certificate or certificates for the Stock to be deposited under this Deposit
Agreement in accordance with the provisions of this Section, shall execute and
deliver a Receipt or Receipts for the number of Series A Depositary Shares
representing such deposited Stock to the person or persons stated in such
order.
Subject to the terms and conditions of this Deposit Agreement,
any holder of Stock may deposit such Stock under this Deposit Agreement by
delivery to the Depositary of a certificate or certificates for the Stock to
be deposited, properly endorsed or accompanied, if required by the Depositary,
by a properly executed instrument of transfer or endorsement in form
satisfactory to the Depositary, together with (i) all such certifications as
may be required by the Depositary in accordance with the provisions of this
Deposit Agreement and (ii) a written order directing the Depositary to execute
and deliver to or upon the written order of the person or persons stated in
such order a Receipt or Receipts for the number of Series A Depositary Shares
representing such deposited Stock.
If required by the Depositary, Stock presented for deposit at
any time, whether or not the register of stockholders of the Company is
closed, shall also be accompanied by an agreement or assignment, or other
instrument satisfactory to the Depositary, that will provide for the prompt
transfer to the Depositary or its nominee of any dividend or right to
subscribe for additional Stock or to receive other property that any person in
whose name the Stock is or has been registered may thereafter receive upon or
in respect of such deposited Stock, or in lieu thereof such agreement of
indemnity or other agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates
for Stock to be deposited hereunder, together with the other documents
specified above, the Depositary shall, as soon as transfer and registration
can be accomplished, present such certificate or certificates to the registrar
and transfer agent of the Stock for transfer and registration in the name of
the Depositary or its nominee of the Stock being deposited. Deposited Stock
shall be held by the Depositary in an account to be established by the
Depositary at the Corporate Office.
Upon receipt by the Depositary of a certificate or
certificates for Stock to be deposited hereunder, together with the other
documents specified above, the Depositary, subject to the terms and
conditions of this Deposit Agreement, shall execute and deliver to or upon
the order of the person or persons named in the written order delivered to
the Depositary referred to in the first or second paragraph of this Section
2.02 a Receipt or Receipts for the number of whole Series A Depositary
Shares representing the Stock so deposited and registered in such name or
names as may be requested by such person or persons. The Depositary shall
execute and deliver such Receipt or Receipts at the Corporate Office,
except that, at the request, risk and expense of any person requesting such
delivery, such delivery may be made at such other place as may be
designated by such person. In each case, delivery will be made only upon
payment by such person to the Depositary of all taxes and other
governmental charges and any fees payable in connection with such deposit
and the transfer of the Deposited Stock.
The Company shall deliver to the Depositary from time to time
such quantities of Receipts as the Depositary may reasonably request to enable
the Depositary to perform its obligations under this Deposit Agreement.
SECTION 2.03. Redemptions of Stock. Whenever the Company
shall elect to redeem shares of Stock in accordance with the Certificate of
Designation, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less than five business
days prior notice of the proposed date of the mailing of the notice of
redemption of Stock required pursuant to paragraph 4(h) of the Certificate of
Designation to be effected in connection with a redemption of Stock and of the
number of such shares of Stock held by the Depositary to be redeemed as
hereinafter provided.
On the date of any redemption of Stock in accordance with the
Certificate of Designation, provided that the Company shall then have
deposited with the Depositary the shares of Common Stock and any funds
required pursuant to the Certificate of Designation for the Stock deposited
with the Depositary to be redeemed, the Depositary shall redeem (using the
shares of Common Stock and funds, if any, deposited with it) the number of
Series A Depositary Shares representing such redeemed Stock. The distribution
of the shares of Common Stock and funds, if any, used to effect such
redemption shall be governed by Sections 4.01 and 4.02 hereof. The Depositary
shall, as directed by the Company, mail, first class postage prepaid, the
notice of the redemption of Stock and the proposed simultaneous redemption of
the Series A Depositary Shares representing the Stock to be redeemed, not less
than 30 and not more than 60 days prior to the date fixed for redemption (the
"redemption date") of such Stock and Series A Depositary Shares. Such notice
shall be mailed to each holder of record on the record date fixed for such
redemption pursuant to Section 4.04 hereof of the Receipts evidencing the
Series A Depositary Shares, at the address of such holder as the same appears
on the records of the Depositary; but neither failure to mail any such notice
to one or more such holders nor any defect in any notice shall affect the
sufficiency of the proceedings for redemption.
With respect to the notices provided in accordance with the
first paragraph of this Section 2.03, the Company shall provide the Depositary
with such notice, and each such notice shall, as appropriate and to the extent
determinable at the time of such notice, state: the record date for such
redemption; the redemption date; that all outstanding Series A Depositary
Shares are to be redeemed or, in the case of a redemption of fewer than all
outstanding Series A Depositary Shares in connection with a partial redemption
of Stock pursuant to paragraph 4(a) of the Certificate of Designation, the
number of such Series A Depositary Shares held by such holder to be so
redeemed; in connection with a redemption of Stock pursuant to paragraph
4(a)(1) of the Certificate of Designation, the Call Price (as defined in the
Certificate of Designation) for the Series A Depositary Shares, the number of
shares of Common Stock deliverable upon redemption of each Series A Depositary
Share to be redeemed and the Current Market Price (as defined in the
Certificate of Designation) (or in the case of a redemption pursuant to
paragraph 4(a)(2) of the Certificate of Designation, the then effective Common
Equivalent Rate) used to calculate the number of shares of Common Stock
(subject to any subsequent adjustments pursuant to paragraph 4(c) of the
Certificate of Designation); the place or places where Receipts evidencing
Series A Depositary Shares to be redeemed are to be surrendered for redemption
and that dividends in respect of the Stock represented by the Series A
Depositary Shares to be redeemed will cease to accrue on such redemption date,
unless the Company shall default in delivering the shares of Common Stock or
cash, if any, payable by the Company at the time and place specified in such
notice. In case fewer than all the outstanding Series A Depositary Shares are
to be redeemed, the Series A Depositary Shares to be redeemed shall be
selected by lot or pro rata (as nearly as practicable without creating
fractional shares) or by any other equitable method determined by the Company.
Notice having been mailed by the Depositary as aforesaid, from
and after the redemption date (unless the Company shall have failed to redeem
the shares of Stock to be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraphs), the Series A Depositary Shares
called for redemption shall be deemed no longer to be outstanding and all
rights of the holders of Receipts evidencing such Series A Depositary Shares
(except the right to receive the shares of Common Stock and any cash upon
redemption) shall, to the extent of such Series A Depositary Shares, cease and
terminate. Upon surrender in accordance with said notices of the Receipts
evidencing such Series A Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Series A Depositary Shares
shall be redeemed (as nearly as may be practicable without creating fractional
shares) in exchange for shares of Common Stock at a rate equal to one-half of
the number of shares of Common Stock delivered in respect of the shares of
Stock represented by such Series A Depositary Shares as is provided for in the
Certificate of Designation. The foregoing shall be subject further to the
terms and conditions of the Certificate of Designation.
If fewer than all of the Series A Depositary Shares evidenced
by a Receipt are called for redemption, the Depositary will deliver to the
holder of such Receipt upon its surrender to the Depositary, a new Receipt
evidencing the Series A Depositary Shares evidenced by such prior Receipt and
not called for redemption, together with the shares of Common Stock for the
Series A Depositary Shares called for redemption.
Subject to paragraph 4(e) of the Certificate of Designation
with respect to the treatment of fractional shares of Common Stock upon
redemption of the Stock, to the extent that Series A Depositary Shares are
redeemed for shares of Common Stock and all of such shares of Common Stock
cannot be distributed to the record holders of Receipts without creating
fractional interests in such shares of Common Stock, the Depositary may, with
the consent of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of such shares of Common Stock representing in the
aggregate such fractional interests at such place or places and upon such
terms as it may deem proper, and the net proceeds of any such sale shall,
subject to Section 3.02, be distributed or made available for distribution to
such record holders that would otherwise receive fractional interests in such
shares of Common Stock.
The Depositary shall not be required (a) to issue, transfer or
exchange any Receipts for a period beginning at the opening of business 15
days next preceding any selection of Series A Depositary Shares and Stock to
be redeemed and ending at the close of business on the day of the mailing of
notice of redemption of Series A Depositary Shares or (b) to transfer or
exchange for another Receipt any Receipt evidencing Series A Depositary Shares
called or being called for redemption in whole or in part, except as provided
in the second preceding paragraph of this Section 2.03.
SECTION 2.04. Transfer of Receipts. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall make transfers on
its books from time to time of Receipts upon any surrender thereof by the
holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement,
together with evidence of the payment of any transfer taxes as may be required
by law. Upon such surrender, the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto evidencing the same aggregate number of Series A Depositary Shares
evidenced by the Receipt or Receipts surrendered.
SECTION 2.05. Combination and Split-ups of Receipts. Upon
surrender of a Receipt or Receipts at the Corporate Office or such other
office as the Depositary may designate for the purpose of effecting a split-up
or combination of Receipts, subject to the terms and conditions of this
Deposit Agreement, the Depositary shall execute and deliver a new Receipt or
Receipts in the authorized denominations requested evidencing the same
aggregate number of Series A Depositary Shares evidenced by the Receipt or
Receipts surrendered; provided, however, that the Depositary shall not issue
any Receipt evidencing a fractional Series A Depositary Share.
SECTION 2.06. Surrender of Receipts and Withdrawal of Stock.
Any holder of a Receipt or Receipts may withdraw any or all of the Stock (but
only in whole shares of Stock) represented by the Series A Depositary Shares
evidenced by such Receipts by surrendering such Receipt or Receipts at the
Corporate Office or at such other office as the Depositary may designate for
such withdrawals. After such surrender, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or persons
designated by such holder as hereinafter provided, the whole number of shares
of Stock represented by the Series A Depositary Shares evidenced by the
Receipt or Receipts so surrendered for withdrawal, but holders of such shares
of Stock will not thereafter be entitled to deposit such shares of Stock
hereunder or to receive Series A Depositary Shares therefor. If the Receipt
or Receipts delivered by the holder to the Depositary in connection with such
withdrawal shall evidence a number of Series A Depositary Shares in excess of
the number of Series A Depositary Shares representing the whole number of
shares of Stock to be withdrawn, the Depositary shall at the same time, in
addition to such whole number of shares of Stock, deliver to such holder, or
(subject to Section 2.04) upon his order, a new Receipt or Receipts evidencing
such excess number of Series A Depositary Shares. Delivery of the Stock being
withdrawn may be made by the delivery of such certificates, documents of title
and other instruments as the Depositary may deem appropriate, which, if
required by the Depositary, shall be properly endorsed or accompanied by
proper instruments of transfer.
To the extent that Series A Depositary Shares are
surrendered and all shares of Stock which would otherwise be distributed
cannot be distributed to the record holder of Receipts without creating
fractional interests in such shares of Stock, the Depositary may, with the
consent of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the
sale (at public or private sale) of such shares of Stock representing in
the aggregate such fractional interests at such place or places and upon
such terms as it may deem proper, and the net proceeds of any such sale
shall, subject to Section 3.02, be distributed or made available for
distribution to such record holders that would otherwise receive fractional
interests in such shares of Stock.
If the Stock being withdrawn is to be delivered to a person or
persons other than the record holder of the Receipt or Receipts being
surrendered for withdrawal of Stock, such holder shall execute and deliver to
the Depositary a written order so directing the Depositary and the Depositary
may require that the Receipt or Receipts surrendered by such holder for
withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer or endorsement in
blank.
The Depositary shall deliver the Stock represented by the
Series A Depositary Shares evidenced by Receipts surrendered for withdrawal at
the Corporate office, except that, at the request, risk and expense of the
holder surrendering such Receipt or Receipts and for the account of the holder
thereof, such delivery may be made at such other place as may be designated by
such holder.
SECTION 2.07. Limitations on Execution and Delivery, Transfer,
Split-up, Combination, Surrender and Exchange of Receipts. As a condition
precedent to the execution and delivery, transfer, split-up, combination,
surrender or exchange of any Receipt, the Depositary, any of the Depositary's
Agents or the Company may require any or all of the following: (i) payment to
it of a sum sufficient for the payment (or, in the event that the Depositary
or the Company shall have made such payment, the reimbursement to it) of any
tax or other governmental charge with respect thereto (including any such tax
or charge with respect to the Stock being deposited or withdrawn or with
respect to the Common Stock of the Company being issued upon redemption); (ii)
the production of proof satisfactory to it as to the identity and genuineness
of any signature; and (iii) compliance with such regulations, if any, as the
Depositary or the Company may establish not inconsistent with the provisions
of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts
against Stock may be suspended, the transfer of Receipts may be refused, and
the transfer, split-up, combination, surrender or exchange of outstanding
Receipts may be suspended (i) during a period when the register of
stockholders of the Company is closed, (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or
the Company at any time or from time to time because of any requirement of law
or of any government or governmental body or commission, or under any
provision of this Deposit Agreement, or (iii) with the approval of the
Company, for any other reason. Without limitation of the foregoing, the
Depositary shall not knowingly accept for deposit under this Deposit Agreement
any shares of Stock that are required to be registered under the Securities
Act unless a registration statement under the Securities Act is in effect as
to such shares of Stock.
SECTION 2.08. Lost Receipts, etc. In case any Receipt shall
be mutilated or destroyed or lost or stolen, the Depositary in its discretion
may execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt or in lieu of and in substitution for
such destroyed, lost or stolen Receipt; provided, however, that the holder
thereof provides the Depositary with (i) evidence satisfactory to the
Depositary of such destruction, loss or theft of such Receipt, of the
authenticity thereof and of his ownership thereof, (ii) reasonable
indemnification satisfactory to the Depositary and (iii) payment of any
expense (including fees, charges and expenses of the Depositary) in connection
with such indemnification, execution and delivery.
SECTION 2.09. Cancellation and Destruction of Surrendered
Receipts. All Receipts surrendered to the Depositary or any Depositary's
Agent shall be cancelled by the Depositary. Except as prohibited by
applicable law or regulation, the Depositary is authorized to destroy such
Receipts so cancelled.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other
Information. Any person presenting Stock for deposit or any holder of a
Receipt may be required from time to time to file such proof of residence or
other information, to execute such certificates and to make such
representations and warranties as the Depositary or the Company may reasonably
deem necessary or proper. The Depositary or the Company may withhold or delay
the delivery of any Receipt, the transfer, redemption or exchange of any
Receipt, the withdrawal of the Stock represented by the Series A Depositary
Shares evidenced by any Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges.
If any tax or other governmental charge shall become payable by or on behalf
of the Depositary with respect to any Receipt, the Series A Depositary Shares
evidenced by such Receipt, the Stock (or fractional interest therein)
represented by such Series A Depositary Shares or any transaction referred to
in Section 4.06, such tax (including transfer, issuance or acquisition taxes,
if any) or governmental charge shall be payable by the holder of such Receipt.
Until such payment is made, transfer of any Receipt or any withdrawal of the
Stock represented by the Series A Depositary Shares evidenced by such Receipt
may be refused, any dividend or other distribution may be withheld and any
part or all of the Stock represented by the Series A Depositary Shares
evidenced by such Receipt may be sold for the account of the holder thereof
(after attempting by reasonable means to notify such holder prior to such
sale). Any dividend or other distribution so withheld and the proceeds of any
such sale may be applied to any payment of such tax or other governmental
charge, the holder of such Receipt remaining liable for any deficiency.
Unless the Company determines otherwise, the Depositary shall act as the
withholding agent for any payments, distributions and exchanges made with
respect to the Series A Depositary Shares and Receipts, and the Stock
represented thereby (collectively, the "Securities"). The Depositary shall be
responsible with respect to the Securities for the timely (i) collection and
deposit of any required withholding or backup withholding tax, and (ii) filing
of any information returns or other documents with federal (and other
applicable) taxing authorities. In the event the Depositary is required to
pay any such amounts, the Company shall reimburse the Depositary for payment
thereof upon the request of the Depositary and the Depositary shall, upon the
Company's request and as instructed by the Company, pursue its rights against
such holder at the Company's expense.
SECTION 3.03. Representations and Warranties as to Stock. In
the case of the initial deposit of the Stock, the Company and, in the case of
subsequent deposits thereof, each person so depositing Stock under this
Deposit Agreement shall be deemed thereby to represent and warrant that such
Stock and each certificate therefor are valid, fully paid and nonassessable
and that the person making such deposit is duly authorized to do so. Such
representations and warranties shall survive the deposit of the Stock and the
issuance of Receipts.
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions. Whenever any cash dividend
or other cash distribution shall be paid on the Stock (including pursuant to
paragraph 4 of the Certificate of Designation), the Company, on behalf of the
Depositary, (or, if the Company determines otherwise, the Depositary) shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of such sum as
are, as nearly as practicable, in proportion to the respective numbers of
Series A Depositary Shares evidenced by the Receipts held by such holders;
provided, however, that in case the Company or the Depositary shall be
required to withhold and does withhold from any cash dividend or other cash
distribution in respect of the Stock an amount on account of taxes or as
otherwise required pursuant to law, regulation or court process, the amount
made available for distribution or distributed in respect of Series A
Depositary Shares shall be reduced accordingly. The Company, on behalf of the
Depositary, (or, if the Company determines otherwise, the Depositary) shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Series A Depositary Shares a fraction of one cent. In the event that the
calculation of any such cash dividend or other cash distribution to be paid
to any record holder on the aggregate number of Series A Depositary Shares
held by such holder results in an amount which is a fraction of a cent, the
amount the Depositary shall distribute to such record holder shall be rounded
to the next highest whole cent; and upon request of the Depositary, the
Company shall pay the additional amount to the Depositary for distribution.
SECTION 4.02. Distributions Other Than Cash. Whenever any
distribution other than cash shall be made on the Stock (including pursuant to
paragraph 4 of the Certificate of Designation), the Company on behalf of the
Depositary (or, if the Company determines otherwise, the Depositary) shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of the securities
or property received by it as are, as nearly as practicable, in proportion to
the respective numbers of Series A Depositary Shares evidenced by the Receipts
held by such holders, in any manner that the Company may deem equitable and
practicable for accomplishing such distribution. If, in the opinion of the
Company, such distribution cannot be made proportionately among such record
holders, or if for any other reason (including any requirement that the
Company or the Depositary withhold an amount on account of taxes or as
otherwise required pursuant to law, regulation or court process), the Company
deems such distribution not to be feasible, the Company on behalf of the
Depositary (or, if the Company determines otherwise, the Depositary) may adopt
such method as it deems equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, at such place or
places and upon such terms as it may deem proper. The net proceeds of any
such sale shall, subject to Sections 3.01 and 3.02, be distributed or made
available for distribution, as the case may be, by the Company on behalf of
the Depositary (or, if the Company determines otherwise, the Depositary) to
record holders of Receipts as provided by Section 4.01 in the case of a
distribution received in cash.
SECTION 4.03. Subscription Rights, Preferences or Privileges.
If the Company shall at any time offer or cause to be offered to the persons
in whose names Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or
any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary or the Company to the record holders of Receipts if the Company so
directs in such manner as the Company shall instruct (including by the issue
to such record holders of warrants representing such rights, preferences or
privileges); provided, however, that (a) if at the time of issue or offer of
any such rights, preferences or privileges the Company determines that it is
not lawful or feasible to make such rights, preferences or privileges
available to some or all holders of Receipts (by the issue of warrants or
otherwise) or (b) if and to the extent instructed by holders of Receipts who
do not desire to exercise such rights, preferences or privileges, the
Depositary shall then, if so instructed by the Company, and if applicable laws
or the terms of such rights, preferences or privileges so permit, sell such
rights, preferences or privileges of such holders at public or private sale,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed by the Depositary or the Company, as the case may be, to the
record holders of Receipts entitled thereto as provided by Section 4.01 in the
case of a distribution received in cash.
If registration under the Securities Act of the securities
to which any rights, preferences or privileges relate is required in order
for holders of Receipts to be offered or sold such securities, the Company
shall promptly file a registration statement pursuant to the Securities Act
with respect to such rights, preferences or privileges and securities and
use its best efforts and take all steps available to it to cause such
registration statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders
to exercise such rights, preferences or privileges. In no event shall the
Depositary make available to the holders of Receipts any right, preference
or privilege to subscribe for or to purchase any securities unless and
until the Depositary has been notified by the Company that such
registration statement has become effective or that the offering and sale
of such securities to such holders are exempt from registration under the
provisions of the Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to
holders of Receipts, the Company will use its best efforts to take such action
or obtain such authorization, consent or permit sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges.
SECTION 4.04. Notice of Dividends, Fixing of Record Date for
Holders of Receipts. Whenever any cash dividend or other cash distribution
shall become payable, any distribution other than cash shall be made, or any
rights, preferences or privileges shall at any time be offered with respect to
the Stock, or whenever the Depositary shall receive notice of (i) any meeting
at which holders of Stock are entitled to vote or of which holders of Stock
are entitled to notice or any solicitation of consents in respect of the
Stock, (ii) any call for redemption of any shares of Stock or (iii) any event
of which holders of Stock are entitled to notice in accordance with the
Certificate of Designation, the Depositary shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
Company with respect to the Stock) for the determination of the holders of
Receipts who shall be entitled (i) to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof,
(ii) to receive notice of, and to give instructions for the exercise of voting
rights at, or the delivery of consents with respect to, any such meeting or
consent solicitation, as the case may be, or (iii) to receive notice of any
such call or other event.
SECTION 4.05. Voting Rights. Upon receipt of notice of any
meeting at which the holders of Stock are entitled to vote, the Depositary
shall, as soon as practicable thereafter (unless another arrangement for
allowing holders of Series A Depositary Shares to exercise the voting rights
associated with the Series A Depositary Shares is agreed by the Company and
the Depositary), mail to the record holders of Receipts a notice, which shall
be provided by the Company and which shall contain (i) such information as is
contained in such notice of meeting, (ii) a statement that the holders of
Receipts at the close of business on a specified record date fixed pursuant to
Section 4.04 will be entitled, subject to any applicable provision of law, the
Articles of Incorporation or the Certificate of Designation, to instruct the
Depositary as to the exercise of the voting rights with respect to the amount
of Stock represented by their respective Series A Depositary Shares and (iii)
a brief statement as to the manner in which such instructions may be given.
Upon the written request of a holder of a Receipt on such record date, the
Depositary shall endeavor insofar as practicable to vote or cause to be voted
with respect to the amount of Stock represented by the Series A Depositary
Shares evidenced by such Receipt in accordance with the instructions set forth
in such request. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting to the extent of the Stock
represented by the Series A Depositary Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Stock and Reclassifications,
Recapitalizations, etc. Upon any split-up, consolidation or any other
reclassification of Stock, or upon any recapitalization, reorganization,
merger, amalgamation or consolidation affecting the Company or to which it is
a party or sale of all or substantially all of the Company's assets, the
Depositary shall, upon the instructions of the Company, treat any shares of
stock or other securities (including depositary shares) or property (including
cash) that shall be received by the Depositary in exchange for or upon
conversion of or in respect of the Stock as new deposited property under this
Deposit Agreement, and Receipts then outstanding shall thenceforth represent
the proportionate interests of holders thereof in the new deposited property
so received in exchange for or upon conversion or in respect of such Stock.
In any such case the Depositary may, in its discretion, with the approval of
the Company, execute and deliver additional Receipts, or may call for the
surrender of all outstanding Receipts to be exchanged for new Receipts
specifically describing such new deposited property. If upon any split-up,
consolidation or any other reclassification of Stock, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party or sale of all or
substantially all of the Company's assets the Company delivers to the
Depositary shares of stock or other securities (including depositary shares)
or property (including cash) a portion of which shall be distributed to record
holders of Receipts in accordance with Sections 4.01, 4.02 and 4.03 and a
portion of which shall be received by the Depositary in exchange for or upon
conversion of or in respect of the Stock as new deposited property under this
Section 4.06, the Company shall clearly indicate such division in the
instructions to the Depositary provided pursuant to this Section 4.06.
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books
by the Depositary; the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain at the Corporate
Office facilities for the execution and delivery, transfer, surrender and
exchange, split-up and combination of Receipts and the deposit and withdrawal
of Stock and at the offices of the Depositary's Agents, if any, facilities for
the delivery, transfer, surrender and exchange, split-up, combination and
redemption of Receipts and the deposit and withdrawal of Stock, all in
accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times
shall be open for inspection by the record holders of Receipts as and to the
extent provided by applicable law. The Depositary shall consult with the
Company upon receipt of any request for inspection. The Depositary may close
such books, at any time or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
The Depositary shall make available for inspection by holders
of Receipts at the Corporate Office and at such other places as it may from
time to time deem advisable during normal business hours any reports and
communications received from the Company that are both received by the
Depositary as the holder of Stock and made generally available to the holders
of Stock.
Promptly upon request from time to time by the Company and at
the Company's sole expense, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Series A Depositary
Shares of all persons in whose names Receipts are registered on the books of
the Depositary.
If the Receipts or the Series A Depositary Shares evidenced
thereby or the Stock represented by such Series A Depositary Shares shall
be listed on the New York Stock Exchange, Inc., the Depositary shall, if
directed by the Company, appoint a Registrar for registry of such Receipts
or Series A Depositary Shares in accordance with the requirements of such
Exchange. Such Registrar (which may be the Depositary if so permitted by
the requirements of such Exchange) may be removed and a substitute
registrar appointed by the Depositary upon the request or with the approval
of the Company. If the Receipts, such Series A Depositary Shares or such
Stock are listed on one or more other stock exchanges, the Depositary will,
at the request of the Company, arrange such facilities for the delivery,
transfer, surrender and exchange of such Receipts, such Series A Depositary
Shares or such Stock as may be required by law or applicable stock exchange
regulations.
SECTION 5.02. Liability of the Depositary, the Depositary's
Agents or the Company. Neither the Depositary nor any Depositary's Agent nor
the Company shall incur any liability to any holder of any Receipt, if by
reason of any provision of any present or future law or regulation thereunder
of the United States of America or of any other governmental authority or, in
the case of the Depositary or the Depositary's Agent, by reason of any
provision, present or future, of the Articles of Incorporation or the
Certificate of Designation or, in the case of the Company, the Depositary or
the Depositary's Agent, by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement
provide shall be done or performed; nor shall the Depositary, any Depositary's
Agent or the Company incur any liability to any holder of a Receipt by reason
of any nonperformance or delay, caused as aforesaid, in the performance of any
act or thing that the terms of this Deposit Agreement provide shall or may be
done or performed, or by reason of any exercise of, or failure to exercise,
any discretion provided for in this Deposit Agreement except, in case of any
such exercise or failure to exercise discretion not caused as aforesaid, if
caused by the negligence, bad faith or willful misconduct of the party charged
with such exercise or failure to exercise.
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents and the Company. Neither the Depositary nor any Depositary Agent nor
the Company nor the Registrar assumes any obligation or shall be subject to
any liability under this Deposit Agreement or any Receipt to holders of
Receipts other than that each of them agrees to use good faith in the
performance of such duties as are specifically set forth in this Deposit
Agreement and other than for its negligence, bad faith or wilful misconduct.
Neither the Depositary nor any Depositary's Agent nor the
Company nor the Registrar shall be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding with respect to
Stock, Series A Depositary Shares or Receipts or Common Stock or other
securities or property that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the
Company nor the Registrar shall be liable for any action or any failure to act
by it in reliance upon the advice of or information from legal counsel,
accountants, any person presenting Stock for deposit, any holder of a Receipt
or any other person believed by it in good faith to be competent to give such
advice or information. The Depositary, any Depositary Agent, the Registrar
and the Company may each rely and shall each be protected in acting upon any
written notice, request, direction or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
Notwithstanding the first paragraph of this Section 5.03, the
Depositary shall not be responsible for any failure to carry out any
instruction to vote any of the deposited shares of Stock or for the manner or
effect of any such vote made, as long as any such action or non-action is in
good faith or in accordance with this Deposit Agreement. The Depositary
undertakes, and any Registrar shall be required to undertake, to perform such
duties and only such duties as are specifically set forth in this Deposit
Agreement against the Depositary or any Registrar. The Depositary will
indemnify the Company against any liability that may arise out of acts
performed or omitted by the Depositary or its agents due to its or their
negligence, bad faith or willful misconduct. The Depositary, its parent,
affiliates or subsidiaries and any Depositary's Agent may own, buy, sell or
deal in any class of securities of the Company and its affiliates and in
Receipts or Series A Depositary Shares or become pecuniarily interested in any
transaction in which the Company or its affiliates may be interested or
contract with or lend money to or otherwise act as fully or as freely as if it
were not the Depositary or the Depositary's Agent hereunder. The Depositary
may also act as transfer agent or registrar of any of the securities of the
Company and its affiliates or act in any other capacity for the Company or its
affiliates.
It is intended that neither the Depositary nor any Depositary's
Agent shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws, it being expressly
understood and agreed that the Depositary and any Depositary's Agent are
acting only in a ministerial capacity as Depositary for the Stock.
The Depositary agrees to comply with all information reporting
and withholding requirements applicable to it under law or this Deposit
Agreement in its capacity as Depositary.
Each of the Company and the Depositary agree to be bound by,
and act in accordance with, the Operating Guidelines current from time to
time.
The Depositary shall not lend the Series A Depositary Shares.
Neither the Depositary (or its officers, directors, employees
or agents) nor any Depositary's Agent nor the Registrar makes any
representation or has any responsibility as to the validity of the Offer to
Purchase/Offering Circular pursuant to which the Series A Depositary Shares
are offered, the Stock, the Series A Depositary Shares or the Receipts (except
its countersignature thereon), or any instruments referred to therein or
herein, or as to the correctness of any statement made therein or herein;
provided, however, that the Depositary is responsible for its representations
in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness
of the description that appears in the Receipts, which can be taken as a
statement of the Company summarizing certain provisions of this Deposit
Agreement. Notwithstanding any other provision herein or in the Receipts,
the Depositary makes no warranties or representations as to the validity,
genuineness or sufficiency of any Stock at any time deposited with the
Depositary hereunder or of the Series A Depositary Shares, as to the
validity or sufficiency of this Deposit Agreement, as to the value of the
Series A Depositary Shares or as to any right, title or interest of the
record holders of Receipts in and to the Series A Depositary shares, except
that the Depositary hereby represents and warrants as follows: (i) the
Depositary has been duly organized and is validly existing and in good
standing under the laws of the State of New York, with full power,
authority and legal right under such law to execute, deliver and carry out
the terms of this Deposit Agreement; (ii) this Deposit Agreement has been
duly authorized, executed and delivered by the Depositary; and (iii) this
Deposit Agreement constitutes a valid and binding obligation of the
Depositary, enforceable against the Depositary in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). The Depositary shall not
be accountable for the use or application by the Company of the Series A
Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.04. Resignation and Removal of the Depositary,
Appointment of Successor Depositary. The Depositary may at any time resign as
Depositary hereunder by notice of its election to do so delivered to the
Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as hereinafter provided.
The Company may, by notice in writing to the Depositary,
terminate the engagement of the Depositary with respect to any or all of the
duties or obligations of the Depositary set out in this Deposit Agreement
(including such duties as are customarily associated with the role of a
transfer agent or paying agent), such termination to take effect upon the
appointment of a successor to fulfill those duties or obligations and its
acceptance of such appointment as hereinafter provided. In the event that the
Company terminates the engagement of the Depositary with respect to some, but
not all, of the duties or obligations of the Depositary, the Depositary shall
thereafter be deemed only to have such rights and obligations under this
Deposit Agreement as are necessary for it to fulfill its remaining duties or
obligations. The Depositary agrees to cooperate with the Company or any
person appointed by the Company or that person with respect to the performance
of any of the duties previously performed by the Depositary.
In case at any time the Depositary acting hereunder shall
resign or the Company shall terminate the engagement of the Depositary with
respect to any or all of the duties or obligations of the Depositary set out
in this Deposit Agreement, the Company shall, within 45 days after the
delivery of the notice of resignation or termination, as the case may be,
appoint a successor with respect to such duties and obligations so terminated.
If such successor is to take title to the Stock (a "Depositary Successor"),
the Depositary Successor shall be a bank or trust company, or an affiliate of
a bank or trust company, having its principal office in the United States of
America and having a combined capital and surplus of at least $50,000,000. If
a successor shall not have been appointed in 45 days, the resigning Depositary
may petition a court of competent jurisdiction to appoint a successor.
Every Depositary Successor shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such Depositary Successor, without any
further act or deed, shall become fully vested with all the duties and
obligations of its predecessor so terminated and all rights and powers with
respect thereto and for all purposes shall be the Depositary under this
Deposit Agreement with respect to the duties and obligations of the
predecessor so terminated, and such predecessor, upon payment of all sums due
it and on the written request of the Company, shall promptly execute and
deliver an instrument transferring to such Depositary Successor all such
rights and powers of such predecessor hereunder, shall, if applicable, duly
assign, transfer and deliver all rights, title and interest in the Stock and
any moneys or property held hereunder to such Depositary Successor and shall,
if applicable, deliver to such Depositary Successor a list of the record
holders of all outstanding Receipts. Any Depositary Successor shall promptly
mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be
merged, consolidated or converted shall be the successor of such Depositary
without the execution or filing of any document or any further act. Such
successor depositary may execute the Receipts either in the name of the
predecessor depositary or in the name of the successor depositary.
SECTION 5.05. Corporate Notices and Reports. The Company
agrees that it will deliver to the Depositary, and the Depositary will,
promptly after receipt thereof, transmit to the record holders of Receipts, in
each case at the address recorded in the Depositary's books, copies of all
notices and reports (including financial statements) required by law, by the
rules of any national securities exchange upon which the Stock, the Series A
Depositary Shares or the Receipts are listed or by the Articles of
Incorporation and the Certificate of Designation to be furnished by the
Company to holders of Stock. Such transmission will be at the Company's
expense and the Company will provide the Depositary with such number of copies
of such documents as the Depositary may reasonably request. In addition, the
Depositary will transmit to the record holders of Receipts at the Company's
expense such other documents as may be requested by the Company. The
Depositary will make available for inspection by holders of Receipts at the
Corporate office and at such other places as it may from time to time deem
advisable during normal business hours any such notices and reports received
from the Company.
SECTION 5.06. Deposit of Stock by the Company. Neither the
Company nor any company controlled by the Company will at any time deposit any
Stock if such Stock is required to be registered under the provisions of the
Securities Act and no registration statement is at such time in effect as to
such Stock.
SECTION 5.07. Indemnification by the Company. The Company
agrees to indemnify the Depositary, any Depositary's Agent and any Registrar
against, and hold each of them harmless from, any liability, costs and
expenses (including reasonable attorneys, fees) that may arise out of or in
connection with its acting as Depositary, Depositary's Agent or Registrar,
respectively, under this Deposit Agreement and the Receipts, except for any
liability arising out of negligence, bad faith or willful misconduct on the
part of any such person or persons.
SECTION 5.08. Fees, Charges and Expenses. No fees, charges
and expenses of the Depositary or any Depositary's Agent hereunder or of
any Registrar shall be payable by any person other than the Company, except
for any taxes and other governmental charges and except as provided in this
Deposit Agreement. If the Depositary incurs fees, charges or expenses for
which it is not otherwise liable hereunder at the election of a holder of a
Receipt or other person, such holder or other person will be liable for
such fees, charges and expenses. All other fees, charges and expenses of
the Depositary and any Depositary's Agent hereunder and of any Registrar
(including, in each case, fees and expenses of counsel) incident to the
performance of their respective obligations hereunder will be paid from
time to time upon consultation and agreement between the Depositary and the
Company as to the amount and nature of such fees, charges and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any
provision of this Deposit Agreement may at any time and from time to time
be amended by agreement between the Company and the Depositary in any
respect that they may deem necessary or desirable. Any amendment that
shall impose any fees, taxes or charges (other than fees and charges
provided for herein or in the Receipts), or that shall otherwise prejudice
any substantial existing right of holders of Receipts, shall not become
effective as to outstanding Receipts until the expiration of 30 days after
notice of such amendment shall have been given to the record holders of
outstanding Receipts. Every holder of an outstanding Receipt at the time
any such amendment becomes effective shall be deemed, by continuing to hold
such Receipt, to consent and agree to such amendment and to be bound by
this Deposit Agreement as amended thereby. In no event shall any amendment
impair the right, subject to the provisions of Sections 2.03, 2.06, 2.07
and Article III, of any owner of any Series A Depositary Shares to
surrender the Receipt evidencing such Series A Depositary Shares with
instructions to the Depositary to deliver to the holder the Stock
represented thereby, except in order to comply with mandatory provisions of
applicable law.
SECTION 6.02. Termination. This Deposit Agreement may be
terminated by the Company or the Depositary only after (a) (i) all outstanding
Series A Depositary Shares shall have been redeemed pursuant to Section 2.03
or (ii) there shall have been made a final distribution in respect of the
Stock in connection with any liquidation, dissolution or winding up of the
Company and such distribution shall have been distributed to the holders of
Series A Depositary Shares pursuant to Section 4.01 or 4.02 as applicable and
(b) reasonable notice has been given to any remaining holders of Receipts.
If any Receipts shall remain outstanding after the date of
termination of this Deposit Agreement, the Depositary thereafter shall
discontinue the transfer of Receipts, the Company or the Depositary, as the
case may be, shall suspend the distribution of dividends to the holders
thereof, and the Depositary shall not give any further notices (other than
notice of such termination) or perform any further acts under this Deposit
Agreement, except that the Depositary shall, if applicable, continue to
collect dividends and other distributions pertaining to Stock, sell rights,
preferences or privileges as provided in this Deposit Agreement and shall
continue to deliver the Stock and any money and other property represented by
Receipts upon surrender thereof by the holders thereof. At any time after the
expiration of two years from the date of termination, the Depositary may sell
Stock then held hereunder at public or private sale, at such places and upon
such terms as it deems proper and may thereafter hold the net proceeds of any
such sale, together with any money and other property held by it hereunder,
without liability for interest, for the benefit, pro rata in accordance with
their holdings, of the holders of Receipts that have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from
all obligations under this Deposit Agreement except to account for such net
proceeds and money and other property.
Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under this Deposit Agreement except
for its obligations to the Depositary, any Depositary's Agent and any
Registrar under Sections 5.07 and 5.08. In the event this Deposit Agreement
is terminated, the Company hereby agrees to use its best efforts to list the
underlying Stock on the New York Stock Exchange, Inc. or any other national
securities exchange on which the Common Stock is listed.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be
executed by the Company and the Depositary in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed an
original, but all such counterparts taken together shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page
to this Deposit Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement. Copies of this
Deposit Agreement shall be filed with the Depositary and the Depositary's
Agents and shall be open to inspection at all reasonable times during normal
business hours at the Corporate Office and the respective offices of the
Depositary's Agents, if any, by any holder of a Receipt.
SECTION 7.02. Exclusive Benefits of Parties. This Deposit
Agreement is for the exclusive benefit of the parties hereto, and their
respective successors hereunder, and shall not be deemed to give any legal or
equitable right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or
more of the provisions contained in this Deposit Agreement or in the
Receipts should be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to
have been duly given if personally delivered or sent by mail, or by telegram
or telex or telecopier confirmed by letter, addressed to the Company at Ten
Penn Center, 1801 Market Street, Philadelphia, PA 19103, (telecopier (215)
977-6733), Attention: Corporate Secretary, or at any other place to which the
Company may have transferred its principal executive office.
Any notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given
if personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.
Any notices given to any record holder of a Receipt hereunder
or under the Receipts shall be in writing and shall be deemed to have been
duly given if personally delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to such record holder at the address
of such record holder as it appears on the books of the Depositary or, if such
holder shall have timely filed with the Depositary a written request that
notices intended for such holder be mailed to some other address, at the
address designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex or telecopier message received by
it from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex or telecopier message shall not subsequently be confirmed by
letter as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from
time to time appoint Depositary's Agents (with the Company's prior written
consent and on terms and conditions acceptable to the Company) to act in any
respect for the Depositary for the purposes of this Deposit Agreement and may
at any time appoint additional Depositary's Agents and vary or terminate the
appointment of such Depositary's Agents. The Depositary will notify the
Company prior to any such action.
SECTION 7.06. Holders of Receipts Are Parties.
Notwithstanding that holders of Receipts have not executed and delivered this
Deposit Agreement or any counterpart thereof, the holders of Receipts from
time to time shall be deemed to be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery of Receipts.
SECTION 7.07. Governing Law. This Deposit Agreement and the
Receipts and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by, and construed in accordance with, the law of the
State of New York without giving effect to principles of conflict of laws.
SECTION 7.08. Headings. The headings of articles and sections
in this Deposit Agreement and in the form of the Receipt set forth in Exhibit
A hereto have been inserted for convenience only and are not to be regarded as
a part of this Deposit Agreement or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, Sun Company, Inc. and First Chicago Trust
Company of New York have duly executed this agreement as of the day and year
first above set forth and all holders of Receipts shall become parties hereto
by and upon acceptance by them of delivery of Receipts issued in accordance
with the terms hereof.
SUN COMPANY, INC.
By: /s/ Malcolm I. Ruddock
_______________________
Authorized Officer
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Joanne Gorostiola
_______________________
Authorized Signatory
EXHIBIT A
DEPOSITARY RECEIPT
FOR
SERIES A DEPOSITARY SHARES,
EACH REPRESENTING ONE-HALF SHARE OF
SERIES A CUMULATIVE PREFERENCE STOCK
(no par value)
OF
SUN COMPANY, INC.
(Incorporated under the Laws of the State of Pennsylvania)
No. _______ Series A Depositary Shares (each Series A Depositary
Share represents one-half share of Series A Cumulative
Preference Stock (no par value)
1. First Chicago Trust Company of New York, a New York
State trust company, as Depositary (the "Depositary"), hereby certifies
that ____________________ is the registered owner of _____ Depositary
Shares (the "Series A Depositary Shares"), each Series A Depositary Share
representing one-half share of Series A Cumulative Preference Stock, no par
value (the "Stock"), of Sun Company, Inc., a corporation duly organized and
existing under the laws of the State of Pennsylvania (the "Company"),
deposited with the Depositary, and the same proportionate interest in any
and all other property received by the Depositary in respect of such share
of Stock and held by the Depositary under the Deposit Agreement (as defined
below). Subject to the terms of the Deposit Agreement, each owner of a
Series A Depositary Share is entitled, proportionately, to all the rights,
preferences and privileges of the Stock represented thereby, including the
dividend, voting, liquidation and other rights contained in the Certificate
of Designation of Series A Cumulative Preference Stock, as amended from
time to time, establishing the rights, preferences, privileges and
limitations of the Stock (the "Certificate of Designation"), copies of
which are on file at the Depositary's office located at the time of the
execution of the Deposit Agreement at 14 Wall Street, Suite 4680, New York,
New York 10005 (such office or the corporate trust office of the Depositary
at which its business in respect of matters governed by the Deposit
Agreement is administered at any later time, being at the relevant time,
the "Corporate Office").
2. The Deposit Agreement. Depositary Receipts (the
"Receipts"), of which this Receipt is one, are made available upon the terms
and conditions set forth in the Deposit Agreement, dated as of June 13, 1995
(the "Deposit Agreement"), between the Company and the Depositary. The
Deposit Agreement (copies of which are on file at the Corporate Office and at
the office of any Depositary's Agent) sets forth the rights of holders of
Receipts and the rights and duties of the Depositary. The statements made on
the face and the reverse of this Receipt are summaries of certain provisions
of the Deposit Agreement and are subject to the detailed provisions thereof,
to which reference is hereby made. In the event of any conflict between the
provisions of this Receipt and the provisions of the Deposit Agreement, the
provisions of the Deposit Agreement will govern. Unless otherwise expressly
herein provided, all defined terms used herein shall have the meanings
ascribed thereto in the Deposit Agreement.
3. Redemptions of Stock. Whenever the Company shall elect
to redeem shares of Stock in accordance with the Certificate of
Designation, it shall (unless otherwise agreed in writing with the
Depositary) give the Depositary in its capacity as Depositary not less than
five business days prior notice of the proposed date of the mailing of the
notice of redemption of the Stock required pursuant to paragraph 4(h) of
the Certificate of Designation in connection with a redemption of Stock and
of the number of such shares of Stock held by the Depositary to be redeemed
as provided herein.
On the date of any redemption of Stock in accordance with the
Certificate of Designation, provided that the Company shall then have
deposited with the Depositary the shares of Common Stock, par value $1 per
share ("Common Stock"), and any funds required pursuant to the Certificate of
Designation for the Stock deposited with the Depositary to be redeemed, the
Depositary shall redeem (using the shares of Common Stock and funds, if any,
deposited with it) the number of Series A Depositary Shares representing such
redeemed Stock. The distribution of the shares of Common Stock and funds, if
any, used to effect such redemption shall be governed by Sections 4.01 and
4.02 of the Deposit Agreement. The Depositary shall, as directed by the
Company, mail, first class postage prepaid, notice of the redemption of Stock
and the proposed simultaneous redemption of Series A Depositary Shares
representing the Stock to be redeemed, not less than 30 and not more than 60
days prior to the date fixed for redemption (the "redemption date") of such
Stock and Series A Depositary Shares. Such notice shall be mailed to each
holder of record on the record date fixed for such redemption as provided in
paragraph 14 below of the Receipts evidencing Series A Depositary Shares. In
case fewer than all the outstanding Series A Depositary Shares are to be
redeemed, the Series A Depositary Shares to be redeemed shall be selected by
lot or pro rata (as nearly as may be practicable without creating fractional
shares) or by any other equitable method determined by the Company.
Notice having been mailed as aforesaid, from and after the
redemption date (unless the Company shall have failed to redeem the shares
of Stock to be redeemed by it, as set forth in the Company's notice
provided for above), the Series A Depositary Shares called for redemption
shall be deemed no longer to be outstanding and all rights of the holders
of Receipts evidencing such Series A Depositary Shares (except the right to
receive the shares of Common Stock and any cash upon redemption) shall, to
the extent of such Series A Depositary Shares, cease and terminate. Upon
surrender in accordance with said notices of the Receipts evidencing such
Series A Depositary Shares (properly endorsed or assigned for transfer, if
the Depositary shall so require), such Series A Depositary Shares shall be
redeemed (as nearly as may be practicable without creating fractional
shares) into shares of Common Stock at a rate equal to one-half of the
number of shares of Common Stock delivered in respect of the shares of
Stock represented by such Depositary Shares as is provided for in the
Certificate of Designation. The foregoing shall be subject further to the
terms and conditions of the Certificate of Designation. If fewer than all
of the Series A Depositary Shares evidenced by this Receipt are called for
redemption, the Depositary will deliver to the holder of this Receipt upon
its surrender to the Depositary, a new Receipt evidencing the Series A
Depositary Shares evidenced by such prior Receipt and not called for
redemption, together with the shares of Common Stock or other property for
the Series A Depositary Shares called for redemption.
4. Surrender of Receipts and Withdrawal of Stock. Upon
surrender of this Receipt to the Depositary at the Corporate Office, or at
such other offices as the Depositary may designate, and subject to the
provisions of the Deposit Agreement, the holder hereof is entitled to
withdraw, and to obtain delivery, to or upon the order of such holder, of any
or all of the Stock (but only in whole shares of Stock) and all money and
other property, if any, at the time represented by the Series A Depositary
Shares evidenced by this Receipt, but holders of such shares of Stock will not
thereafter be entitled to deposit such shares of Stock hereunder or to receive
Series A Depositary Shares therefor. If the Receipt or Receipts delivered by
the holder to the Depositary in connection with such withdrawal shall evidence
a number of Series A Depositary Shares in excess of the number of Series A
Depositary Shares representing the whole number of shares of Stock to be
withdrawn, the Depositary shall, in addition to such whole number of shares of
Stock and such money and other property, if any, to be withdrawn, deliver, to
or upon the order of such holder, a new Receipt or Receipts evidencing such
excess number of Series A Depositary Shares.
5. Transfers, Split-ups, Combinations. Subject to paragraphs
6, 7 and 8 below, this Receipt is transferable on the books of the Depositary
upon surrender of this Receipt to the Depositary, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement, and
upon such transfer the Depositary shall sign and deliver a Receipt to or upon
the order of the person entitled thereto, all as provided in and subject to
the Deposit Agreement. This Receipt may be split into other Receipts or
combined with other Receipts into one Receipt evidencing the same aggregate
number of Series A Depositary Shares evidenced by the Receipt or Receipts
surrendered; provided, however, that the Depositary shall not issue any
Receipt evidencing a fractional Series A Depositary Share.
6. Conditions to Signing and Delivery, Transfer, etc., of
Receipts. Prior to the execution and delivery, transfer, split-up,
combination, surrender or exchange of this Receipt, the Depositary, any of the
Depositary's Agents or the Company may require any or all of the following:
(i) payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement
to it) of any tax or other governmental charge with respect thereto (including
any such tax or charge with respect to Stock being deposited or withdrawn or
with respect to Common Stock of the Company being issued upon redemption);
(ii) the production of proof satisfactory to it as to the identity and
genuineness of any signature; and (iii) compliance with such regulations, if
any, as the Depositary or the Company may establish not inconsistent with the
Deposit Agreement. Any person presenting Stock for deposit, or any holder of
this Receipt, may be required to file such proof of information, to execute
such certificates and to make such representations and warranties as the
Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of this Receipt,
the transfer, redemption or exchange of this Receipt, the withdrawal of the
Stock represented by the Series A Depositary Shares evidenced by this Receipt
or the distribution of any dividend or other distribution until such proof or
other information is filed, such certificates are executed or such
representations and warranties are made.
7. Suspension of Delivery, Transfer, etc. The deposit of
Stock may be refused, the delivery of this Receipt against Stock may be
suspended, or the transfer, split-up, combination, surrender or exchange of
this Receipt may be suspended (i) during any period when the register of
stockholders of the Company is closed, (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or
the Company at any time or from time to time because of any requirement of law
or of any government or governmental body or commission, or under any
provision of the Deposit Agreement, or (iii) with the approval of the Company,
for any other reason. The Depositary shall not be required (a) to issue,
transfer or exchange any Receipts for a period beginning at the opening of
business 15 days next preceding any selection of Series A Depositary Shares
and Stock to be redeemed and ending at the close of business on the day of the
mailing of notice of redemption of Series A Depositary Shares or (b) to
transfer or exchange for another Receipt any Receipt evidencing Series A
Depositary Shares called or being called for redemption in whole or in part,
except as provided in the last sentence of paragraph 3 above.
8. Payment of Taxes or Other Governmental Charges. If any tax
or other governmental charge shall become payable by or on behalf of the
Depositary with respect to this Receipt, the Series A Depositary Shares
evidenced by this Receipt, the Stock (or any fractional interest therein)
represented by such Series A Depositary Shares or any transaction referred to
in Section 4.06 of the Deposit Agreement, such tax (including transfer,
issuance or acquisition taxes, if any) or governmental charge shall be payable
by the holder hereof. Until such payment is made, transfer of this Receipt or
any withdrawal of the Stock, represented by the Series A Depositary Shares
evidenced by this Receipt may be refused, any dividend or other distribution
may be withheld and any part or all of the Stock represented by the Series A
Depositary Shares evidenced by this Receipt may be sold for the account of the
holder hereof (after attempting by reasonable means to notify such holder
prior to such sale). Any dividend or other distribution so withheld and the
proceeds of any such sale may be applied to any payment of such tax or other
governmental charge, the holder of this Receipt remaining liable for any
deficiency.
9. Amendment. The form of the Receipts and any provision of
the Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose any fees, taxes
or charges (other than fees and charges provided for herein or in the Deposit
Agreement), or that shall otherwise prejudice any substantial existing right
of holders of Receipts, shall not become effective as to outstanding Receipts
until the expiration of 30 days after notice of such amendment shall have been
given to the record holders of outstanding Receipts. The holder of this
Receipt at the time any such amendment becomes effective shall be deemed, by
continuing to hold this Receipt, to consent and agree to such amendment and to
be bound by the Deposit Agreement as amended thereby. In no event shall any
amendment impair the right, subject to the provisions of paragraphs 3, 4, 7
and 8 hereof and of Sections 2.03, 2.06, 2.07 and Article III of the Deposit
Agreement, of the owner of the Series A Depositary Shares evidenced by this
Receipt to surrender this Receipt with instructions to the Depositary to
deliver to the holder the Stock and all money and other property, if any,
represented thereby, except in order to comply with mandatory provisions of
applicable law.
10. Fees, Charges and Expenses. The Company will pay all
fees, charges and expenses of the Depositary, except for taxes (including
transfer taxes, if any) and other governmental charges and such charges as are
expressly provided in the Deposit Agreement to be at the expense of persons
depositing Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and
every successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Series A Depositary Shares
evidenced hereby), when properly endorsed or accompanied by a properly
executed instrument of transfer or endorsement, is transferable by delivery
with the same effect as in the case of a negotiable instrument; provided,
however, that until this Receipt shall be transferred on the books of the
Depositary as provided in Section 2.04 of the Deposit Agreement, the
Depositary and the Company may, notwithstanding any notice to the contrary,
treat the record holder hereof at such time as the absolute owner hereof for
the purpose of determining the person entitled to distribution of dividends or
other distributions or to any notice provided for in the Deposit Agreement and
for all other purposes.
12. Cash Dividends and Distributions. Whenever any cash
dividend or other cash distribution shall be paid on the Stock, the
Company, on behalf of the Depositary, (or, if the Company determines
otherwise, the Depositary) will, subject to the provisions of the Deposit
Agreement, make such distribution to record holders of Receipts as nearly
as practicable in proportion to the respective numbers of Series A
Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in the event the Company or the Depositary shall be required
to withhold and does withhold from any cash dividend or other cash
distribution in respect of the Stock an amount on account of taxes or as
otherwise required by law, regulation or court process, the amount made
available for distribution or distributed in respect of Series A Depositary
Shares shall be reduced accordingly. The Company, on behalf of the
Depositary, (or, if the Company determines otherwise, the Depositary) shall
distribute or make available for distribution, as the case may be, only
such amount, however, as can be distributed without attributing to any
owner of Series A Depositary Shares a fraction of one cent. In the event
that the calculation of any such cash dividend or other cash distribution
to be paid to any record holder on the aggregate number of Series A
Depositary Shares held by such holder results in an amount which is a
fraction of a cent, the amount the Depositary shall distribute to such
record holder shall be rounded to the next highest whole cent; and upon
request of the Depositary, the Company shall pay the additional amount to
the Depositary for distribution.
13. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
name Stock is registered on the books of the Company any rights, preferences
or privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary or the Company to the
record holders of Receipts if the Company so directs in such manner as the
Company shall instruct.
14. Notice of Dividends, Fixing of Record Date. Whenever any
cash dividend or other cash distribution shall become payable, any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered with respect to the Stock, or whenever
the Depositary shall receive notice of (i) any meeting at which holders of
Stock are entitled to vote or of which holders of Stock are entitled to notice
or any solicitation of consents in respect of the Stock, (ii) any
call for redemption or exchange of any shares of Stock or (iii) any event of
which holders of Stock are entitled to notice in accordance with the
Certificate of Designation, the Depositary shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
Company with respect to the Stock) for the determination of the holders of
Receipts who shall be entitled (i) to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof,
(ii) to receive notice of, and to give instructions for the exercise of voting
rights at, or the delivery of consents with respect to, any such meeting or
consent solicitation, as the case may be, or (iii) to receive notice of any
such call or other event.
15. Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter (unless another arrangement for allowing holders of
Series A Depositary Shares to exercise the voting rights associated with the
Series A Depositary Shares is agreed by the Company and the Depositary), mail
to the record holders of Receipts a notice, which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that
the holders of Receipts at the close of business on a specified record date
determined as provided in paragraph 14 will be entitled, subject to any
applicable provision of law, the Articles of Incorporation or the Certificate
of Designation, to instruct the Depositary as to the exercise of the voting
rights with respect to the amount of Stock represented by their respective
Series A Depositary Shares, and (iii) a brief statement as to the manner in
which such instructions may be given. Upon the written request of a holder of
a Receipt on such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted with respect to the amount of Stock
represented by the Series A Depositary Shares evidenced by such Receipt in
accordance with the instructions set forth in such request. In the absence of
specific instructions from the holder of a Receipt, the Depositary will
abstain from voting to the extent of the Stock represented by the Series A
Depositary Shares evidenced by such Receipt.
16. Reports, Inspection of Transfer Books. The Depositary
shall make available for inspection by holders of Receipts at the Corporate
Office and at such other places as it may from time to time deem advisable
during normal business hours any reports and communications received from the
Company that are both received by the Depositary as the holder of Stock and
made generally available to the holders of Stock by the Company. The
Depositary shall keep books at the Corporate Office for the registration and
transfer of Receipts, which books at all reasonable times during normal
business hours will be open for inspection by the record holders of Receipts
as and to the extent provided by applicable law.
17. Liability of the Depositary, the Depositary's Agent and
the Company. Neither the Depositary nor any Depositary's Agent nor the
Company shall incur any liability to any holder of any Receipt, if by reason
of any provision of any present or future law or regulation thereunder of any
governmental authority or, in the case of the Depositary or the Depositary's
Agent, by reason of any provision, present or future, of the Articles of
Incorporation or the Certificate of Designation or, in the case of the
Company, the Depositary or the Depositary's Agent, by reason of any act of God
or war or other circumstances beyond the control of the relevant party, the
Depositary, any Depositary's Agent or the Company shall be prevented or
forbidden from doing or performing any act or thing that the terms of the
Deposit Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent or the Company incur any liability to any
holder of a Receipt by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the
Deposit Agreement provide shall or may be done or performed, or by reason of
any exercise of, or failure to exercise, any discretion provided for in the
Deposit Agreement.
18. Obligations of the Depositary, the Depositary's Agents and
the Company. Neither the Depositary nor any Depositary's Agent nor the
Company assumes any obligation or shall be subject to any liability hereunder
or under the Deposit Agreement to holders of Receipts other than that each of
them agrees to use good faith in the performance of such duties as are
specifically set forth in the Deposit Agreement and other than for its
negligence, bad faith or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Stock, Series A Depositary
Shares or Receipts or Common Stock that in its opinion may involve it in
expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the advice of or information from legal counsel, accountants, any person
presenting Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or
information.
19. Termination of Deposit Agreement. The Deposit Agreement
may be terminated by the Company or the Depositary only after (a) (i) all
outstanding Series A Depositary Shares shall have been redeemed pursuant to
Section 2.03 of the Deposit Agreement or there shall have been made a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Series A Depositary Shares pursuant to Section
4.01 or 4.02 of the Deposit Agreement, as applicable and (b) reasonable notice
has been given to any remaining holders of Receipts. Upon the termination of
the Deposit Agreement, the Company shall be discharged from all obligations
thereunder except for its obligations to the Depositary, any Depositary's
Agent and any Registrar under Sections 5.07 and 5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of
termination, the Depositary thereafter shall discontinue all functions and be
discharged from all obligations as provided in the Deposit Agreement, except
as specifically provided therein.
20. Governing Law. The Deposit Agreement and this Receipt and
all rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of New
York without giving effect to principles of conflict of laws.
This Receipt shall not be entitled to any benefits under the
Deposit Agreement or be valid or obligatory for any purpose unless this
Receipt shall have been executed manually or, if a Registrar for the Receipts
(other than the Depositary) shall have been appointed, by facsimile by the
Depositary by the signature of a duly authorized signatory and, if executed by
facsimile signature of the Depositary, shall have been countersigned manually
by such Registrar by the signature of a duly authorized signatory.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY
DEPOSITED STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS
OF THE FOREGOING DESCRIPTION WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY
SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET
FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT
ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
SERIES A DEPOSITARY SHARES OR THE RECEIPTS (EXCEPT FOR ITS COUNTERSIGNATURE
THEREON), AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO
THE VALUE OF THE SERIES A DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR
INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE SERIES
A DEPOSITARY SHARES.
The Company will furnish to any holder of a Receipt without
charge, upon request addressed to its executive office or the office of its
transfer agent, a full statement of the designation, relative rights,
preferences and limitations of the shares of each authorized class, and of
each series of preferred stock authorized to be issued, so far as the same may
have been fixed, and a statement of the authority of the Board of Directors of
the Company to designate and fix the relative rights, preferences and
limitations of each series.
Dated:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By_________________________
Authorized Signatory
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________ the within Receipt and all rights and
interests represented by the Series A Depositary Shares evidenced thereby, and
hereby irrevocably constitutes and appoints _________________ his attorney, to
transfer the same on the books of the within-named Depositary, with full power
of substitution in the premises.
Dated: Signature: _____________________________
NOTE: The signature to this
assignment must correspond
with the name as written upon
the face of the Receipt in
every particular, without
alteration or enlargement, or
any change whatever.
Signature Guarantee:
__________________________
