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________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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TRICO PRODUCTS CORPORATION
(NAME OF SUBJECT COMPANY)
TRICO PRODUCTS CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, NO PAR VALUE
(TITLE OF CLASS OF SECURITIES)
896114105
(CUSIP NUMBER OF CLASS OF SECURITIES)
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CHRISTOPHER T. DUNSTAN
VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER
TRICO PRODUCTS CORPORATION
817 WASHINGTON STREET
BUFFALO, NEW YORK 14203
(716) 852-5700
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
------------------------
WITH A COPY TO:
JOSEPH P. KUBAREK, ESQ.
JAECKLE, FLEISCHMANN & MUGEL
800 FLEET BANK BUILDING
TWELVE FOUNTAIN PLAZA
BUFFALO, NEW YORK 14202-2292
(716) 856-0600
________________________________________________________________________________
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Trico Products Corporation, a New York
corporation (the 'Company'), and the address of its principal executive offices
is 817 Washington Street, Buffalo, New York 14203. The title of the class of
equity securities to which this Statement relates is the Common Stock, no par
value, of the Company (the 'Shares').
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to a tender offer by Stant Expansion Corporation, a
New York corporation (the 'Purchaser'), disclosed in a Tender Offer Statement on
Schedule 14D-1 (the 'Schedule 14D-1') dated November 14, 1994, to purchase all
outstanding Shares for $85.00 per Share net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
November 14, 1994 (the 'Offer to Purchase') and the related Letter of
Transmittal (which together constitute the 'Offer') and pursuant to the terms of
the Agreement and Plan of Merger, dated as of November 8, 1994 (the 'Merger
Agreement'), among Stant Corporation, a Delaware corporation ('Parent'),
Purchaser (a wholly owned subsidiary of Parent) and the Company. Certain
stockholders of the Company have entered into a Stockholders Agreement (as
defined below) with Parent and Purchaser which agreement is described under Item
3 below.
The bidders in the Offer are Purchaser and Parent (the 'Bidders'). The
principal executive offices of the Bidders are located at 425 Commerce Drive,
Richmond, Indiana 47374.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of the Company, which is the person filing this
Statement, are set forth in Item 1 above.
(b) Except for the Merger Agreement and Stockholder Agreement described
below and except for agreements with executive officers of the Company described
in Annex I, which information to the extent that it relates to this Item 3(b) is
incorporated herein by reference, there are no material contracts, agreements,
arrangements or understandings or actual or potential conflicts of interest
between the Company or its affiliates and its executive officers, directors,
consultants and affiliates or the Bidders, their executive officers, directors
or affiliates.
MERGER AGREEMENT
The Merger Agreement provides that, following the satisfaction or waiver of
the conditions described below under 'Conditions Precedent to the Obligations of
Each Party If the Offer Is Consummated' or 'Additional Conditions Precedent to
the Obligations of the Purchaser and Parent If the Offer Is Not Consummated,' as
applicable, the Purchaser will be merged with and into the Company, and each
then outstanding Share (other than Shares held by the Company as treasury stock
or by any subsidiary of the Company, Parent, the Purchaser or any other
subsidiary of Parent or by stockholders, if any, who are entitled to and who
properly exercise dissenters' rights under New York law) will be converted into
the right to receive an amount in cash equal to the price per Share paid
pursuant to the Offer.
Vote Required to Approve Merger. The New York Business Corporation Law
('NYBCL') requires, among other things, that the adoption of any plan of merger
of the Company must be approved by the Board of Directors and generally by the
holders of the Company's outstanding voting securities. The Board of Directors
of the Company has approved the Offer and the Merger, consequently, the only
additional action of the Company that may be necessary to effect the Merger is
approval by such stockholders if the 'short-form' merger procedure described
below is not available. Under the NYBCL, the affirmative vote of holders of
two-thirds of the outstanding Shares (including any Shares owned by the
Purchaser and any Shares subject to the Stockholders Agreement) is generally
required to approve the Merger. If the Purchaser acquires, through the Offer or
otherwise (including in respect of the option granted to the Purchaser under the
Stockholders Agreement described below), voting power with respect to at least
two-thirds of the outstanding Shares (which would be the case if the Minimum
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Condition were satisfied and the Purchaser were to accept for payment Shares
tendered pursuant to the Offer), it would have sufficient voting power to effect
the Merger without the vote of any other stockholder of the Company. The NYBCL
also provides that if a parent company owns at least 90% of each class of stock
of a subsidiary, the parent company can effect a short-form merger with that
subsidiary without the action of the other stockholders of the subsidiary.
Accordingly, if, as a result of the Offer or otherwise, the Purchaser acquires
at least 90% of the outstanding Shares, the Purchaser could, and intends to,
effect the Merger without prior notice to, or any action by, any other
stockholder of the Company. For a discussion of certain terms of the Merger
Agreement that increase the likelihood that the Purchaser could acquire at least
90% of the outstanding Shares, see the discussion of the Contingent Option in
the immediately following paragraph.
Contingent Option of the Purchaser. Pursuant to the Merger Agreement, the
Company has granted to the Purchaser an irrevocable option (the 'Contingent
Option') to purchase for a price of $85.00 per share (the 'Per Share Price') in
cash a number of Shares (the 'Optioned Shares') equal to the Applicable Amount.
'Applicable Amount' is defined to be the number of Shares which, when added to
the number of Shares owned by the Purchaser and Parent immediately prior to its
exercise of the Contingent Option, would result in Parent owning immediately
after its exercise of the Contingent Option 90% of the then outstanding Shares;
provided that such number shall not exceed all Shares held by the Company in its
treasury. Parent may exercise the Contingent Option only if at the time of
exercise, it (x) shall have accepted Shares for payment pursuant to the Offer
and (y) shall own at least two-thirds of the number of outstanding Shares. The
Contingent Option shall expire if not exercised prior to the earlier of the
Effective Date and 12:00 midnight, Eastern time, on the date 15 business days
after termination of the Offer.
Conditions Precedent to the Obligations of Each Party If the Offer Is
Consummated. If the Offer is consummated, the obligations of the Company, Parent
and the Purchaser to effect the Merger shall be subject to the fulfillment at or
prior to the effective time of the Merger (the 'Effective Date') of the
following conditions: (a) if approval of the Merger Agreement by Company
stockholders is required by law, the holders of the shares of capital stock of
the Company and the Purchaser entitled to vote thereon shall have duly approved
the Merger Agreement and the transactions contemplated hereby, all in accordance
with the requirements of the NYBCL and the respective certificates of
incorporation and by-laws of the Company and the Purchaser, (b) no temporary
restraining order, preliminary or permanent injunction or other order by any
court of competent jurisdiction or other legal restraint which prohibits the
consummation of the transactions contemplated by the Merger Agreement shall have
been issued; provided, that the parties shall have used all reasonable efforts
to have such order or injunction vacated or reversed, and (c) the waiting period
(and any extension thereof) as prescribed by the regulations promulgated under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the 'HSR
Act'), shall have expired or shall have been terminated.
Additional Conditions Precedent to the Obligations of the Purchaser and
Parent If the Offer Is Not Consummated. The Merger Agreement provides that, in
certain circumstances, the Merger may be consummated in the event the Offer is
not consummated so long as certain conditions are satisfied. The obligations of
the Purchaser and Parent to effect the Merger in the event that the Offer is not
consummated and the Merger Agreement shall not have been terminated in
accordance with its terms shall be subject to (i) the conditions specified in
clause (a) and clause (c) of 'Conditions Precedent to the Obligations of Each
Party If the Offer Is Consummated' above and (ii) conditions substantially the
same as those set forth in paragraphs (a) through (g) of Section 14 of the Offer
to Purchase.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the Effective Date, whether before or after approval by the
stockholders of the Company:
(a) by mutual written consent of the Board of Directors of Parent and
the Board of Directors of the Company;
(b) by either Parent or the Company if the Offer shall not have been
consummated on or before April 30, 1995 (provided the terminating party is
not otherwise in breach of its representations, warranties or obligations
under the Merger Agreement; and provided further that the Company may not
terminate the Merger Agreement pursuant to the provisions set forth in this
clause (b) if at any time (x) any of the conditions described in paragraph
(d) of Section 14 of this
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Offer to Purchase shall have occurred or (y) any Acquisition Proposal (as
defined below) shall have been publicly announced or otherwise been made
publicly known);
(c) by the Company if any of the conditions specified in 'Conditions
Precedent to the Obligations of Each Party If the Offer Is Consummated'
have not been met or waived by the Company at such time as such condition
is no longer capable of satisfaction as long as the Company is not in
breach of the Merger Agreement;
(d) by Parent if any of the conditions specified in 'Conditions
Precedent to the Obligations of Each Party If the Offer Is Consummated' or
'Additional Conditions Precedent to the Obligations of Purchaser and Parent
If the Offer Is Not Consummated' have not been met or waived by Parent at
such time as such condition is no longer capable of satisfaction as long as
Parent is not in breach of the Merger Agreement;
(e) by the Purchaser or Parent if either the Purchaser or Parent is
entitled to terminate the Offer as a result of the occurrence of any event
described in paragraph (d) of Section 14 of the Offer to Purchase; and
(f) by the Company if all of the following conditions are satisfied:
(i) prior to the consummation of the Offer, the Company or its Board of
Directors shall have received a Superior Proposal (as defined under
'Acquisition Proposals' below) from a Third Party (as defined under
'Acquisition Proposals' below), which Third Party (x) is not referred to in
the engagement letter between the Company and Goldman Sachs and (y) shall
not have entered into a confidentiality agreement with the Company with
respect to a potential acquisition proposal under 'Acquisition Proposals'
since November 1, 1993, (ii) the Board of Directors of the Company shall
have received the written opinion of outside legal counsel to the Company
to the effect that the fiduciary obligations of the Board of Directors
require that the Company terminate the Merger Agreement and enter into an
agreement with respect to the Superior Proposal, (iii) the Board of
Directors of the Company shall have resolved to enter into definitive
documentation with respect to the Superior Proposal within 48 hours of the
termination of the Merger Agreement and (iv) the Company shall have paid to
the Purchaser an amount in cash equal to the Termination Fee.
Termination Fee. The Company shall pay to Parent upon demand an amount in
cash equal to $7,000,000 (the 'Termination Fee') if (i) the Company terminates
the Merger Agreement pursuant to paragraph (f) under 'Termination of the Merger
Agreement' above or (ii) the Purchaser or Parent terminates the Merger Agreement
pursuant to paragraph (e) under 'Termination of the Merger Agreement' above.
Acquisition Proposals. The Merger Agreement provides that neither the
Company nor any of its subsidiaries shall, directly or indirectly, take (nor
shall the Company authorize or permit its subsidiaries, officers, directors,
employees, representatives, investment bankers, attorneys, accountants or other
agents or affiliates, to take) any action to (i) encourage, solicit or initiate
the submission of any Acquisition Proposal (as defined below), (ii) enter into
any agreement with respect to any Acquisition Proposal or (iii) participate in
discussions or negotiations with, or furnish any information to, any person in
connection with any Acquisition Proposal; provided that, to the extent required
by the fiduciary obligations of the Board of Directors of the Company (as
determined in good faith by the Board of Directors of the Company based on the
written advise of outside legal counsel to the Company), upon receipt of (x) an
unsolicited and written Superior Proposal (as defined below) or (y) an
unsolicited and written Potential Superior Proposal (as defined below), in
either case from a Third Party not referred to in the engagement letter between
the Company and Goldman Sachs and with which the Company shall not have entered
into a confidentiality agreement with respect to a potential Acquisition
Proposal since November 1, 1993, the Company may (1) take the action referred to
in clause (ii) with respect to such Superior Proposal or Potential Superior
Proposal but only in connection with a simultaneous termination of the Merger
Agreement in accordance with the provision set forth in paragraph (f) under
'Termination of the Merger Agreement' above, and (2) take any of the actions
referred to in clause (iii) with respect to such Superior Proposal or Potential
Superior Proposal. For purposes of the Merger Agreement 'Acquisition Proposal'
means, except for the transactions contemplated by the Merger Agreement, any
proposed (i) merger, consolidation or similar transaction involving the Company,
(ii) sale, lease or other disposition directly or indirectly by merger,
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consolidation, share exchange or otherwise of assets of the Company or its
subsidiaries representing 10% or more of the consolidated assets of the Company
and its subsidiaries, (iii) issue, sale or other disposition of (including by
way of merger, consolidation, share exchange or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into, such securities) representing 10% or more of the voting power
of the Company or (iv) transaction in which any person shall acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange Act), or the
right to acquire beneficial ownership or any 'group' (as such term is defined
under the Exchange Act) shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of 10% or more of the outstanding
Shares. The Merger Agreement requires that the Company shall notify Parent
promptly of any Acquisition Proposal and shall provide Parent all available
information with respect thereto.
The Merger Agreement further provides that the provisions of the prior
paragraph shall not be deemed to prohibit the Board of Directors of the Company,
prior to the consummation of the Offer, from withdrawing or modifying its
approval or recommendation of the Offer, the Merger Agreement, the Stockholders
Agreement or the Merger if a Superior Proposal is made, provided that (i) such
action is required by the fiduciary obligations of the Board of Directors of the
Company as determined in good faith by a majority of the disinterested members
thereof, taking into account (x) the financial and other terms and conditions of
the Superior Proposal and (y) the time period within which the transactions
contemplated by such Superior Proposal can be consummated and (ii) the Board of
Directors of the Company shall have received the written opinion of specified
outside legal counsel to the Company to the effect that such action is required
by fiduciary obligations of the Board of Directors of the Company.
For purposes of the Merger Agreement, 'Superior Proposal' means a bona fide
proposal made by a Third Party to acquire all the outstanding Shares or all or
substantially all the assets of the Company pursuant to a tender or exchange
offer, a merger or otherwise on terms which a majority of the disinterested
members of the Board of Directors of the Company determine in its good faith
judgment to be financially superior to the Company's stockholders than the Offer
and the Merger (based on a valuation letter of Goldman Sachs stating that, as of
the date of withdrawal or modification of the approval or recommendation of the
Offer and the Merger by the Board of Directors of the Company, the value of the
consideration provided for in such proposal exceeds the value of the
consideration provided for in the Offer and the Merger, which valuation letter
shall be prepared specifically for use by the Company's Board of Directors in
connection with such modification or withdrawal). For purposes of the Merger
Agreement, a 'Potential Superior Proposal' means a proposal that a majority of
the disinterested members of the Board of Directors of the Company determines in
its good faith judgment to be reasonably likely to lead to a Superior Proposal.
For purposes of the Merger Agreement, 'Third Party' means any corporation,
partnership, person or other entity or 'group' (as defined in Section 13(d)(3)
of the Exchange Act) other than Parent, any affiliate of the Purchaser or any of
their respective directors, trustees, officers, employees, representatives and
agents or any entity controlled by one or more such persons. The Merger
Agreement provides that no withdrawal or modification by the Board of Directors
of the Company of its approval or recommendation of the Offer, the Merger
Agreement, the Stockholders Agreement or the Merger pursuant to the provisions
of the Merger Agreement set forth in this paragraph shall affect any of the
Company's obligations under the Merger Agreement, and notwithstanding any such
withdrawal or modification, the Company shall continue to be obligated to carry
out the provisions of the Merger Agreement unless the Merger Agreement is
terminated in accordance with its terms.
Conduct of Business by the Company. The Merger Agreement provides that,
prior to the Effective Date, unless Parent shall otherwise agree in writing: (a)
the Company shall, and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course in substantially
the same manner as heretofore conducted, and shall, and shall cause its
subsidiaries to, use their best efforts to preserve intact their present
business organizations, keep available the services of their present officers
and employees and preserve their relationships with customers, suppliers and
others having business dealings with them; (b) except as required by the Merger
Agreement, the Company shall not, shall not permit any of its subsidiaries to,
and shall not propose to, (i) sell or pledge or agree to sell or pledge any
capital stock owned by it in any of its subsidiaries, (ii) amend its certificate
of incorporation or by-laws, (iii) split, combine or reclassify its outstanding
capital stock or issue or
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authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of capital stock of the Company, or declare,
set aside or pay any dividend or other distribution payable in cash, stock or
property, (iv) directly or indirectly redeem, purchase or otherwise acquire or
agree to redeem, purchase or otherwise acquire any Shares, any shares of capital
stock of any of the Company's subsidiaries or any other rights, interests or
securities of the Company or any of its subsidiaries or any rights, warrants or
options to acquire any such shares or other securities, (v) issue, deliver or
sell or agree to issue, deliver or sell any additional shares of, or rights of
any kind to acquire any shares of, its capital stock of any class, or any
option, rights or warrants to acquire, or securities convertible into, shares of
capital stock other than issuance of Shares pursuant to the exercise of the
Contingent Option or employee stock options outstanding on the date of the
Merger Agreement and disclosed in the Merger Agreement, (vi) acquire, lease or
dispose or agree to acquire, lease or dispose of any capital assets or any other
assets other than sales of inventory in the ordinary course of business
consistent with past practice, (vii) incur additional indebtedness or encumber
or grant a security interest in any asset or enter into any other material
transaction other than short-term borrowings in the ordinary course of business
consistent with past practice which do not result in the aggregate indebtedness
of the Company and its subsidiaries exceeding $53,000,000, (viii) make any loans
or advances to any person (other than customary travel or other allowances to
employees consistent with past practice), (ix) terminate, alter or amend certain
agreements required to be disclosed in the Merger Agreement or enter into any
agreement which would be required to be disclosed in the Merger Agreement if
such agreement were entered into on or prior to the date of the Merger
Agreement, (x) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial equity interest in, or substantial assets of, or by
any other manner, any person, (xi) make or agree to make any new capital
expenditure or expenditures which, individually, is in excess of $100,000 or, in
the aggregate, are in excess of $2,000,000, (xii) make or agree to make any
investment in securities other than investments in investment grade debt
securities with a maturity of less than one year in an aggregate amount of less
than $1,000,000, (xiii) make any tax election or settle or compromise any tax
liability, (xiv) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto) of the
Company included in certain public reports of the Company or incurred in the
ordinary course of business consistent with past practice, (xv) waive the
benefits of, or agree to modify in any manner, any confidentiality, standstill
or similar agreement to which the Company or any of its subsidiaries is a party,
(xvi) take or omit to take any action which would cause any of the
representations or warranties of the Company to become untrue, or (xvii)
authorize, commit or agree to take any of the foregoing actions; and (c) subject
to certain exceptions or as required to comply with applicable law, the Company
shall not, nor shall it permit, any of its subsidiaries to, (i) adopt, enter
into, terminate or amend any bonus, profit sharing, compensation, severance,
termination, stock option, pension, retirement, deferred compensation,
employment or other benefit plan, agreement, trust, fund or other arrangement
for the benefit or welfare of any director, officer or current or former
employee, (ii) increase in any manner the compensation or fringe benefit of, or
pay any bonus to, any director, officer or employee (except for normal increases
or bonuses in the ordinary course of business consistent with past practice to
employees other than directors, officers or senior management personnel and
that, in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company and its subsidiaries relative to the level
in effect prior to such action (but in no event shall the aggregate amount of
all such increases exceed 5% of the aggregate annualized compensation expense of
the Company and its subsidiaries reported in the most recent audited financial
statements of the Company included in certain public reports of the Company)),
(iii) pay any benefit not provided for under any of certain defined benefit
plans and arrangements, (iv) except as permitted in clause (c) (ii), grant any
awards under any bonus, incentive, performance or other compensation plan or
arrangement or benefit plan (including, without limitation, the grant of stock
options, stock appreciation rights, stock based or stock related awards,
performance units or restricted stock, or the removal of existing restrictions
in any benefit plans or agreements or awards made thereunder), (v) take any
action to fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement or benefit
plan other than in the ordinary course of
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business consistent with past practice, or (vi) authorize, commit or agree to
take, any of the foregoing actions.
Board of Directors. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment for, any Shares by the Purchaser pursuant
to the Offer, all of the present directors of the Company shall resign, the
number of directors on the Board of Directors shall be reduced to five and the
Purchaser shall be entitled to designate replacement directors on the Board of
Directors of the Company such that the Purchaser, subject to compliance with
Section 14(f) of the Exchange Act, will control a majority of such directors,
and the Company and the Board of Directors of the Company shall take all such
action needed to cause the Purchaser's designees to be appointed to the
Company's Board of Directors. Subject to applicable law, the Company shall take
all action requested by Parent necessary to effect any such election, including
mailing to its shareholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company agrees to make such mailing with the mailing of this
Schedule 14D-9.
Employee Arrangements. The Merger Agreement provides that after the date of
consummation of the Offer, Parent shall not take any action that would cause the
Company not to honor in accordance with their terms, all employment, severance,
consulting, indemnification, change of control and other compensation contracts
between the Company or any of its subsidiaries and any current or former
director, officer or employee thereof disclosed in the Merger Agreement. The
Merger Agreement further provides that, after the Effective Date, the Purchaser
intends to cause the Surviving Corporation to provide generally to the officers
and employees of the Surviving Corporation and its subsidiaries employee
benefits, including, without limitation, pension benefits, health and welfare
benefits, and severance arrangements that are in the aggregate comparable to the
benefits currently provided by the Company to such employees or to the benefits
currently provided by Parent to similarly situated employees of Parent.
Stock Option Plans. The Merger Agreement provides that on or before the
date of the Merger Agreement, the Board of Directors of the Company (or, if
appropriate, any committee administering the Stock Option Plans (as defined
below)) has adopted such resolutions or taken such other actions as are required
to provide that (i) each outstanding stock option to purchase Shares (a 'Stock
Option') heretofore granted under any stock option, stock appreciation right or
stock purchase plan, program or arrangement of the Company (collectively, the
'Stock Option Plans') outstanding immediately prior to the consummation of the
Offer, whether or not then exercisable, shall be cancelled immediately prior to
the consummation of the Offer in exchange for an amount of cash, payable at the
time of such cancellation, equal to the product of (y) the number of Shares
subject to such Stock Option immediately prior to the date of consummation of
the Offer and (z) the excess of the price per share to be paid in the Offer over
the per share exercise price of such Stock Option and (ii) each stock
appreciation right ('SAR') granted under the Stock Option Plans outstanding
immediately prior to the date of consummation of the Offer shall be cancelled
immediately prior to the date of consummation of the Offer in exchange for an
amount of cash, payable at the time of such cancellation, equal to the product
of (y) the number of Shares covered by such SAR and (z) the excess of the price
per share to be paid in the Offer over the appreciation base per share of such
SAR; provided that no such cash payment shall be made with respect to any SAR
which is related to a Stock Option with respect to which such a cash payment has
been made. The Merger Agreement further provides that any Stock Option or SAR
not cancelled as contemplated by this paragraph immediately prior to the date of
consummation of the Offer, shall be cancelled at the Effective Date in exchange
for an amount in cash, payable at the Effective Date, equal to the amount which
would have been paid had such Stock Option or SAR been cancelled immediately
prior to the consummation of the Offer. In the event that the Company does not
have sufficient cash available to make payments in exchange of any Stock Option
or SAR, Parent will, when and only if the Offer is consummated, make available
to the Company cash sufficient to make such purchases.
The Merger Agreement provides that all Stock Option Plans shall terminate
as of the Effective Date and the provisions in any other benefit plan providing
for the issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be
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deleted as of the Effective Date, and the Company shall ensure that following
the Effective Date no holder of a Stock Option or any participant in any Stock
Option Plan shall have any right thereunder to acquire any capital stock of the
Company, the Purchaser or Parent, except as provided in the prior paragraph.
Indemnification and Insurance. The Merger Agreement provides that Parent
agrees that all rights to indemnification existing in favor of the directors,
officers or employees of the Company (the 'Indemnified Parties') as provided in
the Company's certificate of incorporation, by-laws or indemnification
agreements listed in the Merger Agreement that the Company has entered into with
directors and officers of the Company and its subsidiaries, as in effect as of
the date hereof, with respect to matters occurring through the Effective Date,
shall survive the Merger and shall continue in full force and effect for a
period of not less than six years from the Effective Date. The Merger Agreement
provides that Parent agrees to cause the Surviving Corporation to maintain in
effect for not less than three years after the Effective Date the current
policies of directors' and officers' liability insurance maintained by the
Company with respect to matters occurring prior to the Effective Date for all
persons who are directors or officers of the Company or any of its subsidiaries
on the date of the Merger Agreement; provided that (i) Parent may substitute
therefor policies of at least the same coverage (with carriers comparable to the
Company's existing carriers) containing terms and conditions which are no less
advantageous to the Indemnified Parties and (ii) Parent shall not be required to
pay an annual premium for such insurance in excess of two times the last annual
premium paid prior to the date hereof, but in such case shall purchase as much
coverage as possible for such amount. In the Merger Agreement, the Company
represents to Parent that the last annual premium paid prior to the date hereof
for such insurance does not exceed $300,000.
STOCKHOLDERS AGREEMENT
In connection with the execution of the Merger Agreement, the Purchaser and
Parent entered into a Stockholders Agreement dated November 8, 1994 (the
'Stockholders Agreement') with the John R. Oishei Appreciation Charitable Trust,
the Julia R. and Estelle L. Foundation Incorporated, and Rupert Warren,
individually and in his capacity as trustee of certain trusts established by
John R. Oishei (collectively the 'Principal Stockholders'), pursuant to which
the Principal Stockholders have agreed to tender to the Purchaser, pursuant to
the Offer, all the Shares owned by them, representing an aggregate of 614,296
Shares or approximately 33% of the Shares outstanding as of November 8, 1994.
Accordingly, the Minimum Condition will be satisfied if, in addition to the
Shares owned by the Principal Stockholders, at least 638,124 Shares, or
approximately 51% of those Shares issued and outstanding at November 8, 1994 and
not owned by the Principal Stockholders, are validly tendered and not withdrawn
prior to the Expiration Date.
The Stockholders Agreement provides that within five business days of the
commencement by the Purchaser of the Offer, each Principal Stockholder shall
tender to the Depositary (i) a letter of transmittal with respect to the Shares
owned or held by the relevant Principal Stockholder complying with the terms of
the Offer to Purchase, (ii) the certificates representing the Shares and (iii)
all other documents or instruments required to be delivered pursuant to the
terms of this Offer to Purchase. The Stockholders Agreement further provides
that no Principal Stockholder shall, subject to applicable law, withdraw the
tender effected in accordance with the Stockholders Agreement; provided,
however, that (i) a Principal Stockholder may decline to tender, or may
withdraw, any and all Shares owned by such Principal Stockholder if (A) the
amount or form of consideration to be paid for such Shares is less than $85.00
per share in cash, net to such Principal Stockholder, or (B) the Merger
Agreement is terminated in accordance with its terms and (ii) each Principal
Stockholder shall give the Purchaser at least three business days' prior notice
of any withdrawal of Shares owned by such Principal Stockholder.
The Stockholders Agreement further provides that Principal Stockholders
irrevocably grant Parent an option (the 'Stockholders Option') exercisable only
upon the events and subject to the conditions set forth in the Stockholders
Agreement, to purchase all of the Shares subject to the Stockholders Agreement
at a purchase price per share equal to $85.00 (the 'Option Price'). The
Stockholders Option will terminate upon termination of the Merger Agreement.
Subject to the conditions set forth in the following paragraph, under the
Stockholders Agreement, the Purchaser may exercise the
7
<PAGE>
Stockholders Option in whole as to all Shares at any time prior to the date 60
days after the expiration or termination of the Offer if (x) any Principal
Stockholder fails to comply with any of its obligations under the Stockholders
Agreement or withdraws the tender of the Shares except under the circumstances
set forth in the proviso to the preceding paragraph (but the Stockholders Option
shall not limit any other right or remedy available to the Purchaser or Parent
against any Principal Stockholders for breach of the Stockholders Agreement) or
(y) the Offer is not consummated because of the existence of any of the
conditions to the Offer set forth in Section 14 of the Offer to Purchase (other
than as a result of any action or inaction of the Purchaser or Parent which
constitutes a breach of the Merger Agreement) and (1) the Board of Directors of
the Company or any committee thereof shall have withdrawn or modified in a
manner adverse to the Purchaser or Parent its approval or recommendation of the
Offer, the Merger, the Merger Agreement or the Stockholders Agreement or (2)
there shall have been publicly announced or otherwise publicly disclosed any
Acquisition Proposal. Upon the occurrence of any of such circumstances, the
Parent shall be entitled to exercise the Stockholders Option and (subject to the
following paragraph) Parent shall be entitled to purchase the Shares owned by
the Principal Stockholders and the Principal Stockholders shall sell such Shares
to Parent.
The Stockholders Agreement provides that the obligation of the Purchaser to
purchase the Shares at the Option Price is subject to the following conditions:
(a) all waiting periods under the HSR Act applicable to such purchase shall have
expired or been terminated; and (b) there shall be no preliminary or permanent
injunction or other order, decree or ruling issued by any Governmental Entity
(as defined in the Merger Agreement), nor any statute, rule, regulation or order
promulgated or enacted by any Governmental Entity prohibiting, or otherwise
restraining, such purchase.
Under the Stockholders Agreement the Purchaser may allow the Offer to
expire without accepting for payment or paying for any Shares, as set forth in
this Offer to Purchase, and may allow the Stockholders Option to expire without
exercising the Stockholders Option and purchasing all or any Shares pursuant to
such exercise. If any Shares are not accepted for payment in accordance with the
terms of the Offer to Purchase or pursuant to the exercise of the Stockholders
Option, they shall be returned to the applicable Principal Stockholder,
whereupon they shall continue to be held by such Principal Stockholder subject
to the terms and conditions of the Stockholders Agreement.
The Stockholders Agreement further provides that each Principal Stockholder
revokes any and all previous proxies granted with respect to the Shares owned by
such Principal Stockholder. By entering into the Stockholders Agreement, each
Principal Stockholder consents to the Merger Agreement and the transactions
contemplated thereby, including the Merger. So long as the Merger Agreement is
in effect, each Principal Stockholder agrees (i) to vote all Shares now or
hereafter owned by such Principal Stockholder in favor of the Merger Agreement,
the Merger and the transactions contemplated thereby and (ii) to oppose any
Acquisition Proposal and to vote all Shares now or hereafter owned by such
Principal Stockholder against any Acquisition Proposal.
Each Principal Stockholder covenants and agrees in the Stockholders
Agreement that, so long as the Merger Agreement is in effect: (a) such Principal
Stockholder shall not directly or indirectly (i) solicit, initiate or encourage
(or authorize any person to solicit, initiate or encourage) any Acquisition
Proposal or (ii) participate in any discussions or negotiations regarding, or
furnish to any other person any information with respect to, or otherwise
cooperate in any way with, or participate in, facilitate or encourage any effort
or attempt by any other person to do or seek the foregoing and such Principal
Stockholder shall promptly advise the Purchaser of the terms of any
communications it or any of its affiliates may receive relating to any
Acquisition Proposal, and (b) in the event of any change in the Company's
capital stock by reason of stock dividends, stock splits, mergers,
consolidations, recapitalization, combinations, conversions, exchanges of
shares, extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of the Company which would have the effect of
diluting or changing the Purchaser's rights hereunder, the number and kind of
shares or securities subject to the Stockholders Agreement and the purchase
price shall be appropriately and equitably adjusted so the Purchaser shall
receive pursuant to the Offer or the exercise of the Stockholders Option the
number and class of shares or other securities or property that the Purchaser
would have received in respect of the Shares purchasable pursuant to the Offer
or the exercise of the Stockholders Option if
8
<PAGE>
such purchase had occurred immediately prior to such event and that such
Principal Stockholder shall request the Company to take, and shall use
reasonable efforts to take, such steps in connection with the foregoing as may
be necessary to assure that the provisions hereof shall thereafter apply as
nearly as possible to any securities or property thereafter deliverable pursuant
to the Offer or the exercise of the Stockholders Option.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) At a special meeting held on November 7, 1994, the Board of Directors
of the Company (the 'Board') unanimously determined that each of the Offer and
the Merger is fair to, and in the best interests of, the Company's stockholders
and approved the Merger Agreement and the transactions contemplated thereby. The
Board recommends that the Company's stockholders accept the Offer and tender all
their Shares pursuant to the Offer. Copies of a letter to stockholders is
attached hereto as Exhibit 6 and is incorporated herein by reference.
(b) The reasons for the position stated in paragraph (a) of this Item 4 are
presented in the information furnished below in this Item 4(b).
BACKGROUND OF THE OFFER
Over the past several years, the Company has had discussions with a number
of suppliers of motors for windshield wiping systems regarding long term
arrangements for supply of motors to the Company and other possible strategic
alliances. As the automobile manufacturers increasingly look to suppliers having
an ability to provide complete wiper systems rather than portions thereof, the
Company deemed it to be important to the Company's position in the original
equipment market to have a long term source of motors. In particular, during
1993 and the first half of 1994, the Company had discussions with a specific
supplier of windshield wiper motors with respect to a long term supply contract
for motors or a strategic alliance.
During early 1994, David R. Paridy, President and Chief Executive Officer
of Parent, contacted Richard L. Wolf, Chief Executive Officer of the Company
relating to the possible purchase by Parent of the Company. At this time,
however, the Company was engaged in its discussions with respect to a possible
strategic alliance with a motor manufacturer and it made no immediate response
to that inquiry. The conversations between Mr. Wolf and Mr. Paridy did, however,
lead to an agreement by Mr. Wolf to allow Mr. Paridy and other representatives
of Parent to visit the Company's facilities, but scheduling conflicts prevented
such a visit from taking place.
In May 1994, Rupert Warren, one of the Principal Stockholders, was
contacted on behalf of Parent by an attorney, Arnold B. Gardner, who expressed
to Mr. Warren the interest of Parent in acquiring the Company. During May and
June 1994, Mr. Gardner had a series of conversations with Mr. Warren with regard
to such a proposed acquisition and also had discussions with Christopher T.
Dunstan, a Director and Chief Financial Officer of the Company, and Albert R.
Mugel, a Director of the Company, in order to convey Parent's interest in the
Company and to seek meetings between representatives of Parent and the Company
to explore the subject. In late May and June 1994, Ward W. Woods, Jr., the
Chairman of the Board of Directors of Parent, spoke on several occasions with
Mr. Warren to convey directly and to reaffirm Parent's interest in the Company.
During June and July 1994, Mr. Gardner also had conversations on the same
subject with Mr. Wolf.
The discussions with respect to a strategic alliance described above
continued during the first half of 1994 and, during the summer of 1994, another
company contacted Mr. Wolf and indicated that it would have an interest in
forming a strategic alliance with the Company. At a June 13, 1994 meeting of the
Board, Mr. Wolf briefed the Board on the discussions that had been taking place
with respect to a strategic alliance. Discussions followed of other companies
who might have an interest in entering into a strategic alliance or business
combination with the Company. After deliberations, the Board authorized the
hiring of Goldman Sachs & Co. ('Goldman Sachs') as the Company's independent
financial advisor to assist the Board as it studied its strategic alternatives.
Goldman Sachs' initial engagement was to contact a small number of
companies engaged in the global windshield wiper system business who would gain
strategic benefits from entering into a business
9
<PAGE>
combination or strategic alliance with the Company. In early July, the Company
met with one of the companies contacted by Goldman Sachs to discuss the
possibility of the acquisition of the Company. At a meeting of the Executive
Committee of the Board on July 13, 1994, a discussion of the terms on which the
Company might be acquired by this potential acquiror was held. Representatives
of Goldman Sachs were participants at the July 13, 1994 Executive Committee
meeting and the Executive Committee, devised a strategy for approaching
negotiations with the interested company. On July 27, 1994, this potential
acquiror indicated that it was not at that time interested in pursuing further
negotiations with respect to a business combination or strategic alliance with
the Company at that time.
In the middle of July, the Company noticed a pattern of unusual volume and
price increases in shares. As a result of this, on July 14, 1994 the Company
issued a press release which indicated among other things that the Company had
received expressions of interest in the Company from others. Subsequent to this
release, the Company received additional expressions of interest from potential
business combination and strategic alliance partners. During this mid-July
period, Mr. Gardner had discussions with Mr. Wolf and other representatives of
the Company regarding Parent's continuing interest in acquiring the Company.
On July 23, 1994, the Board held a meeting at which the additional
expressions of interest were discussed. The Board, along with representatives of
Goldman Sachs, discussed the possible strategies that the Company should follow
in dealing with the expressions of interest.
At a meeting of the Executive Committee of the Board on August 13, 1994,
management briefed the Executive Committee with respect to the additional
expressions of interest. A discussion of these expressions followed, and the
Executive Committee authorized management, in conjunction with Goldman Sachs, to
conduct an organized and systematic process in which Goldman Sachs would
identify companies that might be interested in the Company and provide
additional information with respect to the Company to interested parties who
executed confidentiality agreements before being provided with such information.
After having reviewed such information, interested parties could conduct further
due diligence and, if they so desired, make an offer to purchase the Company.
Parent and the Purchaser entered into a confidentiality agreement with the
Company on August 17, 1994 and participated in this process.
During August 1994, the Company continuously received calls from persons
interested in the Company. Among these were calls from various representatives
of Parent and the Purchaser, including Mr. Paridy, Mr. Gardner and Mr. Woods, to
various representatives of the Company, including Mr. Wolf and Mr. Dunstan.
In connection with the process conducted by Goldman Sachs and the Company,
Goldman Sachs had contact with approximately 20 potential acquiring parties. Ten
of those companies signed confidentiality agreements with the Company and were
provided with a memorandum containing information with respect to the Company.
Nine of the ten companies who received the information memorandum made
arrangements to conduct on-site due diligence. This due diligence was conducted
during the months of September and October 1994.
On September 26, 1994, Goldman Sachs wrote to each of the companies who had
confirmed their interest in pursuing a business combination transaction with the
Company after conducting due diligence and issued guidelines for submitting
proposals for business combination transactions with the Company. Such proposals
were required to be submitted by October 21, 1994. The Executive Committee of
the Board held a meeting on October 13, 1994 at which management informed the
members of the Executive Committee of the progress of the process being
conducted by Goldman Sachs. On October 21, 1994, the Company received bids from
six entities. These bids contained various and differing conditions and in
several instances clarification was required. After clarification, a November 1,
1994 date for resubmission or reaffirmation of bids was established.
At a meeting of the Executive Committee of the Board held on November 1,
1994, the status of the bidding for the Company was reviewed by management and
representatives of Goldman Sachs. Based on the bids and the progress of the
process to date, the Executive Committee decided to continue negotiations and to
give all bidders a date certain upon which the bidders should make their best
and final offers.
10
<PAGE>
From November 3, 1994 through November 7, 1994, representatives of the
Company and their financial and legal advisors negotiated with the bidders,
including Parent and the Purchaser, over both the economic and non-economic
terms of the various proposals. A meeting of the Board was scheduled for the
afternoon of November 7, 1994 and all bidders were instructed to communicate
their best and final offers to Goldman Sachs prior to that meeting.
On November 7, 1994, Parent and the Purchaser, along with other bidders,
submitted revised proposals to Goldman Sachs. All proposals were submitted to
the Board on that date and the Board approved the proposal of the Purchaser and
Parent. The factors taken into account by the Board in making its decision are
described below under 'Recommendation of the Board of Directors; Fairness of the
Merger and the Offer.'
On the morning of November 8, 1994, Parent, the Purchaser and the Company
entered into the Merger Agreement and Parent, the Purchaser and the Principal
Stockholders entered into the Stockholders Agreement, and the terms of the
Merger Agreement were publicly announced.
RECOMMENDATION OF THE BOARD OF DIRECTORS; FAIRNESS OF THE OFFER AND THE MERGER
In approving the Merger Agreement and recommending acceptance of the Offer
and adoption of the Merger Agreement, the Board considered a number of factors,
including, but not limited to, the following:
(i) The opinion of Goldman Sachs that, based upon certain
considerations and assumptions, as of November 8, 1994, the $85 per Share
in cash to be received by the holders of Shares in the Offer and the Merger
was fair to such holders. A copy of the written opinion dated November 8,
1994 of Goldman Sachs delivered to the Board which sets forth the
assumptions made, procedures followed, matters considered and limits of
their review is filed as Exhibit 5 to this Schedule 14D-9 and is
incorporated herein by reference. THE FULL TEXT OF SUCH OPINION SHOULD BE
READ IN CONJUNCTION WITH THIS STATEMENT;
(ii) the process conducted by the Company and Goldman Sachs that
involved, among other things, contacting entities that the Company and
Goldman Sachs reasonably believed would be interested in entering into a
business combination transaction with the Company and providing certain
entities with information and access to Company officials and
representatives and inviting proposals and the bid of the Purchaser was the
highest bid received;
(iii) a review of the possible alternatives to the Offer and the
Merger, including the possibility of continuing to operate the Company as
an independent entity or of the Company engaging in a strategic alliance
with another automobile parts manufacturer and the timing and feasibility
of those alternatives, and the possible values to the Company's
stockholders of such alternatives;
(iv) the terms and conditions of the Merger Agreement, including the
fact that the Offer is subject to a minimum tender condition;
(v) the Purchaser's receipt of a commitment letter for the financing
to consummate the Offer and the Merger and the fact that the Offer was not
subject to a financing condition;
(vi) the historical and present market prices for the Shares and, in
particular, the effect on such prices of the Company's July 14, 1994
announcement described under 'Background of the Offer';
(vii) the fact that the Board had received indication that the
Principal Stockholders had agreed to enter into the Stockholder Agreement,
pursuant to which they would agree to tender their Shares in the Offer;
(viii) the provisions of the Merger Agreement described under 'Merger
Agreement -- Acquisition Proposals' above which restrict the Company's
ability to withdraw their recommendations of the Offer in the event of such
a superior proposal;
(ix) the provisions of the Merger Agreement that require the Company
to pay the Purchaser a termination fee of $7 million in the event the
Merger Agreement is terminated as described above under 'Merger Agreement';
and
11
<PAGE>
(x) the recognition by the Board that, if the Offer and the Merger
were consummated, current stockholders of the Company would no longer be
able to participate in any future growth prospects of the combined
companies; however, the Board determined that the premium being effected in
the Offer and the Merger fairly compensated such holders for that loss of
opportunity.
In view of the wide variety of factors considered in connection with its
evaluation of the Offer and the Merger, the Board found it impracticable to, and
did not, quantify or otherwise attempt to assign relative weights to the
specific factors considered in reaching its determination, except that the Board
placed special emphasis on the Offer price and on the matters set forth in Items
(i) and (ii) above. The Board discussed in detail the matters referenced in
Items (vii), (viii) and (ix), and the fact that they constitute impediments to
third parties interested in making alternative proposals regarding the Company.
The Board also discussed in detail the Purchaser's ability to obtain financing
to complete the Offer and the Merger. On balance, however, and in light of the
matters described in Item (ii), the Board determined that these factors were
more than outweighed by the other factors indicating fairness.
It is expected that, if Shares are not accepted for payment by the
Purchaser in the Offer and if the Merger is not consummated, the Company's
current management, under the general direction of the Board, will continue to
manage the Company as an ongoing business. However, the Board may, under such
circumstances, explore other possible methods of maximizing stockholder values.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Goldman Sachs has been retained by the Company to act as financial advisor
to the Company for a five-year period and as exclusive financial advisor in
connection with, among other matters, the potential sale of all or a portion of
the stock or assets of the Company. Pursuant to a letter agreement dated June
14, 1994, between the Company and Goldman Sachs, the Company is required to pay
to Goldman Sachs (a) a fee of $80,000 per year, which was prepaid in full by the
Company paying Goldman Sachs $400,000 on or about June 27, 1994 and (b) an
additional cash fee equal to 1.75% of the aggregate consideration (defined as,
in the case of the sale, exchange or purchase of the Company's equity
securities, the total consideration paid for such securities including amounts
paid to holders of options, warrants and convertible securities, and in the case
of a sale or disposition by the Company of all or a substantial portion of its
assets, the total consideration paid for such assets, plus the net value of any
current assets not sold by the Company) in connection with the sale of the
Company, subject to a credit for fees paid pursuant to clause (a). Assuming a
consummation of the Offer and the Merger on the terms contemplated by the Merger
Agreement, the Company currently estimates that the amount of such additional
fee due to Goldman Sachs (after credits) would be approximately $2,600,000.
In addition, the Company has agreed to reimburse Goldman Sachs for
reasonable out-of-pocket expenses, including the fees and disbursements of its
attorneys, plus any sales, use or similar taxes, whether or not any transaction
in consummated, and to indemnify Goldman Sachs and certain related persons
against certain liabilities in connection with their engagement, including
certain liabilities under the federal securities laws.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) During the past sixty days, no transaction in the Shares has been
effected by the Company or, to the best of the Company's knowledge, by any
executive officer, director, affiliate or subsidiary of the Company, except for
the purchase by the trustees of the Trico Retirement Income Fund (a 401(k) Plan)
(the 'TRIP') of the following:
<TABLE>
<CAPTION>
NUMBER OF PRICE PER
DATE OF TRANSACTION SHARES SHARE
- ----------------------------------------------------------------------- --------- ---------
<S> <C> <C>
October 3, 1994........................................................ 421 $ 47.00
October 5, 1994........................................................ 332 47.00
October 28, 1994....................................................... 313 64.50
</TABLE>
(b) Under the TRIP, the trustees are required to request that each
participant in the Trico Stock Fund (the 'Fund') under the TRIP give
instructions on whether the Shares allocated to that persons' interest in the
Fund should be tendered under the Offer. The Company believes that all executive
12
<PAGE>
officers who are participants in the Fund will instruct the trustees to tender
Shares allocated to their account pursuant to the Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Other than the Offer and the Merger, the Company is not engaged in any
negotiation in response to the Offer which relates to or would result in (1) an
extraordinary transaction, such as a merger or reorganization, involving the
Company or any subsidiary of the Company; (2) a purchase, sale or transfer of a
material amount of assets of the Company or any subsidiary of the Company; (3) a
tender offer for or other acquisition of securities by or of the Company; or (4)
any material change in the present capitalization or dividend policy of the
Company.
(b) Except as set forth or as incorporated by reference in this Item 7 or
in Item 4 hereof, there are no transactions, Board resolutions, agreements in
principle or signed contracts in response to the Offer which relate to or would
result in one or more of the matters referred to in this Item 7.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------------------------------------------------------------------------------------------
<C> <S>
1 -- Agreement and Plan of Merger dated as of November 8, 1994 among the Parent, the Purchaser and the Company
2 -- Stockholders Agreement dated as of November 8, 1994 by and among the Parent, the Purchaser, the John R.
Oishei Appreciation Charitable Trust, the Julia R. and Estelle L. Foundation Incorporated and Rupert
Warren, individually and as trustee of certain trusts established by John R. Oishei
3 -- Confidentiality Agreement dated as of August 17, 1994, between Parent and the Company.
4 -- Joint press release of the Parent and the Company dated November 8, 1994
5 -- Opinion of Goldman Sachs & Co. dated November 8, 1994*
6 -- Letter to stockholders of the Company dated November 14, 1994*
</TABLE>
- ------------
* Included in copies mailed to shareholders.
SIGNATURE
After reasonable 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.
TRICO PRODUCTS CORPORATION
By: /s/ CHRISTOPHER T. DUNSTAN
.................................
CHRISTOPHER T. DUNSTAN
VICE CHAIRMAN AND CHIEF FINANCIAL
OFFICER
Dated: November 14, 1994
13
<PAGE>
ANNEX I
TRICO PRODUCTS CORPORATION
817 WASHINGTON STREET
BUFFALO, NEW YORK 14203
INFORMATION STATEMENT
PURSUANT TO SECTION 14(F) OF
THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
------------------------
This information statement is being mailed on or about November 14, 1994,
as part of a Solicitation/Recommendation Statement on Schedule 14D-9 (the
'Schedule 14D-9'), to holders of record on November 10, 1994, of shares of
Common Stock, no par value (the 'Shares'), of Trico Products Corporation, a New
York corporation (the 'Company'), in connection with the election, other than at
a meeting of the stockholders of the Company, to the Board of Directors of the
Company (the 'Board') of up to five persons (the 'Designees') to be designated
by Stant Expansion Corporation, a New York corporation (the 'Purchaser'). The
Purchaser is a wholly owned subsidiary of Stant Corporation, a Delaware
corporation ('Parent'). Such designation will be made pursuant to the Agreement
and Plan of Merger, dated as of November 8, 1994 (the 'Merger Agreement'), among
the Parent, the Purchaser and the Company, which provides for a tender offer by
the Purchaser for the Shares (the 'Offer') followed by a merger of the Purchaser
into the Company (the 'Merger'). Capitalized terms not otherwise defined herein
have the meanings ascribed to them in the Schedule 14D-9.
The Merger Agreement provides that promptly upon the acceptance for payment
of, and payment for, any Shares by the Purchaser pursuant to the Offer, all of
the present directors of the Company shall resign, the number of directors on
the Board of Directors shall be reduced to five and the Purchaser shall be
entitled to designate replacement directors on the Board of Directors of the
Company such that the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, will control a majority of such directors, and the Company and its
Board of Directors shall take all such action needed to cause the Purchaser's
designees to be appointed to the Company's Board of Directors.
The information contained herein concerning the Parent, the Purchaser and
the Designees has been furnished to the Company by the Parent and the Purchaser,
and the Company assumes no responsibility for the accuracy or completeness of
such information. Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder require the information contained herein to be filed with the
Securities and Exchange Commission (the 'Commission') and transmitted to the
Company's stockholders not less than ten days prior to the date any of the
Designees are elected or appointed to the Board in accordance with the terms of
the Merger Agreement.
As of November 10, 1994, 1,878,629 Shares were issued and outstanding. Each
Share is entitled to one vote on all matters submitted to stockholders of the
Company.
A-1
<PAGE>
THE DESIGNEES AND THE CURRENT MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE
OFFICERS OF THE COMPANY
THE DESIGNEES
Set forth below is certain information about each of the Designees.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
DESIGNEE DURING THE PAST 5 YEARS
- --------------------------------- -------------------------------------------------------------------------------
<S> <C>
Christopher T. Dunstan .......... See information under 'Present Directors of the Company.'
Age 39
Anthony W. Graziano, Jr. ........ Vice President, General Counsel and Secretary since October 1994 of Parent,
Age 53 which is engaged in the design, manufacture and distribution of a broad range
of automotive parts and tools for the original equipment, aftermarket and
industrial markets; from April 1993 until June 1994, Executive Vice President
and General Counsel of Triarc Companies, Inc., which is engaged, through its
subsidiaries in fast food, soft drinks, textiles and liquified petroleum gas;
from its formation in January 1989 until April 1993, Senior Vice
President -- Legal Affairs of Trian Group, Limited Partnership, which
provided investment banking and management services for entities controlled
by Nelson Peltz and Peter W. May.
David R. Paridy ................. Director and Chief Executive Officer of Parent since 1987.
Age 53
Thomas F. Plocinik .............. Senior Vice President -- Finance of Parent since 1991; held executive positions
Age 52 at Standard-Thomson Corporation from 1989 to 1991.
Richard L. Wolf ................. See information under 'Present Directors of the Company.'
Age 59
</TABLE>
PRESENT DIRECTORS OF THE COMPANY
The following table contains information with respect to the present
Directors of the Company, all of whom were elected by the stockholders. Under
the Merger Agreement, the present Directors of the Company will resign on the
date of consummation of the Offer.
<TABLE>
<CAPTION>
YEAR
FIRST
PRINCIPAL OCCUPATIONS BECAME SHARES AND PERCENT OF
NAME DURING THE PAST 5 YEARS DIRECTOR SHARES OWNED(A)
- ------------------------------ --------------------------------------------- -------- ---------------------
<S> <C> <C> <C>
Christopher T. Dunstan ....... Vice Chairman since 1992, Senior Vice 1992 3,439(b)
Age 39 President and Chief Financial Officer since
1989; Vice President Finance for North
America Operations and Corporate Treasurer
of Schlegel Corporation prior thereto
J. Walter Frey ............... Retired; Senior Vice President (1988 to 1989) 1980 1,081(b)(c)
Age 68 Vice President and Secretary (1985 to 1989)
of the Corporation
Randolph A. Marks ............ Retired; Former Chairman of the Board of 1989 1,500(b)
Age 59 Directors of American Brass Co.; Director
of Merchants Group, Inc., Pratt & Lambert,
Inc. and Computer Task Group, Inc.
William F. Milliken, Jr. ..... President of Milliken Research Associates, 1963 200(b)
Age 83 Inc. (engineering consulting firm)
Albert R. Mugel .............. Partner of law firm of Jaeckle, Fleischmann & 1968 None(c)
Age 77 Mugel
</TABLE>
(table continued on next page)
A-2
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
YEAR
FIRST
PRINCIPAL OCCUPATIONS BECAME SHARES AND PERCENT OF
NAME DURING THE PAST 5 YEARS DIRECTOR SHARES OWNED(A)
- ------------------------------ --------------------------------------------- -------- ---------------------
<S> <C> <C> <C>
William Rollo ................ Retired President, Vice President and General 1989 625(b)
Age 67 Manager of Automotive Division of Briggs &
Stratton Corporation
Paul A. Schoelkopf ........... Chairman of the Board of Directors of Niagara 1950 400(b)
Age 77 Share Corporation; Director Emeritus of US
Air Group Inc.
Richard L. Wolf .............. Chairman, President and Chief Executive 1980 20,107(1.1%)(d)
Age 59 Officer of the Corporation; President and
Chief Operating Officer of the Corporation
(1985 to 1989); Director of Fiamm
Technologies, Inc. and member of Chase
Manhattan Bank Upstate Advisory Board
</TABLE>
- ------------
(a) Unless otherwise indicated, individuals have sole voting and sole
investment power of shares listed opposite their names.
(b) Represents ownership of less than 1% outstanding Shares.
(c) Does not include 319,260 Shares owned by the John R. Oishei Appreciation
Charitable Trust, of which Messrs. Frey and Mugel are Trustees. Under the
prohibitions of the 1969 Tax Reform Act, Mr. Frey cannot increase his
existing ownership of the Shares and Mr. Mugel cannot acquire any Shares
without adversely impacting this trust.
(d) Does not include 51,087 Shares owned by a Trust created under the Last Will
and Testament of John R. Oishei, of which Mr. Wolf is co-trustee or 444
Shares owned by the Estate of Jean Reese Oishei, of which Mr. Wolf is
executor.
MEETING AND COMMITTEE DATA
The Board of Directors held four meetings during 1993. Each Director of the
Company attended at least 75% of the aggregate of (i) all meetings of the Board
and (ii) all meetings of committees of the Board of which he was a member.
The Audit Committee of the Board is composed of Messrs. Schoellkopf, Frey
and Marks. The Committee held three meetings during 1993. The Committee reviews
the scope and results of the audit activities of the independent accountants,
significant proposed changes in accounting principles or practices, the
financial reports of the Company and the compensation and general performance of
the Company's public accountants.
The Compensation Committee of the board is composed of Messrs. Mugel,
Milliken and Marks (A. Neville Procter served on this Committee until his death
in May 1994). The Committee held two meetings during 1993. The functions of this
Committee include the review and approval of compensation of employees above a
certain salary level, preparation of recommendations to the Board on the
compensation of employee-directors and administration of the Trico Products
Corporation 1990 Incentive Plan.
The Executive Committee of the board is composed of Messrs. Mugel,
Schoellkopf, Rollo and Wolf. The Executive Committee has the powers of the Board
in directing the management of the Company except as limited by law. Nominees
for election as Director are selected by the Executive Committee. The Committee
held nine meetings during 1993.
A-3
<PAGE>
DIRECTORS' FEES
Directors other than employees of the Company receive an annual retainer of
$10,000 plus $500 for each regular, special or committee meeting attended.
PRESENT EXECUTIVE OFFICERS
The present executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD AND YEAR APPOINTED
- ------------------------------- --- -----------------------------------------------------------------
<S> <C> <C>
Richard L. Wolf................ 59 President -- 1985, Chief Executive Officer -- 1989
Christopher T. Dunstan......... 39 Vice Chairman -- 1992, Senior Vice President Finance and
Administration and Chief Financial Officer -- 1991, Vice
President Finance and Chief Financial Officer -- 1989
Emrys G. Thomas................ 51 Managing Director Trico Folberth Limited -- 1989
Donald R. Fletcher............. 43 Vice President -- 1992
Richard N. Hiss................ 58 Vice President -- Original Equipment Sales -- 1991
Dennis J. Petrus............... 46 Vice President -- 1992
Glenn H. Winkles............... 47 Vice President -- Aftermarket Sales -- 1989
</TABLE>
- ----------------------------------------------------------
Mr. Wolf has been President of the Company since 1985 and Chief Executive
Officer since 1989.
Mr. Dunstan was hired and appointed Vice President -- Finance and Chief
Financial Officer in 1989 and is presently Vice Chairman, Senior Vice President
Finance and Administration and Chief Financial Officer. Prior to his employment
by the Company, Mr. Dunstan, a Certified Public Accountant, was employed for a
number of years by Schlegel Corporation, most recently as Vice
President -- Finance for North American Operations and Corporate Treasurer.
Schlegel manufactured and sold to the automotive, building and office equipment
industries with sales of over $300 million.
Mr. Thomas was hired in 1989 as the Managing Director of Trico Ltd., the
Company's subsidiary in the United Kingdom. Prior to employment by the Company,
Mr. Thomas held positions in top management with Fram Europe, Ltd. and TRW Cam
Gears Ltd., which are European manufacturers of components for the automotive
industry.
Mr. Fletcher became Vice President in 1992. Prior to that, he was director
of Corporate Quality Assurance. Before joining the Company in 1990, Mr. Fletcher
was Plant Manager with Alliance Metal Stamping.
Mr. Hiss joined the Company as Vice President -- Original Equipment Sales
in 1991. Prior to joining the Company, he was Director of Marketing, Planning
and Operations for Associated Spring/Barnes Group, Inc.
Mr. Petrus became employed by the Company in 1989 and has been Director of
Manufacturing Engineering, and Director of Product Engineering before being
appointed to his present position. Before joining the Company, he was
Manufacturing Engineer Manager employed by General Motors Corporation.
Mr. Winkles has been Vice President of aftermarket sales for the Company
since 1989.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
Information regarding certain beneficial owners of Shares as of November
11, 1994, is as follows:
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS OF AMOUNT AND NATURE OF OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OWNERSHIP
- ----------------------------------------------- ------------------------------------------ ----------
<S> <C> <C>
Raymond A. Deibel, Carl E. Larson, Albert R.
Mugel, Rupert Warren and J. Walter Frey,
Trustees of the John R. Oishei Appreciation
Charitable Trust ............................ 319,260 Shares owned indirectly as 17%
trustees with shared voting and
investment power
817 Washington Street
Buffalo, New York 14203
</TABLE>
(table continued on next page)
A-4
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS OF AMOUNT AND NATURE OF OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OWNERSHIP
- ----------------------------------------------- ------------------------------------------ ----------
<S> <C> <C>
Rupert Warren ................................. 17,320 Shares owned directly and 126,992 8%
817 Washington Street owned indirectly as trustee with sole
Buffalo, New York 14203 voting and investment power(a)
Rupert Warren and Carl E. Larson,
as Officers and Directors of the Julia R. &
Estelle L. Foundation, Incorporated ......... 150,924 Shares owned indirectly as 8%
officers and directors with shared
voting and investment power
817 Washington Street
Buffalo, New York 14203
Peter Cundill & Associates
(Bermuda) Ltd. .............................. 245,900 Shares owned indirectly of which 13%
210,000 have shared voting power, of
which 185,000 have sole investment power
and 60,900 have shared investment power
15 Alton Hill
Southampton SN 01
Bermuda
</TABLE>
- ------------
(a) Does not include 319,260 Shares owned by the John R. Oishei Appreciation
Charitable Trust or 150,924 Shares owned by the Julia R. & Estelle L.
Foundation Incorporated, of which Mr. Warren is a trustee and a member,
officer and director, respectively.
- ----------------------------------------------------------
The ownership of Shares by the executive officers of the Company listed in
the Summary Compensation Table (other than Messrs. Wolf and Dunstan, whose
ownership is disclosed above) who own shares as of October 31, 1994 is as
follows: Richard N. Hiss -- 1,568 shares; and Donald R. Fletcher -- 1,000
shares.
A-5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table contains information concerning the annual and
long-term compensation for the years ended December 31, 1993, 1992 and 1991 of
those persons who were, at December 31, 1993, (i) the chief executive officer
and (ii) the other four most highly compensated executive officers of the
Company (the 'Named Officers'):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION
------------------------------------ LONG TERM COMPENSATION
ALL OTHER AWARDS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS(2)
- ----------------------------------------- ---- -------- ----- --------------- ----------------------
Richard L. Wolf ......................... 1993 $239,549 -0- $ 2,352 7,000
Chairman, Chief Executive Officer 1992 225,000 -0- 1,688 -0-
1991 225,000 -0- -- -0-
Christopher T. Dunstan .................. 1993 159,480 -0- 2,983 5,000
Vice Chairman, Senior Vice President 1992 130,000 -0- 1,300 -0-
and Chief Financial Officer 1991 134,812 -0- -- -0-
Richard N. Hiss ......................... 1993 136,877 -0- 1,416 2,400
Vice President -- Original Equipment 1992 128,291 -0- 1,073 -0-
Sales 1991 59,531 -0- -- -0-
Donald R. Fletcher ...................... 1993 124,476 -0- 908 3,500
Vice President 1992 98,234 -0- 871 -0-
1991 69,343 -0- -- -0-
Emrys G. Thomas ......................... 1993 116,120 -0- 18,716 -0-
Managing Director -- Trico Ltd. 1992 136,005 -0- 21,362 -0-
1991 133,528 -0- -- -0-
</TABLE>
- ------------
(1) Under a transition provision of the Securities and Exchange Commission's new
disclosure rules, only 1992 and 1993 amounts are disclosed under this
heading. With respect to all Named Officers except Mr. Thomas, this amount
represents the Company's contributions to the Trico Retirement Income Plan
for the benefit of the Named Officer.
(2) Granted under the Trico Products Corporation 1990 Incentive Plan.
- ----------------------------------------------------------
Option Exercises and Fiscal Year End Values. Shown below is information
with respect to the unexercised options to purchase and stock appreciation
rights (SARs) with respect to the Company's Common Stock. Valuations are based
upon the December 31, 1993 closing price for Shares of $27 per share. None of
the Named Officers exercised any options during the year ended December 31,
1993.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Richard L. Wolf........................................................ 58,800/5,600 $2,450/$9,800
Christopher T. Dunstan................................................. 23,800/4,000 $1,750/$7,000
Richard N. Hiss........................................................ 480/1,920 $840/$3,360
Donald R. Fletcher..................................................... 1,700/2,800 $1,225/$4,900
Emrys G. Thomas........................................................ 19,680/0 $0/0
</TABLE>
A-6
<PAGE>
Option Grants. The following table gives information regarding options
granted to the Named Officers during 1993.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS/SARS
GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE PRESENT
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE VALUE ($)(2)
- ---------------------------------- -------------- ------------ ----------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Richard L. Wolf................... 7,000 10.7% $ 25.25 4/7/03 $102,970
Christopher T. Dunstan(3)......... 5,000 7.6 25.25 4/7/03 73,550
Richard H. Hiss................... 2,400 3.7 25.25 4/7/03 35,304
Donald R. Fletcher................ 3,500 5.4 25.25 4/7/03 51,485
</TABLE>
- ------------
(1) Each option becomes exercisable with respect to 20% of the Shares subject
thereto on each of October 15, 1993, 1994, 1995, 1996 and 1997.
(2) The present value of options granted has been reported using the
Black-Scholes option pricing model. These values assume: grant date -- April
8, 1993; exercise price -- $25.25; assumed exercise date -- April 7, 2003;
risk free rate of return -- 6.8%; and volatility assumption -- 30.2%. This
valuation assumes that the Named Officer will exercise the option
immediately before it expires, and an officer who exercises an option prior
thereto will realize less value.
(3) Mr. Dunstan was also issued an option to purchase 5,000 Shares on June 13,
1994 at an exercise price of $26.00 per Share.
PENSION PLAN
The Company maintains a plan to provide pension benefits to officers upon
retirement. Pension benefits for officers are determined as the sum of the
accrued benefit as of December 31, 1988, plus the sum of annual accruals for
each year thereafter. For each year of credited service after 1988 a participant
accrues a benefit equal to 1 percent of the participant's compensation for the
year plus 0.5 percent of the amount by which the participant's compensation for
the year exceeds the participant's Social Security covered compensation (which
is the average of the Social Security taxable wage bases in effect and projected
for each calendar year in the 35-year period ending with the year in which the
participant will reach Social Security retirement age). A participant's December
31, 1988 accrued benefit was determined under the following formula: (i) 1.5
percent of the participant's average annual base salary for the five highest
consecutive years during the ten year period ended December 31, 1988, less 1.5
percent of the participant's anticipated Social Security primary insurance
amount; multiplied by (ii) the number of the participant's years of credited
service through December 31, 1988. The benefits payable under the plan in the
form of a single life annuity upon normal retirement at age 65 would be $63,200,
$59,500, $18,200 and $38,200 for Messrs. Wolf, Dunstan, Hiss and Fletcher,
respectively, assuming these employees remained with the Company through normal
retirement age at their current rate of compensation. Mr. Thomas is not covered
by the plan but does receive a contribution from the Company for his personal
pension plan in the United Kingdom.
SUPPLEMENTAL RETIREMENT PLAN
The Trico Products Corporation Supplemental Retirement Plan ('SRP') is an
unfunded plan for the provision of supplemental pension benefits for selected
highly compensated management employees. The Board of Directors of the
Corporation designates the employees eligible to participate. Currently, R.L.
Wolf, C.T. Dunstan, and R. Hiss are the only participants. The supplemental
pension benefit under the SRP is calculated under following formula:
(a) Multiply (i) 1.5 percent of the participant's highest five-year
average annual salary less 1.5 percent of the participant's primary Social
Security benefit; by (ii) the participant's years of credited service;
A-7
<PAGE>
(b) Reduce (a) above by the participant's accrued benefit under the
Trico Products Corporation Salaried Employees' Pension Plan (the 'Salaried
Pension Plan'). See 'Pension Plan' for a description of the benefit
provided under the Salaried Pension Plan.
The SRP takes into account as annual salary a participant's salary at its
regular rate, whether or not it is deferred, and without regard to bonuses,
options, or other forms of compensation. The salary taken into account and the
benefits payable under the SRP are not limited by Internal Revenue Code limits
on qualified plan benefits. SRP benefits are payable at retirement on or after
age 62; a reduced benefit is payable upon retirement between ages 55 and 62 and
in the case of disability. A participant involuntarily terminated without cause
after 10 years of service is entitled to a deferred vested benefit. A SRP
benefit is payable under the same form as a participant's Salaried Pension Plan
benefit.
SRP benefits are payable from the general assets of the Corporation. The
Corporation has reserved the right to terminate the SRP; upon termination of the
SRP benefits accrued through the date of termination would be preserved. The SRP
provides that the Corporation's successor in a merger or consolidation would
succeed to the Corporation's obligations under the SRP.
Participants' estimated annual supplemental pension benefits under the SRP
in the form of a single life annuity starting at age 62 would be: Mr. Wolf,
$20,279; Mr. Dunstan, $0; and Mr. Hiss, $0; these estimates are based on
credited service projected only through December 31, 1994.
EMPLOYMENT AGREEMENTS
The Company has entered into identical agreements with each of its
executive officers other than Mr. Wolf. Each agreement has a two-year term that
is extended automatically each month for the following 24 months. Each executive
officer is entitled to a minimum base salary under his agreement ($175,000 for
Mr. Dunstan, $120,000 for Mr. Hiss, $130,000 for Mr. Fletcher, and $116,000 for
Mr. Thomas). The Board may terminate an agreement at any time with no further
obligation upon a finding that an officer has breached or neglected his duties,
and an officer may resign at any time upon 30 days' notice. The Board may also
terminate an agreement at any time without cause; in that event, or upon death
or disability, the officer is entitled to continued salary and benefits for 24
months. Provisions for termination of employment upon a change of control
supersede the agreements' regular termination provisions. Change in control is
defined, subject to various qualifications, as the acquisition by a person or
group of beneficial ownership of 20 percent or more of the Shares, together with
a change in the composition of a majority of the Board. If, within 24 months of
a change of control, either the Company terminates an officer's employment for
reasons other than cause (as defined) or disability, or the officer resigns
because of certain changes in the circumstances of his employment, the officer
is entitled to a severance benefit equal to the lesser of (i) the amount
deductible by the Company under Section 280G of the Internal Revenue Code of
1986, as amended, or (ii) two times the base annual salary payable to the
executive officer at the time of termination.
Mr. Wolf is a party to an employment agreement which provides for an annual
salary of $240,000 and has a term expiring on August 31, 1997. Under this
Agreement, Mr. Wolf's employment may be terminated for misconduct and, in the
event Mr. Wolf resigns because of certain changes in the circumstances of his
employment, the Company may be required to pay Mr. Wolf his salary and to
provide him with benefits for the balance of the term of the Agreement.
COMPENSATION COMMITTEE REPORT
The Company maintains a Compensation Committee composed entirely of
independent, outside directors. The Compensation Committee has established a
compensation program for senior officers of the Company that is composed of
three components: basic salary compensation; cash incentive compensation to
reward senior officers for their and the Company's yearly performance; and stock
based compensation for long-term incentive.
The Compensation Committee set basic compensation for senior executives at
a level it believes that is necessary to attract and retain highly-qualified
executives to lead the Company. In determining the appropriate level of basic
compensation for Mr. Wolf, the Company's chief executive officer, and the other
persons named in the Summary Compensation Table, the Compensation Committee
engaged an
A-8
<PAGE>
independent compensation consultant to determine the median salary levels for
senior executives in various positions in other companies in the automotive
parts and accessories business. Based upon this report and the individual
officer's level of responsibility, the Compensation Committee set the 1993
salary levels for Mr. Wolf and the other persons named in the Summary
Compensation Table at the amounts set forth in the 'salary' column of the
Summary Compensation table. The survey performed by the independent consultant
showed that the Company's level of basic compensation for all senior officers
was below the median for the automotive parts and accessories business, ranging
from 70 to 75% of the median for the chief executive officer and the chief
financial officer to upwards 90% of median for others. Although basic
compensation is not primarily performance based, after the Company sustained
operating losses during 1993, Messrs. Wolf, Dunstan, Fletcher and Hiss the
Company's four most highly domestic compensated executive officers, agreed to
take 10% cuts in basic compensation effective on March 1, 1994.
The Compensation Committee implemented a Critical Success Factors
Management Incentive Plan for 1993. Under this plan, each senior officer will be
evaluated with respect to the Company's goals and objectives and that
executive's performance in helping the Company achieve those goals. These goals
include primarily the maximization of shareholder value, as well as ancillary
goals of customer satisfaction, competitiveness, corporate excellence, employee
morale and corporate social responsibility. The plan required that the Company
achieve certain financial performance goals (70% of the Company's projection for
1993 financial performance) before any bonus awards could be paid to Mr. Wolf or
the other persons named in the Summary Compensation Table. These financial
performance criteria were not achieved in 1993, and no bonuses were paid to Mr.
Wolf and the other persons named in the Summary Compensation Table with respect
to 1993. However, in the event that the performance goals were met, an
individual officer would be entitled to a bonus only to the extent that officer
had met his personal goals. Accordingly, the Compensation Committee believes
that this type of plan promotes the interests of shareholders by providing
incentive compensation to senior management based upon the Company's and each
senior officer's performance.
The Compensation Committee also believes that stock based compensation
awards increase executive's motivation and interest in the Company's long-term
success as measured by the price of the Company's shares. The Compensation
Committee endorses the position that ownership of stock and stock based
performance compensation arrangements are beneficial in aligning management's
and shareholders' interest. In 1993, the Compensation Committee made grants of
stock options to senior management in order to give them further incentive to
increase shareholder value. The Compensation Committee granted options to
purchase 17,900 shares to the persons named in the Summary Compensation Table.
The relative number of option shares granted to an individual was based upon
that person's base compensation. The Board also adopted in 1993 a policy stating
that certain officers designated by the Board (including those in the Summary
Compensation Table) should acquire an amount of the Company's shares with a
value in the range of the officer's annual basic compensation. The Board also
adopted a program to provide those officers with financing to purchase the
Company's shares. The Compensation Committee believes that this policy and
program will further encourage the Company's executives to manage the Company in
the best interest of the shareholders and to maximize shareholder value.
The Compensation Committee also has considered the potential effects on the
Company of the limitations on deductibility of executive compensation in excess
of $1,000,000 for an individual imposed by the Revenue Reconciliation Act of
1993, and based upon the current levels of executive compensation, the Committee
does not believe that this limitation will have any impact on the Company.
A. NEVILLE PROCTER
WILLIAM F. MILLIKEN, JR.
RANDOLPH A. MARKS
PERFORMANCE COMPARISON
Set forth below is a line graph comparing the percentage change in the
cumulative return to the shareholders on the Company's Common Stock against the
cumulative return of Standard & Poor's 500
A-9
<PAGE>
and a peer group index for last five years. The peer group index was prepared by
the Company in good faith in accordance with the rules of the Securities and
Exchange Commission using the following issuers who are engaged in similar lines
of business: Masco Industries, Inc., Standard Products Company, Lifetime
Products, Inc., Douglas & Lomason Company and Simpson Industries, Inc.
[GRAPH]
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Jaeckle, Fleischmann & Mugel, a law firm in which Mr. Mugel is a partner,
rendered legal services to the Company in 1993 and is rendering such services in
1994.
The Company has a program whereby it makes loans to officers to purchase
Shares on the open market, which Shares are then pledged to the Company as
security for those loans. The interest rates on these loans is the applicable
federal rate as set by the Internal Revenue Service. As of September 30, 1994,
the Company had made loans of $235,000 and $24,000 to Messrs. Wolf and Dunstan,
respectively.
A-10
<PAGE>
APPENDIX
ON PAGE A-10 OF 14D-9
The Information Statement mailed to stockholders of the Company contains a
graph with datapoints comparing the total return to an investor as of each
December 31 from 1989 through 1993 assuming such investor had invested $100 on
the close of business on December 31, 1988 in (i) Shares, (ii) the Standard and
Poor's 500 Index (the 'S&P 500'), (iii) the peer group index (the 'Peer Group').
The datapoints on the graph as follows:
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Shares.................................................... 100 71.82 55.80 30.54 28.14 43.72
S&P 500................................................... 100 131.49 127.32 166.21 178.96 196.84
Peer Group................................................ 100 77.18 49.92 69.92 98.92 130.97
</TABLE>
<PAGE>
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the 'Merger Agreement'), dated as
of November 8, 1994, by and among STANT CORPORATION, a Delaware corporation
('Purchaser'), STANT EXPANSION CORPORATION, a New York corporation and a
wholly-owned subsidiary of Purchaser ('Sub'), and TRICO PRODUCTS CORPORATION, a
New York corporation (the 'Company').
W I T N E S S E T H :
WHEREAS, the Boards of Directors of Purchaser and the Company
have approved the acquisition of the Company by Purchaser;
WHEREAS, in furtherance of such acquisition, Purchaser proposes
to cause Sub to make a tender offer (as it may be amended from time to time as
permitted under this Merger Agreement, the 'Offer'), to purchase all the issued
and outstanding shares of Common Stock, no par value, of the Company (the
'Company Common Stock'), at a price per share of Company Common Stock of $85.00,
net to the seller in cash (such price, the 'Offer Price'), upon the terms and
subject to the conditions set forth in this Merger Agreement; and the Board of
Directors of the Company has approved the Offer and is recommending that the
Company's Stockholders accept the Offer;
WHEREAS, the Boards of Directors of Purchaser and the Company
have approved the Offer and the merger of Sub into the Company (the 'Merger'),
upon the terms and subject to the conditions set forth in the Offer and herein;
WHEREAS, concurrently with the execution and delivery of this
Merger Agreement the Purchaser and Sub have entered into an agreement with
certain stockholders of the Company pursuant to which such stockholders, among
other things, have agreed to tender pursuant to the Offer the shares of Company
Common Stock held by such stockholders and have granted to Sub the option to
purchase such shares in certain events;
1
<PAGE>
NOW, THEREFORE, in consideration of the foregoing premises and
representations, warranties and agreements contained herein the parties hereto
agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Subject to the provisions of this
Merger Agreement, as promptly as practicable, but in no event later than
November 15, 1994, Sub shall, and Purchaser shall cause Sub to, commence the
Offer. The obligation of Sub to, and of Purchaser to cause Sub to, commence the
Offer and accept for payment, and pay for, any shares of Company Common Stock
tendered pursuant to the Offer shall be subject to the conditions set forth in
Exhibit A (any of which may be waived in whole or in part by Sub in its sole
discretion) and to the terms and conditions of this Merger Agreement; provided,
however, that Sub shall not, without the Company's consent, waive the Minimum
Condition (as defined in Exhibit A). Sub expressly reserves the right to modify
the terms of the Offer, except that, without the consent of the Company, Sub
shall not (i) reduce the number of shares of Company Common Stock to be
purchased in the Offer, (ii) reduce the Offer Price, (iii) modify or add to the
conditions set forth in Exhibit A in any manner adverse to the holders of
Company Common Stock, (iv) except as provided in the next sentence, extend the
Offer, (v) change the form of consideration payable in the Offer, or (vi) amend
any other term of the Offer in a manner adverse to the holders of Company Common
Stock. Notwithstanding the foregoing, Sub may, without the consent of the
Company, (x) extend the Offer beyond the scheduled expiration date (the initial
scheduled expiration date being 20 business days following commencement of the
Offer) if, at the scheduled expiration date of the Offer, any of the conditions
to Sub's obligation to accept for payment, and pay for, shares of Company Common
Stock shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (y) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the 'SEC') or the staff thereof applicable to the Offer, and (z) extend the
Offer for any reason for an aggregate period of not more than 15 business days
beyond the latest expiration date that would otherwise be permitted under clause
(x) or (y) of this sentence. Subject to the terms and conditions of the Offer
and this Merger Agreement, Sub shall, and Purchaser shall cause Sub to, accept
for payment, and pay for, all shares of Company Common Stock validly tendered
and not withdrawn pursuant to the Offer that Sub becomes obligated to accept for
payment, and pay for, pursuant to the Offer as soon as practicable after the
expiration of the Offer.
(b) On the date of commencement of the Offer, Purchaser and Sub
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer, which Statement shall contain an offer to purchase and a related
letter
2
<PAGE>
of transmittal and summary advertisement (such Schedule 14D-1 and the documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the 'Offer Documents'). The Offer Documents
shall comply as to form in all material respects with the Securities Exchange
Act of 1934, as amended (the 'Exchange Act') and the rules and regulations
promulgated thereunder, and the Offer Documents, on the date first published,
sent or given to the Company's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by Purchaser or Sub with respect to information supplied
by the Company for inclusion or incorporation by reference in the Offer
Documents. Each of Purchaser, Sub and the Company agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect, and each of Purchaser and Sub further agrees to take all steps
necessary to amend or supplement the Offer Documents and to cause the Offer
Documents as so amended or supplemented to be filed with the SEC and to be
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable Federal securities laws. The Company and its counsel
shall be given a reasonable opportunity to review and comment upon the Offer
Documents and all amendments and supplements thereto prior to their filing with
the SEC or dissemination to stockholders of the Company. Purchaser and Sub agree
to provide the Company and its counsel any comments Purchaser, Sub or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
(c) Subject to the terms and conditions of the Offer, Purchaser
shall provide or cause to be provided to Sub on a timely basis the funds
necessary to accept for payment, and pay for, any shares of Company Common Stock
that Sub becomes obligated to accept for payment, and pay for, pursuant to the
Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, duly and unanimously adopted
resolutions approving the Offer, the Merger, this Merger Agreement and the
Stockholder Agreement (as defined below), determining that the terms of the
Offer and the Merger are fair to, and in the best interests of, the Company's
stockholders and recommending that the Company's stockholders accept the Offer
and tender their shares pursuant to the Offer and approve and adopt this Merger
Agreement. The Company has been advised by each of its directors and by each
executive officer who as of the date hereof is aware of the transactions
contemplated hereby, that each such person intends to tender pursuant to the
Offer all shares of Company Common Stock owned by such person. The Company
acknowledges that as a condition to Purchaser entering into this Merger
Agreement,
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Purchaser has entered into an agreement (the 'Stockholder Agreement') with the
holders of Company Common Stock identified on Exhibit B hereto, which holders
own in the aggregate 614,496 shares of Company Common stock (equal to 33% of the
outstanding shares of Company Common Stock), pursuant to which each such holder,
among other things, has agreed to tender all of its shares of Company Common
Stock pursuant to the Offer and has granted Sub the option to purchase such
Shares in certain events. The Company represents that its Board of Directors has
received the opinion of Goldman Sachs & Co. that the proposed consideration to
be received by the holders of shares of Company Common Stock pursuant to the
Offer and the Merger is fair to such holders from a financial point of view.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the 'Schedule 14D-9'), containing the recommendation described in
Section 1.2(a) and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Purchaser or Sub for inclusion or incorporation by reference in the
Schedule 14D-9. Each of the Company, Purchaser and Sub agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
Federal securities laws. Purchaser and its counsel shall be given a reasonable
opportunity to review and comment upon the Schedule 14D-9 and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Purchaser and its
counsel in writing with any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Company Common Stock as of a recent date
and of those persons becoming record holders subsequent to such date, together
with copies of all lists of stockholders, security position listings
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and computer files and all other information in the Company's possession or
control regarding the beneficial owners of Company Common Stock, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Purchaser may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Purchaser and Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if this Merger Agreement shall be terminated, will, upon request, deliver, and
will use their best efforts to cause their agents to deliver, to the Company all
copies of such information then in their possession or control.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the
conditions hereof, on the Effective Date (as defined in Section 2.2), Sub shall
be merged into the Company and the separate existence of Sub shall thereupon
cease, and the name of the Company, as the surviving corporation in the Merger
(the 'Surviving Corporation'), shall by virtue of the Merger remain Trico
Products Corporation.
Section 2.2 Effective Date of the Merger. The Merger shall
become effective when a properly executed Certificate of Merger (the
'Certificate of Merger') is duly filed with the Secretary of State of the State
of New York, which filing shall be made as soon as practicable after the closing
of the transactions contemplated by this Merger Agreement in accordance with
Section 4.7. When used in this Merger Agreement, the term 'Effective Date' shall
mean the date and time at which the Certificate of Merger is so filed or at such
time thereafter as is provided in such Certificate of Merger.
ARTICLE III
THE SURVIVING CORPORATION
Section 3.1 Certificate of Incorporation. The Certificate of
Incorporation attached as Exhibit C hereto shall be filed with the Certificate
of Merger and shall be the Certificate of Incorporation of the Surviving
Corporation after the Effective Date, and thereafter may be amended in
accordance with its terms and as provided by law and this Merger Agreement.
Section 3.2 By-Laws. The By-Laws of Sub as in effect on the
Effective Date shall be the By-Laws of the Surviving Corporation.
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Section 3.3 Board of Directors; Officers. (a) The directors of
Sub immediately prior to the Effective Date shall be the directors of the
Surviving Corporation until their successors are duly elected and qualified.
(b) The officers of the Company immediately prior to the
Effective Date shall be the officers of the Surviving Corporation until their
successors are duly elected and qualified.
Section 3.4 Effects of Merger. The Merger shall have the
effects set forth in Section 906 of the New York Business Corporation Law (the
'BCL').
ARTICLE IV
CONVERSION OF SHARES
Section 4.1 Merger Consideration. As of the Effective Date, by
virtue of the Merger and without any action on the part of any holder of Company
Common Stock:
(a) All shares of Company Common Stock which are held by the Company or
any subsidiary of the Company, and any shares of Company Common Stock owned
by Purchaser or Sub, shall be cancelled and no consideration shall be
delivered in exchange therefor.
(b) Each issued and outstanding share of the capital stock of Sub shall
be converted into and become one fully paid and nonassessable share of
Common Stock, without par value, of the Surviving Corporation.
(c) Subject to Section 4.4, each issued and outstanding share of
Company Common Stock (other than shares to be canceled in accordance with
Section 4.1(a)) shall be converted into the right to receive from the
Surviving Corporation in cash, without interest, the price per share of
Company Common Stock paid pursuant to the Offer (the 'Merger Price'). As of
the Effective Date, all such shares of Company Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Certificate (as defined in Section 4.2)
representing any such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive the Merger Price,
without interest.
Section 4.2 Surrender and Payment. (a) Prior to the Closing (as
defined in Section 4.7), the Purchaser shall appoint an agent (the 'Paying
Agent') for the purpose of paying the Merger Price in exchange for certificates
representing shares of Company Common Stock ('Certificates'). As soon as
practicable after the Effective Date, the Paying Agent shall send a notice and
transmittal form (which shall specify that delivery shall be
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effected, and risk of loss and title to Certificate(s) shall pass, only upon
delivery of such Certificate(s) to the Paying Agent and shall be in a form and
have such other provisions as Purchaser may reasonably specify) to each holder
of a Certificate(s) theretofore evidencing shares of Company Common Stock
outstanding immediately prior to the Effective Date, advising each such holder
of the effectiveness of the Merger and the procedure for surrendering to the
Paying Agent such Certificates for payment of the Merger Price.
(b) The Purchaser shall transmit, or shall cause the Surviving
Corporation to transmit, by wire, or other acceptable means to the Paying Agent
from time to time at and after the Effective Date, funds when and as required
for exchanges in accordance with this Merger Agreement. The Paying Agent shall
agree to deliver such funds (in the form of checks of the Paying Agent) in
accordance with this Section 4.2 and such additional terms as may be agreed upon
by the Paying Agent and the Purchaser. Any portion of such funds which has not
been paid pursuant to this Section 4.2 by six months after the Effective Date
shall promptly be paid to the Surviving Corporation, and thereafter any
stockholders of the Company who have not theretofore complied with this Section
4.2 shall look only to the Surviving Corporation for payment of the amount of
cash to which they are entitled in the Merger.
(c) Each holder of a Certificate(s) theretofore representing
shares of Company Common Stock which are converted into the right to receive the
Merger Price, upon surrender to the Paying Agent of such Certificate(s) for
cancellation, together with a duly completed transmittal form and such other
documents as may be reasonably requested by the Paying Agent, will be entitled
promptly to receive a check representing cash in the amount of the Merger Price
times the number of shares of Company Common Stock represented by such
Certificate(s) less any amount required to be withheld under applicable Federal
income tax regulations ('Backup Withholding') and such Certificate(s) so
surrendered shall forthwith be canceled.
(d) If payment of the Merger Price (or any portion thereof) is
to be made to a person other than the person in whose name the Certificate(s)
surrendered in exchange therefor is registered, it shall be a condition of such
payment that the Certificate(s) so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the person requesting
such payment shall pay to the Paying Agent any transfer or other taxes required
by reason of such payment, or shall establish to the satisfaction of the Paying
Agent that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto shall be liable to any
person claiming the right to receive the Merger Price for any cash delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificate(s) shall not have been surrendered prior to five
years after the Effective Date (or immediately prior to such earlier date on
which any payment pursuant to this Article IV
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would otherwise escheat to or become the property of any Federal, state or local
government agency or court, administrative agency or commission or other
governmental authority or agency, domestic or foreign (a 'Governmental Entity'),
the payment in respect of such Certificate(s) shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(e) In the event any Certificate(s) theretofore representing
shares of Company Common Stock to be exchanged for the Merger Price has been
lost, stolen or destroyed, the Paying Agent shall pay to the person claiming
that such Certificate(s) has been lost, stolen or destroyed the cash into which
the shares theretofore represented by such Certificate(s) have been converted as
provided under the terms of this Merger Agreement (less any required Backup
Withholding), upon receipt of evidence of ownership of such Certificate(s) and
appropriate indemnification in each case satisfactory to the Paying Agent.
(f) Until surrendered as contemplated by this Section 4.02,
each Certificate shall be deemed at any time after the Effective Date to
represent only the right to receive upon such surrender the amount of cash,
without interest, into which the shares of Company Common Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
4.1. No interest shall accrue or be paid on any portion of the Merger Price.
Section 4.3 Shareholders Meeting; Preparation of Proxy
Statement. (a) The Company will, at Purchaser's request, duly call, give notice
of, convene and hold a meeting of the holders of the Company Common Stock if
such meeting is required by applicable law for the purpose of approving this
Merger Agreement and the transactions contemplated by this Merger Agreement.
Subject to the provisions of Section 9.7(b), the Company will, through its Board
of Directors, recommend to its stockholders approval of this Merger Agreement,
the Merger and the other transactions contemplated by this Merger Agreement. At
the meeting, Purchaser shall cause all of the shares of the Company Common Stock
then actually or beneficially owned by Purchaser, Sub or any of their
subsidiaries to be voted in favor of the Merger. Notwithstanding the foregoing,
if Sub or any other subsidiary of Purchaser shall acquire at least 90% of the
outstanding shares of Company Common Stock, the parties shall, at the request of
Purchaser, take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after the expiration of the Offer and
the satisfaction of the conditions contained in Section 10.1 hereto without a
meeting in accordance with Section 905 of the BCL. Without limiting the
generality of the foregoing, the Company agrees that its obligations pursuant to
the first sentence of this Section shall not be affected by either the
commencement, public proposal, public disclosure or communication to the Company
of any Acquisition Proposal (as defined in Section 9.7(a)) or any change in the
recommendation of the Board
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of Directors of the Company approving the Offer, the Merger, this Merger
Agreement and the Stockholder Agreement.
(b) The Company will, at Purchaser's request, prepare and file
a preliminary Proxy Statement with the SEC and will use its best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy Statement
to be mailed to the Company's stockholders as promptly as practicable after
responding to all such comments to the satisfaction of the staff. The Company
will notify Purchaser promptly of the receipt of any comments from the SEC or
its staff and of any requests by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Purchaser with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. If at any time prior to the
meeting there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company will promptly prepare and mail to
its stockholders such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Purchaser
reasonably objects.
Section 4.4 Dissenting Shares. Sections 910 and 623 of the BCL
provide dissenter's rights in connection with the Merger to the stockholders of
the Company. Notwithstanding anything in this Merger Agreement to the contrary,
any issued and outstanding shares of Company Common Stock held by a person (a
'Dissenting Stockholder') who objects to the Merger and complies with all the
provisions of the BCL concerning the right of holders of Company Common Stock to
dissent from the Merger and require appraisal of their shares of Company Common
Stock ('Dissenting Shares') shall not be converted as described in Section
4.1(c) but shall become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to the laws of the
State of New York; provided, however, that the shares of Company Common Stock
outstanding immediately prior to the Effective Date and held by a Dissenting
Stockholder who shall, after the Effective Date, withdraw his demand for
appraisal or lose his right of appraisal, in either case pursuant to the BCL,
shall be deemed to be converted as of the Effective Date, into the right to
receive the Merger Price. The Company shall give Purchaser (i) prompt notice of
any demands for appraisal of shares of Company Common Stock received by the
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands. The Company shall not, without
the prior written consent of Purchaser make any payment with respect to, or
settle, offer to settle or otherwise negotiate, any such demands.
Section 4.5 Closing of the Company's Transfer Books. At the
Effective Date, each holder of a Certificate(s) theretofore representing shares
of Company Common Stock shall cease to have any rights as a stockholder of the
Company and shall not be deemed to be a stockholder of, or be entitled to any
rights of a stockholder with respect to, the Surviving
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Corporation but thereafter shall have only the rights set forth in Sections 4.1,
4.2, 4.3 and 4.4. At the Effective Date, the stock transfer books of the Company
shall be closed and no transfer of shares of Company Common Stock shall be made
thereafter. In the event that, after the Effective Date, Certificates are
presented to the Surviving Corporation, they shall be cancelled and exchanged
for cash as provided in Section 4.1.
Section 4.6 Assistance in Consummation of the Merger.
Purchaser, Sub and the Company shall provide all reasonable assistance to, and
shall cooperate with, each other to bring about the consummation of the Merger
as soon possible in accordance with the terms and conditions of this Merger
Agreement.
Section 4.7 Closing. The closing of the Merger (the 'Closing')
shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue,
New York, NY 10019, at 9:00 a.m. local time on a date to be specified by the
parties which, subject to the satisfaction of the conditions set forth in
Article X, shall be no later than the third business day after the day on which
the last of the conditions set forth in Article X is fulfilled or waived or at
such other time and place as Purchaser and the Company shall agree in writing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND SUB
Section 5.1 Representations and Warranties of the Purchaser and
Sub. The Purchaser and Sub represent and warrant to the Company that the
representations and warranties of Purchaser and Sub contained in this Merger
Agreement are correct and complete.
Section 5.2 Organization. Each of the Purchaser and Sub is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority to carry on its business as now being conducted.
Section 5.3 Capitalization of Sub. The entire authorized
capital stock of Sub consists of 1,000 shares of common stock, without par
value. All of the issued and outstanding capital stock of Sub has been duly
authorized and is validly issued, fully paid and nonassessable and is owned by
Purchaser.
Section 5.4 Authorization of Transaction. Each of Purchaser and
Sub has full power and authority (including full corporate power and authority)
to execute and deliver this Merger Agreement and to perform its obligations
hereunder. The execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated by this Merger
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Agreement have been duly authorized by all necessary corporate action on the
part of Purchaser and Sub. This Merger Agreement has been duly executed and
delivered by each of Purchaser and Sub and constitutes the valid and legally
binding obligation of Purchaser and Sub, enforceable in accordance with its
terms and conditions. Other than in connection with the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the 'HSR
Act'), the BCL, the Securities Exchange Act, the Securities Act of 1933, as
amended (the 'Securities Act'), and the state securities laws, neither Purchaser
nor Sub needs to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any Governmental Entity in order for the
parties to consummate the transactions contemplated by this Merger Agreement,
except to the extent such failure to give notice to file or to obtain any
authorization, consent or approval would not (i) materially impair the ability
of Purchaser or Sub to perform its obligations under this Merger Agreement or
(ii) prevent the consummation of the Offer, the Merger or the other transactions
contemplated by this Merger Agreement (a 'Purchaser Material Adverse Effect').
Section 5.5 Noncontravention. Neither the execution and the
delivery of this Merger Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with the provisions hereof will (a) violate
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any Governmental Entity to which Purchaser or
Sub is subject, (b) violate any provision of the charter or By-Laws of Purchaser
or Sub or (c) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, give rise to a material loss under or create in
any party a material benefit or the right to accelerate, terminate, modify, or
cancel, or require any notice under any contract, lease, sublease, license,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, security interest, or other obligation to which
Purchaser or Sub is a party or by which either is bound or to which any of its
assets is subject, except to the extent such violation, conflict, breach,
default, acceleration, loss, benefit, termination, modification, cancellation or
failure to give notice would not have a Purchaser Material Adverse Effect.
Section 5.6 Brokers' Fees. Neither Purchaser nor Sub has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Merger Agreement for
which any of the Company or its subsidiaries could become liable or obligated
prior to the consummation of the Merger.
Section 5.7 Disclosure. None of the information supplied or to
be supplied by Purchaser or Sub for inclusion or incorporation by reference in
the Offer Documents, the Schedule 14D-9, the Information Statement (as defined
in Section 6.25) or the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the
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Schedule 14D-9 and the Information Statement are filed with the SEC or first
published, sent or given to the Company's stockholders, or, in the case of the
Proxy Statement, at the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the meeting of the Company's
stockholders held to vote on approval and adoption of this Merger Agreement,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation or warranty is made by
Purchaser or Sub with respect to statements made or incorporated by reference
therein based on information supplied by the Company for inclusion or
incorporation by reference therein.
Section 5.8 Financing. The Purchaser will have, as of the date
of consummation of the Offer, cash, cash equivalent assets and/or financing in
an amount sufficient to consummate the Offer and the Merger, assuming the
conditions set forth in the commitment letter referred to in the next sentence
are satisfied. Purchaser has provided the Company with a commitment letter from
Chemical Bank dated October 20, 1994, as supplemented by a letter dated October
27, 1994, pursuant to which the Purchaser intends to obtain financing for the
consummation of the Offer and the Merger. Purchaser acknowledges that obtaining
the financing referred to in the commitment letter described in the preceding
sentence is not a condition to Purchaser's obligations under this Merger
Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 6.1 Representations and Warranties of the Company. The
Company represents and warrants to Purchaser and Sub that the representations
and warranties of the Company contained in this Merger Agreement are correct and
complete. The disclosure schedule delivered by the Company to Purchaser and Sub
concurrent with the execution of this Merger Agreement and which constitutes a
part of this Merger Agreement (the 'Disclosure Schedule') will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Article VI. For purposes of this Merger Agreement, the terms 'Material
Adverse Change' and 'Material Adverse Effect' mean any change, effect or
circumstance (or any development that, insofar as can reasonably be foreseen, is
likely to result in any change, effect or circumstance) that (i) is materially
adverse to the business, properties, assets, financial condition, results of
operations or prospects of the Company and its subsidiaries taken as a whole,
(ii) would materially impair the ability of the Company to perform its
obligations under this Merger Agreement or (iii) would prevent the consummation
of the Offer, the Merger or
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the other transactions contemplated by this Merger Agreement, provided, however,
that changes resulting from automotive industry conditions generally or general
economic conditions shall not constitute a Material Adverse Effect or a Material
Adverse Change. Any qualification to any representation or warranty of the
Company herein to the effect that any exception to such representation or
warranty has not, does not, or would not have a Material Adverse Effect shall be
deemed to mean that such exception, together with similar exceptions to all
other representations and warranties of the Company that are so qualified, has
not, does not, or would not have a Material Adverse Effect.
Section 6.2 Organization, Qualification, Corporate Power and
Subsidiaries. (a) Each of the Company and its subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Each of the Company and its subsidiaries is
duly authorized to conduct business and is in good standing under the laws of
each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification, except where the lack of
such qualification would not have a Material Adverse Effect. Each of the Company
and its subsidiaries has full corporate power and authority to carry on the
business in which it is engaged and to own and use the properties owned and used
by it.
(b) The Disclosure Schedule lists each subsidiary of the
Company. All the outstanding shares of capital stock of each such subsidiary
have been validly issued and are fully paid and nonassessable and, except as set
forth in the Disclosure Schedule, are owned by the Company, by another
subsidiary of the Company, by the Company and another subsidiary or by two
subsidiaries of the Company, all as set forth in the Disclosure Schedule, free
and clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, 'Liens'). Except for
the capital stock of its subsidiaries and except for the other ownership
interests set forth in the Disclosure Schedule, the Company does not own,
directly or indirectly, any capital stock or other ownership interest in any
corporation, partnership, joint venture or other entity.
Section 6.3 Capitalization. The entire authorized capital stock
of the Company consists of 2,700,000 shares of Company Common Stock. As of the
date of this Merger Agreement, 1,878,629 shares of Company Common Stock are
issued and outstanding and 821,371 shares of Company Common Stock are held by
the Company in its treasury. Of the shares of Company Common Stock held by the
Company in its treasury on the date of this Merger Agreement, 197,780 shares are
reserved for issuance upon the exercise of Stock Options (as defined in Section
9.3(c)) and 623,591 shares are reserved for issuance upon exercise by Purchaser
of the Option (as defined in Section 7.1). There are no authorized but unissued
shares of Company Common Stock. All of the issued and outstanding shares of
Company Common Stock and
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the shares of Company Common Stock which may be sold pursuant to the exercise of
Stock Options or the Option have been duly authorized and are (or, in the case
of shares which may be sold pursuant to the exercise of Stock Options or the
Option, will be when so sold) validly issued, fully paid, and nonassessable.
Except for the Option and grants of Stock Options under the 1990 Incentive Plan,
there are no outstanding or authorized options, warrants, rights, contracts,
calls, puts, rights to subscribe, conversion rights, or other agreements or
commitments to which the Company is a party or which are binding upon the
Company providing for the issuance, disposition, redemption, repurchase or
acquisition of any of its capital stock. Except for grants of SARs (as defined
in Section 9.3) under the 1990 Incentive Plan, there are no outstanding or
authorized stock appreciation, phantom stock, business performance units or
similar rights ('Stock Equivalents') with respect to the Company or any of its
subsidiaries.
Section 6.4 Authorization of Transaction. The Company has full
corporate power and authority to execute and deliver this Merger Agreement,
grant the Option and perform its obligations hereunder; provided, however, that
the Company cannot consummate the Merger unless and until it receives the
requisite Company stockholder approval under the BCL and the Company's
Certificate of Incorporation if such approval is required under the BCL. This
Merger Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms and conditions. To the
knowledge of the Company, other than in connection with the provisions of the
HSR Act, the BCL, the Securities Exchange Act, the Securities Act, and the state
securities laws, none of the Company and its subsidiaries needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Entity in order for the parties hereto to
consummate the transactions contemplated by this Merger Agreement, except to the
extent the failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a Material Adverse Effect.
Section 6.5 Noncontravention. Except as set forth on the
Disclosure Schedule, to the knowledge of the Company, neither the execution and
the delivery of this Merger Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with the provisions hereof, will (a) violate
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any Governmental Entity to which any of the
Company and its subsidiaries is subject, (b) violate any provision of the
charter or By-Laws of any of the Company or any of its subsidiaries or (c)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, give rise to a material loss under, create in any party a
material benefit under or the right to accelerate, terminate, modify, or cancel,
or require any notice under any contract, lease, sublease, license, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument
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of indebtedness, security interest, or other obligation to which any of the
Company and its subsidiaries is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any security interest
upon any of its assets) except to the extent the violation, conflict, breach,
default, acceleration, loss, benefit, termination, modification, cancellation or
failure to give notice would not have a Material Adverse Effect.
Section 6.6 Filings with the Securities and Exchange
Commission. The Company has made all filings with the SEC that it has been
required to make within the past three years under the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder (collectively
the 'Public Reports'). To the knowledge of the Company, each of the Public
Reports has complied with the Securities Act and the Exchange Act, respectively,
and the rules and regulations promulgated thereunder in all material respects.
None of the Public Reports, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Except to the extent that information
contained in any Public Report has been revised or superseded by a later-filed
Public Report, none of the Public Reports contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 6.7 Financial Statements. The Company has filed a
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1994
(the 'Most Recent Fiscal Quarter End'), and an Annual Report on Form 10-K for
the fiscal year ended December 31, 1993. The financial statements included in or
incorporated by reference into these Public Reports (including the related notes
and schedules) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby, and present fairly in all material respects the consolidated
financial condition of the Company and its subsidiaries as of the indicated
dates and the results of operations and cash flows of the Company and its
subsidiaries for the indicated periods; provided, however, that the interim
statements are subject to normal year-end adjustments.
Section 6.8 Undisclosed Liabilities; Aggregate Indebtedness;
Fees. (a) Except as set forth or referred to in the Public Reports or on the
Disclosure Schedule, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise), except for any liabilities or obligations (including any
liabilities or obligations that have arisen in the ordinary course of business)
which, individually or in the aggregate, have not had and would not have a
Material Adverse Effect.
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(b) The aggregate indebtedness of the Company and its
subsidiaries as of the date of this Merger Agreement does not and as of the
Effective Date will not exceed $53,000,000.
(c) Other than the fees, costs and expenses described in the
Disclosure Schedule, the aggregate fees, costs and expenses to be incurred by
the Company or any of its subsidiaries in connection with the Offer, the Merger,
and the other transactions contemplated by this Merger Agreement shall not
exceed $1,500,000 plus the fees and expenses payable to Goldman Sachs & Co.
pursuant to the agreement referred to in Section 6.15. The Disclosure Schedule
sets forth the calculation of the fee payable to Goldman, Sachs & Co. pursuant
to such agreement if the Offer and the Merger are consummated as provided
herein.
Section 6.9 Absence of Certain Changes. Except as disclosed in
the Public Reports or on the Disclosure Schedule, since December 31, 1993, the
Company and its subsidiaries have conducted their respective businesses in the
ordinary and usual course of such businesses and there has not been (i) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock, (ii) any change by the Company in accounting
principles, practices or methods (except as required by changes in generally
accepted accounting principles concurred in by the Company's independent
auditors), (iii) any split, combination or reclassification of any of the
Company Common Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of the
Company Common Stock, (iv) any granting by the Company or any of its
subsidiaries of any increase in compensation or in severance or termination pay,
except for (x) increases in the ordinary course of business consistent with
prior practice and (y) increases required under employment or severance
agreements listed in the Disclosure Schedule, (v) any entry (except as set forth
in the Disclosure Schedule) by the Company or any of its subsidiaries into any
employment, severance or termination agreement with any employee, (vi) any
damage, destruction or loss, whether or not covered by insurance, except for
such damage, destruction or loss that would not have a Material Adverse Effect
or (vii) any other changes which, individually or in the aggregate, have had a
Material Adverse Effect.
Section 6.10 Compliance with Laws. Except as disclosed in the
Public Reports or in the Disclosure Schedule or for matters relating to
Environmental Laws (as defined in Section 7.14), each of the Company and each
subsidiary has previously conducted and is conducting its respective business in
compliance with all applicable laws, regulations and requirements of each
jurisdiction in which such business is carried on, except for failures to comply
which individually or in the aggregate have not had and would not have a
Material Adverse Effect. Each of the Company and each subsidiary has all
approvals, consents, licenses, registrations and permits of Governmental
Entities necessary to carry on its business as presently conducted, except
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where the failure to have any such approvals, consents, licenses, registrations
and permits would not have a Material Adverse Effect, and no event has occurred
which would allow revocation or termination of, or would result in the
impairment of its rights with respect to, such approvals, consents, licenses,
registrations or permits, except to the extent such revocation, termination or
impairment has not had and would not have a Material Adverse Effect.
Section 6.11 Tax Returns and Audits.
(a) The Company and its subsidiaries have timely filed, or
timely requested an extension of, all Federal Income Tax Returns and all other
material returns, declarations, reports, estimates, information returns and
statements ('Returns') required to be filed or sent by them in respect of any
Taxes (as hereinafter defined). All such Returns were complete and correct in
all material respects at the time of filing.
(b) All Taxes required to be shown on such Returns (without
regard to extensions), and all material Taxes for which no return was required
to be filed, have been paid in full or adequate reserves have been made for any
such Taxes on the Company's balance sheet dated as of the Most Recent Fiscal
Quarter End included in the quarterly report on Form 10-Q filed by the Company
for the Most Recent Fiscal Quarter End.
(c) Except as set forth in the Disclosure Schedule, there are
no outstanding audit examinations, deficiencies or refund litigation with
respect to any Taxes of the Company or any subsidiary of the Company that are
not adequately reserved for in the Company's balance sheet dated as of the Most
Recent Fiscal Quarter End included in the Quarterly Report on Form 10-Q for the
Most Recent Fiscal Quarter End. All Taxes due with respect to completed and
settled examinations or concluded litigation relating to the Company have been
paid in full or adequate provision has been made for any such Taxes on the
Company's balance sheet (in accordance with generally accepted accounting
principles). The federal income Tax Returns of the Company and each of its
subsidiaries consolidated in such Returns have been examined by and settled with
the Internal Revenue Service for all taxable years through the taxable year
ending December 31, 1986.
For purposes of this Merger Agreement, 'Taxes' shall mean all
taxes, charges, fees, levies or other assessments, including without limitation
all net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding payroll, employment, excise, severance,
stamp, occupation, property or other taxes, customs, duties, fees, assessments
or charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any Federal, state, local,
foreign or other authority upon the Company or any subsidiary of the Company.
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(d) Except as set forth in the Disclosure Schedule, the
disallowance of a deduction under Section 162(m) of the Code for employee
remuneration will not apply to any amount paid or payable by the Company or any
of its subsidiaries under any Arrangement, Plan or Foreign Benefit Plan (as such
terms are defined in Section 6.13), or under any other contract, program or
understanding (including any employment, severance, or termination agreement)
currently in effect.
(e) Except as set forth in the Disclosure Schedule, any amount
or other entitlement that could be received (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this
Merger Agreement by any employee, officer or director of the Company or any of
its subsidiaries who is a 'disqualified individual' (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any Arrangement, Plan,
Foreign Benefit Plan, contract, program or understanding (including any
employment, severance or termination agreement) currently in effect would not be
characterized as an 'excess parachute payment' (as such term is defined in
Section 280G(b)(1) of the Code).
Section 6.12 Employee Relations. The Company has previously
made available to the Purchaser correct and complete copies of all labor and
collective bargaining agreements to which the Company or any subsidiary is a
party or by which any of them are bound. Except as set forth in the Disclosure
Schedule, no unfair labor practice charges, investigations or complaints are
pending or, to the knowledge of the Company, threatened against the Company or
any subsidiary. Except as set forth on the Disclosure Schedule, there has been
no strike, slowdown or work stoppage during the last five years and no strike,
slowdown, work stoppage or other labor controversy exists or, to the knowledge
of the Company, is threatened, except to the extent such strike, slowdown, work
stoppage or controversy has not had and would not have a Material Adverse
Effect.
Section 6.13 Employee Benefit Plans.
(a) Definitions. For purposes of this Section 6.13:
(i) Arrangements. The term 'Arrangement' means any
material written personnel policy (including, but not limited to, vacation time,
holiday pay, bonus programs, moving expense reimbursement programs and sick
leave), salary reduction agreement, change-in-control agreement, employment
agreement, stock option plan, consulting agreement or any other material written
benefit program, agreement or contract, other than a Plan or Foreign Benefit
Plan, (1) that currently is being maintained for current or former employees of
the Company, a subsidiary of the Company, or of any Control Group member or (2)
to which the Company, a subsidiary of the Company or any Control Group member
currently makes or is required to make contributions.
(ii) Foreign Benefit Plans. The term 'Foreign Benefit
Plans' means any pension, profit-sharing, stock bonus,
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supplemental retirement, retiring allowance, severance, deferred compensation,
stock purchase, payroll savings or supplementary unemployment benefit plan, any
life, health, insurance, dental, legal, disability, or welfare benefit plan,
program or arrangement and any personnel policy, salary reduction agreement,
change-in-control agreement, employment agreement, stock option plan or
consulting agreement, or any other plan, program, or arrangement, that is
maintained for current or former employees of the Company, a subsidiary of the
Company, or a Control Group member who are not employed in the United States.
(iii) Plan. The term 'Plan' means each employee
benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer
Plan and other than a Foreign Benefit Plan) (1) that currently is maintained for
current or former employees of the Company, a subsidiary of the Company or any
Control Group member or (2) to which the Company, a subsidiary of the Company,
or any Control Group member currently makes or is required to make
contributions.
(iv) Qualified Plan. The term 'Qualified Plan' means
any Plan that is an employee pension benefit plan as defined in Section 3(2) of
ERISA and that is intended to meet the qualification requirements of Section
401(a) of the Code.
(v) Title IV Plan. The term 'Title IV Plan' means any
Qualified Plan that is a defined benefit plan (as defined in Section 3(35) of
ERISA) and is subject to Title IV of ERISA.
(vi) Multiemployer Plan. The term 'Multiemployer
Plan' means any employee benefit plan that is a 'multiemployer plan' within the
meaning of Section 3(37) of ERISA and to which the Company, a subsidiary of the
Company or any Control Group member currently has or ever has had any obligation
to contribute.
(vii) Control Group. The term 'Control Group' means a
controlled group of persons that, together with the Company, is treated as a
single employer under Section 414(b), (c), (m), or (o) of the Code.
(viii) ERISA. The term 'ERISA' means the Employee
Retirement Income Security Act of 1974, as amended.
(ix) Code. The term 'Code' means the Internal Revenue
Code of 1986, as amended.
(x) PBGC. The term 'PBGC' means the Pension Benefit
Guaranty Corporation.
(b) Arrangements, Plans and Foreign Benefit Plans Listed. The
Disclosure Schedule sets forth a correct and complete list of all Plans that are
'pension benefit plans' as defined in Section 3(2) of ERISA; welfare benefit
plans as defined in Section 3(l) of ERISA providing medical, surgical or
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hospital care benefits or benefits in the event of sickness, accident,
disability, death or unemployment; all Foreign Benefit Plans; and all
Arrangements.
(c) Operations of Arrangements, Plans and Foreign Benefit
Plans. (i) Except as set forth in the Disclosure Schedule, each Arrangement,
Plan and Foreign Benefit Plan is being administered in material compliance with
its terms. Except as set forth in the Disclosure Schedule, to the knowledge of
the Company, (x) all the Plans, Foreign Benefit Plans and Arrangements thereof
are in compliance in all material respects with applicable provisions of ERISA,
the Code, and all other applicable Federal, state, county, municipal, local and
foreign laws, (y) all reports, returns and similar documents with respect to the
Plans, Foreign Benefit Plans and Arrangements required to be filed with any
Governmental Entity or distributed to any Plan, Foreign Benefit Plan or
Arrangement participant have been duly and timely filed or distributed and (z)
all reports, returns and similar documents actually filed or distributed were
true, complete and correct in all material respects. Except as set forth in the
Disclosure Schedule, all Plans that are welfare benefit plans may be amended or
terminated without material liability to the Company or any of its subsidiaries
at any time after the Effective Date.
(ii) Except as set forth in the Disclosure Schedule,
no action is pending or, to the knowledge of the Company, is threatened against
the Company, any subsidiary of the Company, any Control Group member, or any
fiduciary of an Arrangement or Plan, with respect to any Arrangement or Plan.
(iii) Except as set forth in the Disclosure Schedule,
neither the Company, nor any subsidiary of the Company, nor any other Control
Group member, nor any of their respective directors or their respective
employees, nor any fiduciary, has engaged in any transaction in violation of
Section 406(a) or (b) of ERISA or that is a 'prohibited transaction' (as defined
in Section 4975(c)(1) of the Code) for which no exemption exists under Section
408(b) of ERISA or Section 4975(d) of the Code or for which no administrative
exemption has been granted under Section 408(a) of ERISA that could subject the
Company, any subsidiary of the Company, or other Control Group member to a Tax
or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA
in an amount that would reasonably be likely to have a Material Adverse Effect.
Except as set forth in the Disclosure Schedule, no Plan has been terminated or
has been the subject of a 'reportable event' (as defined in Section 4043 of
ERISA and the regulations thereunder).
(iv) Except as set forth in the Disclosure Schedule,
no liability to the PBGC has been incurred or is expected to be incurred by the
Company, any subsidiary of the Company, or any other Control Group member with
respect to any Title IV Plan currently or formerly maintained by the Company,
any subsidiary of the Company, or any other Control Group member, other than
premium payment obligations. The PBGC has not
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instituted any proceedings, and there exists no event or condition that would
constitute grounds for institution of proceedings by the BGC, to terminate
any Title IV Plan under Sections 4042(a)(1), (2) or (3) of ERISA.
(v) Each Qualified Plan (together with its related
funding instrument) is intended to be qualified and tax exempt under Sections
401 and 501 of the Code and is the subject of a favorable Internal Revenue
Service determination with respect to such qualification and exemption;
provided, however, that no applications have yet been made for determinations
with respect to qualification under provisions of the Tax Reform Act of 1986 and
subsequent legislation. No such determination letter has been revoked, and, to
the knowledge of the Company, revocation has not been threatened; no event has
occurred and no circumstances exist that would reasonably be expected to
adversely affect the tax-qualification of such Qualified Plan; and such
Qualified Plan has not been amended since the effective date of its most recent
determination letter in any respect that might adversely affect its
qualification or require security under Section 307 of ERISA. No event has
occurred that could subject any Qualified Plan to Tax under Section 511 of the
Code.
(vi) To the knowledge of the Company and except as
set forth in the Disclosure Schedule, the Company has not received notice that
any material inquiry or investigation by the Department of Labor, the Internal
Revenue Service, or the PBGC (or any equivalent foreign authority) is pending
relating to any Plan, Foreign Benefit Plan or Arrangement, including any trust
related thereto or funding medium thereunder.
(vii) Except as set forth in the Disclosure Schedule
or as contemplated in this Merger Agreement, there are no Plans or Arrangements
to which the Company, any subsidiary of the Company, or any Control Group member
is a party or by which any of them is bound and under which, as a result of this
Merger Agreement or any transaction, contemplated by this Merger Agreement, any
director, officer, employee, or other agent of the Company, any subsidiary of
the Company, or any other Control Group member or any other party claiming
through such a person shall or may acquire rights with respect to any Plan or
Arrangement (including, without limitation, the creation, increase, or extension
of new or existing rights) that such person would not have acquired if this
Merger Agreement had not been signed or such transaction had not occurred, or
become entitled to a distribution or payment with respect to any Plan or
Arrangement at a date earlier than if this Merger Agreement had not been signed
or such transaction had not occurred.
(d) Arrangement, Plan and Foreign Benefit Plan Documents and
Records. The Company has provided or will undertake to provide complete copies
of the following documents, including all amendments thereto, with respect to
each Arrangement, Plan or Foreign Benefit Plan: (i) current Plan, Foreign
Benefit Plan or Arrangement documents, trust agreements, insurance contracts,
annuity contracts, funding agreements,
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summary plan descriptions, investment manager and investment adviser contracts
and to the extent applicable, Internal Revenue Service determination letters (or
equivalent foreign documentation), and (ii) to the extent applicable, the annual
actuarial reports as of January 1, 1991, January 1, 1992 and January 1, 1993,
and Annual Reports (Form 5500)(or equivalent foreign documentation) for the 1991
and 1992 plan years.
(e) Finances.
(i) Except as set forth in the Disclosure Schedule,
no Title IV Plan had an accumulated funding deficiency (as such term is defined
in Section 302 of ERISA) as of the last day of the most recent plan year of such
Plan ended prior to the date hereof. Except as set forth in the Disclosure
Schedule, as of the most recent valuation date for each Title IV Plan, there was
not any amount of 'unfunded benefit liabilities' (as defined in Section
4001(a)(18) of ERISA) under such Title IV Plan, and the Company is not aware of
any facts or circumstances that would materially change the funded status of any
such Title IV Plan.
(ii) All contributions payable to each Qualified Plan
that is not a Title IV Plan for all benefits earned and other liabilities
accrued through December 31, 1993, determined in accordance with the terms and
conditions of such Qualified Plan, ERISA and the Code, have been paid or
otherwise provided for. All such contributions to, and payments from, the
Qualified Plans, except those payments to be made from a trust qualified under
Section 401(a) of the Code, for any period ending before the Effective Date that
are not yet, but will be, required to be made, will be properly made up to and
including the Effective Date.
(iii) No waiver from the minimum funding standard
requirements of Section 302 of ERISA and Section 412 of the Code has been
obtained or applied for or is contemplated with respect to any Title IV Plan.
(f) Multiemployer Plans. Neither the Company, nor any
subsidiary of the Company, nor any Control Group member has had any obligation
to contribute to any Multiemployer Plan since January 1, 1980.
Section 6.14 Environmental Matters.
(a) Except as set forth on the Disclosure Schedule or in the
Public Reports, to the knowledge of the Company, the Company and each subsidiary
of the Company are in compliance with all applicable Federal, foreign, state and
local laws, rules and regulations, court and administrative orders, permits and
approvals relating to the release of chemicals, pollutants or contaminants
(collectively, 'Environmental Laws'), except for such non-compliance as has not
and would not in the aggregate be reasonably likely to have a Material Adverse
Effect. Environmental Laws include, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act
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('CERCLA'), the Resource Conservation and Recovery Act ('RCRA'), the Clean Air
Act, the Clean Water Act, the Toxic Substances Control Act, the Emergency
Planning and Community Right-to-Know Act of 1986, the Occupational Safety and
Health Act, the Safe Drinking Water Act, together with all rules and regulations
promulgated thereunder and any similar state, local or foreign laws, rules and
regulations.
(b) Except as set forth on the Disclosure Schedule, to the
knowledge of the Company, neither the Company nor any subsidiary of the Company
has received any claim, demand, notice, complaint, court order, administrative
order or request for information from any Governmental Entity or private party
in the past five years alleging violation of, or asserting any non-compliance
with or liability under or potential liability under or exceedance under, any
Environmental Laws by it.
(c) Except as set forth on the Disclosure Schedule, to the
knowledge of the Company, each of the Company and each subsidiary of the Company
possesses all material permits, licenses, orders, consents and approvals of
Governmental Entities required under all Environmental Laws and necessary to the
ownership of the properties, and to the conduct of the business of the Company
and each of its subsidiaries (collectively 'Environmental Permits'), and the
consummation of the Offer and the Merger will not result in any loss or
revocation of or limitation on any such Environmental Permit.
(d) Except as set forth on the Disclosure Schedule, to the
knowledge of the Company, (i) neither the Company nor any subsidiary of the
Company has transported, or arranged for the transportation of, any Hazardous
Materials to any site which is the subject of Federal, foreign, state or local
environmental enforcement actions, or other governmental environmental
investigations about which the Company has been notified in writing, and (ii)
except in accordance with applicable law, neither the Company nor any subsidiary
of the Company nor any other party has treated, stored for more than 90 days,
disposed of or recycled any Hazardous Materials on any real property owned,
leased or operated by the Company or any subsidiary of the Company at any time,
except in the case of clauses (i) and (ii) above for such transportation,
arrangement for transportation, release, treatment, storage, disposal or
recycling as has not and would not in the aggregate would be reasonably likely
to have a Material Adverse Effect.
(e) Except as set forth on the Disclosure Schedule, to the
knowledge of the Company, there has been no release, as defined in Environmental
Laws, of Hazardous Materials at, on, under or adjacent to any property currently
or formerly owned, leased or operated by the Company or any of its subsidiaries
that, individually or in the aggregate, would be reasonably likely to have a
Material Adverse Effect.
For purposes of this Section 6.14, 'Hazardous Materials' are
any materials containing any (i) 'hazardous
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substances' as defined by CERCLA or any similar applicable state or foreign law,
(ii) petroleum, including crude oil or any fraction thereof, (iii) natural gas,
natural gas liquids or synthetic gas usable fuel, and (iv) asbestos,
polychlorinated biphenyls ('PCBs') or isomers of dioxin.
(f) The Disclosure Schedule identifies all environmental
audits, assessments or studies within the possession of the Company or any
subsidiary of the Company with respect to the facilities or real property owned,
leased or operated by the Company or any subsidiary of the Company, which were
conducted within the last five years. The Company has previously furnished to
Purchaser complete and correct copies of all such audits, assessments and
studies.
Section 6.15 Broker's Fees. None of the Company and its
subsidiaries has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Merger Agreement except for the fees of Goldman, Sachs & Co. provided for
in an agreement between the Company and Goldman, Sachs & Co. dated June 27,
1994, a complete and correct copy of which has been delivered to Purchaser.
Section 6.16 Takeover Provisions Inapplicable. As of the date
hereof and at all times on or prior to the Effective Date, Section 912 of the
BCL is, and shall be, inapplicable to the Offer, Merger and the transactions
contemplated by this Merger Agreement. The Board of Directors of the Company, at
a meeting duly called and held, has by the vote required by applicable law, (a)
taken any necessary steps to render Section 912 of the BCL inapplicable to the
Offer, the Merger and the transactions contemplated by this Merger Agreement and
(b) adopted a resolution having the effect of causing the Company not to be
subject, to the extent permitted by applicable law, to any state takeover law
that may purport to be applicable to the Offer, the Merger and the transactions
contemplated by this Merger Agreement.
Section 6.17. Voting Requirements. The affirmative vote of the
holders of two-thirds of the outstanding shares of Company Common Stock
approving this Merger Agreement is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve this Merger
Agreement, and the transactions contemplated by this Merger Agreement.
Section 6.18. Opinion of Financial Advisor. The Company has
received the opinion of Goldman, Sachs & Co., to the effect that, as of the date
of this Merger Agreement, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair to the Company's stockholders from
a financial point of view, subject to only customary qualifications.
Section 6.19. Contracts; Debt Instruments. (a) Set forth in the
Disclosure Schedule is (i) a list of all loan or
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credit agreements, notes, bonds, mortgages, indentures and other agreements and
instruments pursuant to which any indebtedness of the Company or any of its
subsidiaries in an aggregate principal amount in excess of $500,000 is
outstanding or may be incurred, indicating the respective principal amounts
outstanding thereunder as of September 30, 1994, (ii) a list of all leases or
similar agreements under which (A) the Company or any of its subsidiaries is a
lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible
personal property owned by a third party or (B) the Company or any of its
subsidiaries is a lessor or sublessor of, or makes available for use by any
third party, any tangible personal property owned or leased by the Company or
any of its subsidiaries, in each such case which has an aggregate future
liability in excess of $100,000 and is not terminable by notice of not more than
60 days for a cost of less than $100,000, (iii) a list of all employment,
severance, consulting, indemnification, change of control and other compensation
contracts between the Company or any of its subsidiaries and any current or
former director, officer or employee thereof, (iv) all agreements of the Company
or any of its subsidiaries containing an unexpired covenant not to compete or
similar restriction applying to the Company or any of its subsidiaries, (v) any
interest rate, currency or commodity hedging, swap or similar derivative
transaction, (vi) all agreements (other than purchase orders obtained by the
Company or any of its subsidiaries in the ordinary course of business) between
the Company or any of its subsidiaries and customers in the original equipment
market, (vii) all other material agreements between the Company and its
subsidiaries and any customers with respect to price concessions, price rebates,
repricing or similar arrangements and (viii) all agreements of the Company or
any of its subsidiaries to sell any material assets of the Company or any such
subsidiary (other than inventory sold in the ordinary course) or to acquire any
material assets (other than raw materials purchased in the ordinary course of
business or the capital expenditures and customer rebillable tooling set forth
in the Disclosure Schedule).
(b) Except as set forth in the Disclosure Schedule, each of the
agreements listed in the Disclosure Schedule is a valid and binding obligation
of the Company or its subsidiary, as the case may be, and, to the Company's
knowledge, of each other party thereto, and each such agreement is in full force
and effect and is enforceable by the Company or its subsidiary in accordance
with its terms. There are no existing defaults (or circumstances or events that,
with the giving of notice or lapse of time or both would become defaults) of the
Company or any of its subsidiaries (or, to the knowledge of the Company, any
other party thereto) under any of the agreements listed in the Disclosure
Schedule except for defaults that have not and would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 6.20. Litigation. Except as disclosed in the Disclosure
Schedule, there is no suit, action, investigation or proceeding pending or, to
the knowledge of the Company,
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threatened against the Company or any of its subsidiaries or directly affecting
the business of the Company or any of its subsidiaries (and the Company is not
aware of any fact or circumstance that is reasonably likely to result in any
such suit, action or proceeding), except for such suits, actions, investigations
and proceedings, which, individually or in the aggregate, would not, if decided
adversely to the Company or any its subsidiaries, have a Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any of its
subsidiaries except such as do not and would not have a Material Adverse Effect.
Section 6.21 Title to Properties. (i) Except as set forth in
the Disclosure Schedule, each of the Company and each of its subsidiaries has
good and marketable title to, or valid leasehold interests in, all its
properties and assets except for such as are no longer used or useful in the
conduct of its businesses or as have been disposed of for fair value in the
ordinary course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in the
aggregate, do not and will not materially interfere with its ability to conduct
its business as currently conducted. All such assets and properties, other than
assets and properties in which the Company or any of its subsidiaries has
leasehold interests, are free and clear of all Liens other than those set forth
in the Disclosure Schedule and except for Liens that, in the aggregate, do not
and will not materially interfere with the ability of the Company and its
subsidiaries to conduct business as currently conducted.
(ii) Except as set forth in the Disclosure Schedule, each of
the Company and each of its subsidiaries has complied in all material respects
with the terms of all material leases to which it is a party, and all such
leases are in full force and effect. Each of the Company and each of its
subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
Section 6.22 Intellectual Property. To the knowledge of the
executive officers of the Company, the Company and its subsidiaries own, or are
valid licensees of or otherwise have the right to use, all patents, patent
rights, patent applications, inventions, designs, trademarks, trademark rights,
trademark applications, trade names, trade name rights, service marks, service
mark rights, service mark applications, copyrights and other proprietary
intellectual property rights and computer programs (collectively, 'Intellectual
Property Rights') which are material to the conduct of the business of the
Company and its subsidiaries taken as a whole, free and clear of all Liens,
except for those set forth in the Disclosure Schedule.
Section 6.23. Insurance. The Company and its Subsidiaries have
obtained and maintained in full force and effect, insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms and
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covering such risks, including fire and other risks insured against by extended
coverage, as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated or otherwise required by law, and
each has maintained in full force and effect public liability insurance,
insurance against claims for personal injury or death or property damage
occurring in connection with any of activities of the Company or its
subsidiaries or any of any properties owned, occupied or controlled by the
Company or its subsidiaries, in such amount as reasonably deemed necessary by
the Company or its Subsidiaries.
Section 6.24. Disclosure. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in the
Offer Documents, the Schedule 14D-9, the information statement to be filed by
the Company in connection with the Offer pursuant to Rule 14f-1 promulgated
under the Exchange Act (the 'Information Statement') or the Proxy Statement,
will, in the case of the Offer Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents, the Schedule 14D-9 and
the Information Statement are filed with the SEC or first published, sent or
given to the Company's stockholders, or, in the case of the Proxy Statement, at
the time the Proxy Statement is first mailed to the Company's stockholders or at
the time of the meeting of the Company's stockholders held to vote on approval
and adoption of this Merger Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Schedule 14D-9, the
Information Statement and the Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied by Purchaser or Sub for inclusion or incorporation
by reference therein.
ARTICLE VII
CONTINGENT OPTION OF PURCHASER
Section 7.1. Grant of Option. The Company hereby grants to the
Purchaser an irrevocable option (the 'Option') to purchase for a price of $85.00
per share (the 'Per Share Price') in cash a number of shares of Company Common
Stock (the 'Optioned Shares') equal to the Applicable Amount. The 'Applicable
Amount' shall be the number of shares of Company Common Stock which, when added
to the number of shares of Company Common Stock owned by the Purchaser and Sub
immediately prior to its exercise of the Option, would result in Purchaser
owning immediately after its exercise of the Option 90% of the then outstanding
shares of Company Common Stock; provided that such number shall not exceed all
shares of Company Common Stock held by Company in its
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treasury. The Purchaser may exercise the Option only if at the time of exercise,
it (x) shall have accepted shares of Company Common Stock for payment pursuant
to the Offer and (y) shall own at least two-thirds of the number of shares of
Company Common Stock then outstanding. The Option shall expire if not exercised
prior to the earlier of the Effective Date and 12:00 midnight, Eastern time, on
the date 15 business days after termination of the Offer.
Section 7.2. Exercise of Option. Provided that the conditions
to exercise of the Option set forth in Section 7.1 are satisfied, the Purchaser
may exercise the Option only in whole at any time prior to the expiration of the
Option. In the event that the Purchaser wishes to exercise the Option, the
Purchaser shall give written notice (the date of such notice being herein called
the 'Notice Date') to the Company specifying the number of Optioned Shares it
will purchase pursuant to such exercise and a place and date (not later than ten
business days from the Notice Date) for the closing of such purchase.
Section 7.3. Payment of Purchase Price and Delivery of
Certificates for Optioned Shares. At any closing hereunder, (a) the Purchaser
will make payment to the Company of the full purchase price for the Optioned
Shares in New York Clearing House funds by certified or official bank check
payable to the order to Company, in an amount equal to the product of the Per
Share Price multiplied by the number of Optioned Shares being purchased at such
closing and (b) the Company will deliver to the Purchaser a duly executed
certificate or certificates representing the number of Optioned Shares so
purchased, registered in the name of the Purchaser or its nominee in the
denominations designated by the Purchaser in its notice of exercise.
Section 7.4. Securities Act. The Purchaser represents that any
Optioned Shares purchased by the Purchaser will be acquired for investment only
and not with a view to any public distribution thereof and the Purchaser will
not offer to sell or otherwise dispose of any Optioned Shares so acquired by it
in violation of the registration requirements of the Securities Act. The
certificate(s) representing the shares acquired pursuant to the exercise of the
Option will bear a legend indicating that such shares of Company Common Stock
were sold without registration under the Securities Act.
Section 7.5. Adjustment upon Changes in Capitalization. In the
event of any change in the number of outstanding shares of Company Common Stock
by reason of any stock dividend, stock split, recapitalization, combination,
exchange of shares, merger, consolidation, reorganization or the like or any
other change in the corporate or capital structure of the Company that would
have the effect of diluting the Purchaser's rights hereunder, the number of
Optioned Shares and the Per Share Price shall be adjusted appropriately so as to
restore the Purchaser to its rights hereunder with respect to the Option;
provided, however, that nothing in this Section 7.5 shall be construed as
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permitting the Company to take any action or enter into any transaction
prohibited by this Merger Agreement.
ARTICLE VIII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 8.1 Conduct of Business by the Company Pending the
Merger. Prior to the Effective Date, unless Purchaser shall otherwise agree in
writing:
(a) the Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as
heretofore conducted, and shall, and shall cause its subsidiaries
to, use their best efforts to preserve intact their present
business organizations, keep available the services of their
present officers and employees and preserve their relationships
with customers, suppliers and others having business dealings with
them;
(b) except as required by this Merger Agreement, the
Company shall not, shall not permit any of its subsidiaries to, and
shall not propose to, (i) sell or pledge or agree to sell or pledge
any capital stock owned by it in any of its subsidiaries, (ii)
amend its Certificate of Incorporation or By-Laws, (iii) split,
combine or reclassify its outstanding capital stock or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital
stock of the Company, or declare, set aside or pay any dividend or
other distribution payable in cash, stock or property, (iv)
directly or indirectly redeem, purchase or otherwise acquire or
agree to redeem, purchase or otherwise acquire any shares of
Company Common Stock, any shares of capital stock of any of the
Company's subsidiaries or any other rights, interests or securities
of the Company or any of its subsidiaries or any rights, warrants
or options to acquire any such shares or other securities; (v)
issue, deliver or sell or agree to issue, deliver or sell any
additional shares of, or rights of any kind to acquire any shares
of, its capital stock of any class, or any option, rights or
warrants to acquire, or securities convertible into, shares of
capital stock other than issuance of Company Common Stock pursuant
to the exercise of the Option or Stock Options outstanding on the
date hereof and disclosed on the Disclosure Schedule, (vi) acquire,
lease or dispose or agree to acquire, lease or dispose of any
capital assets or any other assets other than sales of inventory in
the ordinary course of business consistent with past practice,
(vii) incur additional indebtedness or
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encumber or grant a security interest in any asset or enter into
any other material transaction other than short-term borrowings in
the ordinary course of business consistent with past practice which
do not result in the aggregate indebtedness of the Company and its
subsidiaries exceeding $53,000,000, (viii) make any loans or
advances to any person (other than customary travel or other
allowances to employees consistent with past practice), (ix)
terminate, alter or amend any of the agreements listed in Section
6.19 of the Disclosure Schedule or enter into any agreement which
would be required to be disclosed pursuant to such Section if
entered into on or prior to the date of this Merger Agreement, (x)
acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in, or substantial assets
of, or by any other manner, any person, (xi) make or agree to make
any new capital expenditure or expenditures which, individually, is
in excess of $100,000 or, in the aggregate, are in excess of
$2,000,000, (xii) make or agree to make any investment in
securities other than investments in investment grade debt
securities with a maturity of less than one year in an aggregate
amount of less than $1,000,000, (xiii) make any Tax election or
settle or compromise any Tax liability, (xiv) pay, discharge or
satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements
(or the notes thereto) of the Company included in the Public
Reports or incurred in the ordinary course of business consistent
with past practice, (xv) waive the benefits of, or agree to modify
in any manner, any confidentiality, standstill or similar agreement
to which the Company or any of its subsidiaries is a party, (xvi)
take or omit to take any action which would cause any of the
representations or warranties of the Company to become untrue, or
(xvii) authorize, commit or agree to take any of, the foregoing
actions.
(d) except as set forth on the Disclosure Schedule or
as required to comply with applicable law, the Company shall not,
nor shall it permit, any of its subsidiaries to, (i) adopt, enter
into, terminate or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or other benefit plan, agreement, trust,
fund or other arrangement for the benefit or welfare of any
director, officer or current or former employee, (ii) increase in
any manner the compensation or fringe benefit of, or pay any bonus
to, any director, officer or employee
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(except for normal increases or bonuses in the ordinary course of
business consistent with past practice to employees other than
directors, officers or senior management personnel and that, in the
aggregate, do not result in a material increase in benefits or
compensation expense to the Company and its subsidiaries relative
to the level in effect prior to such action (but in no event shall
the aggregate amount of all such increases exceed 5% of the
aggregate annualized compensation expense of the Company and its
subsidiaries reported in the most recent audited financial
statements of the Company included in the Public Reports)), (iii)
pay any benefit not provided for under any Arrangement, Plan or
Foreign Benefit Plan, (iv) except as permitted in clause (ii),
grant any awards under any bonus, incentive, performance or other
compensation plan or arrangement or benefit plan (including,
without limitation, the grant of stock options, stock appreciation
rights, stock based or stock related awards, performance units or
restricted stock, or the removal of existing restrictions in any
benefit plans or agreements or awards made thereunder), (v) take
any action to fund or in any other way secure the payment of
compensation or benefits under any employee plan, agreement,
contract or arrangement or benefit plan other than in the ordinary
course of business consistent with past practice, or (vi)
authorize, commit or agree to take, any of the foregoing actions.
ARTICLE IX
ADDITIONAL AGREEMENTS
Section 9.1 Access and Information. The Company and its
subsidiaries shall afford to Purchaser and Purchaser's accountants, counsel and
other representatives full access during normal business hours (and at such
other times as the parties may mutually agree) throughout the period prior to
the Effective Date, to all of its properties, books, contracts, commitments,
records, personnel and representatives, accountants and agents (including the
persons responsible for the preparation of Returns) and, during such period, the
Company shall, and shall cause each of its subsidiaries to, furnish promptly to
the Purchaser (a) a copy of each report, schedule and other document filed or
received by it pursuant to the requirements of federal or state securities laws,
and (b) all other information concerning its business, properties and personnel
as the Purchaser may reasonably request. Purchaser and Sub shall hold, and shall
cause their respective employees and agents to hold, in confidence all such
information in accordance with the terms of the Confidentiality Agreement
between the Company and Purchaser dated August 17, 1994.
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Section 9.2 Filings. Purchaser, Sub and the Company shall make
all necessary filings with respect to the Offer and the Merger under the
Securities Act and the Exchange Act and the rules and regulations thereunder,
under applicable Blue Sky or similar securities laws and under other applicable
state or foreign securities laws, rules and regulations and shall use all
reasonable efforts to obtain required approvals and clearances with respect
thereto.
Section 9.3 Employee Arrangements. (a) After the date of
consummation of the Offer, Purchaser shall not take any action that would cause
the Company not to honor in accordance with their terms, all employment,
severance, consulting, indemnification, change of control and other compensation
contracts between the Company or any of its subsidiaries and any current or
former director, officer or employee thereof listed in the Disclosure Schedule.
(b) After the Effective Date, Purchaser intends to cause the
Surviving Corporation to provide generally to the officers and employees of the
Surviving Corporation and its subsidiaries employee benefits, including, without
limitation, pension benefits, health and welfare benefits, and severance
arrangements that are in the aggregate comparable to the benefits currently
provided by the Company to such employees or to the benefits currently provided
by Purchaser to similarly situated employees of Purchaser.
(c) On or before the date of this Merger Agreement, the Board
of Directors of the Company (or, if appropriate, any committee administering the
Stock Option Plans (as defined below)) has adopted such resolutions or taken
such other actions as are required to provide that (i) each outstanding stock
option to purchase shares of Company Common Stock (a 'Stock Option') heretofore
granted under any stock option, stock appreciation rights or stock purchase
plan, program or arrangement of the Company (collectively, the 'Stock Option
Plans') outstanding immediately prior to the consummation of the Offer, whether
or not then exercisable, shall be cancelled immediately prior to the
consummation of the Offer in exchange for an amount in cash, payable at the time
of such cancellation, equal to the product of (y) the number of shares of
Company Common Stock subject to such Stock Option immediately prior to the date
of consummation of the Offer and (z) the excess of the price per share to be
paid in the Offer over the per share exercise price of such Stock Option and
(ii) each stock appreciation right ('SAR') granted under the Stock Option Plans
outstanding immediately prior to the date of consummation of the Offer shall be
cancelled immediately prior to the date of consummation of the Offer in exchange
for an amount of cash, payable at the time of such cancellation, equal to the
product of (y) the number of shares of Company Common Stock covered by such SAR
and (z) the excess of the price per share to be paid in the Offer over the
appreciation base per share of such SAR; provided, however, that no such cash
payment shall be made with respect to any SAR which is related to a Stock Option
with respect to which such a cash payment has been made. Any Stock
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Option or SAR not cancelled in accordance with this paragraph (c) immediately
prior to the date of consummation of the Offer, shall be cancelled at the
Effective Date in exchange for an amount in cash, payable at the Effective Date,
equal to the amount which would have been paid had such Stock Option or SAR been
cancelled immediately prior to the consummation of the Offer. A listing of all
outstanding Stock Options and SARs specifying the date such Stock Options or
SARs become exercisable (and the date upon which they expire) and their exercise
price and appreciation base, respectively, is set forth on the Disclosure
Schedule. In the event that the Company does not have sufficient cash available
to make payments in exchange of any Stock Option or SAR, Purchaser will, when
and only if the Offer is consummated, make available to the Company cash
sufficient to make such purchases.
(d) All Stock Option Plans shall terminate as of the Effective
Date and the provisions in any other benefit plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall be deleted as of the Effective Date,
and the Company shall ensure that following the Effective Date no holder of a
Stock Option or any participant in any Stock Option Plan shall have any right
thereunder to acquire any capital stock of the Company, Purchaser or Sub, except
as provided in Section 9.3(c). The Disclosure Schedule sets forth a mathematical
formula for determining the cost to the Company of the cancellation of
outstanding Stock Options and SARs provided for in this Section 9.3 and also
contains the Company's best estimate of the fees and expenses that will be
incurred by the Company in connection with the Merger.
Section 9.4 Indemnification. (a) Purchaser agrees that all
rights to indemnification existing in favor of the directors, officers or
employees of the Company (the 'Indemnified Parties') as provided in the
Company's Certificate of Incorporation, By-Laws or indemnification agreements
listed in the Disclosure Schedule that the Company has entered into with
directors and officers of the Company and its subsidiaries, as in effect as of
the date hereof, with respect to matters occurring through the Effective Date,
shall survive the Merger and shall continue in full force and effect for a
period of not less than six years from the Effective Date. Purchaser agrees to
cause the Surviving Corporation to maintain in effect for not less than three
years after the Effective Date the current policies of directors' and officers'
liability insurance maintained by the Company with respect to matters occurring
prior to the Effective Date for all persons who are directors or officers of the
Company or any of its subsidiaries on the date hereof; provided, however, that
(i) Purchaser may substitute therefor policies of at least the same coverage
(with carriers comparable to the Company's existing carriers) containing terms
and conditions which are no less advantageous to the Indemnified Parties and
(ii) Purchaser shall not be required to pay an annual premium for such insurance
in excess of two (2) times the last annual premium paid prior to the date
hereof, but in such case shall purchase as much coverage as possible for such
amount. The Company represents to Purchaser
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that the last annual premium paid prior to the date hereof for such insurance
does not exceed $300,000.
(b) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated by this Merger
Agreement is commenced, whether before or after the Effective Date, the parties
hereto agree to cooperate and use their respective reasonable efforts to
vigorously defend against and respond thereto.
Section 9.5 HSR Act; Other Action. The Company, Sub and
Purchaser shall (a) use their best efforts to file as soon as practicable
notifications under the HSR Act in connection with the Merger and the other
transactions contemplated hereby, and to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission (the 'FTC') and the
Antitrust Division of the Department of Justice (the 'Antitrust Division') for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters and
(b) use their best efforts to promptly take, or cause to be taken, all other
action and do, or cause to be done, all other things necessary, proper or
appropriate under applicable laws and regulations to consummate and make
effective in the most expeditious manner possible, the Offer, the Merger and the
transactions contemplated by this Merger Agreement as soon as practicable
including, without limitation, (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Merger Agreement or the consummation of any of the transactions
contemplated by this Merger Agreement, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Merger Agreement; provided, however, that
a party shall not be obligated to take any action pursuant to the foregoing if
the taking of such action or the obtaining of any waiver, consent, approval or
exemption is reasonably likely (x) to be materially burdensome to such party and
its subsidiaries taken as a whole or to impact in a materially adverse manner
the economic or business benefits of the transactions contemplated by this
Merger Agreement so as to render inadvisable the consummation of the
transactions contemplated by this Merger Agreement or (y) to result in the
imposition of a condition or restriction of the type described in paragraph (a)
of Exhibit A hereto. In connection with and without limiting the foregoing, the
Company and its Board of
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Directors shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the Offer,
the Merger, this Merger Agreement or any of the other transactions contemplated
by this Merger Agreement, (ii) if any state takeover statute or similar statute
or regulation becomes applicable to the Offer, the Merger, this Merger Agreement
or any other transaction contemplated by this Merger Agreement, take all action
necessary to ensure that the Offer, the Merger and the other transactions
contemplated by this Merger Agreement may be consummated as promptly as
practicable on the terms contemplated by this Merger Agreement and otherwise to
minimize the effect of such statute or regulation on the Offer, the Merger and
the other transactions contemplated by this Merger Agreement and (iii) cooperate
with Purchaser and Sub in obtaining the Financing and fulfilling their
obligations under the commitment letter described in Section 5.8.
Section 9.6 Additional Agreements. The Company shall give
prompt notice to Purchaser, and Purchaser or Sub shall give prompt notice to the
Company, of (i) any representation or warranty made by it contained in this
Merger Agreement becoming untrue or inaccurate in any respect (including in the
case of representations or warranties by the Company, the Company or the
Purchaser receiving knowledge of any fact, event or circumstance which may cause
any representation qualified as to the knowledge of the Company to be or become
untrue or inaccurate in any respect) or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Merger Agreement; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Merger Agreement. The Company acknowledges that if after
the date of this Merger Agreement the Company or the Purchaser receives
knowledge of any fact, event or circumstance that would cause any representation
or warranty that is conditioned as to the knowledge of the Company to be or
become untrue or inaccurate in any respect, the receipt of such knowledge shall
constitute a breach of the representation or warranty that is so conditioned as
of the date of such receipt.
Section 9.7 No Solicitation. (a) Neither the Company nor any of
its subsidiaries shall, directly or indirectly, take (nor shall the Company
authorize or permit its subsidiaries, officers, directors, employees,
representatives, investment bankers, attorneys, accountants or other agents or
affiliates, to take) any action to (i) encourage, solicit or initiate the
submission of any Acquisition Proposal (as defined below), (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) participate in
discussions or negotiations with, or furnish any information to, any person in
connection with any Acquisition Proposal; provided, that, to the extent required
by the fiduciary obligations of the Board of Directors of the Company (as
determined in good faith by the Board of Directors of the Company based on the
written advice of Jaeckle, Fleischmann & Mugel), upon receipt of (x) an
unsolicited and
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written Superior Proposal (as defined in Section 9.7(b)) or (y) an unsolicited
and written Potential Superior Proposal, in either case from a Third Party not
referred to in the agreement specified in Section 6.15 and with which the
Company shall not have entered into a confidentiality agreement with respect to
a potential Acquisition Proposal since November 1, 1993, the Company may (1)
take the action referred to in clause (ii) with respect to such Superior
Proposal or Potential Superior Proposal but only in connection with a
simultaneous termination of this Merger Agreement in accordance with Section
11.1(f), and (2) take any of the actions referred to in clause (iii) with
respect to such Superior Proposal or Potential Superior Proposal. A Potential
Superior Proposal shall mean a proposal that a majority of the disinterested
members of the Board of Directors of the Company determines in its good faith
judgment to be reasonably likely to lead to a Superior Proposal. 'Acquisition
Proposal' shall mean, except for the transactions contemplated by this Merger
Agreement, any proposed (i) merger, consolidation or similar transaction
involving the Company, (ii) sale, lease or other disposition directly or
indirectly by merger, consolidation, share exchange or otherwise of assets of
the Company or its subsidiaries representing 10% or more of the consolidated
assets of the Company and its subsidiaries, (iii) issue, sale or other
disposition of (including by way of merger, consolidation, share exchange or any
similar transaction) securities (or options, rights or warrants to purchase, or
securities convertible into, such securities) representing 10% or more of the
voting power of the Company or (iv) transaction in which any person shall
acquire beneficial ownership (as such term is defined in Rule 13d-3 under the
Exchange Act), or the right to acquire beneficial ownership or any 'group' (as
such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of 10% or
more of the outstanding Company Common Stock. The Company shall notify Purchaser
promptly of any Acquisition Proposal and shall provide Purchaser all available
information with respect thereto.
(b) The provisions of Section 9.7(a) shall not be deemed to
prohibit the Board of Directors of the Company, prior to the consummation of the
Offer, from withdrawing or modifying its approval or recommendation of the
Offer, this Merger Agreement, the Stockholder Agreement or the Merger if a
Superior Proposal is made, provided that (i) such action is required by the
fiduciary obligations of the Board of Directors of the Company as determined in
good faith by a majority of the disinterested members thereof, taking into
account (x) the financial and other terms and conditions of the Superior
Proposal and (y) the time period within which the transactions contemplated by
such Superior Proposal can be consummated and (ii) the Board of Directors of the
Company shall have received the written opinion of Jaeckle, Fleischmann & Mugel
to the effect that such action is required by the fiduciary obligations of the
Board of Directors of the Company. For purposes of this Merger Agreement,
'Superior Proposal' means a bona fide proposal made by a Third Party to acquire
all the outstanding Company Common Stock or all or substantially all the assets
of the Company pursuant to
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a tender or exchange offer, a merger or otherwise on terms which a majority of
the disinterested members of the Board of Directors of the Company determine in
its good faith judgment to be financially superior to the Company's stockholders
than the Offer and the Merger (based on a valuation letter of Goldman, Sachs &
Co. stating that, as of the date of withdrawal or modification of the approval
or recommendation of the Offer and the Merger by the Board of Directors of the
Company, the value of the consideration provided for in such proposal exceeds
the value of the consideration provided for in the Offer and the Merger, which
valuation letter shall be prepared specifically for use by the Company's Board
of Directors under this Section 9.7(b)). For purposes of this Merger Agreement,
'Third Party' shall mean any corporation, partnership, person or other entity or
'group' (as defined in Section 13(d)(3) of the Exchange Act) other than
Purchaser, any affiliate of Purchaser or any of their respective directors,
trustees, officers, employees, representatives and agents or any entity
controlled by one or more such persons. No withdrawal or modification by the
Board of Directors of the Company of its approval or recommendation of the
Offer, this Merger Agreement, the Stockholder Agreement or the Merger pursuant
to the foregoing provisions of this Section 9.7(b) shall affect any of the
Company's obligations under this Merger Agreement, and notwithstanding any such
withdrawal or modification, the Company shall continue to be obligated to carry
out the provisions of this Merger Agreement, including, without limitation, the
provisions of Section 9.5 hereof.
(c) The Company shall pay to Purchaser upon demand an amount in
cash equal to $7,000,000 (the 'Termination Fee') if (i) the Company terminates
this Merger Agreement pursuant to Section 11.1(f) or (ii) Purchaser or Sub
terminates this Merger Agreement pursuant to Section 11.1(e).
Section 9.8 Directors. Promptly upon the acceptance for payment
of, and payment for, any shares of Company Common Stock by Sub validly tendered
and not withdrawn pursuant to the Offer, all of the present directors of the
Company shall resign, the number of directors on the Board of Directors shall be
reduced to five (5) and Sub shall be entitled to designate replacement directors
on the Board of Directors of the Company such that Sub, subject to compliance
with Section 14(f) of the Exchange Act, will control a majority of such
directors, and the Company and its Board of Directors of the Company shall take
all such action needed to cause Sub's designees to be appointed to the Company's
Board of Directors. Subject to applicable law, the Company shall take all action
requested by Purchaser necessary to effect any such election, including mailing
to its shareholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company agrees to make such mailing with the mailing of the
Schedule 14D-9.
Section 9.9 Opinion. Within three days of the date of this Merger
Agreement, the Company shall provide to Purchaser a signed
37
<PAGE>
copy of the written opinion of Goldman Sachs & Co. referred to in Section 6.18.
ARTICLE X
CONDITIONS PRECEDENT
Section 10.1 Conditions Precedent to the Obligations of Each
Party If the Offer is Consummated. If the Offer is consummated, the obligations
of Company, Sub and Purchaser to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Date of the following conditions:
(a) If approval of this Merger Agreement by Company
stockholders is required by law, the holders of the shares of capital stock of
the Company and the Sub entitled to vote thereon shall have duly approved this
Merger Agreement and the transactions contemplated hereby, all in accordance
with the requirements of the BCL and the respective Certificates of
Incorporation and By-Laws of the Company and Sub.
(b) No temporary restraining order, preliminary or permanent
injunction or other order by any court of competent jurisdiction or other legal
restraint which prohibits the consummation of the transactions contemplated by
this Merger Agreement shall have been issued; provided, however, that the
parties shall have used all reasonable efforts to have such order or injunction
vacated or reversed.
(c) The waiting period (and any extension thereof) as
prescribed by the regulations promulgated under the HSR Act shall have expired
or shall have been terminated.
Section 10.2. Additional Conditions Precedent to the Obligations of
Purchaser and Sub If the Offer is not Consummated. (a) The obligations of
Purchaser and Sub to effect the Merger in the event that the Offer is not
consummated and this Merger Agreement shall not have been terminated in
accordance with its terms shall be subject to (i) the conditions specified in
Sections 10.1(a) and 10.1(c) and (ii) the following further conditions:
(A) there shall not be threatened or pending by any
Governmental Entity or any other person any suit, action or proceeding
(in the case of a suit, action or proceeding by a person other than a
Governmental Entity, such suit action or proceeding having a reasonable
likelihood of success), (1) challenging the acquisition by Purchaser or
Sub of any shares of Company Common Stock, seeking to restrain or
prohibit the consummation of the Merger or any of the other
transactions contemplated by this Merger Agreement, or seeking to
obtain from the Company, Purchaser or Sub any damages that are material
in relation to the Company and its subsidiaries taken as a whole, (2)
seeking to prohibit or limit the ownership or operation by the Company,
Purchaser or any of their respective subsidiaries of a material portion
of the business or assets of the Company and its
38
<PAGE>
subsidiaries, taken as a whole, or Purchaser and its subsidiaries,
taken as a whole, or to compel the Company or Purchaser to dispose of
or hold separate any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or Purchaser and its
subsidiaries, taken as a whole, as a result of the Offer, the Merger or
any of the other transactions contemplated by this Merger Agreement,
(3) seeking to impose material limitations on the ability of Purchaser
or Sub to acquire or hold, or exercise full rights of ownership of, any
shares of Company Common Stock including, without limitation, the right
to vote such Company Common Stock on all matters properly presented to
the stockholders of the Company, (4) seeking to prohibit Purchaser or
any of its subsidiaries from effectively controlling in any material
respect the business or operations of the Company or any of its
subsidiaries, or (5) which otherwise is reasonably likely to have a
Material Adverse Effect;
(B) there shall not be any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction threatened,
proposed, sought, enacted, entered, enforced, promulgated or deemed
applicable to (1) the Purchaser, the Company, or any of their
respective subsidiaries or (2) the Merger, or any other action shall be
taken by any Governmental Entity, other than the application to the
Offer or the Merger of applicable waiting periods under the HSR Act,
that is reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (1) through (5) of paragraph
(A) above;
(C) there shall not have occurred any Material Adverse Change;
(D) (1) the Board of Directors of the Company or any committee
thereof shall not have withdrawn or modified in a manner adverse to
Purchaser or Sub its approval or recommendation of the Offer, the
Merger or this Merger Agreement;
(E) there shall have not occurred (1) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States that continues for a period of two days (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index) or (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States.
(F) all of the representations and warranties of the Company
set forth in this Merger Agreement shall be true and correct as of the
date of the Merger Agreement and as of the Effective Date, taking into
account in accordance with Section 6.1 any materiality qualifications
contained in such representations and warranties (except to the extent
such
39
<PAGE>
representations and warranties expressly relate to an earlier date);
and
(G) the Company shall not have failed to perform in any
material respect any obligation or to comply in any material respect
with any agreement or covenant of the Company to be performed or
complied with by it under this Merger Agreement.
(b) The obligation of the Company to effect the Merger if the
Offer is not consummated shall be subject to the fulfillment at or prior to the
Effective Date of all of the conditions set forth in Section 10.1.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1 Termination. This Merger Agreement may be
terminated at any time prior to the Effective Date, whether before or after
approval by the shareholders of the Company:
(a) by mutual written consent of the Board of Directors of
Purchaser and the Board of Directors of the Company;
(b) by either Purchaser or the Company if the Offer shall not
have been consummated on or before April 30, 1995 (provided the terminating
party is not otherwise in breach of its representations, warranties or
obligations under this Merger Agreement; and provided further that the Company
may not terminate this Merger Agreement pursuant to this Section 11.1(b) if at
any time (x) any of the conditions described in paragraph (d) of Exhibit A
hereto shall have occurred or (y) any Acquisition Proposal shall have been
publicly announced or otherwise been made publicly known);
(c) by the Company if any of the conditions specified in
Section 10.1 have not been met or waived by the Company at such time as such
condition is no longer capable of satisfaction as long as the Company is not in
breach of this Merger Agreement;
(d) by Purchaser if any of the conditions specified in Article
X have not been met or waived by Purchaser at such time as such condition is no
longer capable of satisfaction as long as the Purchaser is not in breach of this
Merger Agreement;
(e) by Purchaser or Sub if either Purchaser or Sub is entitled
to terminate the Offer as a result of the occurrence of any event described in
paragraph (d) of Exhibit A to this Merger Agreement;
(f) by the Company if all of the following conditions are
satisfied: (i) prior to the consummation of the Offer, the Company or its Board
of Directors shall have received a Superior Proposal from a Third Party, which
Third Party (x) is not
40
<PAGE>
referred to in the agreement specified in Section 6.15 and (y) shall not have
entered into a confidentiality agreement with the Company with respect to a
potential Acquisition Proposal since November 1, 1993, (ii) the Board of
Directors of the Company shall have received the written opinion of Jaeckle,
Fleischmann & Mugel to the effect that the fiduciary obligations of the Board of
Directors require that the Company terminate this Merger Agreement and enter
into an agreement with respect to the Superior Proposal, (iii) the Board of
Directors of the Company shall have resolved to enter into definitive
documentation with respect to the Superior Proposal within 48 hours of the
termination of this Merger Agreement and (iv) the Company shall have paid to
Purchaser an amount in cash equal to the Termination Fee; and
(g) by the Company if Chemical Bank shall not have informed the
Purchaser in writing (with a copy to be delivered by the Purchaser to the
Company) that its counsel has received and reviewed to their satisfaction
documentation relating to environmental, litigation, tax and capital structure
matters relating to the Company and its subsidiaries on or before 9:00 a.m.,
Eastern Standard Time, on November 10, 1994.
Section 11.2 Effect of Termination. In the event of termination
of this Merger Agreement by either Purchaser or the Company, as provided above,
this Merger Agreement shall forthwith become void and (except for the willful
breach of this Merger Agreement by any party hereto) there shall be no liability
on the part of either the Company, Purchaser or Sub or their respective officers
or directors; provided that the last sentence of Section 9.1 and Sections 5.6,
6.15, 9.7(c), 11.2, 12.3 and 12.7 shall survive the termination.
Section 11.3 Amendment. This Merger Agreement may be amended by
the parties hereto, at any time before or after any required approval of matters
presented in connection with the Merger by the stockholders of the Company;
provided, however, that after any such approval, there shall not be made any
amendment that by law requires further approval by such stockholders without the
further approval of such stockholders; and provided further, however that
following the consummation of the Offer, the provisions of Sections 9.3 and 9.4
may not be amended in any manner adverse to the directors, officers or employees
referred to therein.
Section 11.4 Waiver. At any time prior to the Effective Date,
the parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
documents delivered pursuant hereto, and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Merger Agreement to assert any of its rights under this Merger
41
<PAGE>
Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE XII
GENERAL PROVISIONS
Section 12.1 Non-Survival of Representations, Warranties and
Agreements. Only those agreements and covenants of the parties which by their
express terms apply in whole or in part after the Effective Date (including,
inter alia, the agreements and covenants expressed in Article III and Sections
9.1, 9.3 and 9.4 and this Section 12.1) shall survive the Effective Date. All
other representations, warranties, agreements and covenants shall expire at the
Effective Date.
Section 12.2 Notices. All notices or other communications under
this Merger Agreement shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, telex or other standard form of telecommunications, or by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Company:
Trico Products Corporation
817 Washington Street
Buffalo, New York 14203
Attention: Richard L. Wolf
Chairman of the Board of
Directors, President, and
Chief Executive Officer
Fax No.: (716) 857-3092
With a copy to:
Jaeckle, Fleischmann & Mugel
800 Fleet Bank Building
Twelve Fountain Plaza
Buffalo, New York 14202
Attention: Albert R. Mugel, Esq.
Joseph P. Kubarek, Esq.
Fax No.: (716) 856-0432
If to Purchaser or Sub:
Stant Corporation
425 Commerce Drive
Richmond, Indiana 47374
Attention: Anthony Graziano, Esq.
Fax No.: 317-962-6866
42
<PAGE>
With a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Timothy G. Massad, Esq.
Fax No.: 212-474-3700
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
Section 12.3 Fees and Expenses. Subject to Section 9.7(c),
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Merger Agreement and the transactions contemplated by this
Merger Agreement shall be paid by the party incurring such expenses.
Section 12.4 Publicity. So long as this Merger Agreement is in
effect, Purchaser, Sub and the Company agree to consult with each other in
issuing any press release or otherwise making any public statement with respect
to the Offer, the Merger and the transactions contemplated by this Merger
Agreement, and none of them shall issue any press release or make any public
statement prior to such consultation, except as may be required by law or by
obligations pursuant to any listing agreement with any national securities
exchange. The commencement of litigation relating to this Merger Agreement or
the transactions contemplated hereby or any proceedings in connection therewith
shall not be deemed a violation of this Section 12.4.
Section 12.5 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Merger Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Merger
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Section 12.6 Interpretation; Definitions. When a reference is
made in this Merger Agreement to a 'subsidiary' of Purchaser or the Company, the
word subsidiary means a corporation, partnership, joint venture, association,
trust, unincorporated organization or other entity, an amount of the voting
ownership or voting partnership interests of which sufficient to elect at least
a majority of its Board of Directors or other governing body (or, if there are
no such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by the Company or Purchaser, as the case may be. For
purposes of this Merger Agreement, the term 'person' shall mean an individual,
corporation, partnership, joint venture, association, trust, unincorporated
organization or other entity and the term 'indebtedness' shall mean, with
respect to any person, without duplication, (A) all obligations of such
43
<PAGE>
person for borrowed money, or with respect to deposits or advances of any kind,
(B) all obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (C) all obligations of such person upon which interest
charges are customarily paid (other than trade payables incurred in the ordinary
course of business), (D) all obligations of such person under conditional sale
or other title retention agreements relating to property purchased by such
person, (E) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding obligations of such person to
creditors for raw materials, inventory, services and supplies incurred in the
ordinary course of such person's business) (F) all lease obligations of such
person capitalized on the books and records of such person, (G) all obligations
of others secured by any lien on property or assets owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (H)
all obligations of such person under interest rate, or currency or commodity
hedging, swap or similar derivative transactions (valued at the termination
value thereof), (I) all letters of credit issued for the account of such person
(excluding letters of credit issued for the benefit of suppliers to support
accounts payable to suppliers incurred in the ordinary course of business) and
(J) all guarantees and arrangements having the economic effect of a guarantee of
such person of any indebtedness of any other person.
Section 12.7 Miscellaneous. This Merger Agreement (including
the documents and instruments referred to herein) (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof (other than as provided in the Confidentiality Agreement between
Purchaser and the Company dated August 17, 1994), (b) is not intended to confer
upon any other person any rights or remedies hereunder, (c) shall not be
assigned by operation of law or otherwise, and (d) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of New York (without giving effect to the provisions thereof relating to
conflicts of law). The headings contained in this Merger Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Merger Agreement. This Merger Agreement may be executed
in two or more counterparts which together shall constitute a single agreement.
44
<PAGE>
IN WITNESS WHEREOF, Purchaser, Sub the Company have caused this
Merger Agreement to be signed by their respective officers thereunder duly
authorized all as of the date first written above.
STANT CORPORATION,
By: /s/ Thomas F. Plocinik
Name: Thomas F. Plocinik
Title: Senior Vice President-Finance
STANT EXPANSION CORPORATION,
By: /s/ Thomas F. Plocinik
Name: Thomas F. Plocinik
Title: Vice President and Treasurer
TRICO PRODUCTS CORPORATION,
By: /s/ Christopher T. Dunstan
Name: Christopher T. Dunstan
Title: Vice Chairman, Senior
Vice President and
Chief Financial Officer
45
<PAGE>
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Merger
Agreement, Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-l(c) under the
Exchange Act (relating to Sub's obligation to pay for or return tendered shares
of Company Common Stock after the termination or withdrawal of the Offer), to
pay for any shares of Company Common Stock tendered pursuant to the Offer
unless, (i) there shall have been validly tendered and not withdrawn prior to
the expiration of the Offer such number of shares of Company Common Stock which
would constitute two-thirds of the outstanding shares of Company Common Stock
(the 'Minimum Condition') and (ii) any waiting period under the HSR Act
applicable to the purchase of shares of Company Common Stock pursuant to the
Offer shall have expired or been terminated (the 'HSR Condition'). Furthermore,
notwithstanding any other term of the Offer or this Merger Agreement, Sub shall
not be required to accept for payment or, subject as aforesaid, to pay for any
shares of Company Common Stock not theretofore accepted for payment or paid for,
and may terminate the Offer if, at any time on or after the date of this Merger
Agreement and before the acceptance of such shares for payment or the payment
therefor, any of the following conditions exist (other than as a result of any
action or inaction of Purchaser or any of its subsidiaries which constitutes a
breach of this Merger Agreement):
(a) there shall be threatened or pending by any Governmental
Entity or any other person any suit, action or proceeding (in the case of a
suit, action or proceeding by a person other than a Governmental Entity, such
suit action or proceeding having a reasonable likelihood of success), (i)
challenging the acquisition by Purchaser or Sub of any shares of Company Common
Stock under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or any of the other transactions
contemplated by this Merger Agreement, or seeking to obtain from the Company,
Purchaser or Sub any damages that are material in relation to the Company and
its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Purchaser or any of their respective
subsidiaries of a material portion of the business or assets of the Company and
its subsidiaries, taken as
A-1
<PAGE>
a whole, or Purchaser and its subsidiaries, taken as a whole, or to compel the
Company or Purchaser to dispose of or hold separate any material portion of the
business or assets of the Company and its subsidiaries, taken as a whole, or
Purchaser and its subsidiaries, taken as a whole, as a result of the Offer, the
Merger or any of the other transactions contemplated by this Merger Agreement,
(iii) seeking to impose material limitations on the ability of Purchaser or Sub
to acquire or hold, or exercise full rights of ownership of, any shares of
Company Common Stock accepted for payment pursuant to the Offer including,
without limitation, the right to vote such Company Common Stock on all matters
properly presented to the stockholders of the Company, (iv) seeking to prohibit
Purchaser or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company or of its
subsidiaries, or (v) which otherwise is reasonably likely to have a Material
Adverse Effect;
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction threatened, proposed, sought,
enacted, entered, enforced, promulgated or deemed applicable to (i) the
Purchaser, the Company, or any of their respective subsidiaries or (ii) the
Offer or the Merger, or any other action shall be taken by any Governmental
Entity, other than the application to the Offer or the Merger of applicable
waiting periods under the HSR Act, that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) through (v)
of paragraph (a) above;
(c) there shall have occurred any Material Adverse Change;
(d) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser or Sub
its approval or recommendation of the Offer, the Merger or this Merger
Agreement;
(e) 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 in the United States that continues
for a period of two days (excluding any coordinated trading halt triggered
solely as a result of a specified decrease in a market index) and (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States;
(f) any of the representations and warranties of the Company set
forth in this Merger Agreement shall not be true and correct as of the date of
the Merger Agreement and as of any time
A-2
<PAGE>
thereafter through the time of the acceptance of shares of Company Common Stock
or the time of payment therefor pursuant to the Offer as if made as of such
time, taking into account in accordance with Section 6.1 any materiality
qualifications contained in such representations and warranties (except to the
extent such representations and warranties expressly relate to an earlier date);
(g) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any agreement
or covenant of the Company to be performed or complied with by it under this
Merger Agreement; or
(h) the Merger Agreement shall have been terminated in
accordance with its terms.
The foregoing conditions are for the sole benefit of Sub and
Purchaser and may, subject to the terms of the Merger Agreement, be waived by
Sub and Purchaser in whole or in part at any time and from time to time in their
sole discretion. The failure by Purchaser or Sub 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 and circumstances and each
such right shall be deemed an ongoing right that may be asserted at any time and
from time to time.
A-3
<PAGE>
EXHIBIT B
CERTAIN SHAREHOLDERS
<TABLE>
<CAPTION>
Stockholder Number of
Stockholder Shares
<S> <C> <C> <C>
1. JOHN R. OISHEI, APPRECIATION CHARITABLE TRUST 319,260
2. JULIA R. & ESTELLE L. FOUNDATION INCORPORATED 150,924
3. MR. RUPERT WARREN, individually and as trustee 144,112
</TABLE>
B-1
<PAGE>
EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
TRICO PRODUCTS CORPORATION
Under Section 402 of the Business Corporation Law
The undersigned, of the age of eighteen years or over, for the
purpose of forming a corporation pursuant to Section 402 of the Business
Corporation Law, does hereby certify:
FIRST: The name of the Corporation is 'TRICO PRODUCTS
CORPORATION', hereinafter referred to as the 'Corporation'.
SECOND: The purposes for which the Corporation is formed is to
engage in any lawful act or activity for which corporations may be organized
under the Business Corporation Law, provided that the corporation is not formed
to engage in any act or activity which requires the consent or approval of any
state official, department, board, agency or other body, without such consent or
approval first being obtained.
THIRD: The capital of the Corporation shall be at least equal to
the sum of the aggregate amount of consideration received by the Corporation for
the issuance of shares without par value, plus such amounts as from time to time
by resolution of the Board of Directors may be transferred thereto.
C-1
<PAGE>
FOURTH: The total number of shares which the Corporation is
authorized to issue is 1,000 shares, all of which are to be common shares
without par value.
FIFTH: The Secretary of State is designated as the agent of the
corporation upon whom process against the corporation may be served. The post
office address to which the Secretary of State shall mail a copy of any process
against the corporation served upon him is: c/o C T Corporation System, 1633
Broadway, New York, New York 10019.
SIXTH: The name and address of the registered agent which is to
be the agent of the corporation upon whom process against it may be served, is C
T CORPORATION SYSTEM, 1633 Broadway, New York, New York 10019.
SEVENTH: The office of the Corporation shall be located in
Buffalo, New York.
EIGHTH: The duration of the Corporation is to be perpetual.
NINTH: The number of directors of the Corporation is to be three
(3).
TENTH: The directors of the Corporation need not be stockholders
therein, unless the By-laws shall so require. The Board of Directors shall have
power to hold its meetings in the
C-2
<PAGE>
State of New York, or outside the State of New York, in such places as from time
to time may be designated by the By-laws, or by resolution of the Board of
Directors. No contract or other transaction of the Corporation shall be affected
by the fact that any of the directors of the Corporation are in any way
interested in, or connected with, any other party to such contract or
transaction, or are themselves parties to such contract or transaction.
ELEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision herein contained, in the manner now or hereafter
prescribed by law, and all rights conferred on stockholders hereunder are
granted subject to this provision.
TWELFTH: To the fullest extent permitted by the New York Business
Corporation Law, as the same exists on the date of the adoption of this
Certificate or to such greater extent permitted by any amendment of such law, a
director of the Corporation shall not be liable to the Corporation or its
stockholders for damages for any breach of duty as a director. No amendment or
repeal of this paragraph or adoption of any provision inconsistent herewith
shall have any effect on the liability of any director of the Corporation with
respect to any act or omission as a director occurring prior to the amendment,
repeal or adoption.
C-3
<PAGE>
CONFORMED COPY
AGREEMENT dated as of November 8, 1994 (this
'Agreement'), among STANT CORPORATION, a Delaware corporation
('Purchaser'), STANT EXPANSION CORPORATION, a New York
corporation and a wholly owned subsidiary of Purchaser
('Sub'), JOHN R. OISHEI APPRECIATION CHARITABLE TRUST
('Oishei'), THE JULIA R. & ESTELLE L. FOUNDATION INCORPORATED
('Foundation') and MR. RUPERT WARREN ('Warren') (Oishei,
Foundation and Warren being collectively referred to herein
as the 'Stockholders', each individually being a
'Stockholder').
WHEREAS, Purchaser, Sub, and Trico Products Corporation, a New
York corporation (the 'Company'), propose to enter into an Agreement and Plan of
Merger dated as of the date hereof (the 'Merger Agreement'), which provides,
among other things, that Sub shall make the Offer (as defined in the Merger
Agreement) to purchase all of the issued and outstanding shares of the Company's
Common Stock, no par value (the 'Company Common Stock'), and shall merge with
and into the Company (the 'Merger'), upon the terms and subject to the
conditions set forth in the Merger Agreement (any term used herein without
definition shall have the definition ascribed thereto in the Merger Agreement);
WHEREAS, the Stockholders collectively own 614,296 shares of
Company Common Stock (such shares of Company Common Stock being collectively
referred to herein as the 'Stockholder Shares') and each Stockholder owns the
number of Stockholder Shares set forth in Schedule I hereto and;
WHEREAS, as a condition to the willingness of Purchaser and Sub
to enter into the Merger Agreement, and as an inducement to them to do so, the
Stockholders have agreed for the benefit of Purchaser and Sub to tender the
Stockholder Shares and any other shares of Company Common Stock at any time
during the term of this Agreement held by the Stockholders, pursuant to the
Offer, to vote all the Stockholder Shares and any other shares of Company Common
Stock owned by the Stockholders in favor of the Merger, and to grant to Sub an
option to acquire all Stockholder Shares and all other shares of Company Common
Stock owned by the Stockholders under certain circumstances, all on the terms
and conditions contained in this Agreement; and
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement the parties
hereby agree as follows:
<PAGE>
ARTICLE I
Tender Offer and Option
SECTION 1.01. Tender of Shares. (a) Within five business days
of the commencement by Sub of the Offer, each Stockholder shall tender to the
Depository designated in the Offer to Purchase (the 'Offer to Purchase')
distributed by Sub in connection with the Offer (i) a letter of transmittal with
respect to the Stockholder Shares and any other shares of Company Common Stock
held by such Stockholder (whether or not currently held by such Stockholder; the
Stockholder Shares and all other shares owned by any Stockholder being
collectively referred to herein as the 'Shares'), complying with the terms of
the Offer to Purchase, (ii) the certificates representing the Shares and (iii)
all other documents or instruments required to be delivered pursuant to the
terms of the Offer to Purchase.
(b) No Stockholder shall, subject to applicable law, withdraw
the tender effected in accordance with Section 1.01(a); provided, however, that
(i) a Stockholder may decline to tender, or may withdraw, any and all Shares
owned by such Stockholder if (A) the amount or form of consideration to be paid
for such Shares is less than $85.00 per share in cash, net to such Stockholder
(the 'Purchase Price') or (B) the Merger Agreement is terminated in accordance
with its terms and (ii) Each Stockholder shall give Sub at least three business
days' prior notice of any withdrawal of Shares owned by such Stockholder.
SECTION 1.02. Option. (a) The Stockholders hereby irrevocably
grant Sub an option (the 'Option'), exercisable only upon the events and subject
to the conditions set forth herein, to purchase all of the Shares at a purchase
price per share equal to the Purchase Price.
(b) Subject to the conditions set forth in Section 1.03, Sub
may exercise the Option in whole as to all Shares at any time prior to the date
60 days after the expiration or termination of the Offer if (x) any Stockholder
fails to comply with any of its obligations under this Agreement or withdraws
the tender of the Shares except under the circumstances set forth in the proviso
to Section 1.01(b) (but the Option shall not limit any other right or remedy
available to Purchaser or Sub against any Stockholder for breach of this
Agreement) or (y) the Offer is not consummated because of the existence of any
of the conditions to the Offer set forth in Exhibit A to the Merger Agreement
(other than as a result of any action or inaction of Purchaser or Sub which
constitutes a breach of the Merger Agreement) and (1) the Board of Directors of
the Company or any committee thereof shall have withdrawn or modified in a
manner adverse to Purchaser or Sub its approval or recommendation of the Offer,
the Merger, the Merger Agreement or this Agreement or
2
<PAGE>
(2) there shall have been publicly announced or otherwise publicly disclosed any
Acquisition Proposal. Upon the occurrence of any of such circumstances, Sub
shall be entitled to exercise the Option and (subject to Section 1.03) Sub shall
be entitled to purchase the Shares and the Stockholders shall sell the Shares to
Sub. Sub shall exercise the Option by delivering written notice thereof to each
Stockholder, specifying the date, time and place for the closing of such
purchase. The closing of the purchase of Shares pursuant to this Section 1.02
(the 'Closing') shall take place on the date, at the time and at the place
specified in such notice; provided, that if at such date any of the conditions
specified in Section 1.03 shall not have been satisfied (or waived), Sub may
postpone the Closing until a date within five business days after such
conditions are satisfied.
(c) At the Closing, each Stockholder will deliver to Sub (in
accordance with Sub's instructions) the certificates representing the Shares
owned by such Stockholder and being purchased pursuant to Section 1.02(c), duly
endorsed or accompanied by stock powers duly executed in blank. At such Closing,
Sub shall deliver to each Stockholder a certified or bank cashier's check
payable to or upon the order of each Stockholder in an amount equal to the
number of Shares being purchased from such Stockholder at such Closing
multiplied by the Purchase Price.
(d) The Option will terminate upon termination of the Merger
Agreement.
SECTION 1.03. Conditions to Option. The obligation of Sub to
purchase the Shares at the Closing is subject to the following conditions:
(a) all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and regulations promulgated
thereunder, (the 'HSR Act') applicable to such purchase shall have
expired or been terminated; and
(b) there shall be no preliminary or permanent injunction or
other order, decree or ruling issued by any Governmental Entity, nor
any statute, rule, regulation or order promulgated or enacted by any
Governmental Entity prohibiting, or otherwise restraining, such
purchase.
SECTION 1.04. No Purchase. Sub may allow the Offer to expire without
accepting for payment or paying for any Shares, on the terms and conditions set
forth in the Offer to Purchase, and may allow the Option to expire without
exercising the Option and purchasing all or any Shares pursuant to such
exercise. If any Shares are not accepted for payment in accordance with the
terms of the Offer to Purchase or pursuant to the exercise of the
3
<PAGE>
Option, they shall be returned to the applicable Stockholder, whereupon they
shall continue to be held by such Stockholder subject to the terms and
conditions of this Agreement.
ARTICLE II
Consent and Voting
Each Stockholder hereby revokes any and all previous proxies
granted with respect to the Shares owned by such Stockholder. By entering into
this Agreement, each Stockholder hereby consents to the Merger Agreement and the
transactions contemplated thereby, including the Merger. So long as the Merger
Agreement is in effect, each Stockholder hereby agrees (i) to vote all Shares
now or hereafter owned by such Stockholder in favor of the Merger Agreement, the
Merger and the transactions contemplated thereby and (ii) to oppose any
Acquisition Proposal and to vote all Shares now or hereafter owned by such
Stockholder against any Acquisition Proposal.
ARTICLE III
Representations, Warranties and Covenants
of Stockholders
Each Stockholder represents, warrants and covenants to
Purchaser and the Sub that:
SECTION 3.01. Ownership. Such Stockholder is the sole, true,
lawful and beneficial owner of the Shares owned by such Stockholder and listed
in Schedule I hereto and that there are no restrictions on voting rights or
rights of disposition pertaining to such Shares. Such Stockholder will convey
good and valid title to the Shares owned by such Stockholder and being acquired
pursuant to the Offer, the Merger or the exercise of the Option, as the case may
be, free and clear of any and all Liens. None of the Shares owned by such
Stockholder is subject to any voting trust or other agreement, arrangement or
restriction with respect to the voting of such Shares. Until this Agreement is
terminated, such Stockholder shall not, directly or indirectly, sell, exchange,
encumber, pledge, assign or otherwise transfer or dispose of, or agree to or
solicit any of the foregoing, or grant any right or power to any person that
limits such Stockholder's sole power to vote, sell, assign, transfer, pledge,
encumber or otherwise dispose of the Shares owned by such Stockholder or
otherwise directs such Stockholder with respect to such Shares. Such Stockholder
agrees to notify Purchaser and Sub promptly and to provide all details requested
by Purchaser or Sub if such Stockholder or any of its affiliates shall be
approached or
4
<PAGE>
solicited, directly or indirectly, by any person with respect to any of the
foregoing.
SECTION 3.02. Authority and Non-Contravention. The execution,
delivery and performance by such Stockholder of this Agreement and the
consummation of the transactions contemplated hereby (i) are within such
Stockholder's power and authority, have been duly authorized by all necessary
action (including any consultation, approval or other action by or with any
other person), (ii) require no action by or in respect of, or filing with, any
Governmental Entity (except as may be required under the HSR Act), and (iii) do
not and will not contravene or constitute a default under, or give rise to a
right of termination, cancellation or acceleration of any right or obligation of
such Stockholder or to a loss of any benefit of such Stockholder under, any
provision of applicable law or regulation of any agreement, judgment,
injunction, order, decree, or other instrument binding on such Stockholder or
result in the imposition of any Lien on any asset of such Stockholder.
SECTION 3.03. Binding Effect. This Agreement has been duly
executed and delivered by such Stockholder and is the valid and binding
agreement of such Stockholder, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
SECTION 3.04. Total Shares. The Stockholder Shares owned by
such Stockholder and listed in Schedule I opposite the name of such Stockholder
are the only shares of Company Common Stock beneficially owned as of the date
hereof by such Stockholder and such Stockholder has no option to purchase or
right to subscribe for or otherwise acquire any securities of the Company and
has no other interest in or voting rights with respect to any other securities
of the Company.
SECTION 3.05. Finder's Fees. No investment banker, broker or
finder is entitled to a commission or fee from Sub or the Company in respect of
this Agreement based upon any arrangement or agreement made by or on behalf of
such Stockholder, except as otherwise provided in the Merger Agreement.
ARTICLE IV
Representations, Warranties and Covenants
of Purchaser and Sub
Purchaser and Sub represent, warrant and covenant to each
Stockholder:
5
<PAGE>
SECTION 4.01. Corporate Power and Authority. Purchaser and Sub
have all requisite corporate power and authority to enter into this Agreement
and to perform their obligations hereunder. The execution, delivery and
performance by Purchaser and Sub of this Agreement and the consummation by
Purchaser and Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser and Sub.
SECTION 4.02. Binding Effect. This Agreement has been duly
executed and delivered by Purchaser and Sub and is a valid and binding agreement
of Purchaser and Sub, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
SECTION 4.03. Acquisition for Sub's Account. Any Shares to be
acquired upon consummation of the Offer, or upon exercise of the Option will be
acquired by Sub for its own account and not with a view to the public
distribution thereof and will not be transferred except in compliance with the
Securities Act and the rules and regulations promulgated thereunder. The
certificates representing Shares acquired pursuant to the exercise of the Option
may bear a legend indicating that such Shares were sold without registration
under the Securities Act.
ARTICLE V
Additional Agreements
SECTION 5.01. Agreements of Stockholders. Each Stockholder
hereby covenants and agrees that, so long as the Merger Agreement is in effect:
(a) No Solicitation. Such Stockholder shall not directly or
indirectly (i) solicit, initiate or encourage (or authorize any person
to solicit, initiate or encourage) any Acquisition Proposal or (ii)
participate in any discussion or negotiations regarding, or furnish to
any other person any information with respect to, or otherwise
cooperate in any way with, or participate in, facilitate or encourage
any effort or attempt by any other person to do or seek the foregoing.
Such Stockholder shall promptly advise Purchaser of the terms of any
communications it or any of its affiliates may receive relating to any
Acquisition Proposal.
(b) Adjustment upon Changes in Capitalization or Merger. In the
event of any change in the Company's capital stock by reason of stock
dividends, stock splits, mergers, consolidations, recapitalization,
combinations, conversions,
6
<PAGE>
exchanges of shares, extraordinary or liquidating dividends, or other
changes in the corporate or capital structure of the Company which
would have the effect of diluting or changing the Sub's rights
hereunder, the number and kind of shares or securities subject to this
Agreement and the Purchase Price shall be appropriately and equitably
adjusted so that the Sub shall receive pursuant to the Offer or the
exercise of the Option the number and class of shares or other
securities or property that the Sub would have received in respect of
the Shares purchasable pursuant to the Offer or the exercise of the
Option if such purchase had occurred immediately prior to such event.
Such Stockholder shall request the Company to take, and shall use
reasonable efforts to take, such steps in connection with the foregoing
as may be necessary to assure that the provisions hereof shall
thereafter apply as nearly as possible to any securities or property
thereafter deliverable pursuant to the Offer or the exercise of the
Option.
ARTICLE VI
Miscellaneous
SECTION 6.01. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 6.02. Further Assurances. Purchaser, Sub and the
Stockholders will each execute and deliver or cause to be executed and delivered
all further documents and instruments and use its best efforts to secure such
consents and take all such further action as may be reasonably necessary in
order to consummate the transactions contemplated hereby and by the Merger
Agreement.
SECTION 6.03. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement.
SECTION 6.04. Specific Performance. Each Stockholder agrees
that Purchaser and Sub would be irreparably damaged if for any reason any
Stockholder fails to perform any of its obligations under this Agreement, and
that Purchaser and Sub would not have an adequate remedy at law for money
damages in
7
<PAGE>
such event. Accordingly, Purchaser and Sub shall be entitled to specific
performance and injunctive and other equitable relief to enforce the performance
of this Agreement by each Stockholder. This provision is without prejudice to
any other rights that Purchase or Sub may have against any Stockholder for any
failure to perform its obligations under this Agreement.
SECTION 6.05. Notices. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given when
delivered in person, by telecopy, or by registered or certified mail (postage
prepaid, return receipt requested) to such party at its address set forth on the
signature page hereto.
SECTION 6.06 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares.
SECTION 6.07. Amendments; Termination. This Agreement may not
be modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
will terminate upon the termination of the Merger Agreement in accordance with
its terms.
SECTION 6.08. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, that Sub may
assign its rights and obligations to another wholly-owned subsidiary of
Purchaser which is the assignee of Sub's rights under the Merger Agreement; and
provided further that except as set forth in the prior clause, a party may not
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other parties hereto and any purported
assignment, delegation or transfer without such consent shall be null and void.
SECTION 6.09. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of New York without giving effect to
the principles of conflicts of laws thereof.
SECTION 6.10. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effects as if the signatures thereto and thereof were upon the
same instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
STANT CORPORATION,
by /s/ Thomas F. Plocinik
Name: Thomas F. Plocinik
Title: Senior Vice
President-Finance
Address for Notices:
425 Commerce Drive
Richmond, IN 47374
Attn: Anthony Graziano, Esq.
STANT EXPANSION CORPORATION,
by /s/ Thomas F. Plocinik
Name: Thomas F. Plocinik
Title: Vice President and
Treasurer
Address for Notices:
In care of Stant Corporation
425 Commerce Drive
Richmond, IN 47374
Attn: Anthony Graziano, Esq.
9
<PAGE>
JOHN R. OISHEI APPRECIATION
CHARITABLE TRUST,
by /s/ Rupert Warren
Name: Rupert Warren
Title: Co-Trustee
by /s/ Albert R. Mugel
Name: Albert R. Mugel
Title: Co-Trustee
by /s/ J. Walter Frey
Name: J. Walter Frey
Title: Co-Trustee
by /s/ Allan R. Wiegley
Name: Allan R.
Wiegley
Title: Co-Trustee
Address for Notices:
817 Washington Street
Buffalo, New York 14203
JULIA R. & ESTELLE L.
FOUNDATION INCORPORATED,
by /s/ Rupert Warren
Name: Rupert Warren
Title: President
Address for Notices:
817 Washington Street
Buffalo, New York 14203
/s/ Rupert Warren
Rupert Warren, individually
and as sole trustee of the
trusts established by John
R. Oshei listed on
Schedule II
10
<PAGE>
Address for Notices:
817 Washington Street
Buffalo, New York 14203
11
<PAGE>
SCHEDULE I
STOCKHOLDER SHARES
<TABLE>
<CAPTION>
Number of
Stockholder Stockholder Shares
----------- ------------------
<S> <C> <C>
1. John R. Oishei,
Appreciation
Charitable Trust 319,260
2. Julia R. & Estelle L.
Foundation Incorporated 150,924
3. Mr. Rupert Warren, individually
and as trustee of the trusts
listed on Schedule II 144,112
</TABLE>
12
<PAGE>
SCHEDULE II
Rupert Warren Holdings
<TABLE>
<CAPTION>
PERSONAL NUMBER OF SHARES
-------- ----------------
<S> <C>
R. Warren 17,320
</TABLE>
<TABLE>
<CAPTION>
AS TRUSTEE NUMBER OF SHARES
---------- ----------------
<S> <C>
JO Trust A 8,096
POM Trust A 8,096
JO Trust B 444
POM Trust B 444
Trust C 1,380
Trust for RJO (now Fdn.) 28,975
Trust for JO 29,281
Trust for JO 6,000
Trust for JO 1,255
Trust for POM 29,281
Trust for POM 6,000
Trustee for POM 1,255
Trust for Worth 4,685
Trust for Butman 1,600
</TABLE>
13
<PAGE>
August 15, 1994
Stant Corporation
425 Commerce Drive
Richmond, IN 47374
Attention: Mr. Ward Woods
Chairman of the Board
Trico Products Corporation is furnishing you with certain information in order
for you to consider a possible business combination or other transaction with
the Company (as hereinafter defined). To induce the Company to furnish you such
information, you agree as follows with respect to any information supplied to
you by the Company or its representatives, whether supplied before, on or after
the date of this Agreement, and information which you obtain concerning the
Company as a result of the access to such information provided to you by the
Company, other than information that has been made available to the public
(hereinafter collectively referred to as the 'Confidential Material'):
(1) You recognize and acknowledge the confidential nature and
competitive value of the Confidential Material and the damage
that could result to the Company if information contained
therein is disclosed to any third party. You further
acknowledge that you are aware of your obligations under
federal and state securities laws and regulations, and agree
that you will not use the Confidential Material in any manner
that would constitute a violation of such laws and regulations.
(2) You will not use the Confidential Material in any way
detrimental to the Company, and it will be used solely for the
purpose of evaluating a possible transaction between the
Company and you. Except as may be provided below, you also
agree that you and Your Representatives (as hereinafter
defined) will not disclose any of the Confidential Material to
any person or entity without the prior written consent of the
Company; provided, however, that the Confidential Material may
be disclosed to your advisers and agents who (a) need to know
such information for the purpose of evaluating a
<PAGE>
possible transaction with the Company and (b) agree in writing
to keep such Information confidential and to be bound by this
Agreement to the same extent as if they were parties hereto.
You will be responsible for any breach of this Agreement by any
of Your Representatives. If you or any of Your Representatives
are requested or required (by legal process, civil
investigative demand or similar process) to disclose any
Confidential Material, you will promptly notify the Company so
that the Company may seek an appropriate protective order or
waive compliance with this Agreement. If you or any of Your
Representatives are nonetheless compelled to disclose
information concerning the Company to any tribunal, you or Your
Representative may disclose such to the tribunal, provided that
you shall use reasonable efforts to obtain, at the request of
the Company and at Company expense, an order or other
reasonable assurance that confidential treatment will be
accorded to such information.
(3) You and Your Representatives will not, without the prior
written consent of the Company, disclose to any person or
entity either the fact that discussions or negotiations are
taking place concerning a possible transaction with the Company
or any of the terms, conditions or other facts with respect to
any such possible transaction, including the status thereof.
(4) You also agree that except as stated in Exhibit A attached
hereto, for a period of three (3) years from the date hereof,
neither you nor any of Your Representatives will, without the
prior written consent of the Company:
(a) acquire, offer to acquire, or agree to
acquire, directly or indirectly, by purchase or
otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of
the Company or any subsidiary thereof, or of any
successor to or person in control of the Company, or
any assets of the Company or any subsidiary or
division thereof or of any such successor or
controlling person;
2
<PAGE>
(b) make, or in any way participate, directly
or indirectly, in any 'solicitation' of 'proxies' (as
such terms are used in the rules of the Securities
and Exchange Commission) to vote, or seek to advise
or influence any person or entity with respect to the
voting, of any voting securities of the Company;
(c) make any public announcement with respect
to, or submit a proposal for, or offer of (with or
without conditions) any extraordinary transaction
(including but not limited to any tender or exchange
offer, merger, recapitalization or other business
combination) involving the Company or its securities
or assets; or
(d) form, join or in any way participate in a
'group' as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, in
connection with any of the foregoing.
You will promptly advise the Company of any inquiry or proposal made to you with
respect to any of the foregoing:
(5) In the event that the transaction whose possibility is
contemplated by this Agreement is not consummated, neither you
nor Your Representatives shall, without the prior written
consent of the Company, use any of the Confidential Material
for any purpose.
(6) If you determine that you do not wish to enter into a
transaction with the Company, you will promptly advise the
Company of that decision. In that event, or at any time upon
our request, all Confidential Material (and all copies,
summaries, extracts and notes of the contents or parts thereof)
shall be returned and not retained by you or Your
Representatives in any form for any reason; provided, however,
that you may destroy, in lieu of returning, any summaries,
notes, analyses or studies prepared by you and your advisers in
connection with the Confidential Material.
(7) You and Your Representatives shall have no obligation
hereunder with respect to any
3
<PAGE>
information in the Confidential Material to the extent that
such information has been made public other than by acts of you
or Your Representatives in violation of this Agreement.
(8) You and Your Representatives shall direct all inquiries and
requests for Confidential Material to Goldman, Sachs & Co., and
you agree that you and Your Representatives shall not enter the
Company's premises without first receiving the Company's
permission and then only when accompanied by a representative
of the Company or Goldman, Sachs & Co.
(9) Although you understand that the Company has endeavored to
include in the Confidential Material information known to it
which it believes to be relevant for the purposes of your
investigation, you further understand that the Company does not
make any representation or warranty to the accuracy or
completeness of the Confidential Material. You agree that
neither the Company nor any of its officers, directors,
representatives or agents shall have any liability to you or
any of Your Representatives resulting from the use of the
Confidential Material by you or Your Representatives, except
such liability as may result from the terms of a definitive
agreement with respect to a transaction referred to above.
(10) You and Your Representatives agree that, without limiting
any other available remedies, the Company shall be entitled to
an injunction and other equitable relief in the event of Your
or Your Representatives' failure to comply with the provisions
of this Agreement. It is further understood and agreed that no
failure or delay by the Company in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other
or further exercise of any right, power or privilege.
(11) This letter agreement is for the benefit of the Company
and shall be governed by the internal laws of the State of New
York without regard to the principles of conflicts of laws.
4
<PAGE>
(12) As used in this Agreement, the following terms shall have
the following meaning:
(a) 'Company' shall mean, either collectively
or individually as the context may require, Trico
Products Corporation and its direct and indirect
subsidiaries.
(b) 'Your Representatives' shall mean,
collectively or individually as the context may
require, your parent corporations and its or their
other subsidiaries and affiliated companies, and your
and their respective directors, officers, employees,
attorneys, investment advisers, investment bankers,
commercial lenders, and all other advisers and
agents. As used herein, a person 'affiliated' with a
specified person shall mean a person that directly,
or indirectly through one or more intermediaries,
controls or is controlled by, or is under common
control with, the person specified.
Please acknowledge your agreement to the foregoing by countersigning this letter
in the space provided below.
Very truly yours,
TRICO PRODUCTS CORPORATION
By: /s/ Goldman, Sachs & Co.
Goldman, Sachs & Co.
on behalf of Trico Products Corporation
Confirmed and Agreed to:
STANT CORPORATION
by /s/ Ward Woods
Date: 8/17/94
5
<PAGE>
EXHIBIT A
The Bessemer Group, Incorporated ('BGI'), whose principal
business is owning and operating trust companies doing business in the states of
New York, New Jersey and Florida and in the Cayman Islands, may be alleged to be
an affiliate of Stant Corporation ('Stant') whose majority voting stockholder is
Bessemer Capital Partners, L.P. ('BCP') and of BCP's limited partner, Bessemer
Securities Corporation ('BSC') by virtue of being allegedly under common
control, through BSC, with Stant and BCP.
Five heirs of Henry Phipps, deceased, and the chief executive
officers of each of BGI and BSC are common directors of BGI, BSC and each of the
trust companies owned by BGI (with minor exceptions). The Chairman of the Board
of BGI is the same as the Chairman of the Board of BSC and is one of the heirs
of Henry Phipps, deceased, mentioned above.
Notwithstanding anything else in this agreement to the
contrary, nothing undertaken or agreed to by Stant shall in any way restrict the
normal investment activities of BGI or its subsidiaries with respect to
securities issued by the Company; provided, however, that Stant shall be fully
responsible for not disclosing the Confidential Material to BGI. It is
understood that the common officers and directors of BGI and BSC may receive the
Confidential Material in their capacity as officers and directors of BSC (or in
the capacity of president of one of the corporate general partners of the
general partner of BCP) but may not in any way disclose it to the other
personnel of BGI or use it in any way in BGI's business without causing Stant to
be in breach of this agreement. It is, of course, recognized by the parties to
this agreement that all of Stant, BCP, BSC, and BGI and the subsidiaries of BGI
are bound by the laws respecting purchasing and selling securities while in
possession of material, non-public information concerning the issuer of such
securities.
6
<PAGE>
Contact: 317/962-6655
STANT CORPORATION
Thomas F. Plocinik
Sr. Vice President and
Chief Financial Officer
Contact: 716/857-3352
TRICO PRODUCTS CORPORATION
Christopher T. Dunstan
Vice Chairman and
Chief Financial Officer
FOR IMMEDIATE RELEASE November 8, 1994
(SUGGESTED HEADLINE)
'STANT CORPORATION AGREES TO ACQUIRE TRICO
PRODUCTS CORPORATION FOR $85 PER SHARE IN CASH'
Stant Corporation (NASDAQ:STNT), a leading manufacturer of automotive parts and
tools, announced today that it has entered into a merger agreement with Trico
Products Corporation (NASDAQ:TRCO), the leading manufacturer of windshield
wiping systems worldwide. Under the terms of the agreement, unanimously approved
by the Trico Board of Directors late Monday afternoon, Stant will commence a
tender offer to purchase all outstanding shares of Trico common stock for $85
per share, net to the seller in cash. The tender offer will be conditioned upon,
among other things, the tender of shares which represent at least two-thirds of
the outstanding shares and certain regulatory approvals. The Oishei Family
Charitable Foundation and other family trusts that own 33% of Trico's
outstanding shares have agreed to tender their shares and have granted Stant an
option to purchase their shares at the offer price. Following the tender offer,
a merger will be consummated in
<PAGE>
2
which each share of Trico common stock not purchased pursuant to the tender
offer will be converted into the right to receive $85 in cash. The aggregate
purchase price in the offer and merger will be approximately $160 million.
Stant and Trico expect that the necessary filings with the Securities and
Exchange Commission in connection with the tender offer will be made early next
week, and that these tender offer documents will be mailed to Trico's
shareholders promptly thereafter.
Stant Corporation President and CEO, David R. Paridy said, 'We are delighted at
the prospect of having Trico join our family of companies and intend to continue
and build on Trico's worldwide reputation for excellence.'
Richard L. Wolf, Chairman and CEO of Trico Products, which is headquartered in
Buffalo, NY, said, 'This alliance with Stant will enable Trico to meet the
challenges of our industry. We have long been aware of Stant's outstanding
position in the automotive industry and believe that this merger will enhance
our position as a world class automotive supplier.'
Goldman Sachs advised Trico in this transaction.
<PAGE>
[LETTERHEAD OF GOLDMAN, SACHS & CO.]
CONFIDENTIAL
November 8, 1994
Board of Directors
Trico Products Corporation
817 Washington Street
Buffalo, New York 14203
Gentlemen:
You have requested our opinion as to the fairness to the holders of the
outstanding shares of Common Stock, no par value (the 'Shares'), of Trico
Products Corporation (the 'Company') of the $85.00 per Share in cash proposed to
be paid by Stant Corporation ('Purchaser') in the Tender Offer and the Merger
(each as defined below) pursuant to the Agreement and Plan of Merger dated as of
November 8, 1994 among Purchaser, Stant Expansion Corporation, a wholly-owned
subsidiary of Purchaser ('Sub'), and the Company (the 'Agreement'). The
Agreement provides for a tender offer for all of the Shares (the 'Tender Offer')
pursuant to which Sub will pay $85.00 per Share in cash for each share accepted.
The Agreement further provides that following completion of the Tender Offer,
Sub will be merged into the Company (the 'Merger') and each outstanding Share
(other than Shares already owned by Purchaser or Sub) will be converted into the
right to receive $85.00 in cash.
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having acted as its financial advisor in connection
with, and having participated in certain of the negotiations leading to, the
Agreement.
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company for the five fiscal years ended December 31, 1993; certain interim
reports to stockholders and Quarterly Reports on Form 10-Q; certain other
communications from the Company to its stockholders; and certain internal
financial analyses and forecasts for the Company prepared by its management. We
also have held discussions with members of the senior management of the Company
regarding its past and current business operations, financial condition and
future prospects. In addition, we have reviewed the reported price and trading
activity for the Shares, compared certain financial and stock market information
for the Company with similar information for certain other companies the
securities of which are publicly traded, reviewed the financial terms of certain
recent business combinations in the automotive component industry specifically
and in other industries generally and performed such other studies and analyses
as we considered appropriate.
We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us for
purposes of this opinion. In addition, we have not made an independent
evaluation or appraisal of the assets and liabilities of the Company or any of
its subsidiaries and we have not been furnished with any such evaluation or
appraisal.
Based upon the foregoing and such other matters as we consider relevant, it
is our opinion that as of the date hereof the $85.00 per Share in cash to be
received by the holders of Shares in the Tender Offer and the Merger, taken as a
unitary transaction, is fair to such holders.
Very truly yours,
GOLDMAN, SACHS & CO.
GOLDMAN, SACHS & CO.
[LETTERFOOT OF GOLDMAN, SACHS & CO.]
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November 14, 1994
Dear Stockholder:
On behalf of the Board of Directors of Trico Products Corporation, I am
pleased to inform you that Trico has entered into a Merger Agreement providing
for the acquisition of Trico at a price of $85.00 per share in cash to Trico
stockholders. The acquisition will be made by a subsidiary of Stant Corporation
(the 'Purchaser'). The Purchaser has today commenced a cash tender offer at the
$85.00 per share price for all outstanding shares of Trico's common stock. The
offer is to be followed by a merger of the Purchaser into Trico in which each
share of Trico common stock not purchased in the offer will be converted into
the right to receive the same $85.00 in cash.
Your Board of Directors has determined that the Offer and the Merger are
fair to, and in the best interests of, the stockholders of the Company and
recommends that all stockholders accept the offer and tender all of their shares
to the Purchaser.
As a condition to the Purchaser's Offer, a foundation and certain trusts
established by John R. Oishei, Trico's founder, have agreed to sell all 614,296
shares held by them to the Purchaser at $85.00 pursuant to the Offer or
otherwise.
Enclosed for your consideration are copies of the Purchaser's tender offer
materials and Trico's Solicitation/Recommendation Statement on Schedule 14D-9,
which are being filed with the Securities and Exchange Commission. All of the
documents should be read carefully. In particular, I call your attention to Item
4 of Trico's Schedule 14D-9, which describes the Board's reasons for its
recommendation.
On behalf of the Board of Directors,
Chairman of the Board
