OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
LIBERTY TECHNOLOGIES, INC.
AT
$3.50 NET PER SHARE
BY
LTI MERGER, INC.
A WHOLLY OWNED SUBSIDIARY
OF
CRANE CO.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
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THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT EACH OF THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND
THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN), IS FAIR TO AND IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, HAS APPROVED THE OFFER AND THE
MERGER AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE COMPANY'S SHAREHOLDERS.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK OF
THE COMPANY ON A FULLY DILUTED BASIS BEING VALIDLY TENDERED PRIOR TO THE
EXPIRATION OF THE OFFER AND NOT PROPERLY WITHDRAWN. SEE SECTION 14.
---------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such
shareholder's Shares (as defined herein) either should (a) complete and sign
the Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together
with the certificate(s) representing tendered Shares and any other required
documents to the Depositary or tender such Shares pursuant to the procedures
for book-entry transfer set forth in Section 3 or (b) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee
to effect such transaction. A shareholder whose Shares are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such shareholder desires to tender such Shares.
A shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis may tender such
Shares by following the procedures for guaranteed delivery set forth in
Section 3.
Questions and requests for assistance may be directed to Beacon Hill
Partners, Inc. (the "Information Agent") at its address and telephone number
set forth on the back cover of this Offer to Purchase. Additional copies of
this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be obtained from the Information
Agent or from brokers, dealers, commercial banks and trust companies.
August 14, 1998
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TABLE OF CONTENTS
PAGE
--------
INTRODUCTION ............................................................................... 1
1. Terms of the Offer....................................................................... 2
2. Acceptance for Payment and Payment ...................................................... 3
3. Procedures for Accepting the Offer and Tendering Shares.................................. 4
4. Withdrawal Rights........................................................................ 7
5. Certain Tax Consequences................................................................. 8
6. Price Range of the Shares; Dividends..................................................... 8
7. Effect of the Offer on the Market for the Shares; Nasdaq National Market Listing; Margin
Regulations; Exchange Act Registration................................................... 9
8. Certain Information Concerning the Company............................................... 10
9. Certain Information Concerning the Purchaser and Crane................................... 11
10. Background of the Offer; Contacts with the Company...................................... 12
11. Purpose of the Offer; The Merger Agreement; The Stock Option Agreement; The Shareholder
Agreements; Dissenters' Rights; Plans for the Company; The Rights....................... 13
12. Source and Amount of Funds.............................................................. 31
13. Dividends and Distributions............................................................. 32
14. Certain Conditions of the Offer......................................................... 32
15. Certain Legal Matters; Required Regulatory Approvals.................................... 33
16. Certain Fees and Expenses .............................................................. 37
17. Miscellaneous .......................................................................... 38
Schedule I--Directors and Executive Officers of Xxxxx and the Purchaser..................... I-1
Schedule II--Sections 1930(a) and 1571 through 1580 (Subchapter D of Chapter 15) of the
Pennsylvania Business Corporation Law.......................................... II-1
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To: All Holders of Shares of Common Stock of Liberty Technologies, Inc.:
INTRODUCTION
LTI Merger, Inc. (the "Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of Crane Co., a Delaware corporation ("Crane"),
hereby offers to purchase all outstanding shares of common stock, par value
$.01 per share (the "Shares" or "Company Common Stock"), of Liberty
Technologies, Inc., a Pennsylvania corporation (the "Company"), and the
associated Preferred Stock Purchase Rights (the "Rights") issued pursuant to
the Amended and Restated Rights Agreement, dated as of October 6, 1997,
between the Company and StockTrans, Inc., as Rights Agent (as amended, the
"Rights Agreement"), at a purchase price of $3.50 per Share (and associated
Right), net to the seller in cash, without interest thereon (the "Per Share
Amount"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"). Unless the context otherwise requires, all
references to Shares shall include the associated Rights.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of
First Chicago Trust Company of New York, as Depositary (the "Depositary"),
and Beacon Hill Partners, Inc., as Information Agent (the "Information
Agent"), incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT EACH OF THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND
THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN), IS FAIR TO AND IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, HAS APPROVED THE OFFER AND THE
MERGER AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE COMPANY'S SHAREHOLDERS.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated ("Xxxx Xxxxx"), the Company's
financial advisor, has delivered to the Board of Directors of the Company a
written opinion dated August 10, 1998 to the effect that, as of such date,
each of the consideration to be received by the holders of Shares pursuant to
the Offer and the Merger is fair to the Company's shareholders from a
financial point of view. A copy of such opinion is included with the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which is being mailed to shareholders concurrently
herewith, and shareholders are urged to read the opinion in its entirety for
a description of the assumptions made, matters considered and limitations of
the review undertaken by Xxxx Xxxxx.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST A MAJORITY OF
THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1) AND NOT
PROPERLY WITHDRAWN (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER TERMS AND CONDITIONS. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS EXTENDED. SEE SECTIONS 1,
14, AND 15 BELOW.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of August 11, 1998 (the "Merger Agreement"), among the Company, the
Purchaser and Crane pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser
will be merged with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation (the "Surviving Corporation"). In the
Merger, each outstanding Share (other than Shares held by Crane, the
Purchaser or any wholly owned subsidiary of Crane or Purchaser or held in the
treasury of the Company, which will be canceled with no payment being made
with respect thereto, and other than Shares, if any, held by shareholders who
object to the Merger and demand a right to receive payment of the fair value
of such shareholders' Shares in accordance with Pennsylvania law, unless such
right shall have been withdrawn or otherwise lost ("Dissenting Shares"))
will, by virtue of the Merger and without any action by the holder thereof,
be converted into the right to receive $3.50 in cash (the "Merger
1
Consideration"), payable to the holder thereof, without interest thereon upon
the surrender of the certificate formerly representing such Share. In
conjunction with the Merger Agreement, Xxxxx entered into a Stock Option
Agreement (the "Stock Option Agreement") with the Company pursuant to which
the Company has granted Crane an option to purchase up to 997,633 newly
issued shares (or, based on information supplied to the Purchaser by the
Company, approximately 19.9% of the outstanding Shares as of August 11, 1998)
of Company Common Stock, and Xxxxx has entered into Shareholder Agreements
(the "Shareholder Agreements") with certain shareholders of the Company
(including certain directors and officers of the Company) holding in the
aggregate 982,072 Shares (or, based on information supplied to the Purchaser
by the Company, approximately 19.6% of the outstanding Shares as of August
11, 1998), pursuant to which such shareholders have, among other things,
agreed to tender their Shares pursuant to the Offer. The Merger Agreement,
the Stock Option Agreement and the Shareholder Agreements are more fully
described in Section 11 below. Certain U.S. federal income tax consequences
of the sale of Shares pursuant to the Offer and the Merger, as the case may
be, are described in Section 5 below.
The Pennsylvania Business Corporation Law (the "PBCL") requires the
affirmative vote of holders of at least a majority of the votes cast by
holders of Shares to approve the Merger. As a result, if the Minimum
Condition and the other conditions to the Offer are satisfied and the Offer
is consummated, the Purchaser will own a sufficient number of Shares to
ensure that the Merger will be approved. Under the PBCL, if after
consummation of the Offer the Purchaser owns at least 80% of the Shares then
outstanding, the Purchaser will be able to cause the Merger to occur without
a vote of the Company's shareholders. If, however, after consummation of the
Offer, the Purchaser owns less than 80% of the then outstanding Shares, a
vote of the Company's shareholders will be required under the PBCL to approve
the Merger, and a significantly longer period of time will be required to
effect the Merger. See Section 11.
The Company has informed the Purchaser that, as of August 11, 1998, there
were 5,013,233 Shares issued and outstanding and 1,154,000 Shares reserved
for issuance upon the exercise of outstanding options to acquire Company
Common Stock ("Options") granted pursuant to the Company's 1992 Stock Option
Plan and 1988 Stock Option Plan.
No dissenters' rights are available in connection with the Offer; however,
shareholders will have dissenters' rights in connection with the Merger
regardless of whether the Merger is consummated with or without a vote of the
Company's shareholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), the Purchaser will accept for payment and pay for
all Shares validly tendered on or prior to the Expiration Date (as defined
below) and not withdrawn in accordance with the procedures set forth in
Section 4, as soon as practicable after such Expiration Date; provided that,
if all of the conditions to the Offer are satisfied and more than 65% but
less than 80% of the outstanding shares of Company Common Stock on a fully
diluted basis (including shares of Company Common Stock issuable upon
exercise of outstanding Options) have been validly tendered and not withdrawn
in the Offer, the Purchaser reserves the right, in its sole discretion, to
extend the Offer from time to time for up to a maximum of ten additional
business days in the aggregate for all such extensions provided the Purchaser
agrees to waive the conditions set forth in paragraphs (c), (f) and (g) of
Section 14. The Offer shall remain open until 12:00 midnight, Eastern time,
on Friday, September 11, 1998 (the "Expiration Date"), unless the Purchaser
shall have extended the period of time for which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by the Purchaser, shall expire. If, at any
Expiration Date, the conditions to the Offer described in Section 14 hereof
shall not have been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated) to extend the Offer from time to time by giving
oral or written notice to the Depositary. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer
and subject to the right of a tendering shareholder to withdraw such
shareholder's Shares. See Section 4.
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Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), the Purchaser also expressly reserves the
right, in its sole discretion, at any time or from time to time, to (i)
terminate the Offer if any condition referred to in Section 14 has not been
satisfied by any Expiration Date and return all tendered Shares; (ii) waive
any condition; or (iii) except as set forth in the Merger Agreement,
otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such termination, waiver or amendment to the Depositary. In
the Merger Agreement, the Purchaser has agreed that, without the prior
written consent of the Company, it will not (i) decrease the price per Share
or change the form of consideration payable in the Offer, (ii) decrease the
number of Shares sought to be purchased in the Offer, (iii) impose additional
conditions to the Offer or (iv) amend any other term of the Offer in any
manner adverse to the holders of Shares.
Any such extension, termination or amendment will be followed as promptly
as practicable by public announcement thereof, and such announcement in the
case of an extension will be made no later than 9:00 a.m., Eastern time, on
the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, subject to applicable law (including Rules 14d-4(c) and
14d-6(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which require that material changes be promptly disseminated to
holders of Shares), the Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to the Dow Xxxxx News Service. The rights reserved by the
Purchaser in the preceding paragraph are in addition to the Purchaser's
rights described in Section 14.
If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the
Offer and disseminate additional tender offer materials to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-l under the Exchange Act. The
minimum period during which an offer must remain open following material
changes in the terms of the Offer, other than a change in price or a change
in percentage of securities sought, will depend upon the facts and
circumstances, including the materiality of the changes. In the Commission's
view, an offer should remain open for a minimum of five business days from
the date the material change is first published, sent or given to
shareholders, and, if material changes are made with respect to information
that approaches the significance of price and the percentage of securities
sought, a minimum of ten business days may be required to allow for adequate
dissemination and investor response. With respect to a change in price, a
minimum ten business day period from the date of such change is generally
required under applicable Commission rules and regulations to allow for
adequate dissemination to shareholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a U.S. federal
holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, Eastern time.
As of the date of this Offer to Purchase, the Rights are evidenced by the
certificates representing Shares (each, a "Share Certificate") and do not
trade separately. Accordingly, by tendering a Share Certificate, a
shareholder is automatically tendering the associated Rights. If, however,
pursuant to the Rights Agreement or for any other reason, the Rights detach
and separate certificates representing Rights ("Rights Certificates") are
issued, shareholders will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share.
The Company has provided the Purchaser with the Company's shareholder
lists and security position listings for the purpose of disseminating the
Offer to holders of Shares. This Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed by the Purchaser to
record holders of Shares and will be furnished by the Purchaser to brokers,
dealers, commercial banks, trust companies and similar persons whose names,
or the names of whose nominees, appear on the shareholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), the Purchaser will purchase, by accepting for payment,
and will pay for, all Shares validly tendered and not properly withdrawn (in
3
accordance with Section 4) prior to the Expiration Date as soon as
practicable after the Expiration Date. See Sections 1 and 14. In addition,
subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
in order to comply with applicable law, including the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder (the "HSR Act"). See Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) Share Certificates or
timely confirmation (a "Book-Entry Confirmation") of the book-entry transfer
of such Shares into the Depositary's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3; (ii) the appropriate Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined below) in connection with a
book-entry transfer; and (iii) any other documents required by the Letter of
Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of such
Book-Entry Confirmation that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary
of the Purchaser's acceptance of such Shares for payment pursuant to the
Offer. In all cases, upon the terms and subject to the conditions of the
Offer, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from
the Purchaser and transmitting payment to validly tendering shareholders.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY THE PURCHASER.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than
are tendered, Share Certificates representing unpurchased or untendered
Shares will be returned, without expense to the tendering shareholder (or, in
the case of Shares delivered by book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set
forth in Section 3, such Shares will be credited to an account maintained
within such Book-Entry Transfer Facility), as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH
INCREASED CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE
PURCHASED PURSUANT TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED
PRIOR TO SUCH INCREASE IN CONSIDERATION.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to assign, in whole or from time to time in part, to one or more
of Crane's subsidiaries or affiliates the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but no such assignment
will relieve Xxxxx of any liability under the Merger Agreement for any breach
of the Merger Agreement by any such assignee.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to
be validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter
of Transmittal must be
4
received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date and either
(i) Share Certificates representing tendered Shares must be received by the
Depositary or tendered pursuant to the procedure for book-entry transfer set
forth below and Book-Entry Confirmation must be received by the Depositary,
in each case on or prior to the Expiration Date, or (ii) the guaranteed
delivery procedures set forth below must be complied with.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER, AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer
to Purchase. Any financial institution that is a participant in the system of
the Book-Entry Transfer Facility may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account at the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures for the transfer. Although
delivery of Shares may be effected through book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in connection
with a book-entry transfer, and any other required documents must, in any
case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date, or the guaranteed delivery procedure set forth below
must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution"),
unless the Shares tendered thereby are tendered (i) by a registered holder of
Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the
Letter of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made to,
or Share Certificates for unpurchased Shares are to be issued or returned to,
a person other than the registered holder, then the tendered Share
Certificates must be endorsed or accompanied by appropriate stock powers,
signed exactly as the name or names of the registered holder or holders
appear on the Share Certificates, with the signatures on the Share
Certificates or stock powers guaranteed by an Eligible Institution as
provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter
of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) must accompany each such delivery.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date or the procedures for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered if all of the following guaranteed delivery
procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
5
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal are received by the Depositary
within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the shareholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within
the meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof),
together with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required by
the Letter of Transmittal. Accordingly, payment might not be made to all
tendering shareholders at the same time, and will depend upon when Share
Certificates are received by the Depositary or Book-Entry Confirmations of
such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Backup U.S. Federal Income Tax Withholding. Under the backup U.S. federal
income tax withholding laws applicable to certain shareholders (other than
certain exempt shareholders, including, among others, all corporations and
certain foreign individuals), the Depositary may be required to withhold 31%
of the amount of any payments made to such shareholders pursuant to the
Offer. To prevent backup U.S. federal income tax withholding, each such
shareholder must provide the Depositary with such shareholder's correct
taxpayer identification number and certify that such shareholder is not
subject to backup U.S. federal income tax withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. See Instruction 9
of the Letter of Transmittal.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
shareholder irrevocably appoints designees of the Purchaser, and each of
them, as such shareholder's agents, attorneys-in-fact and proxies, with full
power of substitution, in the manner set forth in the Letter of Transmittal,
to the full extent of such shareholder's rights with respect to the Shares
tendered by such shareholder and accepted for payment by the Purchaser and
with respect to any and all other Shares and other securities or rights
issued or issuable in respect of such Shares on or after the date of this
Offer to Purchase. All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest in the tendered Shares.
Such appointment will be effective upon the acceptance for payment of such
Shares by the Purchaser in accordance with the terms of the Offer. Upon such
acceptance for payment, all other powers of attorney and proxies given by
such shareholder with respect to such Shares and such other securities or
rights prior to such payment will be revoked, without further action, and no
subsequent powers of attorney and proxies may be given by such shareholder
(and, if given, will not be deemed effective). The designees of the Purchaser
will, with respect to the Shares and such other securities and rights for
which such appointment is effective, be empowered to exercise all voting and
other rights of such shareholder as they in their sole discretion may deem
proper at any annual or special meeting of the Company's shareholders, or any
adjournment or postponement thereof, or by consent in lieu of any such
meeting or otherwise. In order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, the Purchaser or
its designee must be able to exercise full voting rights with respect to such
Shares and other securities, including voting at any meeting of shareholders.
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Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding on all
parties. The Purchaser reserves the absolute right to reject any or all
tenders determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of the Purchaser's counsel, be
unlawful. The Purchaser also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any tender of Shares
of any particular shareholder whether or not similar defects or
irregularities are waived in the case of other shareholders.
The Purchaser's interpretation of the terms and conditions of the Offer
will be final and binding. No tender of Shares will be deemed to have been
validly made until all defects and irregularities with respect to such tender
have been cured or waived by the Purchaser. None of Crane, the Purchaser or
any of their respective affiliates or assigns, the Depositary, the
Information Agent or any other person or entity will be under any duty to
give any notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time on or prior to the Expiration Date and, unless
theretofore accepted for payment as provided herein, may also be withdrawn at
any time after Monday, October 12, 1998.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or the Purchaser is unable to
accept for payment or pay for Shares tendered pursuant to the Offer, then,
without prejudice to the Purchaser's rights set forth herein, the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares and
such Shares may not be withdrawn except to the extent that the tendering
shareholder is entitled to and duly exercises withdrawal rights as described
in this Section 4. Any such delay will be by an extension of the Offer to the
extent required by law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary
at one of its addresses set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn, and (if Share Certificates have been tendered) the name of the
registered holder of the Shares as set forth in the Share Certificates, if
different from that of the person who tendered such Shares. If Share
Certificates have been delivered or otherwise identified to the Depositary,
then prior to the physical release of such Share Certificates, the tendering
shareholder must submit the serial numbers shown on the particular Share
Certificates evidencing the Shares to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Shares tendered for the account of an Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer
set forth in Section 3, the notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares, in which case a notice of withdrawal will be effective
if delivered to the Depositary by any method of delivery described in the
first sentence of this paragraph. Withdrawals of Shares may not be rescinded.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section
3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Crane,
the Purchaser or any of their respective affiliates or assigns, the
Depositary, the Information Agent or any other person or entity will be under
any duty to give any notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
7
5. CERTAIN TAX CONSEQUENCES
Sales of Shares pursuant to the Offer (and the receipt of cash by
shareholders of the Company pursuant to the Merger) will be taxable
transactions for U.S. federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be taxable transactions
under applicable state, local, foreign and other tax laws. For U.S. federal
income tax purposes, a tendering shareholder will generally recognize gain or
loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer (or pursuant to the Merger) and the
aggregate tax basis in the Shares tendered by the shareholder and purchased
pursuant to the Offer (or canceled pursuant to the Merger). Gain or loss will
be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer (or canceled pursuant to the Merger).
If tendered Shares are held by a tendering shareholder as capital assets,
gain or loss recognized by the tendering shareholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
shareholder's holding period for the Shares exceeds one year. Long-term
capital gains recognized by a tendering individual shareholder will generally
be taxed at a maximum U.S. federal marginal tax rate of 20%, and long-term
capital gains recognized by a tendering corporate shareholder will be taxed
at a maximum U.S. federal marginal tax rate of 35%.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL
TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE
COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT
APPLY TO A HOLDER OF SHARES IN LIGHT OF ITS INDIVIDUAL CIRCUMSTANCES.
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF
ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE
MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS
According to the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (the "Company Form 10-K"), the Shares are traded on the
Nasdaq Stock Market's National Market (the "Nasdaq National Market"). The
following table sets forth, for the periods indicated and according to
published sources, the reported high and low closing sale prices for the
Shares on the Nasdaq National Market. No dividends were paid on the Shares
during any of the periods presented.
HIGH LOW
-------- --------
YEAR ENDED DECEMBER 31, 1996
First Quarter ........................... $5.875 $4.375
Second Quarter .......................... 8.625 5.500
Third Quarter ........................... 6.000 3.250
Fourth Quarter .......................... 4.250 2.750
YEAR ENDED DECEMBER 31, 1997
First Quarter ........................... 4.125 2.625
Second Quarter .......................... 3.625 2.563
Third Quarter ........................... 4.188 2.625
Fourth Quarter .......................... 3.750 2.250
YEAR ENDED DECEMBER 31, 1998
First Quarter ........................... 3.500 2.063
Second Quarter .......................... 3.844 2.250
Third Quarter (through August 13, 1998) . 3.375 2.125
8
On August 11, 1998, the last full day of trading prior to the announcement
of the execution of the Merger Agreement, the reported closing sale price on
the Nasdaq National Market for the Shares was $2.50 per Share. On August 13,
1998, the last full day of trading prior to the commencement of the Offer,
the closing sale price per Share as reported on the Nasdaq National Market
was $3.375.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ NATIONAL MARKET
LISTING; MARGIN REGULATIONS; EXCHANGE ACT REGISTRATION
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of
holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by shareholders other than the Purchaser.
The Purchaser cannot predict whether the reduction in the number of Shares
that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for, or marketability of, the Shares or whether
such reduction would cause future market prices to be greater or less than
the Offer price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer be eligible for quotation on the Nasdaq National Market.
If, as a result of the purchase of Shares pursuant to the Offer, the Shares
no longer meet the criteria for quotation on the Nasdaq National Market, the
market for the Shares could be adversely affected. According to the Nasdaq
National Market's published guidelines, in order for the Shares to be
eligible for continued quotation on the Nasdaq National Market, there must
continue to be, among other things, either (i) at least 750,000 publicly held
Shares, held by at least 400 round lot shareholders, with a market value of
at least $5,000,000, net tangible assets of at least $4,000,000 and at least
two registered and active market makers for the Shares, or (ii) at least
1,100,000 publicly held Shares, held by at least 400 round lot shareholders,
with a market value of at least $15,000,000, either (x) market capitalization
of at least $50,000,000 or (y) total assets and total revenue of $50,000,000
each for the most recently completed fiscal year or two of the last three
most recently completed fiscal years, and at least four registered and active
market makers for the Shares. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are
not considered as being publicly held for this purpose. If the Shares were no
longer eligible for quotation on the Nasdaq National Market, they may
nevertheless continue to be included in the Nasdaq SmallCap Market unless,
among other things, the number of publicly held Shares (excluding Shares held
by officers, directors and beneficial owners of more than 10% of the Shares)
was less than 100,000, or there were fewer than 300 round lot holders in
total. If the Shares are no longer eligible for inclusion in the Nasdaq
National Market or the Nasdaq SmallCap Market, the Shares might still be
quoted on the OTC Bulletin Board. The extent of the public market for the
Shares and availability of such quotations would, however, depend upon such
factors as the number of holders and/or the aggregate market value of the
publicly-held Shares at such time, the interest in maintaining a market in
the Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act and other factors.
According to the Company, there were approximately 184 holders of record of
Shares as of August 12, 1998.
The Shares are currently "margin securities" under the rules of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend
credit on the collateral of the Shares for the purpose of buying, carrying or
trading in securities ("purpose loans"). Depending upon factors similar to
those described above with respect to listing and market quotations, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for purpose loans made by brokers.
The Shares are currently registered under the Exchange Act. The purchase
of Shares pursuant to the Offer may result in the Shares becoming eligible
for deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares
are not listed on a national securities exchange and there are fewer than 300
record holders. The termination of the registration of the Shares under the
Exchange Act would substantially reduce the information
9
required to be furnished by the Company to holders of the Shares and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement in connection with shareholders' meetings, and the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private"
transactions, no longer applicable to the Shares. Furthermore, "affiliates"
of the Company and persons holding "restricted securities" of the Company
could be deprived of the ability to dispose of the securities pursuant to
Rule 144 under the Securities Act of 1933, as amended. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for Nasdaq quotation. The Purchaser intends
to seek to cause the Company to terminate the registration of the Shares as
soon after the consummation of the Offer or the Merger as the requirements
for termination of registration are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
Except as otherwise noted below, the information concerning the Company
contained in this Offer to Purchase, including financial information, has
been taken from or based upon publicly available documents and records on
file with the Commission and other public sources.
The Company is a Pennsylvania corporation whose principal executive
offices are located at 000 Xxxxx Xxxx, Xxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000. Unless the context indicates otherwise, the term the "Company" also
refers to its consolidated subsidiaries.
The Company, founded in 1984, develops, manufactures, markets and sells
valve, motor, engine and compressor condition monitoring products and
provides related services to customers in nuclear power generation and
industrial process markets worldwide. The Company's services are designed to
reduce operating and maintenance costs and increase efficiency, reliability
and safety of plant operation. The Company has established certain strategic
technical and commercial alliances to advance its business objectives. The
Company has three key business segments to support its mission: (1)
performance and condition monitoring products, (2) RADView (TM) imaging
systems and (3) Liberty Technical Services.
The Company's performance and condition monitoring products provide
customers with the tools to prevent unplanned downtime, improve asset
utilization and increase plant safety. The Company's proprietary products
gather and interpret operating data of valves, engines, compressors, motors,
and certain motor-driven equipment. The products utilize sensors, instruments
and proprietary software that capture and log data for trending and analysis.
RADView imaging systems concentrates exclusively on the production and sale
of the Company's RADView Digital Radiography product line to customers in the
power, process and aerospace industries. Liberty Technical Services provides
comprehensive dynamic testing services primarily for customers in the power
industry. Dynamic testing services are provided for many plant components,
including valves, compressors, engines, motors and certain motor-driven
equipment. Special services include process safety management support, plant
inspection, computerized reporting and training.
Set forth below is a summary of certain consolidated financial information
with respect to the Company for its fiscal years ended December 31, 1997,
1996 and 1995 and the six months ended June 30, 1998 and 1997, excerpted from
financial statements presented in the Company Form 10-K, the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (the
"Company Form 10-Q") and other documents filed by the Company with the
Commission. More comprehensive financial information is included in such
reports (including management's discussion and analysis of results of
operations and financial condition) and other documents filed by the Company
with the Commission, and the financial information summary set forth below is
qualified in its entirety by reference to such reports and other documents,
which are incorporated herein by reference, as well as all the financial
information and related notes contained therein. The Company Form 10-K, the
Company Form 10-Q and such other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
10
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share amounts)
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------------------------------------
1997 1996 1995 1998 1997
--------- --------- --------- --------- ---------
(UNAUDITED)
INCOME STATEMENT DATA:
Revenue............................................ $22,630 $17,547 $21,842 $ 8,431 $11,953
Gross profit....................................... 10,281 8,934 9,857 2,663 5,954
Loss from continuing operations ................... (6,071) (4,536) (5,476) (3,482) (996)
Income tax benefit ................................ (2,311) 30 (1,263) (1,359) --
Minority interest in loss of joint venture ....... (134) (50) -- 121 105
Loss from continuing operations, net of tax ....... (3,626) (4,516) (4,213) (2,002) (891)
Income from discontinued operations, net of tax .. 88 -- -- -- 871
Gain on sale of discontinued operations, net of
tax............................................... 2,641 -- -- -- --
Net income (loss).................................. (897) (2,572) (2,642) (2,002) (20)
AT DECEMBER 31, AT JUNE 30, 1998
------------------ ----------------
1997 1996 (UNAUDITED)
-------- --------
BALANCE SHEET DATA:
Working capital............................ $ 9,816 $ 7,536 $ 6,747
Total assets............................... 18,434 23,658 15,007
Long-term debt (including current portion) 282 262 220
Shareholders' equity....................... 13,125 13,973 11,109
The Company is subject to the information and reporting requirements of
the Exchange Act and is required to file reports and other information with
the Commission relating to its business, financial condition and other
matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them,
the principal holders of the Shares, any material interests of such persons
in transactions with the Company and other matters is required to be
disclosed in proxy statements distributed to the Company's shareholders and
filed with the Commission. These reports, proxy statements and other
information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 000 Xxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, and also should be available for inspection and
copying at prescribed rates at the following regional offices of the
Commission: Seven World Trade Center, New York, New York 10048; and 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000. Copies of this material
may also be obtained by mail, upon payment of the Commission's customary
fees, from the Commission's principal office at 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000. The Commission also maintains an Internet web site at
xxxx://xxx.xxx.xxx that contains reports, proxy statements and other
information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND CRANE
The Purchaser. The Purchaser is a Pennsylvania corporation which was
organized in 1998. The principal offices of the Purchaser are located at 000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The Purchaser is a wholly
owned subsidiary of Crane. Until immediately prior to the time that the
Purchaser will purchase Shares pursuant to the Offer, it is not expected that
the Purchaser will have any significant assets or liabilities or engage in
activities other than the ownership of Shares and those activities incident
to the transactions contemplated by the Offer.
Crane. Crane is a Delaware corporation with its principal executive
offices located at 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
Crane is a diversified manufacturer of engineered industrial products and the
largest American distributor of doors, windows and millwork. Founded in 1855,
Xxxxx employs over 10,000 people in North America, Europe, Asia and
Australia.
Crane is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning Xxxxx'x directors and
officers, their remuneration, stock options granted to them, the principal
holders of Xxxxx'x securities, any material interests of such persons in
transactions with Crane and other matters is required to be disclosed in
proxy
11
statements distributed to Xxxxx'x shareholders and filed with the Commission.
These reports, proxy statements and other information are available for
inspection and copies may be obtained in the same manner as set forth for the
Company in Section 8. Xxxxx'x Common Stock is listed on the New York Stock
Exchange (the "NYSE"), and reports, proxy statements and other information
concerning Crane are also available for inspection at the offices of the
NYSE, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The name, citizenship, business address, principal occupation or
employment and five-year employment history for each of the directors and
executive officers of Xxxxx and the Purchaser are set forth in Schedule I
hereto.
No Ownership of Shares. Neither Crane nor the Purchaser, nor, to the
knowledge of Crane or the Purchaser, any of the persons listed in Schedule I
hereto, or any associate or majority-owned subsidiary of such persons,
beneficially owns any equity security of the Company, and neither Crane nor
the Purchaser, nor, to the knowledge of Crane or the Purchaser, any of the
other persons referred to above, has effected any transaction in any equity
security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, neither Xxxxx nor the
Purchaser, nor, to the knowledge of Crane or the Purchaser, any of the
persons listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or
the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, neither Xxxxx nor the Purchaser, nor, to the knowledge of Crane or
the Purchaser, any of the persons listed in Schedule I hereto has had any
transactions with the Company, or any of its executive officers, directors or
affiliates that would require reporting under the rules of the Commission.
No Civil Proceedings. During the past five years neither Xxxxx nor the
Purchaser, nor, to the knowledge of Crane or the Purchaser, any of the
persons listed in Schedule I hereto has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, U.S.
federal or state securities laws, or finding any violation of such laws.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
Xxxxx initially began considering the possibility of acquiring the Company
in October 1997, after becoming aware of the filing of a shelf registration
statement covering the sale from time to time in market transactions of
Shares held by certain substantial shareholders of the Company. Also, in
mid-November the Company publicly reported that it faced certain liquidity
issues. Although these issues had been mitigated by receipt of the proceeds
from the sale of one of the Company's businesses, Xxxxx believed that
liquidity ultimately could be a longer-term issue for the Company, creating a
possible opportunity for an acquisition by Xxxxx. In late February, following
the Company's announcement of continuing operating losses in the fourth
quarter of 1997, Xx. X.X. Xxxxx, Chairman and Chief Executive Officer of
Xxxxx, contacted Xx. Xxxxx X. Xxxxxxx, a financial advisor based in
Philadelphia, and asked him to explore the Company's possible interest in a
transaction with Xxxxx with any contacts he had on the Company's Board of
Directors.
During late February and early March 1998, Xx. Xxxxxxx met separately with
Xx. Xxxxxx X. Xxxxxxx, XX, a director of the Company, Messrs. Xxxxxxx Xxxxx
and Xxxxxxx Xxxx, non-management founders of the Company with substantial
holdings of Shares, and Xx. Xxxxxxx Xxxxxxx, a director of the Company, each
of whom indicated interest in discussing a possible transaction with Xxxxx.
On March 10, Messrs. Xxxxxxx and Xxxxx met with Mr. Xxxxxxx Xxxxx, a director
and substantial shareholder of the Company, who also expressed interest in a
possible transaction.
A Confidentiality Agreement was signed by Xxxxx on March 18, 1998, and
management presentations to Crane by the Company and preliminary due
diligence by Crane occurred on March 19, 1998.
12
During the remainder of March and early April, Xxxxx made a number of
follow-up requests for data from the Company, and conducted a more detailed
review of the Company on April 2 and 3, 1998. During this period, Xx. Xxxxxxx
had a number of discussions with Xx. Xxxxx concerning a possible transaction.
On May 5, 1998, Xxxxx delivered a written indication of interest to the
Company to acquire the Company (excluding the Company's RADView business) at
a price of $4.25 per Share payable in shares of Crane Common Stock or $4.50
per Share payable in cash, subject to satisfactory due diligence, definitive
documentation and approval by the Boards of Directors of Crane and the
Company and the Company's shareholders, as well as the receipt of any
necessary governmental approvals. Xxxxx subsequently was advised that the
Company had decided to explore other possible alternatives.
On May 12, 1998, the Company issued a press release reporting financial
results for the quarter ended March 31, 1998 that reflected decreased
revenues and earnings as compared to the first quarter of 1997. The press
release further stated that the Company's Board of Directors "is considering
strategic alternatives to enhance shareholder value, and that such
alternatives may include the sale or restructuring of all or part of the
Company."
On May 22, 1998, Xx. Xxxxx advised Xx. Xxxxx that he was withdrawing
Xxxxx'x May 5 proposal.
On June 8, 1998, the Company issued a press release reporting "a
restructuring of the Company in an effort to reduce operating expenses and to
provide additional focus to their key accounts and markets."
On June 25, 1998, Xx. Xxxxx and Xx. Xxxxxxx met with Xx. Xxxxx to explore
renewal of Xxxxx'x interest in a possible transaction with the Company. Xx.
Xxxxx was advised that Xxxxx would need to take a close look at the
then-current financial condition and operating performance of the Company in
considering whether to make a proposal.
During the period from June 29 through July 1, 1998, Xxxxx conducted
additional due diligence with respect to the Company.
On July 13, 1998, Xxxxx submitted a revised indication of interest at a
price of $3.25 per Share in cash, to be structured as a tender offer with an
80% minimum and a subsequent merger to acquire shares not purchased in the
tender offer, and otherwise with conditions substantially the same as Xxxxx'x
initial proposal. Following discussions with Xx. Xxxxx subsequent to a
meeting of the Company's Board of Directors on July 16, 1998, Xxxxx agreed
that it would increase its proposal to $3.50 per Share.
Between July 22, 1998 and August 10, 1998, Xxxxx and the Company and their
respective professional advisors negotiated the Merger Agreement. On July 24,
1998, the Board of Directors of Crane approved the transaction and authorized
management to negotiate the Merger Agreement and all necessary ancillary
documentation.
On August 10, 1998, the Board of Directors of the Company authorized
representatives of the Company to execute the Merger Agreement and the Stock
Option Agreement. The Merger Agreement and the Stock Option Agreement,
together with the Shareholder Agreements, were executed on August 11, 1998
and the transaction was publicly announced on the morning of August 12, 1998.
Other than as set forth above, there have not been any contacts,
negotiations or transactions between Crane or the Purchaser, or their
respective subsidiaries, or, to the best knowledge of Crane or the Purchaser,
any of the persons listed in Schedule I hereto, on the one hand, and the
Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors, or a sale or other
transfer of a material amount of assets.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE STOCK OPTION AGREEMENT;
THE SHAREHOLDER AGREEMENTS; DISSENTERS' RIGHTS; PLANS FOR THE COMPANY;
THE RIGHTS
Purpose. The purpose of the Offer and the Merger is to acquire control of,
and the entire equity interest in, the Company.
The Merger Agreement. Following is a summary of the Merger Agreement, a
copy of which has been filed as an exhibit to the Schedule 14D-1 filed by the
Purchaser with the Commission in connection
13
with the Offer. Such summary is qualified in its entirety by reference to the
Merger Agreement. The Merger Agreement should be read in its entirety for a
more complete description of the matters summarized below. Defined terms used
below and not defined herein have the respective meanings assigned to those
terms in the Merger Agreement.
The Merger Agreement provides that, without the prior written consent of
the Company, the Purchaser may not (i) decrease the amount offered per Share
or change the form of consideration payable in the Offer, (ii) decrease the
number of Shares sought to be purchased in the Offer, (iii) impose additional
conditions to the Offer, or (iv) amend any other term of the Offer in any
manner adverse to the holders of Shares. If at any Expiration Date, any of
the conditions to the Offer are not satisfied or waived by the Purchaser, the
Purchaser may extend the Offer from time to time. Subject to the terms of the
Offer and the Merger Agreement and the satisfaction of all the conditions to
the Offer as of any Expiration Date, the Purchaser will accept for payment
and pay for all Shares validly tendered and not withdrawn pursuant to the
Offer as soon as practicable after such Expiration Date of the Offer,
provided that, if all of the conditions to the Offer are satisfied and more
than 65% but less than 80% of the outstanding shares of Company Common Stock
on a fully diluted basis (including shares of Company Common Stock issuable
upon exercise of outstanding Options) have been validly tendered and not
withdrawn in the Offer, the Purchaser will have the right, in its sole
discretion, to extend the Offer from time to time for up to a maximum of ten
additional business days in the aggregate, provided the Purchaser agrees to
waive the conditions set forth in paragraphs (c), (f) and (g) of Section 14
hereof.
The Company has represented to Crane in the Merger Agreement that the
Board of Directors of the Company (the "Company Board"), at a meeting duly
called and held, has (i) determined that each of the transactions
contemplated by the Merger Agreement, including each of the Offer and the
Merger, is fair to and in the best interests of the Company and its
shareholders, (ii) approved the Offer, the Merger, the Stock Option Agreement
and the Shareholder Agreements, (iii) recommended acceptance of the Offer and
approval of the Merger Agreement by the Company's shareholders, and (iv)
taken all other action necessary to render Section 2538 and Subchapter F of
Chapter 25 of the PBCL and the Rights inapplicable to the Offer and the
Merger. Such recommendation and approval may be withdrawn, modified or
amended only to the extent permitted by the Merger Agreement. The Company
further represented that, prior to the execution of the Merger Agreement,
Xxxx Xxxxx delivered to the Company Board its written opinion that the
consideration to be received by the holders of Shares pursuant to the Offer
and the Merger is fair to the Company's shareholders from a financial point
of view.
The Merger Agreement provides that Xxxxx, upon the payment by the
Purchaser for Shares pursuant to the Offer representing at least such number
of Shares as shall satisfy the Minimum Condition, and from time to time
thereafter, is entitled to designate such number of directors, rounded up to
the next whole number, on the Company Board as is equal to the product of the
total number of directors on the Company Board (determined after giving
effect to the directors so elected pursuant to this provision) multiplied by
the percentage that the aggregate number of Shares beneficially owned by
Crane or its affiliates bears to the total number of Shares then outstanding.
The Company shall, upon request of Xxxxx, promptly take all actions (but
specifically excluding the calling of a shareholders' meeting) necessary to
cause Xxxxx'x designees to be so elected, including, if necessary, amending
the By-laws of the Company (to the extent permitted to be amended by the
Board of Directors) and seeking the resignations of one or more existing
directors; provided, however, that prior to the time the Merger becomes
effective (the "Effective Time"), the Company Board shall always have not
less than two members who were directors of the Company on the date of the
Merger Agreement ("Current Directors") and, in Xxxxx'x sole discretion, up to
five Current Directors. If the number of Current Directors is reduced prior
to the Effective Time below the number of Current Directors so specified by
Xxxxx due to the death or resignation of one or more of the Current
Directors, then the remaining director or directors who is or are Current
Directors shall be entitled to designate by majority action of the remaining
Current Directors or action of the sole remaining Current Director, one or
more persons, as the case may be, that has not been designated by, and is not
an Affiliate of, Crane to fill such vacancy or vacancies and who shall be
deemed to be Current Directors for all purposes of the Merger Agreement.
Following the election or appointment of Xxxxx'x designees and prior to the
Effective Time, any amendment or termination of the Merger Agreement by the
Company, any extension by the Company of the time for the performance of
14
any of the obligations or other acts of Xxxxx or the Purchaser or waiver of
any of the Company's rights thereunder, will require the concurrence of a
majority of the directors of the Company then in office who are Current
Directors (or in the case where there are two or fewer directors who are
Current Directors, the concurrence of one director who is a Current
Director).
The Merger. The Merger Agreement provides that, at the Effective Time, the
Purchaser will be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser will cease and the Company will
continue as the Surviving Corporation.
The Second Amended and Restated Articles of Incorporation of the Company,
in the form attached to the Merger Agreement as Exhibit 1, will be the
articles of incorporation of the Surviving Corporation, until thereafter
changed or amended as provided therein or by applicable law. The By-Laws of
the Company in effect at the Effective Time will be the by-laws of the
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable law.
Subject to applicable law, the officers and directors of the Purchaser
immediately prior to the Effective Time will be the officers and directors,
respectively, of the Surviving Corporation and will hold office until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified.
By virtue of the Merger and without any action on the part of the holders
thereof, at the Effective Time, each Share issued and outstanding immediately
prior to the Effective Time (other than (i) any Shares held by Crane, the
Purchaser, any wholly owned subsidiary of Crane or the Purchaser, or held in
the treasury of the Company, which Shares, by virtue of the Merger and
without any action on the part of the holder thereof, will be canceled and
retired and will cease to exist with no payment being made with respect
thereto and (ii) Dissenting Shares) will be canceled and retired and will be
converted into the right to receive the Merger Consideration in cash, payable
to the holder thereof, without interest thereon, upon surrender of the
certificate formerly representing such Share. At the Effective Time, each
share of common stock of the Purchaser issued and outstanding immediately
prior to the Effective Time will, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and become one
validly issued, fully paid and non-assessable share of common stock of the
Surviving Corporation.
The Merger Agreement provides that, prior to the Effective Time, the
Company will take all actions necessary to cause (i) each unexpired and
unexercised Option that has an exercise price less than the Per Share Amount
to be automatically converted at the Effective Time into an amount equal to
the difference between the Per Share Amount and the exercise price of the
Option, multiplied by the number of shares of Company Common Stock issuable
immediately prior to the Effective Time upon exercise of the Option (without
regard to vesting periods or restrictions on exercisability) and (ii) each
unexpired and unexercised Option that has an exercise price equal to or
greater than the Per Share Amount to be canceled so that no Option shall have
any force or effect on or after the Effective Time.
The Company has agreed pursuant to the Merger Agreement that, if required
by applicable law in order to consummate the Merger, as soon as practicable
following the acceptance for payment and payment for Shares by the Purchaser
pursuant to the Offer, it will (i) convene a special meeting of its
shareholders for the purpose of considering and taking action upon the Merger
Agreement; (ii) prepare and file with the Commission a preliminary proxy
statement relating to the Merger Agreement, and use its reasonable efforts
(x) to obtain and furnish the information required to be included by the
Commission therein and to cause a definitive proxy statement (the "Proxy
Statement") to be mailed to its shareholders and (y) to obtain the necessary
approvals of the Merger and the Merger Agreement by its shareholders; and
(iii) subject to certain provisions of the Merger Agreement, include in the
Proxy Statement the recommendation of the Company Board that shareholders of
the Company vote in favor of the approval of the Merger and the Merger
Agreement. Xxxxx has agreed in the Merger Agreement that (x) it will vote, or
cause to be voted, all of the Shares then owned by it, the Purchaser or any
of its other subsidiaries in favor of approval of the Merger and the Merger
Agreement and, (y) following consummation of the Offer, it shall use its best
efforts to cause the Company to take the actions described in clauses (i),
(ii) and (iii) of this paragraph, if such actions are required by applicable
law to consummate the Merger.
15
Representations and Warranties of the Company. The Merger Agreement
contains customary representations and warranties with respect to the
Company, including, among other things, (i) with respect to the organization,
corporate powers and qualifications of the Company and each of its
subsidiaries; (ii) with respect to the capitalization of the Company and its
subsidiaries; (iii) that the execution and delivery of the Merger Agreement
and the Stock Option Agreement by the Company and the consummation by the
Company of the transactions contemplated thereby have been duly and validly
authorized and approved by the Company Board and that no other corporate
proceedings on the part of the Company are necessary to authorize or approve
the Merger Agreement or the Stock Option Agreement or to consummate the
transactions contemplated thereby (other than, with respect to the Merger,
the approval of the Merger by the affirmative vote of the holders of at least
a majority of the votes cast by holders of Shares entitled to vote thereon,
to the extent required by applicable law); (iv) with respect to the absence
of conflicts, violations or breaches resulting from the execution and
delivery of the Merger Agreement or the Stock Option Agreement or
consummation of the transactions contemplated thereby, of any provision of
the Amended and Restated Articles of Incorporation or the By-laws of the
Company, under any note, bond, mortgage, indenture, lease, contract,
agreement, instrument or obligation to which the Company or any of its
subsidiaries is a party or by which their assets are bound, or of any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
subsidiaries or their assets; (v) with respect to required consents,
approvals, orders or authorizations of, or registration, declaration or
filing with, any Governmental Authority (as defined below) by or with respect
to the Company or any of its subsidiaries in connection with the execution
and delivery of the Merger Agreement or the Stock Option Agreement or the
consummation of the transactions contemplated thereby; (vi) with respect to
the accuracy of the documents filed by the Company with the Commission; (vii)
with respect to the Company's financial statements and its financial
condition; (viii) with respect to indebtedness, indemnification obligations
and liabilities of the Company and its subsidiaries; (ix) with respect to the
absence of certain changes or events since June 30, 1998, including that
there has been no Material Adverse Effect (as defined below) with respect to
the Company and its subsidiaries taken as a whole; (x) with respect to
certain tax matters regarding the Company and its subsidiaries; (xi) with
respect to the absence of certain transactions between the Company and any of
its affiliates and the absence of certain payments by the Company or any of
its affiliates; (xii) with respect to Required Authorizations (as defined
below) that must be given or obtained in connection with the Merger Agreement
or the Stock Option Agreement; (xiii) with respect to the absence of certain
litigation with respect to the Company; (xiv) with respect to compliance by
the Company and its subsidiaries with applicable laws and regulations; (xv)
with respect to contracts to which the Company or any of its subsidiaries is
a party; (xvi) with respect to real property leases to which the Company or
any of its subsidiaries is party; (xvii) with respect to personal property
owned or leased by the Company or any of its subsidiaries; (xviii) with
respect to patents, trademarks and other intellectual property of the Company
and its subsidiaries; (xix) with respect to environmental matters affecting
the Company or any of its subsidiaries or their respective properties; (xx)
with respect to products and services liabilities of the Company and its
subsidiaries; (xxi) with respect to insurance maintained by the Company and
its subsidiaries; (xxii) with respect to employment and related agreements to
which the Company or any of its subsidiaries is a party; (xxiii) with respect
to certain labor matters; (xxiv) with respect to the Company's employee
benefit plans; (xxv) with respect to the absence of discussions or
negotiations regarding any Acquisition Proposal involving the Company; (xxvi)
with respect to the accuracy and completeness of the information supplied by
the Company in connection with the Offer and the Proxy Statement; (xxvii)
with respect to the vote of shareholders of the Company required to approve
the Merger; (xxviii) with respect to certain provisions of the PBCL or other
state takeover statutes being inapplicable to the transactions contemplated
by the Merger Agreement, the Stock Option Agreement and the Shareholder
Agreements; (xxix) with respect to certain amendments made to the Rights
Agreement in conjunction with the Merger Agreement, the Stock Option
Agreement and the Shareholder Agreements; and (xxx) with respect to the
absence of brokerage or finders fees or commissions payable in connection
with the Merger Agreement and the transactions contemplated thereby (other
than with respect to fees payable to Xxxx Xxxxx); and (xxxi) the accuracy and
completeness of representations and warranties made by the Company in the
Merger Agreement and related documents.
16
For purposes of the Merger Agreement, "Governmental Authority" means any
nation or government, any state, province or other political subdivision
thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of a government with jurisdiction over
the matter in question.
For purposes of the Merger Agreement, "Material Adverse Effect" means a
material adverse effect on the business, assets (including intangible
assets), condition (financial or otherwise), or results of operations of the
Company and its subsidiaries taken as a whole; provided, however, that for
purposes of the Merger Agreement, (a) a decline in the market price of the
Company Common Stock shall not, in and of itself, constitute a Material
Adverse Effect and (b) operating losses shall not constitute a Material
Adverse Effect unless such operating losses exceed $1,000,000 in any
consecutive four week period from and after June 30, 1998 and, provided
further, that such operating losses shall be determined on the basis of
accounting and financial management practices consistent with the Company's
past practices.
For purposes of the Merger Agreement, "Required Authorizations" shall
mean, with respect to any person, (i) all consents, authorizations, approvals
or other orders or actions of, or filings or registrations with, any federal,
state, local or foreign governmental authority or agency and (ii) all
notices, permits, approvals, consents, qualifications, waivers or other
actions of third parties under any lease, note, mortgage, indenture,
agreement or other instrument (or, in the case of the Company, under any
Contract, Employment Agreement or any Governmental Approval) or under any
other third-party franchise, license or permit, other than any such consents,
authorizations, approvals, permits, qualifications, waivers, orders,
registrations, filings, applications or other actions, the absence of which
would not reasonably be expected to have a Material Adverse Effect with
respect to such person and its subsidiaries, taken as a whole.
Representations and Warranties of Crane and the Purchaser. The Merger
Agreement contains customary representations and warranties by Crane and the
Purchaser, including, among other things, (i) with respect to the
organization, corporate powers and qualifications of Crane and the Purchaser;
(ii) that each of Crane and the Purchaser has the necessary corporate power
and authority to execute and deliver the Merger Agreement and to consummate
the transactions contemplated thereby; (iii) with respect to the absence of
conflict between the terms and provisions of the Merger Agreement and the
transactions contemplated thereby with any laws, regulations, agreements,
contracts or other instruments and obligations; (iv) the accuracy and
completeness of information supplied by Crane or the Purchaser for inclusion
in the Schedule 14D-9 or the Proxy Statement; and (v) with respect to the
ownership by Crane or Purchaser of Company Common Stock.
Certain Covenants. The Merger Agreement obligates the Company, from the
date of the Merger Agreement until the consummation of the Offer, to conduct
its (and its subsidiaries') operations only in the ordinary and usual course
of business consistent with past practice and to use its reasonable efforts
to preserve intact their business organizations, to keep available the
services of their present officers and key employees and to preserve the
goodwill of those having business relationships with them. The Merger
Agreement also contains specific covenants as to certain activities of the
Company prior to the consummation of the Offer, which provide that the
Company will (and will cause its subsidiaries to):
(i) preserve and maintain its corporate existence and all of its rights,
privileges and franchises reasonably necessary or desirable in the normal
conduct of its business, except to the extent contemplated by any
transactions specifically permitted by the Merger Agreement;
(ii) not acquire any stock or other interest in, nor (except in the
ordinary course of business) purchase any assets of, any corporation,
partnership, association or other business organization or entity or any
division thereof (except any stock or assets distributed to the Company or
any of its subsidiaries as part of any bankruptcy or other creditor
settlement or pursuant to a plan of reorganization), nor agree to do any
of the foregoing;
(iii) not sell, lease, assign, transfer or otherwise dispose of any of
its assets (including, without limitation, patents, trade secrets or
licenses), nor suffer to exist or create any Lien on any of its assets,
except as permitted by the Merger Agreement or in the ordinary course of
business and except that the Company and each of its subsidiaries may sell
or otherwise dispose of any assets which are obsolete;
17
(iv) not incur any indebtedness, other than as a result of borrowings or
drawdowns, the issuance of letters of credit for the account of the
Company and the incurrence of interest, letter of credit reimbursement
obligations and other obligations under the terms of the Silicon Valley
Bank Loan , which indebtedness shall be incurred only for working capital
purposes;
(v) not (x) alter, amend or repeal any provision of the Amended and
Restated Articles of Incorporation of the Company or Bylaws of the Company
or the certificate of incorporation or by-laws of any subsidiary of the
Company, (y) change the number of its directors (other than as a result of
the death, retirement or resignation of a director), (z) form or acquire
any subsidiaries not existing as of the date of the Merger Agreement, (xx)
enter into, modify or terminate any contracts, real property leases or
personal property leases or agree to do so, (yy) enter into, modify or
terminate any employment agreement or hire any personnel other than
temporary personnel not eligible to participate in any benefit plans or
programs of the Company, or (zz) declare, pay, commit to or incur any
obligation of any kind for the payment of any bonus, additional salary or
compensation or retirement, termination, welfare or severance benefits or
change in control benefits payable or to become payable to any of its
employees or such other persons, except for such matters as are required
pursuant to the terms of any existing employment agreement or benefit
plan;
(vi) maintain its books, accounts and records in the usual, ordinary and
regular manner and in material compliance with all applicable laws;
(vii) pay and discharge all taxes imposed upon it or upon its income or
profits, or upon any property belonging to it, prior to the date on which
penalties attach thereto, except to the extent that the Company is
currently contesting, in good faith and by proper proceedings, the payment
of such taxes and the Company maintains appropriate reserves with respect
thereto;
(viii) not settle any tax claim against the Company or any of its
subsidiaries or any litigation (net of applicable insurance proceeds) in
excess of $10,000;
(ix) meet in all material respects its obligations under all contracts,
real property leases and personal property leases and not become in
default thereunder;
(x) maintain in all material respects its business and assets in good
repair, order and condition, reasonable wear and tear excepted, and
maintain insurance upon such business and assets at least comparable in
amount and kind to that in effect on the date hereof;
(xi) maintain in all material respects its present relationships and
goodwill with suppliers, brokers, manufacturers, representatives,
distributors, customers and others having business relations with it
(provided that it may pursue overdue accounts and otherwise exercise
lawful remedies in its customary fashion);
(xii) not declare, set aside, make or pay any dividends or other
distributions with respect to its capital stock, including, without
limitation, in the case of the Company, the Company Common Stock, or
purchase or redeem any shares of its capital stock, including, without
limitation, in the case of the Company, the Company Common Stock, or agree
to take any such action;
(xiii) not authorize or make any single capital expenditure in excess of
$5,000 or make any capital expenditure if the aggregate of the amount of
such capital expenditure together with the amounts of all other capital
expenditures since the date of the Merger Agreement shall exceed $25,000;
(xiv) not violate any law or regulation applicable to it nor violate any
order, injunction or decree applicable to the conduct of its business;
(xv) not increase the number of shares authorized or issued and
outstanding of its capital stock, including, without limitation, in the
case of the Company, the Company Common Stock, nor grant or make any
pledge, option, warrant, call, commitment, right or agreement of any
character relating to its capital stock, including, without limitation, in
the case of the Company, the Company Common Stock, nor issue or sell any
shares of its capital stock, including, without limitation, in the case of
the
18
Company, the Company Common Stock, or securities convertible into such
capital stock, or any bonds, promissory notes, debentures or other
corporate securities or become obligated so to sell or issue any such
securities or obligations, except, in any case, issuance of shares of the
Company Common Stock (i) pursuant to the exercise of outstanding options,
warrants or other rights or (ii) pursuant to the Stock Option Agreement;
(xvi) not make any change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles;
(xvii) not expend any money pursuant to, or incur expenses related to
performance under, the Development Contract with Norwegian Oil Companies,
Saga Petroleum ASA, Xxxxxxxx Petroleum Co., Statoil and Norsk Hydro
Produksjon in excess of $100,000 in the aggregate;
(xviii) not waive any right of substantial value or cancel any debt owed
to the Company or any subsidiary or claim against any person or entity;
and
(xix) not authorize, or commit or agree to take, any of the foregoing
actions;
provided, however, that if the Company requests in writing that Crane consent
to the taking of any affirmative action on the part of the Company the taking
of which would require such consent pursuant to this section of the Merger
Agreement and the failure to grant such consent within four business days of
receipt by Xxxxx of such request is the sole cause of the occurrence of a
Material Adverse Effect, then such Material Adverse Effect shall not be an
Event for purposes of Section 14 of this Offer to Purchase nor shall Crane be
permitted to terminate the Merger Agreement solely due to the occurrence of
such Material Adverse Effect.
The Merger Agreement also provides that the Company will not, and will not
permit any of its subsidiaries to, take any action that would, or that could
reasonably be expected to, result in (i) any of its representations and
warranties set forth in the Merger Agreement that are qualified as to
materiality becoming untrue, (ii) any of its representations and warranties
that are not so qualified becoming untrue in any material respect or (iii)
subject to certain of the Company's rights under the Merger Agreement, any of
the conditions to the Merger set forth in the Merger Agreement that are
within the Company's control not being satisfied.
Advice of Changes. The Merger Agreement provides that the Company shall
promptly advise Crane orally and in writing of (i) any representation or
warranty made by it contained in the Merger Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (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 the Merger Agreement or (iii) any
change or event having, or which could reasonably be expected to have, a
Material Adverse Effect on the Company and its subsidiaries taken as a whole
or on the truth of its representations and warranties or the ability of the
conditions to the Merger set forth in the Merger Agreement to be satisfied.
Upon such notification, Crane and Purchaser shall have the option either to
terminate the Merger Agreement or to waive any right to consider any of the
foregoing in connection with a determination as to whether any of the Events
specified in subparagraphs (c), (f) or (g) of Section 14 of this Offer to
Purchase has occurred.
No Solicitation. The Merger Agreement provides that the Company shall not,
nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by
it or any of its subsidiaries to, directly or indirectly through another
person, (i) solicit or initiate (including by way of furnishing information),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes any Acquisition Proposal (as defined below) or (ii)
participate in any discussions or negotiations regarding any Acquisition
Proposal; provided, however, that if, at any time prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer, the Board of
Directors of the Company determines in good faith, based on the advice of
outside counsel, that it is required to do so in order to comply with its
fiduciary duties to the Company's shareholders under applicable law, the
Company may, in response to an Acquisition Proposal that was not solicited by
it, and
19
subject to compliance with Section 5.02(c) of the Merger Agreement described
below (regarding informing Xxxxx of the existence and terms of such
Acquisition Proposal), (x) furnish information with respect to the Company
and its subsidiaries to any person pursuant to a customary confidentiality
agreement (as determined by the Company after consultation with its outside
counsel) and (y) participate in negotiations regarding such Acquisition
Proposal. For purposes of the Merger Agreement, "Acquisition Proposal" means
any inquiry, proposal or offer from any person relating to any direct or
indirect acquisition or purchase of 20% or more of the assets of the Company
and its subsidiaries or 20% or more of any class of equity securities of the
Company or any of its subsidiaries, any tender offer or exchange offer that
if consummated would result in any person beneficially owning 20% or more of
any class of equity securities of the Company or any of its subsidiaries, or
any merger, consolidation, business combination, share exchange,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement.
The Merger Agreement provides that, except as expressly permitted by the
terms of the preceding paragraph, neither the Board of Directors of the
Company nor any committee thereof shall (i) (unless, prior to the acceptance
for payment of shares of Company Common Stock pursuant to the Offer, it
determines in good faith, based upon the advice of outside counsel, that it
is required to do so in order to comply with its fiduciary duties to the
Company's shareholders under applicable law) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Crane, the approval or
recommendation by such Board of Directors or such committee of the Offer
(including by amendment of the Schedule 14D-9), the Merger or the Merger
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or (iii) cause the Company to enter into
any letter of intent, agreement in principle, acquisition agreement or other
similar agreement (each, an "Acquisition Agreement") related to any
Acquisition Proposal. Notwithstanding the foregoing, in the event that prior
to the acceptance for payment of Shares pursuant to the Offer the Company
receives a Superior Proposal (as defined below), the Board of Directors of
the Company may, if it determines in good faith, based on the advice of
outside counsel, that it is required to do so in order to comply with its
fiduciary duties to the Company's shareholders under applicable law, (x)
withdraw or modify its approval or recommendation of the Offer, the Merger or
the Merger Agreement or (y) approve or recommend such Superior Proposal and
terminate the Merger Agreement (and concurrently with or after such
termination, if it so chooses, cause the Company to enter into an Acquisition
Agreement with respect to any Superior Proposal) but only at a time that is
after the third business day following Xxxxx'x receipt of written notice from
the Company advising Crane that the Board of Directors of the Company has
received a Superior Proposal, specifying the terms and conditions of such
Superior Proposal and identifying the person making such Superior Proposal.
For purposes of the Merger Agreement, a "Superior Proposal" means any
proposal or offer made by a third party to acquire, directly or indirectly,
for consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Company Common Stock then outstanding
or a substantial portion of the assets of the Company and its subsidiaries
and otherwise on terms which the Board of Directors of the Company determines
in its good faith judgment, based upon the advice of its financial advisors,
to be more favorable to the Company's shareholders than the Offer and the
Merger and for which financing is either not a contingency, or, if a
contingency, is then committed and available.
In addition to the obligations of the Company set forth in the two
immediately preceding paragraphs, the Company is to as promptly as
practicable advise Crane of any Acquisition Proposal, the material terms and
conditions of such Acquisition Proposal and the identity of the person making
such request or Acquisition Proposal. The Company will keep Crane reasonably
informed of the status and details (including amendments) of any such
Acquisition Proposal.
None of the foregoing provisions of the Merger Agreement shall prohibit
the Company from taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from
making any disclosure to the Company's shareholders if, in the good faith
judgment of the Board of Directors of the Company, after consultation with
outside counsel, failure so to disclose would be inconsistent with its
fiduciary duties to the Company's shareholders under applicable law;
provided, however, that neither the Company nor its Board of Directors nor
any committee thereof shall,
20
except as permitted by such provisions, withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to this Agreement
or the Offer or the Merger or approve or recommend, or propose publicly to
approve or recommend, an Acquisition Proposal.
Access to Information. The Merger Agreement provides that, until the
earlier of the termination of the Merger Agreement and the Effective Time,
the Company will give Crane and the Purchaser and their representatives
reasonable access, during normal business hours, to the offices and other
facilities and to the books and records of the Company and its subsidiaries.
Required Authorizations. The Merger Agreement provides that Crane, the
Purchaser and, subject to the provisions of the Merger Agreement discussed
under the heading "No Solicitation", above ("Section 5.02"), the Company,
shall each, and subject to Section 5.02, the Company shall cause each of its
subsidiaries to, as promptly as practicable, take all reasonable actions
necessary to obtain all Required Authorizations (if any) required to be given
or obtained by it, respectively, to permit Crane and the Purchaser, on the
one hand, and the Company, on the other, to consummate the transactions
contemplated by the Merger Agreement and the Stock Option Agreement and to
realize the respective benefits to each party contemplated thereby; provided
that Crane shall not be required to take any action to comply with any legal
requirement or agree to the imposition of any order of any Governmental
Authority that would (i) prohibit or restrict the ownership or operation by
Crane of any portion of the business or assets of Crane or the Company (or
any of their respective subsidiaries), (ii) compel Crane or the Company (or
any of their respective subsidiaries) to dispose of or hold separate any
portion of its or the Company's business or assets, or (iii) impose any
limitation on the ability of Crane or the Company or any of their respective
affiliates or subsidiaries to own or operate the business and operations of
the Company and its subsidiaries, and provided further that the Company and
its subsidiaries are not to incur fees and expenses in excess of $25,000 in
the aggregate in order to obtain certain such Required Authorizations without
the prior written consent of Xxxxx.
Xxxxx, the Purchaser and, subject to Section 5.02, the Company, are to
each cooperate with the others in filing in a timely manner any applications,
requests, reports, registrations or other documents, including, without
limitation, all reports and documents required to be filed by or under the
Exchange Act (including, without limitation, the Offer documents, the
Schedule 14D-9 and the Proxy Statement), with any Governmental Authority
having jurisdiction with respect to the transactions contemplated by the
Merger Agreement and in consulting with and seeking favorable action from any
Governmental Authority.
Subject to Section 5.02, the Company is to, and is to cause each of its
subsidiaries to, take all reasonable action necessary to obtain all approvals
or consents of any person needed in order that certain contracts continue in
full force and effect under the same terms and conditions currently in effect
following consummation of the transactions contemplated by the Merger
Agreement; provided, however, that the receipt of any approval or consent
under any contracts pursuant to the requirement stated in this paragraph is
not a condition precedent to the obligations of Crane or Purchaser under the
Merger Agreement.
Subject to Section 5.02, the Company and its Board of Directors are to (i)
take all reasonable action necessary to ensure that no state takeover statute
or similar statute or regulation in effect on the date of the Merger
Agreement is or becomes applicable to the Offer, the Merger, the Merger
Agreement, the Stock Option Agreement, the Shareholder Agreements or any of
the other transactions contemplated by the Merger Agreement and (ii) if any
such state takeover statute or similar statute or regulation becomes
applicable to the Offer, the Merger, the Merger Agreement, the Stock Option
Agreement, the Shareholder Agreements or any other transaction contemplated
by the Merger Agreement, take all reasonable action necessary to ensure that
the Offer, the Merger, the Stock Option Agreement, the Shareholder Agreements
and the other transactions contemplated by the Merger Agreement may be
consummated as promptly as practicable on the terms contemplated by the
Merger Agreement and otherwise to minimize the effect of such statute or
regulation on the Merger and the other transactions contemplated by the
Merger Agreement.
Financial Statements of the Company. As soon as practicable but in any
event within 30 days after the end of each calendar month commencing with
July 1998, through the consummation of the Offer or earlier termination of
the Merger Agreement in accordance with its terms, the Company is to deliver
to
21
Xxxxx unaudited consolidated balance sheets of the Company and its
subsidiaries as at the end of such calendar month and as at the end of the
comparative month of the preceding year, together with unaudited summaries of
consolidated earnings of the Company and its subsidiaries for such calendar
month and the comparative calendar month of the preceding year. As soon as
practicable but in any event within 30 days after the end of each fiscal
quarter of the Company, commencing with June 30, 1998, and within 60 days
after the end of the fiscal year ended December 31, 1998, as the case may be,
through the consummation of the Offer or earlier termination of the Merger
Agreement, the Company is to deliver to Crane unaudited consolidated and
consolidating balance sheets of the Company and its subsidiaries as at the
end of such fiscal quarter and as at the end of the comparative fiscal
quarter of the preceding year, together with the related unaudited statements
of consolidated income and cash flows for the fiscal quarters then ended.
Employee Matters. The Merger Agreement includes Crane's agreement (a) that
on and after the consummation of the Offer and until the date that is 18
months after the Effective Time, Crane shall cause the Company, and, on and
after the Effective Time, the Surviving Corporation, to honor the severance
policy of the Company and the employment agreements that are identified in
the Company Disclosure Schedule, (b) to give the employees of the Company
full credit for purposes of eligibility and vesting under any employee
benefit plans or arrangements maintained by Crane, the Company or any
subsidiary of Crane for such employees' service with the Company or any of
its subsidiaries to the same extent recognized by the Company immediately
prior to the consummation of the Offer, (c) to waive all limitations as to
pre-existing conditions, exclusions or waiting periods with respect to
participation and coverage requirements applicable to the Company employees
under any welfare benefit plans that such employees may be eligible to
participate in after the consummation of the Offer and (d) to provide
employees of the Company, and, after the Effective Time, the Surviving
Corporation, with employee benefits comparable to those provided by Crane (or
any of its subsidiaries) to similarly situated employees of Crane (or any of
its subsidiaries).
Rights Agreement. The Merger Agreement provides that the Board of
Directors of the Company will take all further action reasonably requested in
writing by Xxxxx (including redeeming the Rights immediately prior to the
Effective Time or amending the Rights Agreement) in order to render the
Rights inapplicable to the Offer, the Merger and the other transactions
contemplated by the Merger Agreement.
Indemnification; Directors' and Officers' Insurance. The Merger Agreement
provides that for six years after the Effective Time, Crane shall, or shall
cause the Company to, indemnify, defend and hold harmless any person who is,
or has been at any time prior to the date of the Merger Agreement, or who
becomes prior to the Effective Time, a director or an officer (an
"Indemnified Person") of the Company or any of its subsidiaries against all
losses, claims, damages, liabilities, costs and expenses (including
attorneys' fees and expenses), judgments, fines, losses and amounts paid in
settlement in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any such
Claim is based on, or arises out of: (i) the fact that such Indemnified
Person is or was a director or an officer of the Company or any of its
subsidiaries or is or was serving at the request of the Company or any of its
subsidiaries as a director or an officer of another corporation, partnership,
joint venture, trust or other enterprise; or (ii) the Merger Agreement or any
of the transactions contemplated hereby, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing or occurring
prior to or at the Effective Time, regardless of whether such Claim is
asserted or claimed prior to, at or after the Effective Time, to the full
extent permitted under the PBCL, the Amended and Restated Articles of
Incorporation of the Company and the Company's By-laws; provided, however,
that neither Crane nor the Company shall be required to indemnify any
Indemnified Person in connection with any proceeding (or portion thereof)
involving any Claim initiated by such Indemnified Person unless the
initiation of such proceeding (or portion thereof) was authorized by the
Board of Directors of Crane or unless such proceeding is brought by an
Indemnified Person to enforce rights to indemnification under the Merger
Agreement. If any Indemnified Person becomes involved in any Claim, after the
consummation of the Offer, Crane shall, or shall cause the Company to,
periodically advance to such Indemnified Person its legal and other expenses
(including the cost of any investigation and preparation incurred in
connection therewith), subject to the providing by such Indemnified Person of
an undertaking to reimburse all amounts so advanced in the case of a final
nonappealable determination by a court of competent jurisdiction that such
Indemnified Person is not entitled to be indemnified therefor.
22
The Merger Agreement also provides that Crane or the Company shall
maintain the Company's existing directors' and officers' liability insurance
policy ("D&O Insurance") for a period of not less than six years after the
Effective Time; provided, however, that Crane may substitute therefor
policies of substantially similar coverage (including pursuant to Crane's own
policy) and amounts containing terms no less advantageous to such former
directors or officers; provided further that, subject to the preceding
proviso, if the existing D&O Insurance expires or is canceled during such
period, Crane or the Surviving Corporation shall use their best efforts to
obtain substantially similar D&O Insurance; and provided further that neither
Crane nor the Surviving Corporation shall be required to pay an annual
premium for D&O Insurance in excess of 200% of the last annual premium paid
prior to the date of the Merger Agreement, but in such case shall purchase as
much coverage as possible for such amount.
Public Announcement. The Merger Agreement provides that Crane and the
Company will consult with each other before issuing, and provide each other
the opportunity to review, comment upon and concur with, any press release or
other public statements with respect to the transactions contemplated by the
Merger Agreement, including the Offer and the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or
by obligations pursuant to any listing agreement with any national securities
exchange.
Shareholder Litigation. The Merger Agreement provides that the Company
shall give Xxxxx the opportunity to participate, at no expense to the
Company, in the defense or settlement of any shareholder litigation against
the Company and its directors relating to the transactions contemplated by
the Merger Agreement. No such settlement is to be agreed to without Xxxxx'x
consent; provided, however, that if a failure to so consent is the sole cause
of the occurrence of a Material Adverse Effect, then such Material Adverse
Effect shall not be an Event for purposes of Section 14 of this Offer to
Purchase nor shall Crane be permitted to terminate the Merger Agreement
solely due to the occurrence of such Material Adverse Effect.
Conditions to Consummation of the Merger. Pursuant to the Merger
Agreement, the respective obligations of Crane, the Purchaser and the Company
to consummate the Merger are subject to the satisfaction, at or before the
Effective Time, of each of the following conditions: (i) the shareholders of
the Company shall have duly approved the transactions contemplated by the
Merger Agreement, if required by applicable law; (ii) any waiting period (and
any extension thereof) under the HSR Act applicable to the Merger shall have
expired or terminated; (iii) no judgment, decree, statute, law, ordinance,
rule, regulation, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or issued
by any court of competent jurisdiction or other Governmental Authority or
other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect; provided, however, that each of the parties shall
have used all reasonable efforts to prevent the entry of any such restraints
and to appeal as promptly as possible any such restraints that may be
entered; and (iv) the Purchaser shall have accepted for payment and paid for
Shares pursuant to the terms and conditions of the Offer.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, notwithstanding approval thereof by the shareholders of
the Company: (i) by the mutual written consent of Crane and the Company; (ii)
by either Xxxxx or the Company:
(a) if the Offer is terminated or withdrawn pursuant to its terms without
any Shares being purchased thereunder; provided, however, that neither
Crane nor the Company may so terminate the Merger Agreement if such party
shall have materially breached the Merger Agreement;
(b) if the Offer has not been consummated on or before October, 31, 1998;
or
(c) if any Governmental Authority shall have issued an order, decree,
ruling or injunction or taken any other action permanently enjoining,
restraining or otherwise prohibiting acceptance for payment of Shares
pursuant to the Offer or the consummation of the Merger and such order,
decree, ruling, injunction or other action shall have become final and
nonappealable;
(iii) by the Company if Crane or the Purchaser shall not have accepted for
payment and paid for shares of Company Common Stock pursuant to the Offer in
violation of the terms hereof and of the Merger Agreement; provided, however,
that the Company may not so terminate the Merger Agreement if the Company
shall have materially breached the Merger Agreement;
23
(iv) by the Company in accordance with Section 5.02 prior to the
acceptance for payment of Shares pursuant to the Offer; provided that it has
complied with all provisions of that Section;
(v) by Crane prior to the purchase of Shares pursuant to the Offer if (i)
the Board of Directors of the Company or any committee thereof shall have
withdrawn or modified in a manner adverse to Crane its approval or
recommendation of the Offer (including by amendment of the Schedule 14D-9),
the Merger or the Merger Agreement, or approved or recommended any Superior
Proposal or (ii) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions; or
(vi) by Xxxxx or the Purchaser pursuant to Section 5.01(c) of the Merger
Agreement (regarding advice of certain changes).
In the event of any such termination of the Merger Agreement by either the
Company or Crane, the Merger Agreement shall forthwith become void and have
no effect, without any liability or obligation on the part of Crane, the
Purchaser or the Company, except as to certain provisions and to the extent
that such termination results from the willful and material breach by a party
of any of its representations, warranties, covenants or agreements set forth
in the Merger Agreement.
The Merger Agreement may be amended by the parties at any time before or
after the Company Shareholder Approval; provided, however, that after any
such approval, there shall not be made any amendment that by law requires
further approval by the shareholders of the Company without the further
approval of such shareholders. The Merger Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
At any time prior to the Effective Time, a party may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties of
the other parties contained in the Merger Agreement or in any document
delivered pursuant to the Merger Agreement or (c) with certain exceptions,
waive compliance by the other parties with any of the agreements or
conditions contained in the Merger Agreement. Any agreement on the part of a
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any
party to the Merger Agreement to assert any of its rights under the Merger
Agreement or otherwise shall not constitute a waiver of such rights.
A termination of the Merger Agreement, an amendment of the Merger
Agreement or an extension or waiver by any party to the Merger Agreement
shall, in order to be effective, require action by its Board of Directors or,
with respect to any amendment to the Merger Agreement, to the extent
permitted by applicable law, a duly authorized committee of its Board of
Directors.
Fees and Expenses. Except as provided below, all fees and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby are to be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
The Company is to reimburse Crane for out-of-pocket expenses incurred by
Xxxxx relating to the transactions contemplated by the Merger Agreement prior
to termination (including, but not limited to, fees and expenses of Crane's
counsel, accountants and financial advisors), if (i) the Merger Agreement
shall have been terminated pursuant to the provisions of the Merger Agreement
described in paragraphs (iv) or (v) under the heading "Termination" above,
(ii) the Company enters into an Acquisition Agreement with a party other than
Crane or any of its affiliates within one year of the date of such
termination and (iii) the transaction contemplated by such Acquisition
Agreement is consummated within 18 months of the date of such termination.
Such reimbursement is to be paid in same-day funds within one business day
after the consummation of the transaction contemplated by any such
Acquisition Agreement.
The Stock Option Agreement. Following is a brief summary of the Stock
Option Agreement, a copy of which has been filed as an exhibit to the
Schedule 14D-1 filed by the Purchaser with the Commission in connection with
the Offer. Such summary is qualified in its entirety by reference to the
Stock Option Agreement.
24
Pursuant to the Stock Option Agreement, Xxxxx has the irrevocable right
(the "Stock Option"), under certain circumstances, to acquire from the
Company up to 997,633 shares of Company Common Stock (the "Option Shares"),
or approximately 19.9% of the outstanding Company Common Stock on the date of
the Merger Agreement, including the associated Rights, at a price of $2.75
per share. The exercise price is payable in cash. The Stock Option Agreement
could have the effect of making an acquisition of the Company by a third
party more costly because of the need to acquire in any such transaction the
Option Shares issued under the Stock Option Agreement.
The Stock Option may be exercised by Xxxxx, in whole or in part, at any
time or from time to time after the termination of the Merger Agreement
pursuant to the provisions of the Merger Agreement described in clause (iv)
or clause (v) under the heading "Termination", above (an "Exercise Event").
The Stock Option shall terminate upon the earlier of (i) the consummation of
the Offer, (ii) the termination of the Merger Agreement pursuant to its terms
(other than a termination following an Exercise Event), or (iii) 365 days
following any termination of the Merger Agreement following an Exercise Event
(or, if at the expiration of such 365-day period, the Stock Option cannot be
exercised by reason of any applicable judgment, decree, order, law,
regulation or waiting period, 15 days after such impediment to exercise shall
have been removed or such waiting period has expired).
If, at any time during the period after the occurrence of an Exercise
Event and before termination of the Stock Option, Xxxxx sends to the Company
a notice indicating Crane's election to exercise its rights to receive the
cash value of any Stock Option, then the Company is to pay to Crane, in
exchange for the cancellation of the Stock Option with respect to such number
of Option Shares as Crane specifies in such notice, an amount in cash equal
to such number of Option Shares multiplied by the difference between (i) the
average closing price per share of Company Common Stock for the 10 trading
days commencing on the 12th trading day immediately preceding the date of the
notice and (ii) the per share exercise price of the Stock Option.
In the event of any change in Company Common Stock or in the number of
outstanding shares of Company Common Stock by reason of a stock dividend,
split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company, the type and number of shares or securities to be issued upon
exercise of the Stock Option shall be adjusted appropriately and proper
provision shall be made in agreements governing such transaction, so that
Crane shall receive upon exercise of the Stock Option the number and class of
shares or other securities or property that Xxxxx would have received in
respect of the Option Shares if the Stock Option had been exercised
immediately prior to such event or the record date therefor.
The Stock Option Agreement further provides that at any time and from time
to time after payment for and delivery of the Option Shares upon exercise of
the Stock Option, Xxxxx may make a written request for registration of all or
part of its Option Shares under and in accordance with the provisions of the
Securities Act of 1933, as amended. Such registration may be, at Crane's
option, a shelf registration or a registration involving an underwritten
offering.
The Shareholder Agreements. Following is a summary of the Shareholder
Agreements, the form of which has been filed as an exhibit to the Schedule
14D-1 filed by the Purchaser with the Commission in connection with the
Offer. Such summary is qualified in its entirety by reference to the full
text of the form of Shareholder Agreement.
Pursuant to the Shareholder Agreements, each of Atalanta Selective Fund
Number Six Limited Partnership, Xxxxxxx X. Xxxxx Profit Sharing Plan, Xxxxxxx
X. Xxxxx, Xxxxx Resources, Inc., Xxx Xxxxxxxx Xxxxx Foundation, X. Xxx Xxxxx,
Xxxxxx X. Xxxx, Xxxxx Xxxx and Xxxxxx X. Xxxxxxx, XX (each, a "Shareholder")
has agreed, among other things, that, (i) until the earlier of the date on
which the Offer is terminated or withdrawn or the date on which the Merger
Agreement is terminated in accordance with its terms, the Shareholder will
tender, and not withdraw, his Shares pursuant to the Offer, and (ii) until
the earlier of the Effective Time, the date on which the Merger Agreement is
terminated in accordance with its terms or the purchase of all of the Shares
owned by such Shareholder pursuant to the Offer (the earliest of such dates
being the "Expiration Date"), the Shareholder will vote, or grant his consent
with respect to, all of his shares of Company Common Stock (x) in favor of
the approval of the Merger Agreement and the Merger and any other transaction
contemplated by the Merger Agreement or the
25
Stock Option Agreement, as such Merger Agreement or Stock Option Agreement
may be modified or amended from time to time, and (y) against any action,
omission or agreement which would impede or interfere with, or have the
effect of discouraging, the Merger, including, without limitation, any
Acquisition Proposal other than the Merger.
At the request of Xxxxx, each Shareholder will execute, in accordance with
the provisions of the PBCL, and deliver to Xxxxx an irrevocable proxy and
irrevocably appoint Xxxxx or its designees his attorney and proxy to vote or
give consent with respect to all of his shares of Company Common Stock for
the purposes set forth above. Any such proxy will terminate on the Expiration
Date.
Each Shareholder Agreement contains the agreement of the Shareholder that,
among other things, he will: (a) until the date that is six months after the
Expiration Date, not, and will not agree to, sell, transfer, pledge,
hypothecate, encumber, assign, tender or otherwise dispose of any of his
shares of Company Common Stock other than pursuant to the Merger Agreement,
unless and until such transferee executes and delivers to Crane a joinder to
the Shareholder Agreement pursuant to which such transferee shall agree that,
for all purposes of the Shareholder Agreement, (i) such transferee shall be
deemed to be the Shareholder thereunder and (ii) all shares of the Company
Common Stock transferred to such transferee pursuant to this provision shall
be deemed to be "Shares" under the Shareholder Agreement; (b) other than as
contemplated by the Shareholder Agreement, until the Expiration Date, not
grant any powers of attorney or proxies or consents in respect of any of his
shares of Company Common Stock, deposit any of his shares of Company Common
Stock into a voting trust, enter into a voting agreement with respect to any
of his shares of Company Common Stock or otherwise restrict the ability of
the holder of any of his shares of Company Common Stock freely to exercise
all voting rights with respect thereto; and (c) until the Expiration Date,
not initiate, solicit or encourage, directly or indirectly, any inquiries or
the making or implementation of any Acquisition Proposal or engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition Proposal,
or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal.
Pursuant to each Shareholder Agreement, Xxxxx has the irrevocable right
(the "Shareholder Stock Option"), at any time or from time to time if the
Company enters into an Acquisition Agreement with a party other than Crane or
any of its affiliates within six months after the Expiration Date, to acquire
from each Shareholder all or any portion of the shares of Company Common
Stock owned by each Shareholder, including the associated Rights, at a price
of $3.50 per share. The exercise price is payable in cash.
In the event (a) of any stock dividend, stock split, merger,
recapitalization, reclassification, combination, exchange of shares or the
like of the capital stock of the Company on, or affecting the shares to be
issued upon exercise of the Shareholder Stock Option or (b) that the
Shareholder shall become the beneficial owner of any additional shares of
Company Common Stock or other securities entitling the holder thereof to vote
or give consent with respect to the matters set forth in the Shareholder
Agreement, then such additional shares of Company Common Stock and other
securities shall become shares subject to the Shareholder Stock Option and
the terms of the Shareholder Agreement shall otherwise apply to the shares of
capital stock or other instruments or documents held by the Shareholder
immediately following the effectiveness of the events described in clause (a)
or the Shareholder becoming the beneficial owner thereof as described in
clause (b), as though, in either case, they were shares subject to the
Shareholder Agreement.
Each Shareholder Agreement contains the Shareholder's representations and
warranties relating to, among other things, (a) the execution, delivery and
enforceability of his Shareholder Agreement, (b) the ownership of his shares
of Company Common Stock, and (c) the absence of encumbrances on his shares of
Company Common Stock.
Dissenters' Rights. No dissenters' rights are available in connection with
the Offer. However, if the Merger is consummated, shareholders who fully
comply with the statutory dissenters' procedures set forth in the PBCL, the
relevant portions of which are attached to this Offer to Purchase as Schedule
II, will be entitled to receive cash for the fair value of their Shares as
determined pursuant to the procedures
26
presented by the PBCL. Merely voting against the Merger Agreement will not
perfect a shareholders' dissenters' rights. Shareholders are urged to review
carefully the dissenting shareholders' rights provisions of the PBCL, a
description of which is provided below and the full text of which is attached
to this Offer to Purchase as Schedule II and incorporated herein by
reference. SHAREHOLDERS WHO FAIL TO COMPLY STRICTLY WITH THE APPLICABLE
PROCEDURES WILL FORFEIT THEIR DISSENTERS' RIGHTS IN CONNECTION WITH THE
MERGER. See Schedule II to this Offer to Purchase.
Sections 1571 through 1580 of the PBCL ("Subchapter D") and Section
1930(a) of the PBCL, copies of which are included in Schedule II attached to
this Offer to Purchase, entitle any holder of record of Shares who objects to
the Merger, in lieu of receiving the consideration for such Shares provided
under the Merger Agreement, to demand in writing that he be paid in cash the
fair value of his Shares. Section 1572 of the PBCL defines "fair value" as
"[t]he fair value of shares immediately before the effectuation of the
corporate action to which the dissenter objects, taking into account all
relevant factors, but excluding any appreciation or depreciation in
anticipation of the corporate action."
Before the vote of the shareholders is taken on the Merger, the dissenting
shareholder must deliver to the Company a written notice of intention to
demand that he be paid the fair value of his Shares if the Merger is
effected. Such written notice must be sent to the Secretary of the Company at
Xxx Xxxx, Suite 0000, 000 Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. A
vote against the Merger is not sufficient to satisfy the requirement of
delivering a written notice to the Company. In addition, the shareholder must
not effect any change in the beneficial ownership of his Shares from the date
of filing the notice with the Company through the consummation of the Merger,
and Shares for which payment of fair value is sought must not be voted in
favor of the Merger. Failure by a dissenting shareholder to comply with any
of the foregoing will result in his forfeiture of any right to demand payment
of fair value for his Shares.
A record holder of Xxxxxx held in whole or in part for the benefit of
another person may assert dissenters' rights as to fewer than all of the
Shares registered in his name only if he dissents with respect to all the
Shares beneficially owned by any one person and discloses the name and
address of the person or persons on whose behalf he dissents. A beneficial
owner of Shares who is not the record holder may assert dissenters' rights
with respect to Xxxxxx held on his behalf if he submits to the Company the
written consent of the record holder not later than the time of assertion of
dissenters' rights. A beneficial owner may not dissent with respect to fewer
than all of the Shares owned by him, whether or not such Shares are
registered in his name.
If the Merger is approved, the Company shall mail to all dissenters who
gave due notice of their intention to demand payment of fair value and who
refrained from voting in favor of the Merger, a notice stating where and when
a demand for payment should be sent and certificates for Shares deposited in
order to obtain payment. The notice shall be accompanied by a copy of
Subchapter D and a form for demanding payment. The time set for the receipt
of demands and the deposit of certificates shall not be less than 30 days
from the mailing of the notice. Failure by a shareholder to demand payment or
deposit certificates pursuant to such notice will cause such shareholder to
lose all right to have a court determine the fair value of his Shares. If the
Merger has not been effected within 60 days after the date set for demanding
payment and depositing certificates, the Company shall return any
certificates that have been deposited. The Company, however, may at any later
time send a new notice regarding demand for payment and deposit of
certificates with like effect.
Promptly after the consummation of the Merger or upon timely receipt of
demand for payment if the Merger has already been effected, the Company shall
remit to dissenters who have made timely demand and deposited their
certificates the amount the Company estimates to be the fair value of their
Shares or give written notice that no remittance will be made under Section
1577 of the PBCL. Such remittance or notice shall be accompanied by (i) the
closing balance sheet and statement of income of the Company for a fiscal
year ending not more than 16 months prior to the date of remittance or notice
together with the latest available interim financial statements, (ii) a
statement of the Company's estimate of the fair value of the Shares, and
(iii) a notice of the right of the dissenting shareholder to demand payment
or
27
supplemental payment, as the case may be, accompanied by a copy of Subchapter
D. If the Company does not remit the amount of its estimate of the fair value
of the Shares, it shall return all certificates that have been deposited and
may make a notation thereon that a demand for payment has been made.
If Shares with respect to which notation has been so made shall be
transferred, each new certificate issued therefor shall bear a similar
notation, together with the name of the original dissenting holder or owner
of such Shares. A transferee of such Shares shall not acquire by such
transfer any rights in the Company other than those that the original
dissenter had after making demand for payment of fair value for such Shares.
If a dissenting shareholder believes that the amount estimated or paid by
the Company for his Shares is less than the fair value, the shareholder may
send to the Company his own estimate of the fair value which shall be deemed
a demand for payment of the amount of the deficiency. If the dissenter does
not file his own estimate of fair value within 30 days after the mailing by
the Company of its remittance or estimate of fair value, the dissenter shall
be entitled to no more than the amount remitted to him or estimated by the
Company.
Within 60 days after the latest of (i) the consummation of the Merger,
(ii) timely receipt of any demands for payment or (iii) timely receipt of any
shareholder estimates of fair value, if any demands for payment remain
unsettled, the Company may file in court an application for relief requesting
that the fair value of the Shares be determined by the court. Each dissenter
whose demand has not been settled shall be made a party to the proceeding and
shall be entitled to recover the amount by which the fair value of his Shares
is found to exceed the amount, if any, previously remitted, plus interest. If
the Company fails to file an application within the 60-day period, any
dissenter who has not settled his claim may do so in the name of the Company
within 30 days after the expiration of this 60-day period. If no dissenter
files an application within such 30-day period, each dissenter entitled to
file an application shall be paid no more than the Company's estimate of the
fair value of his Shares and may bring an action to recover any amount not
previously remitted.
The costs and expenses of any valuation proceedings, including the
reasonable compensation and expenses of any appraiser appointed by the court,
shall be determined by the court and assessed against the Company except that
any part of such costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters whose action in
demanding supplemental payment is found by the court to be dilatory,
obdurate, arbitrary, vexatious or in bad faith. The court may also assess the
fees and expenses of counsel and experts for any or all of the dissenters
against the Company if the Company fails to comply substantially with
Subchapter D or acts in bad faith or in a dilatory, obdurate, arbitrary or
vexatious manner. The court can also assess any such fees or expenses
incurred by the Company against a dissenter if such dissenter is found to
have acted in bad faith or in a dilatory, obdurate, arbitrary or vexatious
manner. If the court finds that the services of counsel for any dissenter
were of substantial benefit to the other dissenters and should not be
assessed against the Company, it may award to such counsel reasonable fees to
be paid out of the amounts awarded to the dissenters who were benefited.
Section 1712 of the PBCL provides that a director of a Pennsylvania
corporation stands in a fiduciary relation to such corporation and must
perform his duties as a director in good faith, in a manner he reasonably
believes to be in the best interests of the corporation and with such care,
including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances. Section 1105 of the PBCL
provides in substance that a shareholder of a Pennsylvania corporation shall
not have any right to obtain, in the absence of fraud or fundamental
unfairness, an injunction against the Merger, nor any right to claim the
right to valuation and payment of the fair value of his Shares because of the
Merger, except that he may dissent and claim such payment if and to the
extent provided in Subchapter D of the PBCL, described above. Absent fraud or
fundamental unfairness, such dissenters' rights are the exclusive remedy of
such shareholders. However, the United States Court of Appeals, Third
Circuit, interpreting the predecessor statute to Section 1105 of the PBCL in
Xxxxxxxxxx v. NutriSystem, Inc., concluded that dissenters' rights coexist
with common law causes of action, such as rescission or money damages, in the
context of an action for breach of fiduciary duty or misrepresentation in a
cash-out
28
merger. Shareholders should be aware that due to the enactment of the PBCL in
1988 it is unclear whether the decision in Xxxxxxxxxx remains applicable to
dissenters' rights. IN VIEW OF THE COMPLEXITIES OF THESE PROVISIONS OF
PENNSYLVANIA LAW, SHAREHOLDERS WHO ARE CONSIDERING DISSENTING FROM THE MERGER
SHOULD CONSULT THEIR OWN LEGAL COUNSEL.
SEE SCHEDULE II ATTACHED HERETO FOR A REPRODUCTION OF THE TEXT OF THE
RELEVANT SECTIONS OF THE PBCL.
Plans for the Company. If Xxxxx acquires control of the Company, its first
priority will be to restore profitability to the Company. The Company's
product lines share common technologies and customers with two of Crane's
business units--Crane Nuclear and Dynalco Controls--and the integration of
the Company's operations into these two businesses could offer significant
synergies. The RADView business of the Company does not align with any
current Crane operation, however, and Xxxxx will be evaluating that business
and the available strategic alternatives for it. Crane intends to continue
its review of the Company and its subsidiaries and their respective assets,
businesses, corporate structure, capitalization, operations, properties,
policies, management and personnel. If Xxxxx acquires control of the Company,
Xxxxx will determine what actions or changes, if any, would be desirable in
light of the circumstances which then exist, and reserves the right to effect
such actions or changes. Xxxxx'x decisions could be affected by information
hereafter obtained, changes in general economic or market conditions or in
the business of the Company or its subsidiaries, actions by the Company or
its subsidiaries and other factors.
Except as described in this Offer to Purchase, none of the Purchaser,
Crane nor, to the best knowledge of the Purchaser and Crane, any of the
persons listed on Schedule I, has any present plans or proposals that would
relate to or would result in (i) an extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving the Company or any of
its subsidiaries, (ii) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries, (iii) any change in the present
Company Board or management of the Company, (iv) any material change in the
present capitalization or dividend policy of the Company, (v) any material
change in the Company's corporate structure or business, (vi) causing a class
of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association or (vii) a
class of equity securities of the Company becoming eligible for termination
of registration pursuant to Section 12(g) (4) of the Exchange Act.
The Rights. The following discussion is derived from the description of
the Rights Agreement and the Rights included as part of an exhibit to the
Company's Current Report on Form 8-K dated October 6, 1997 and is qualified
in its entirety by reference to such exhibit.
Under the Rights Agreement, each Share carries with it one Right. Each
Right entitles the registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock of the Company at a purchase price of $48.00
per Unit, subject to adjustment.
The Rights Agreement provides that the Rights will separate from the
Company Common Stock and the "Distribution Date" will occur (i) upon the
earlier of (x) 10 business days following a public announcement (the date of
such announcement being the "Stock Acquisition Date") that a person or group
of affiliated or associated persons (other than the Company, any subsidiary
of the Company or any employee benefit plan of the Company or such
subsidiary) (an "Acquiring Person") has acquired, obtained the right to
acquire, or otherwise obtained beneficial ownership of 15% or more of the
then outstanding shares of Company Common Stock, and (y) 10 business days
following the commencement of a tender offer or exchange offer that would
result in an Acquiring Person owning 15% or more of the then outstanding
shares of Company Common Stock, or (ii) such later date as may be determined
by action of a majority of the independent members of the Board of Directors
(such determination to be made prior to such time as any person becomes an
Acquiring Person pursuant to (x) or (y) above). The Rights Agreement exempts
from its definition of Acquiring Person any person that acquires, obtains the
right to acquire, or otherwise obtains beneficial ownership of 15% or more of
the then outstanding shares of Company Common Stock without any intention of
changing or influencing control of the Company
29
provided that such person, as promptly as practicable, divests himself or
itself of a sufficient number of shares of Company Common Stock so that such
person would no longer own 15% or more of the outstanding shares of Company
Common Stock. Until the Distribution Date, (i) the Rights will be evidenced
by Company Common Stock certificates, (ii) new Company Common Stock
certificates issued after the Record Date (also including shares distributed
from the Company's treasury) will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates representing outstanding Company Common Stock will also
constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close
of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a merger
with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Company Common Stock, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such times as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest
being increased by more than 1% (e.g., by means of a reverse stock split or
recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to receive upon exercise Units (or, in certain
circumstances, Company Common Stock, cash, property or other securities of
the Company) having a current market value equal to two times the exercise
price of the Right. The exercise price is the purchase price multiplied by
the number of Units issuable upon exercise of a Right prior to the events
described in this paragraph. Notwithstanding any of the foregoing, following
the occurrence of any of the events set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
and the Company is not the surviving corporation (other than a merger
described in the preceding paragraph), (ii) any person consolidates or merges
with the Company and all or part of the Company Common Stock is converted or
exchanged for securities, cash or property of any other Person or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as
described above) shall thereafter have the right to receive, upon exercise,
common stock of the Acquiring Person having a current market value equal to
two times the exercise price of the Right.
The Rights Agreement exempts certain shareholders from triggering the
distribution of the Rights ("Exempt Person") unless they, individually or
together with their affiliates or associates, increase their beneficial
ownership of outstanding Company Common Stock. These shareholders consist of
Edison Venture Fund, L.P., and their affiliates and associates. The Rights
Agreement also designates X. Xxxx Xxxxxx, Xxxxx X. Xxxxxxxx, Xxx X. Xxxxxx,
Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxx, Energy Consolidation,
Inc., Atalanta Investment Company and Atalanta Selective Fund Number Six
Limited Partnership as Exempt Persons, so long as those parties and their
affiliates and associates are in compliance with the Standstill Agreement
between the Company and certain of the aforementioned individuals and
entities dated August 18, 1997.
At any time until (i) ten business days following the Stock Acquisition
Date or (ii) such later date as a majority of the independent members of the
Board of Directors shall determine (such determination to be made prior to
the date specified in (i) above), a majority of the independent directors may
redeem the Rights in whole, but not in part, at a price of $.001 per Right
(subject to adjustment in certain events) (the "Redemption Price"), payable,
at the election of such majority of the independent directors in cash or
shares of Company Common Stock. Immediately upon the action of a majority of
the independent directors ordering the redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
30
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Units of Preferred Stock (or other
consideration).
Any of the provisions of the Rights Agreement may be amended without the
approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption
shall be made at such time as the Rights are not redeemable.
On August 10, 1998, the Company Board approved (and on August 11, 1998,
the Company executed) an amendment to the Rights Agreement to provide that
notwithstanding anything contained in the Rights Agreement to the contrary,
(x) until the termination of the Merger Agreement in accordance with its
terms, Crane (including each affiliate and associate of Crane) shall be an
Exempt Person, and (y) no Distribution Date, Stock Acquisition Date or
Triggering Event (as defined in the Rights Agreement) will be deemed to have
occurred, neither Crane nor any affiliate or associate of Xxxxx will be
deemed to have become an Acquiring Person and no holder of Rights will be
entitled to exercise any Rights under or be entitled to any rights pursuant
to the Rights Agreement by reason of (i) the approval, execution, delivery or
effectiveness of the Merger Agreement, the Stock Option Agreement or the
Shareholder Agreements, or (ii) the consummation of any of the transactions
contemplated by any of the foregoing agreements or the taking of any action
by any party to any of the foregoing agreements or any affiliate or associate
thereof to facilitate the consummation of any such transactions. The Rights
Agreement was also amended to (i) provide that the Rights Agreement shall not
be amended or supplemented in any manner until the termination of the Merger
Agreement in accordance with its terms without the prior written consent of
Crane and (ii) to change the Expiration Date of the Rights Agreement to the
earlier to occur of (x) the close of business on the tenth anniversary of the
Rights Agreement and (y) the Effective Time.
Based on publicly available information, the Purchaser believes that, as
of the date of this Offer, the Rights were not exercisable, Rights
Certificates have not been issued and the Rights were evidenced by the Share
Certificates.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the text of the
Rights Agreement filed as an exhibit to the Company's Current Report on Form
8-K dated October 6, 1997 filed with the Commission and any subsequent
amendments to the Rights Agreement as filed with the Commission. Copies of
these documents may be obtained in the manner set forth in Section 8, above.
Shareholders are required to tender one Right for each Share tendered in
order to effect a valid tender of such Share. If the Distribution Date does
not occur prior to the Expiration Date, a tender of Shares will automatically
constitute a tender of the associated Rights. See Section 1.
12. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by Purchaser to consummate the Offer
and the Merger and to pay related fees and expenses is estimated to be
approximately $19,000,000. Xxxxx will ensure that the Purchaser has
sufficient funds to acquire all the outstanding Shares pursuant to the Offer
and the Merger. Crane plans to provide such funds from its cash accounts.
13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of this Offer to Purchase, the Company should (i)
split, combine or otherwise change the Shares or its capitalization, (ii)
issue or sell any additional securities of the Company or otherwise cause an
increase in the number of outstanding securities of the Company or (iii)
acquire
31
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares, then, without prejudice to the Purchaser's rights under
Sections 1 and 14, the Purchaser, in its sole discretion, may make such
adjustments as it deems appropriate in the purchase price and other terms of
the Offer, including, without limitation, the amount and type of securities
offered to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any dividend on the Shares or make any distribution
(including, without limitation, the issuance of additional Shares pursuant to
a stock dividend or stock split, the issuance of other securities or the
issuance of rights for the purchase of any securities) with respect to the
Shares that is payable or distributable to shareholders of record on a date
prior to the transfer to the name of the Purchaser or its nominee or
transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to the Purchaser's rights
under Sections 1 and 14, (i) the Per Share Amount payable by the Purchaser
pursuant to the Offer will be reduced by the amount of any such cash dividend
or cash distribution, and (ii) any such non-cash dividend, distribution or
right to be received by the tendering shareholders will be received and held
by such tendering shareholders for the account of the Purchaser and will be
required to be promptly remitted and transferred by each such tendering
shareholder to the Depositary for the account of the Purchaser, accompanied
by appropriate documentation of transfer. Pending such remittance and subject
to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right and
may withhold the entire purchase price or deduct from the purchase price the
amount of value thereof, as determined by the Purchaser in its sole
discretion.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act, pay for any tendered Shares and may terminate or, subject to
the terms of the Merger Agreement, amend the Offer, if (i) there shall not be
validly tendered and not properly withdrawn prior to the Expiration Date for
the Offer that number of Shares which satisfies the Minimum Condition, (ii)
any applicable waiting period (and any extensions thereof) under the HSR Act
shall not have expired or been terminated prior to the Expiration Date, or
(iii) at any time prior to the time of acceptance for payment or payment for
any Shares, any of the following events (each, an "Event") shall occur:
(a) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted,
enforced, promulgated, amended, issued or deemed applicable to the Offer,
by any Governmental Authority, directly or indirectly, (i) challenging the
acquisition by Crane or the Purchaser of any shares of capital stock of
the Company or the Surviving Corporation, seeking to restrain or prohibit
the consummation of the Offer or the Merger or any of the other
transactions contemplated by the Merger Agreement or seeking to obtain
from the Company or Crane any damages that are material in relation to the
Company and its subsidiaries taken as a whole or Crane and its
subsidiaries taken as a whole, as applicable, (ii) seeking to prohibit or
limit the ownership or operation by the Company, Crane or any of their
respective subsidiaries of all or any material portion of the business or
assets of the Company, Crane or any of their respective subsidiaries, or
to compel the Company, Crane or any of their respective subsidiaries to
dispose of or hold separate all or any material portion of the business or
assets of the Company, Crane or any of their respective subsidiaries, as a
result of the Offer, the Merger or any of the other transactions
contemplated by the Merger Agreement, (iii) seeking to impose limitations
on the ability of Crane to acquire or hold, or exercise full rights of
ownership of, any shares of capital stock of the Company or the Surviving
Corporation, (iv) seeking to prohibit Crane or any of its subsidiaries
from effectively controlling in any material respect the business or
operations of the Company or its subsidiaries or (v) which otherwise would
reasonably be expected to have a Material Adverse Effect on the Company or
Crane; or
(b) there shall be pending or threatened any action or proceeding by any
Governmental Authority seeking, or 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 or by any third party for which
there is a substantial likelihood of resulting in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above; or
32
(c) there shall have occurred any Material Adverse Effect with respect to
the Company and its subsidiaries taken as a whole; or
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified (including by amendment to the Schedule
14D-9) in a manner adverse to Crane or the Purchaser its approval or
recommendation of the Offer or the Merger Agreement, or approved or
recommended any Superior Proposal, (ii) the Company shall have entered
into an Acquisition Agreement with a party other than Crane on any of its
affiliates, or (iii) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing; or
(e) the Company and the Purchaser and Crane shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(f) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct (without regard to any
materiality qualifications or references to Material Adverse Effect
contained in any specific representation or warranty), as if such
representations and warranties were made at the time of such determination
except to the extent such representations and warranties expressly relate
to an earlier date (in which case as of such date); provided that this
paragraph (f) shall be deemed satisfied so long as the failure of all such
representations and warranties to be true and correct would not (i) have a
Material Adverse Effect on the Company, (ii) prevent or materially delay
the consummation of the Offer, (iii) materially increase the cost of the
Offer to the Purchaser or (iv) have a material adverse effect on the
benefits to Crane of the transactions contemplated by the Merger
Agreement; or
(g) the Company shall have failed to perform in all material respects all
obligations required to be performed by it under the Merger Agreement; or
(h) there shall have occurred, and continued to exist, (i) any general
suspension of, or limitation on prices for, trading in securities on the
New York Stock Exchange or on the Nasdaq National Market, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) a commencement of a war,
armed hostilities or other national or international crises involving the
United States or a material limitation (whether or not mandatory) by any
governmental Entity on the extension of credit by banks or other lending
institutions, or (iv) with respect to any of the foregoing in effect on
the date of the Merger Agreement, a material worsening or acceleration
thereof.
The foregoing conditions (including those set forth in clauses (i) and
(ii) of the initial paragraph) are for the benefit of Crane and the Purchaser
and may be asserted by Crane or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Crane or the
Purchaser in whole or in part at any time and from time to time in their
reasonable discretion, in each case, subject to the terms of the Merger
Agreement. The failure by Crane or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS
General. Except as set forth below, neither the Purchaser nor Crane is
aware of any licenses or other regulatory permits that appear to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company's subsidiaries) as
contemplated herein, or of any filings, approvals or other actions by or with
any domestic (U.S. federal or state), foreign or supranational governmental
authority or administrative or regulatory agency that would be required prior
to the acquisition of Shares (or the indirect acquisition of the stock of the
Company's subsidiaries) by the Purchaser pursuant to the Offer as
contemplated herein. Should any such approval or other action be required, it
is the Purchaser's present intention to seek such approval or action.
However, the Purchaser does not presently intend to delay the purchase of
Shares tendered pursuant to the Offer pending the receipt of any such
approval or the taking of any such action (subject to the Purchaser's right
to delay or
33
decline to purchase Shares if any of the conditions in Section 14 shall not
have been satisfied). There can be no assurance that any such approval or
other action, if needed, would be obtained without substantial conditions or
that adverse consequences might not result to the business of the Company,
Crane or the Purchaser or that certain parts of the businesses of the
Company, Crane or the Purchaser might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain
such approval or other action or in the event that such approval was not
obtained or such other action was not taken, any of which could cause the
Purchaser to elect to terminate the Offer without the purchase of the Shares
hereunder. The Purchaser's obligation under the Offer to accept for payment
and pay for Shares is subject to certain conditions, including conditions
relating to the legal matters discussed in this Section 15. See Section 14.
State Takeover Statutes. Various states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, shareholders, executive offices or places of business in such
states. In Xxxxx x.Mite Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided
that such laws were applicable only under certain conditions.
The Pennsylvania Takeover Disclosure Law (the "PTDL") purports to regulate
certain attempts to acquire a corporation which (1) is organized under the
laws of Pennsylvania or (2) has its principal place of business and
substantial assets located in Pennsylvania. The PTDL requires, among other
things, that the offeror, 20 days prior to any takeover offer, file a
registration statement for the takeover offer with the Pennsylvania
Securities Commission and publicly disclose the offering price of the
proposed offer. However, in Crane Co. x. Xxx, 509 F.Supp. 782 (E.D. Pa.
1981), the District Court preliminarily enjoined, on grounds arising under
the United States Constitution, enforcement of at least the portion of the
PTDL involving the pre-offer waiting period thereunder.
Chapter 25 of the PBCL contains other provisions relating generally to
takeovers and acquisitions of certain publicly owned Pennsylvania
corporations such as the Company that have a class or series of shares
entitled to vote generally in the election of directors registered under the
Exchange Act (a "registered corporation"). The following discussion is a
general and highly abbreviated summary of certain features of such chapter,
is not intended to be complete or to completely address potentially
applicable exceptions or exemptions, and is qualified in its entirety by
reference to the full text of Chapter 25 of the PBCL.
In addition to other provisions not applicable to the Offer or the Merger,
Subchapter D of Chapter 25 of the PBCL ("Subchapter D") includes provisions
requiring approval of a merger of a registered corporation with an
"interested shareholder" by the affirmative vote of the shareholders entitled
to cast at least a majority of the votes that all shareholders other than the
interested shareholder are entitled to cast with respect to the transaction
without counting the votes of the interested shareholder. This disinterested
shareholder approval requirement is not applicable to a transaction (i)
approved by a vote of the board of directors, without counting the votes of
directors who are directors or officers of, or who have a material equity
interest in, the interested shareholder, (ii) in which the consideration to
be received by shareholders is not less than the highest amount paid by the
interested shareholder in acquiring his shares, or (iii) effected without
submitting the proposed merger to a vote of shareholders as permitted in
Section 1924(b)(1)(ii) of the PBCL. The requirements of Subchapter D do not
apply to the Merger because, among other things, the Offer and the Merger
have been approved by the Board of Directors of the Company.
Subchapter E of Chapter 25 of the PBCL ("Subchapter E"), among other
things, governs "control transactions" (defined generally as a transaction in
which a person acquires at least 20% of the voting power of a corporation
involving a "registered corporation" and provides that the shareholders of
such
34
corporation are entitled to demand that they be paid the fair value of their
shares. Pursuant to Subchapter E, the minimum value the shareholders can
receive may not be less than the highest price paid per share by the control
person within the 90-day period ending on and including the date of the
control transaction. The Amended and Restated Articles of Incorporation
specifically provide that Subchapter E does not apply to the Company.
Subchapter F purports to prohibit under certain circumstances a
"registered corporation" from engaging in a "Business Combination" with an
"Interested Shareholder" for a period of five years following the date such
person became an "Interested Shareholder" unless: (i) before such person
became an Interested Shareholder, the board of directors of the corporation
approved either the Business Combination or the transaction in which the
Interested Shareholder became an Interested Shareholder; (ii) the Business
Combination is approved by a majority vote of the corporation's voting
shares, other than shares held by the Interested Shareholder, no earlier than
three months after the Interested Shareholder became, and provided that at
the time of such vote the Interested Shareholder is, the beneficial owner of
shares entitled to cast at least 80% of the votes that all shareholders would
be entitled to cast in an election of directors of the corporation, and the
Business Combination satisfies the "fair price" criteria (generally, the
higher of (a) the highest price per share paid by the Interested Shareholder
at a time when the Interested Shareholder was the beneficial owner of a least
five percent of the voting power of the corporation and (b) the market value
per share on the announcement date with respect to the Business Combination
or on the Interested Shareholder's acquisition date, whichever is higher,
plus, in any case, interest and less the value of any distributions on the
shares); (iii) the Business Combination is approved by all of the holders of
the corporation's outstanding common shares; (iv) the Business Combination is
approved by a majority vote of the corporation's voting shares, other than
shares held by the Interested Shareholder, no earlier than five years after
the Interested Shareholder became an Interested Shareholder; or (v) the
Business Combination is approved by a majority vote of the corporation's
voting shares no earlier than five years after the Interested Shareholder
became an Interested Shareholder and the Business Combination satisfies the
"fair price" criteria described above. Subchapter F does not apply to the
Merger because, among other things, the Board of Directors of the Company has
approved the Merger.
Subchapter G of Chapter 25 of the PBCL ("Subchapter G"), relating to
"control-share acquisitions," prevents under certain circumstances the owner
of a control-share block of shares of a registered corporation from voting
such shares unless a majority of the "disinterested" shares approve such
voting rights. Failure to obtain such approval may result in a forced sale by
the control-share owner of the control-share block to the corporation at a
possible loss. The Amended and Restated Articles of Incorporation
specifically provide that Subchapter G does not apply to the Company.
Subchapter H of Chapter 25 of the PBCL ("Subchapter H"), relating to
disgorgement by certain controlling shareholders of a registered corporation,
provides that under certain circumstances any profit realized by a
controlling person from the disposition of shares of the corporation to any
person (including to the corporation under Subchapter G or otherwise) will be
recoverable by the corporation. The Amended and Restated Articles of
Incorporation specifically provide that Subchapter H does not apply to the
Company.
Subchapter I of Chapter 25 of the PBCL ("Subchapter I") entitles "eligible
employees" of a registered corporation to a lump sum payment of severance
compensation under certain circumstances if the employee is terminated, other
than for willful misconduct, within two years after voting rights lost as a
result of a control-share acquisition are restored by a vote of disinterested
shareholders ("Control-Share Approval") or, in the event the termination was
accomplished pursuant to an agreement, arrangement or understanding with the
acquiring person, within 90 days prior to Control-Share Approval. Subchapter
J of Chapter 25 of the PBCL ("Subchapter J") provides protection against
termination or impairment under certain circumstances of "covered labor
contracts" of a registered corporation as a result of a "business
combination" transaction if the business operation to which the covered labor
contract relates was owned by the registered corporation at the time voting
rights are restored by shareholder vote after a control-share acquisition.
Subchapters I and J apply only in the event of a "control-share acquisition"
specified in Subchapter G. The Amended and Restated Articles of Incorporation
specifically provide that Subchapter G does not apply to the Company.
35
Section 2504 of the PBCL provides that the applicability of Chapter 25 of
the PBCL to a registered corporation having a class or series of shares
entitled to vote generally in the election of directors registered under the
Exchange Act or otherwise satisfying the definition of a registered
corporation under Section 2502(l) of the PBCL shall terminate immediately
upon the termination of the status of the corporation as a registered
corporation. Purchaser intends to seek to cause the Company to terminate the
registration of the Shares under the Exchange Act as soon after consummation
of the Merger as the requirements for termination of registration of the
Shares are met.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or
have substantial assets, shareholders, principal executive offices or
principal places of business, or whose business operations otherwise have
substantial economic effects, in such states. Neither Purchaser nor Xxxxx has
currently complied with any state takeover statute or regulation. Purchaser
reserves the right to challenge the applicability or validity of any state
law purportedly applicable to the Offer or the Merger and nothing in this
Offer to Purchase or any action taken in connection with the Offer or the
Merger is intended as a waiver of such right. If it is asserted that any
state takeover statute is applicable to the Offer or the Merger and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger, Purchaser might be required to file
certain information with, or to receive approvals from, the relevant state
authorities, and Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in consummating the
Offer or the Merger. In such case, Purchaser may not be obligated to accept
for payment or pay for any Shares tendered pursuant to the Offer.
Should any person seek to apply any state takeover law, Purchaser will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court
proceedings. In the event it is asserted that one or more state takeover laws
are applicable, and an appropriate court does not determine that such law is,
or such laws are, inapplicable or invalid as applied to the Offer or Merger,
Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined,
Purchaser might be unable to accept for payment any Shares tendered pursuant
to the Offer, or be delayed in consummating the Offer. In such case,
Purchaser may not be obligated to accept for payment any Shares tendered.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws as described above. The Purchaser does not believe that any
such takeover statutes are applicable to the Offer or the Merger and has not
attempted to comply with any such state takeover statutes in connection
therewith. The Purchaser reserves the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer or the
Merger and nothing in this Offer to Purchase nor any action taken in
connection herewith is intended as a waiver of that right.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder, certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division and the
Federal Trade Commission (the "FTC") and certain waiting period requirements
have been satisfied. The acquisition of Shares pursuant to the Offer is
subject to such requirements. See the Introduction and Section 14.
Xxxxx expects to file on August 17, 1998 with the FTC and the Antitrust
Division a Premerger Notification and Report Form in connection with the
purchase of Shares pursuant to the Offer. Under the provisions of the HSR Act
applicable to the Offer, the purchase of Shares pursuant to the Offer may not
be consummated until the expiration of a 15 calendar-day waiting period
following the filing by Crane and notification to the Company of such filing.
Accordingly, it is expected that the waiting period under the HSR Act
applicable to the Offer will expire at 11:59 p.m., Eastern time, on September
1, 1998, unless early termination of the waiting period is granted or the FTC
or the Antitrust Division extends the waiting period by requesting additional
information or documentary material from Crane. If either the FTC or the
Antitrust Division were to request additional information or documentary
material from Crane, the waiting period would expire at 11:59 p.m., Eastern
time, on the tenth calendar day after the date of substantial compliance by
Xxxxx with such request. Thereafter, the waiting period could be extended by
36
court order or by consent of Crane. If the acquisition of Shares is delayed
pursuant to a request by the FTC or the Antitrust Division for additional
information or documentary material pursuant to the HSR Act, the Offer may,
but need not, be extended and in any event the purchase of and payment for
Shares will be deferred until ten days after the request is substantially
complied with, unless the waiting period is sooner terminated by the FTC and
the Antitrust Division. Only one extension of such waiting period pursuant to
a request for additional information is authorized by the HSR Act and the
rules promulgated thereunder, except by court order or by consent of Crane.
Any such extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4. Although
the Company is required to file certain information and documentary material
with the Antitrust Division and the FTC in connection with the Offer, neither
the Company's failure to make such filings nor a request from the Antitrust
Division or the FTC for additional information or documentary material made
to the Company will extend the waiting period.
The FTC and the Antitrust Division frequently scrutinize the legality
under the antitrust laws of transactions such as the proposed acquisition of
Shares by the Purchaser pursuant to the Offer. At any time before or after
the purchase by the Purchaser of Shares pursuant to the Offer, either the FTC
or the Antitrust Division could take such action under the antitrust laws as
it deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Offer or seeking the
divestiture of Shares purchased by the Purchaser or the divestiture of
substantial assets of Crane, its subsidiaries or the Company. Private parties
and state attorneys general may also bring legal action under U.S. federal or
state antitrust laws under certain circumstances.
Based upon an examination of publicly available information relating to
the businesses in which the Company is engaged, Xxxxx is confident that it
can overcome any antitrust objections of the Antitrust Division and the FTC
or any other party to the acquisition of Shares pursuant to the Offer and the
Merger. Nevertheless, there can be no assurance that a challenge to the Offer
on antitrust grounds will not be made, or, if such challenge is made, what
the result will be.
16. CERTAIN FEES AND EXPENSES
Beacon Hill Partners, Inc. has been retained by the Purchaser as
Information Agent in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interview and may request brokers, dealers and other nominee shareholders to
forward material relating to the Offer to beneficial owners of Shares. The
Purchaser will pay the Information Agent reasonable and customary
compensation for all such services in addition to reimbursing the Information
Agent for reasonable out-of-pocket expenses in connection therewith.
In addition, First Chicago Trust Company of New York has been retained as
the Depositary. The Purchaser will pay the Depositary reasonable and
customary compensation for its services in connection with the Offer, will
reimburse the Depositary for its reasonable out-of-pocket expenses in
connection therewith and will indemnify the Depositary against certain
liabilities and expenses in connection therewith, including certain
liabilities under the U.S. federal securities laws.
Except as set forth above, neither Xxxxx nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks
and trust companies and other nominees will, upon request, be reimbursed by
Xxxxx or the Purchaser for customary clerical and mailing expenses incurred
by them in forwarding offering materials to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the
Purchaser may, in its discretion, take such action as it may deem necessary
to make the Offer in any jurisdiction and extend the Offer to holders of
Shares in such jurisdiction.
37
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed
to be made on behalf of the Purchaser by one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
Crane and the Purchaser have filed with the Commission a Schedule 14D-l,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule
14D-l and any amendments thereto, including exhibits, may be examined and
copies may be obtained from the office of the Commission in the same manner
as described in Section 8 with respect to information concerning the Company,
except that copies will not be available at the regional offices of the
Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF CRANE OR THE PURCHASER NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer shall under any circumstances create any implication that there has
been no change in the affairs of Crane, the Purchaser, the Company or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
LTI MERGER, INC.
August 14, 1998
38
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
XXXXX AND THE PURCHASER
1. Directors and Executive Officers of Crane. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Crane. The
current business address of each person is 000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, each such person is a citizen of the United
States and, unless otherwise indicated, the named individual has held the
principal occupation indicated for more than the past five years.
A. DIRECTORS
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
--------------------------- ------------------------------------------------------------------
X.X. Xxxxx ................ Director of Crane since 1979; Chairman and Chief Executive Officer
of Crane; Chairman and Chief Executive Officer of Medusa
Corporation to June 1998; Director of Fansteel, Inc., HBD
Industries, Inc., and Southdown, Inc.
X. Xxxxxx Xxxxxxx, Xx. .... Director of Crane Since 1984; Chief Executive Officer, Court TV,
New York, New York, an affiliate of Time Warner Entertainment LP
(cable television program services) since March 1, 1997; President
and Chief Executive Officer, Time Warner Cable Programming Inc.,
Stamford, Connecticut, a subsidiary of Time Warner Entertainment
LP (cable television program services), 1991 to 1997; Director of
Xxxx Xxxxxx & Co. Mutual Funds.
Xxxxxxx X. Xxxxx .......... Director of Crane since 1983; President, Xxxxxx Xxxxx Cashmere
Company, South Natick, Massachusetts (importer) since January
1997; Chairman since January 1997 and, prior thereto, President,
Forte Cashmere Company, Inc. (importer and manufacturer).
Xxxxxx X. Xxxxxxx ......... Director of Crane from 1982 to 1986 and since 1989; President,
Xxxxx Management Company, Inc., Boston, Massachusetts (investment
management); Director of Filene's Basement Corp., and Medicus
Systems Corp.
Xxxx Xxxxxx ............... Director of Crane since 1996; Vice Chairman, President and Chief
Operating Officer, Ultramar Diamond Shamrock Corporation, San
Antonio, Texas (petroleum refining and marketing) since 1996;
Chairman and Chief Executive Officer, Ultramar Corporation,
Greenwich, Connecticut (petroleum refining and marketing) 1992 to
1996; Director of Quebec Telephone and Ultramar Diamond Shamrock
Corporation.
Xxxxxx X. Xxxxxx .......... Director of Crane since 1983; Chairman of the Board, Church &
Xxxxxx Co., Inc., Princeton, New Jersey (manufacturer of consumer
and specialty products); Director of Church & Xxxxxx Co., Inc.
Xxxxxxx X. Xxxxxxx, Xx. ... Director of Crane since 1986; Senior Counsel since 1995 and prior
thereto, Partner, Xxxxxxxxxxx & Xxxxxxxx LLP, Pittsburgh,
Pennsylvania (attorneys at law); Director of Allegheny Teledyne
Incorporated.
I-1
Xxxxx X. X. Xxxxxx ........ Director of Crane since 1998; Chairman and Chief Executive
Officer, Xxxxxx-Xxxxxxxxx & Co., Inc., Greenwich, Connecticut
(venture capital investments in the health care industry) since
1986; Director of Acme United Corporation and Physician Sales &
Service, Inc.
Xxxxx Xxxxxx .............. Director of Crane since 1987; Principal, Xxxx, Xxxxxx & Associates
LLC, New York, New York (governance consultants); Xxxx Xxxxxx
Professor Emeritus of Public Policy and Business Responsibility,
Xxxx Xxxxxxxx, Columbia University Graduate School of Business,
New York, New York since 1993; Director and Vice Chairman, The
Institute for the Future; Director of Israel Discount Bank of New
York.
B. EXECUTIVE OFFICERS
Xxxxx'x current executive officers and certain biographical information
concerning such individuals is set forth below. Each such person is a citizen
of the United States and has a current business address of 000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
------------------------- ---------------------------------------------------------------------
X. X. Xxxxx ............. Director of Crane since 1979; Chairman and Chief Executive Officer of
Crane; Chairman and Chief Executive Officer of Medusa Corporation to
June 1998; Director of Fansteel, Inc., HBD Industries, Inc., and
Southdown, Inc.
X. Xxxx Xxxxx ........... President and Chief Operating Officer of Crane since October 1995;
Executive Vice President of Xxxxx from January 1994 to October 1995;
Group Vice President--Fluid Handling Systems of Crane from September
1993 to January 1994; President of Xxxxx'x Xxxx Romec Division from
May 1990 to September 1993; Previously held various positions within
Allied Signal Inc., a diversified manufacturing company.
Xxx X. Xxxxxxx .......... Treasurer of Crane since 1992.
Xxxxxxxx X. xxXxxx ...... Vice President, General Counsel and Secretary of Crane since January
1996; Vice President, General Counsel and Secretary of Xxxxxx
Industries, Inc., a manufacturer of apparel textiles and industrial
coated fabrics from May 1994 to December 1995; Vice President,
General Counsel and Secretary of Xxxxxxx Technologies, Inc., a
manufacturer of electronic components, from May 1987 to December
1993.
Xxxxxxx X. Xxxxx.......... Vice President--Chief Information Officer of Xxxxx since 1997; Previously
with the business systems consulting group of Xxxxxx Xxxxxxxx LLP.
Xxxxxxx X. Xxxxxxxxxx .... Vice President--Environment, Health & Safety of Crane since 1989.
Xxxxxxx X. Xxxxxxxx ..... Vice President--Human Resources of Crane since 1987.
Xxxxxxx X. Xxxxxxx ....... Controller of Crane since 1985.
Xxxxx X. Xxxxx ........... Vice President--Finance and Chief Financial Officer of Crane since March
1994; Vice President--Corporate Development of Crane from March 1991 to
March 1994.
I-2
2. Director and Executive Officers of the Purchaser. The following table
sets forth the name, and present principal occupation or employment, and
material occupations, positions, offices or employments and business
addresses thereof for the past five years of the director and each executive
officer of the Purchaser. The current business address of each person is 000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. Each such person is a
United States citizen.
A. DIRECTOR
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
----------------------- ------------------------------------------------------------------
Xxxxxxxx X. xxXxxx .... Vice President, General Counsel and Secretary of Crane since
January 1996; Vice President, General Counsel and Secretary of
Xxxxxx Industries, Inc., a manufacturer of apparel textiles and
industrial coated fabrics from May 1994 to December 1995; Vice
President, General Counsel and Secretary of Xxxxxxx Technologies,
Inc., a manufacturer of electronic components, from May 1987 to
December 1993.
B. EXECUTIVE OFFICERS
The Purchaser's current executive officers and certain biographical
information concerning such individuals are set forth below.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
---------------------- ------------------------------------------------------------------
Xxxxxxxx X. xxXxxx ... Vice President, General Counsel and Secretary of Crane since
January 1996; Vice President, General Counsel and Secretary of
Xxxxxx Industries, Inc., a manufacturer of apparel textiles and
industrial coated fabrics from May 1994 to December 1995; Vice
President, General Counsel and Secretary of Xxxxxxx Technologies,
Inc., a manufacturer of electronic components, from May 1987 to
December 1993.
Xxxxx X. Xxxxx ....... Vice President--Finance and Chief Financial Officer of Crane since
March 1994; Vice President--Corporate Development of Crane from
March 1991 to March 1994.
I-3
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SCHEDULE II
SECTIONS 1930(A) AND 1571 THROUGH 1580
(SUBCHAPTER D OF CHAPTER 15) OF THE
PENNSYLVANIA BUSINESS CORPORATION LAW
1930 DISSENTERS RIGHTS
(a) General rule. If any shareholder of a domestic business corporation
that is to be a party to a merger or consolidation pursuant to a plan of
merger or consolidation objects to the plan of merger or consolidation and
complies with the provisions of Subchapter D of Chapter 15 (relating to
dissenters rights), the shareholder shall be entitled to the rights and
remedies of dissenting shareholders therein provided, if any. See also
Section 1906(c) (relating to dissenters rights upon special treatment).
1571 APPLICATION AND EFFECT OF SUBCHAPTER
(a) General rule. Except as otherwise provided in subsection (b), any
shareholder of a business corporation shall have the right to dissent from,
and to obtain payment of the fair value of his shares in the event of, any
corporate action, or to otherwise obtain fair value for his shares, where
this part expressly provides that a shareholder shall have the rights and
remedies provided in this subchapter. See:
Section 1906(c) (relating to dissenters rights upon special treatment).
Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share exchanges).
Section 1932(c) (relating to dissenters rights in asset transfers).
Section 1952(d) (relating to dissenters rights in division).
Section 1962(c) (relating to dissenters rights in conversion).
Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).
Section 2325(b) (relating to minimum vote requirement).
Section 2704(c) (relating to dissenters rights upon election).
Section 2705(d) (relating to dissenters rights upon renewal of election).
Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions).
Section 7104(b)(3) (relating to procedure).
(b) Exceptions. (1) Except as otherwise provided in paragraph (2) , the
holders of the shares of any class or series of shares that, at the record
date fixed to determine the shareholders entitled to notice of and to vote at
the meeting at which a plan specified in any of sections 1930, 1931(d),
1932(c) or 1952(d) is to be voted on, are either:
(i) listed on a national securities exchange; or
(ii) held of record by more than 2,000 shareholders; shall not have the
right to obtain payment of the fair value of any such shares under this
subchapter.
(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the
case of:
(i) Shares converted by a plan if the shares are not converted solely into
shares of the acquiring, surviving, new or other corporation or solely into
such shares and money in lieu of fractional shares.
II-1
(ii) Shares of any preferred or special class unless the articles, the
plan or the terms of the transaction entitle all shareholders of the class to
vote thereon and require for the adoption of the plan or the effectuation of
the transaction the affirmative vote of a majority of the votes cast by all
shareholders of the class.
(iii) Shares entitled to dissenters rights under section 1906(c) (relating
to dissenters rights upon special treatment).
(3) The shareholders of a corporation that acquires by purchase, lease,
exchange or other disposition all or substantially all of the shares,
property or assets of another corporation by the issuance of shares,
obligations or otherwise, with or without assuming the liabilities of the
other corporation and with or without the intervention of another corporation
or other person, shall not be entitled to the rights and remedies of
dissenting shareholders provided in this subchapter regardless of the fact,
if it be the case, that the acquisition was accomplished by the issuance of
voting shares of the corporation to be outstanding immediately after the
acquisition sufficient to elect a majority or more of the directors of the
corporation.
(c) Grant of optional dissenters rights. The bylaws or a resolution of the
board of directors may direct that all or a part of the shareholders shall
have dissenters rights in connection with any corporate action or other
transaction that would otherwise not entitle such shareholder to dissenters
rights.
(d) Notice of dissenters rights. Unless otherwise provided by statute, if
a proposed corporate action that would give rise to dissenters rights under
this subpart is submitted to a vote at a meeting of shareholders, there shall
be included in or enclosed with the notice of meeting:
(1) A statement of the proposed action and a statement that the
shareholders have a right to dissent and obtain payment of the fair value of
their shares by complying with the terms of this subchapter; and
(2) A copy of this subchapter.
(e) Other statutes. The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part
that makes reference to this subchapter for the purpose of granting
dissenters rights.
(f) Certain provisions of articles ineffective. This subchapter may not be
relaxed by any provision of the articles.
(g) Cross references. See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure) .
1572 DEFINITIONS
The following words and phrases when used in this subchapter shall have
the meanings given to them in this section unless the context clearly
indicates otherwise:
"Corporation." The issuer of the shares held or owned by the dissenter
before the corporate action or the successor by merger, consolidation,
division, conversion or otherwise of that issuer. A plan of division may
designate which of the resulting corporations is the successor corporation
for the purposes of this subchapter. The successor corporation in a division
shall have sole responsibility for payments to dissenters and other
liabilities under this subchapter except as otherwise provided in the plan of
division.
"Dissenter." A shareholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every
act required up to the time involved for the assertion of those rights.
"Fair Value." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects, taking into account
all relevant factors, but excluding any appreciation or depreciation in
anticipation of the corporate action.
"Interest." Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all the
circumstances, taking into account all relevant factors, including the
average rate currently paid by the corporation on its principal bank loans.
II-2
1573 RECORD AND BENEFICIAL HOLDERS AND OWNERS
(a) Record holders of shares. A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of
the same class or series beneficially owned by any one person and discloses
the name and address of the person or persons on whose behalf he dissents. In
that event, his rights shall be determined as if the shares as to which he
has dissented and his other shares were registered in the names of different
shareholders.
(b) Beneficial owners of shares. A beneficial owner of shares of a
business corporation who is not the record holder may assert dissenters
rights with respect to shares held on his behalf and shall be treated as a
dissenting shareholder under the terms of this subchapter if he submits to
the corporation not later than the time of the assertion of dissenters rights
a written consent of the record holder. A beneficial owner may not dissent
with respect to some but less than all shares of the same class or series
owned by the owner, whether or not the shares so owned by him are registered
in his name.
1574 NOTICE OF INTENTION TO DISSENT
If the proposed corporate action is submitted to a vote at a meeting of
shareholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair market value of his shares must file with the
corporation, prior to the vote, a written notice of intention to demand that
he be paid the fair value for his shares if the proposed action is
effectuated, must effect no change in the beneficial ownership of his shares
from the date of such filing continuously through the effective date of the
proposed action and must refrain from voting his shares in approval of such
action. A dissenter who fails in any respect shall not acquire any right to
payment of the fair value of his shares under this subchapter. Neither a
proxy nor a vote against the proposed corporate action shall constitute the
written notice required by this section.
1575 NOTICE TO DEMAND PAYMENT
(a) General rule. If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice
of intention to demand payment of the fair value of their shares and who
refrained from voting in favor of the proposed action. If the proposed
corporate action is to be taken without a vote of shareholders, the
corporation shall send to all shareholders who are entitled to dissent and
demand payment of the fair value of their shares a notice of the adoption of
the plan or other corporate action. In either case, the notice shall:
(1) State where and when a demand for payment must be sent and
certificates for certificated shares must be deposited in order to obtain
payment.
(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is received.
(3) Supply a form for demanding payment that includes a request for
certification of the date on which the shareholder, or the person on whose
behalf the shareholder dissents, acquired beneficial ownership of the shares.
(4) Be accompanied by a copy of this subchapter.
(b) Time for receipt of demand for payment. The time set for receipt of
the demand and deposit of certificated shares shall be not less than 30 days
from the mailing of the notice.
1576 FAILURE TO COMPLY WITH NOTICE TO DEMAND PAYMENT, ETC.
(a) Effect of failure of shareholder to act. A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to
timely deposit certificates, as required by a notice pursuant to section 1575
(relating to notice to demand payment) shall not have any right under this
subchapter to receive payment of the fair value of his shares.
II-3
(b) Restriction on uncertificated shares. If the shares are not
represented by certificates, the business corporation may restrict their
transfer from the time of receipt of demand for payment until effectuation of
the proposed corporate action or the release of restrictions under the terms
of section 1577(a) (relating to failure to effectuate corporate action) .
(c) Rights retained by shareholder. The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of
the proposed corporate action.
1577 RELEASE OF RESTRICTIONS OR PAYMENT FOR SHARES.
(a) Failure to effectuate corporate action. Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall
return any certificates that have been deposited and release uncertificated
shares from any transfer restrictions imposed by reason of the demand for
payment.
(b) Renewal of notice to demand payment. When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming
to the requirements of section 1575 (relating to notice to demand payment)
with like effect.
(c) Payment of fair value of shares. Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if
the corporate action has already been effectuated, the corporation shall
either remit to dissenters who have made demand and (if their shares are
certificated) have deposited their certificates the amount that the
corporation estimates to be the fair value of the shares, or give written
notice that no remittance under this section will be made. The remittance or
notice shall be accompanied by:
(1) The closing balance sheet and statement of income of the issuer of the
shares held or owned by the dissenter for a fiscal year ending not more than
16 months before the date of remittance or notice together with the latest
available interim financial statements.
(2) A statement of the corporation's estimate of the fair value of the
shares.
(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.
(d) Failure to make payment. If the corporation does not remit the amount
of its estimate of the fair value of the shares as provided by subsection
(c), it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such
certificate or on the records of the corporation relating to any such
uncertificated shares that such demand has been made. If shares with respect
to which notation has been so made shall be transferred, each new certificate
issued therefor or the records relating to any transferred uncertificated
shares shall bear a similar notation, together with the name of the original
dissenting holder or owner of such shares. A transferee of such shares shall
not acquire by such transfer any rights in the corporation other than those
that the original dissenter had after making demand for payment of their fair
value.
1578 ESTIMATE BY DISSENTER OF FAIR VALUE OF SHARES.
(a) General rule. If the business corporation gives notice of its estimate
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as
permitted by section 1577(c) (relating to payment of fair value of shares)
and the dissenter believes that the amount stated or remitted is less than
the fair value of his shares, he may send to the corporation his own estimate
of the fair value of the shares, which shall be deemed a demand for payment
of the amount or the deficiency.
(b) Effect of failure to file estimate. Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to
no more than the amount stated in the notice or remitted to him by the
corporation.
II-4
1579 VALUATION PROCEEDINGS GENERALLY.
(a) General rule. Within 60 days after the latest of:
(1) Effectuation of the proposed corporate action;
(2) Timely receipt of any demands for payment under section 1575 (relating
to notice to demand payment); or
(3) Timely receipt of any estimates pursuant to section 1578 (relating to
estimate by dissenter of fair value of shares);
If any demands for payment remain unsettled, the business corporation may
file in court an application for relief requesting that the fair value of the
shares be determined by the court.
(b) Mandatory joinder of dissenters. All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding
as in an action against their shares. A copy of the application shall be
served on each such dissenter. If a dissenter is a nonresident, the copy may
be served on him in the manner provided or prescribed by or pursuant to 42
Pa.C.S. Ch. 53 (relating to bases of jurisdiction and interstate and
international procedure) .
(c) Jurisdiction of the court. The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority as may be specified in the order of appointment or
in any amendment thereof.
(d) Measure of recovery. Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found
to exceed the amount, if any, previously remitted, plus interest.
(e) Effect of corporation's failure to file application. If the
corporation fails to file an application as provided in subsection (a), any
dissenter who made a demand and who has not already settled his claim against
the corporation may do so in the name of the corporation at any time within
30 days after the expiration of the 60-day period. If a dissenter does not
file an application within the 30-day period, each dissenter entitled to file
an application shall be paid the corporation's estimate of the fair value of
the shares and no more, and may bring an action to recover any amount not
previously remitted.
1580 COSTS AND EXPENSES OF VALUATION PROCEEDINGS.
(a) General rule. The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as
the court deems appropriate against all or some of the dissenters who are
parties and whose action in demanding supplemental payment under section 1578
(relating to estimate by dissenter of fair value of shares) the court finds
to be dilatory, obdurate, arbitrary, vexatious or in bad faith.
(b) Assessment of counsel fees and expert fees where lack of good faith
appears. Fees and expenses of counsel and of experts for the respective
parties may be assessed as the court deems appropriate against the
corporation and in favor of any or all dissenters if the corporation failed
to comply substantially with the requirements of this subchapter any may be
assessed against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted in bad faith or in a dilatory, obdurate, arbitrary or
vexatious manner in respect to the rights provided by this subchapter.
(c) Award of fees for benefits to other dissenters. If the court finds
that the services of counsel for any dissenter were of substantial benefit to
other dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of
the amounts awarded to the dissenters who were benefited.
II-5
Facsimiles of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal and certificates
evidencing Shares and any other required documents should be sent or
delivered by each shareholder or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY MAIL: BY HAND DELIVERY: BY OVERNIGHT MAIL:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
Tenders & Exchanges, Suite 4660 c/o Securities Transfer & Reporting Services Tenders & Exchanges, Suite 4680
P.O. Box 0000 Xxx Xxxxxxxx Xxxxx, Third Floor 00 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000-2569 Attention: Tenders & Exchanges New York, New York 00000
Xxx Xxxx, Xxx Xxxx 00000
-------------
Questions or requests for assistance may be directed to the Information
Agent, at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent. A shareholder
may also contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
00 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
(000) 000-0000
BANKS AND BROKERAGE FIRMS
PLEASE CALL:
(000) 000-0000
