OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
AT
$15.50 NET PER SHARE
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
XXXX-XXXXX COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF SUPER FOOD SERVICES, INC. HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS DETERMINED THAT
THE TERMS OF THE OFFER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF SUPER FOOD SERVICES, INC. AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS HEREINAFTER DEFINED)
PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER DEFINED)
A NUMBER OF SHARES OF SUPER FOOD SERVICES, INC. WHICH, TOGETHER WITH SHARES
BENEFICIALLY OWNED BY XXXX-XXXXX COMPANY, NFC ACQUISITION CORPORATION AND/OR
OTHER SUBSIDIARIES OF XXXX-XXXXX COMPANY, REPRESENTS AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS. THE PURCHASER
ESTIMATES THAT APPROXIMATELY 5,620,913 SHARES WILL NEED TO BE VALIDLY TENDERED
(AND NOT WITHDRAWN) TO SATISFY THIS MINIMUM CONDITION (AS HEREINAFTER DEFINED).
THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 1, 13 AND 16.
XXXX-XXXXX COMPANY HAS ENTERED INTO A STOCKHOLDER AGREEMENT WITH THE
DIRECTORS AND CERTAIN OFFICERS OF SUPER FOOD SERVICES, INC., INCLUDING XXXX
XXXXXX, THE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF SUPER FOOD
SERVICES, INC., PURSUANT TO WHICH, AMONG OTHER THINGS, SUCH PERSONS HAVE AGREED
(SUBJECT TO CERTAIN EXCEPTIONS) TO TENDER IN THE OFFER ALL SHARES OWNED BY THEM,
WHICH CONSTITUTE APPROXIMATELY 5.2% OF ALL OUTSTANDING SHARES.
------------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR A PORTION OF SUCH STOCKHOLDER'S
SHARES (AS HEREINAFTER DEFINED) SHOULD EITHER (1) 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 THE LETTER OF TRANSMITTAL TOGETHER
WITH THE CERTIFICATE(S) EVIDENCING SUCH SHARES, AND ANY OTHER REQUIRED
DOCUMENTS, TO THE DEPOSITARY OR TENDER SUCH SHARES PURSUANT TO THE PROCEDURE FOR
BOOK-ENTRY TRANSFER SET FORTH IN SECTION 4, OR (2) REQUEST HIS BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR
HIM. A STOCKHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH STOCKHOLDER
DESIRES TO TENDER SUCH SHARES.
A STOCKHOLDER 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 PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN SECTION
4.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT OR TO THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE
NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE. ADDITIONAL COPIES
OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED
DELIVERY AND OTHER RELATED MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT,
THE DEALER MANAGER, OR TO BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES.
------------------------
The Dealer Manager for the Offer is:
XXXXX XXXXXXX INC.
TABLE OF CONTENTS
SECTION PAGE
----------------------------------------------------------------------------------------------------------- -----
INTRODUCTION............................................................................................... 1
1. Terms of the Offer; Expiration Date.................................................................... 3
2. Acceptance of and Payment for Shares................................................................... 3
3. Withdrawal Rights...................................................................................... 4
4. Procedures for Accepting the Offer and Tendering Shares................................................ 5
5. Certain Income Tax Consequences........................................................................ 8
6. Market Prices of Shares; Dividends..................................................................... 8
7. Certain Effects of the Offer........................................................................... 9
8. Certain Information Concerning the Company............................................................. 10
9. Certain Information Concerning the Purchaser and Parent................................................ 11
10. Background of the Offer................................................................................ 13
11. Purpose of the Offer and Merger; Plans for the Company; the Merger
Agreement and Stockholder Agreement..................................................................... 16
12. Source and Amount of Funds............................................................................. 21
13. Certain Conditions of the Offer........................................................................ 22
14. Dividend and Distributions............................................................................. 24
15. Certain Legal Matters.................................................................................. 24
16. Extension of Tender Period, Termination and Amendments................................................. 27
17. Certain Fees and Expenses.............................................................................. 28
18. Miscellaneous.......................................................................................... 28
Schedule A -- Directors and Executive Officers of Parent and the Purchaser................................. A-1
i
TO THE HOLDERS OF COMMON STOCK OF SUPER FOOD SERVICES, INC.:
INTRODUCTION
NFC Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Xxxx-Xxxxx Company, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of the Common
Shares, par value $1.00 per share, including the associated preferred share
purchase rights (collectively, unless the context otherwise requires, the
"Shares"), of Super Food Services, Inc., a Delaware corporation (the "Company"),
at $15.50 per Share, net to the seller in cash, without any interest, 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").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares
pursuant to the Offer. The Purchaser will pay charges and reimbursable expenses
incurred in connection with the Offer by Xxxxx Xxxxxxx Inc., which is acting as
the Dealer Manager for the Offer (in such capacity, the "Dealer Manager"),
Norwest Bank Minnesota, N.A., which is acting as the Depositary (the
"Depositary") and X.X Xxxx & Co., Inc., which is acting as the Information Agent
(the "Information Agent"). See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER DEFINED)
A NUMBER OF SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE TOTAL OF ALL
SHARES OUTSTANDING AT THE TIME OF PURCHASE ON A FULLY DILUTED BASIS (INCLUDING
ALL SHARES ISSUABLE UPON EXERCISE OF OPTIONS (DEFINED BELOW) OR OTHER STOCK
PURCHASE RIGHTS WHICH ARE OUTSTANDING AT THE TIME OF PURCHASE, WHETHER OR NOT
SUCH OPTIONS OR OTHER STOCK PURCHASE RIGHTS ARE EXERCISABLE OR FULLY VESTED
("FULLY DILUTED SHARES")) (THE "MINIMUM CONDITION"). SEE SECTION 13.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 8, 1996, by and among the Company, Parent and the Purchaser (the
"Merger Agreement"). The Merger Agreement provides, among other things, that as
soon as practicable after the consummation of the Offer and the satisfaction of
certain conditions, the Purchaser will be merged with and into the Company (the
"Merger") and the Company will become a wholly owned subsidiary of Parent. At
the effective time of the Merger (the "Effective Time"), each then outstanding
Share (other than Shares held by Parent, the Purchaser or any of their
subsidiaries, or in the treasury of the Company or by any subsidiary of the
Company, if any, all of which will be canceled, and other than Shares
("Dissenting Shares") held by stockholders who properly exercise and perfect
appraisal rights under the General Corporation Law of the State of Delaware
("DGCL")), will be converted into the right to receive $15.50 in cash, or such
higher price per Share as shall have been paid in the Offer. The Merger
Agreement is more fully described in Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT EACH OF THE OFFER AND
THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
ON OCTOBER 8, 1996, LAZARD FRERES & CO. LLC ("LAZARD FRERES"), THE COMPANY'S
FINANCIAL ADVISOR, DELIVERED A WRITTEN OPINION TO THE BOARD OF DIRECTORS OF THE
COMPANY THAT, BASED UPON AND SUBJECT TO VARIOUS CONSIDERATIONS AND ASSUMPTIONS
SET FORTH THEREIN, THE PROPOSED $15.50 PER SHARE CASH CONSIDERATION TO BE
RECEIVED BY THE STOCKHOLDERS OF THE COMPANY IN CONNECTION WITH THE OFFER AND THE
MERGER IS FAIR TO THE STOCKHOLDERS OF THE COMPANY FROM A FINANCIAL POINT OF
VIEW. A COPY OF THE OPINION RENDERED BY XXXXXX FRERES TO THE BOARD OF DIRECTORS
OF THE COMPANY, SETTING FORTH THE PROCEDURES FOLLOWED, THE MATTERS CONSIDERED,
THE SCOPE OF THE REVIEW UNDERTAKEN AND THE ASSUMPTIONS MADE BY LAZARD FRERES IN
ARRIVING AT ITS OPINION, IS ATTACHED AS AN EXHIBIT TO THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 THAT IS BEING MAILED TO
THE COMPANY'S STOCKHOLDERS HEREWITH.
The consummation of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required by law, the approval and adoption
of the Merger Agreement by the stockholders of the Company. If the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power under
the DGCL to effect the Merger without the concurrence of any other stockholder
of the Company. Under the Merger Agreement, Parent and the Purchaser have agreed
to vote all Shares acquired in the Offer in favor of the Merger. If at least 90%
of the outstanding Shares are purchased in the Offer, the Purchaser will be able
to effect a short-form merger under Section 253 of the DGCL without prior notice
to, or any action by, any other stockholder of the Company. See Section 11.
According to the Company, as of October 8, 1996, there were 10,997,448
Shares issued and outstanding and 197,277 Shares subject to issuance upon the
exercise of outstanding options to purchase shares of Common Stock (the
"Options") granted under the Company's 1978 Stock Option Plan and 1986 Stock
Option Plan (together, the "Option Plans"). In addition, according to the
Company, up to 47,099 Shares may be issued under the Company's Employee Stock
Purchase Plan (the "Stock Purchase Plan"). Accordingly, 244,376 Shares issuable
upon the exercise of such Options or reserved for issuance under the Stock
Purchase Plan are included in the Fully Diluted Shares. According to the
Company, 180,272 of such Shares are issuable pursuant to Options with an
exercise price of less than $15.50 per Share.
Based on the foregoing, and assuming the number of Fully Diluted Shares
would be 11,241,824, the Purchaser would need to purchase 5,620,913 Shares for
the Minimum Condition to be satisfied. The Purchaser reserves the right (but is
not obligated), subject to the rules and regulations of the Securities and
Exchange Commission (the "Commission"), to waive or amend the Minimum Condition
and to purchase pursuant to the Offer fewer than the number of Shares necessary
to satisfy the Minimum Condition. The Merger Agreement requires the Company's
consent to a waiver of the Minimum Condition. See Section 1.
As of the date of this Offer to Purchase, the Company's Series A Preferred
Share Purchase Rights (the "Rights"), issued pursuant to the Rights Agreement,
dated as of January 27, 1989, as amended, between the Company and Chase
Manhattan Bank, N.A., as Rights Agent (the "Rights Agreement"), are evidenced by
the certificates representing Shares. The Company has informed Parent, however,
that the Rights will not become exercisable as a result of the Offer or the
Merger, or as a result of the transactions contemplated thereby, because the
Company's Directors, after receiving advice from a nationally recognized
investment banking firm selected by the Board of Directors, has determined that
the acquisition of the Shares by the Purchaser is at a price and on terms that
are fair to the Company's stockholders and is otherwise in the best interests of
the Company and its stockholders, and has unanimously approved the Offer, the
Merger Agreement, the acquisition of the Shares and the Merger so that the
Rights will not become exercisable as a result of the Offer or the Merger. The
Company has further represented in the Merger Agreement that the Rights
Agreement has been amended to provide that neither Parent nor the Purchaser will
be deemed to be an Acquiring Person or a Beneficial Owner (as such terms are
defined in the Rights Agreement). Pursuant to the Merger Agreement, the Company
has agreed, immediately prior to the consummation of the purchase of Shares
pursuant to the Offer, if requested by Xxxxxx, to redeem all of the outstanding
Rights. Should the Rights be so redeemed, record holders of Rights will be
entitled only to the payment of the redemption price therefor ($0.02 per Right).
Unless the Rights are so redeemed, by tendering Shares pursuant to the Offer, a
stockholder will also be tendering the associated Rights. Therefore, acceptance
for payment of, and payment for, Shares by the Purchaser will also constitute
the concurrent purchase of such Rights; accordingly, no additional or separate
consideration will be paid for Rights so purchased. See Section 3.
Simultaneously with entering into the Merger Agreement, Parent and the
Purchaser entered into a Stockholder Agreement (the "Stockholder Agreement")
with the directors and certain officers of the Company (the "Tendering
Stockholders"), including Xxxx Xxxxxx, the Chairman of the Board and Chief
Executive Officer. Pursuant to the Stockholder Agreement, each Tendering
Stockholder has agreed to tender pursuant to the Offer and before the Expiration
Date all of the Shares owned of record or beneficially by such Tendering
Stockholder on the date of the Stockholder Agreement, together with any Shares
acquired by any such Tendering Stockholder prior to the termination of the
Stockholder Agreement. As of the date hereof, the Tendering Stockholders
beneficially owned 577,491 Shares, or approximately 5.2% of all outstanding
Shares.
2
The Merger Agreement and the Stockholder Agreement are more fully described
in Section 11 of this Offer to Purchase. Stockholders are encouraged to read
that Section carefully, together with all other terms and conditions of the
Offer, before deciding whether to tender their Shares.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING. ANY
SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY OR SOLICITATION
MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
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; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), the Purchaser
will accept for payment and will pay for any and all Shares validly tendered on
or prior to the Expiration Date and not withdrawn in accordance with Section 3
of this Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New
York City time, on Wednesday, November 6, 1996, unless the Purchaser, in its
sole discretion, 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. See
Section 16.
The Offer is subject to certain conditions set forth in Section 13,
including satisfaction of the Minimum Condition and the expiration or
termination of the waiting period applicable to the Purchaser's acquisition of
Shares pursuant to the Offer under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR Act"). If any condition to the Purchaser's
obligation to purchase shares is not satisfied prior to the payment for any such
Shares, the Purchaser may (i) terminate the Offer and return all tendered Shares
to tendering stockholders, (ii) extend the Offer and, subject to withdrawal
rights as set forth in Section 3, retain all such Shares until the expiration of
the Offer as so extended, (iii) waive such condition and, subject to any
requirement to extend the period of time during which the Offer is open,
purchase all Shares validly tendered by the Expiration Date and not withdrawn,
or (iv) delay acceptance for payment of or payment for Shares, subject to
applicable law, until satisfaction or waiver of the conditions of the Offer.
The Merger Agreement provides that, unless previously approved by the
Company, and subject to certain rights of the Purchaser to extend the Offer, the
Purchaser will not reduce the price to be paid per Share pursuant to the Offer,
change the form of consideration to be paid in the Offer or the Merger, increase
or waive the Minimum Condition, change the Expiration Date, or amend the terms
of the Offer (including any of the conditions set forth in Section 13) in a
manner that is materially adverse to the holders of Shares. For a description of
the Purchaser's right to extend the period of time during which the Offer is
open, and to amend, delay or terminate the Offer, see Section 16.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder list 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 OF AND PAYMENT FOR SHARES. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, any and all Shares
3
validly tendered and not withdrawn following the later of (i) the expiration or
termination of all waiting periods under the HSR Act that are applicable to the
purchase of Shares pursuant to the Offer, and (ii) the Expiration Date. In
addition, the Purchaser expressly reserves the right, in its sole discretion, to
delay the acceptance of or payment for Shares in order to comply, in whole or in
part, with any applicable law. 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 certificates for such Shares or timely confirmation of book-entry
transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (each, a "Book-Entry Transfer Facility" and collectively, the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 4, a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by the
Letter of Transmittal.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares 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. Payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payments to
tendering stockholders. The Purchaser will not, under any circumstances, pay any
interest on the purchase price, regardless of any delay in making such payment.
If any tendered Shares are not purchased pursuant to the Offer, or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of book-entry transfer within a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration
or termination of the Offer.
The Purchaser will pay all stock transfer taxes, if any, payable with
respect to the transfer to it of Shares purchased pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if unpurchased
Shares are to be registered in the name of any person other than the registered
holder (in the circumstances permitted by the Offer), or if tendered
certificates are registered in the name of any person other than the person
signing any Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such other person) payable on
account of such payment or transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted.
The Purchaser expressly reserves the right to transfer or assign to Parent
or to one or more of Parent's direct or indirect wholly owned subsidiaries the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but no such transfer or assignment will relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
If, prior to the Expiration Date, the Purchaser shall decide, in its sole
discretion, to increase the consideration offered to stockholders pursuant to
the Offer, such increased consideration shall be paid to all holders of Shares
accepted for payment and paid for pursuant to the Offer.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date and, unless previously accepted for payment, may also be
withdrawn after December 7, 1996. If the Purchaser is delayed in its acceptance
or purchase of or payment for Shares or is unable to purchase or pay for Shares
for any reason, then, without prejudice to the Purchaser's rights under Sections
1, 13 and 16, tendered Shares may be retained by the Depositary on behalf of the
Purchaser and may not be withdrawn except as permitted by this Section 3 and
subject to Rule 14e-1(c) under the Exchange Act. See Section 16.
4
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
specified on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and, if certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name(s) in which such certificate(s) is (are) registered, if
different from the name of the person tendering such Shares. If certificates
have been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates evidencing such
Shares and the signature on the notice of withdrawal must be guaranteed by a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. ("NASD"), a commercial bank or
trust company having an office, branch or agency in the United States or any
other institution that is a member of the Medallion Signature Guaranty Program
(each being referred to herein as an "Eligible Institution"). If Shares have
been tendered pursuant to the procedure for book-entry tender as set forth in
Section 4, the notice of withdrawal must specify the name and account number(s)
of the account(s) at the applicable 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. None of Parent, the Purchaser, the Dealer
Manager, the Depositary or the Information Agent will be obligated to give
notice of any defects or irregularities in any notice of withdrawal, nor shall
any of them incur any liability for failure to give any such notice. 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.
Withdrawals of Shares tendered may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Withdrawn Shares, however, may be retendered by following one of the
procedures described in Section 4 at any time prior to the Expiration Date.
4. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER: In order for a holder of Shares to validly tender Shares
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), together with any required
signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase, on or prior to the Expiration
Date. Either (i) the certificates for such Shares must be delivered to the
Depositary or (ii) such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below and a Book-Entry Confirmation must be
received by the Depositary (including an Agent's Message (as defined below), if
the tendering stockholder has not delivered a Letter of Transmittal), in each
case on or prior to the Expiration Date. Delivery of documents to a Book-Entry
Transfer Facility does not constitute delivery to the Depositary. Alternatively,
the tendering stockholder may comply with the guaranteed delivery procedure set
forth below. The term "Agent's Message" means a message transmitted by a
Book-Entry Transfer Facility to and received by the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from a participant in the system
established by such Book-Entry Transfer Facility tendering the Shares which are
the subject of such Book-Entry Confirmation that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such Letter of Transmittal against such participant.
Unless the Rights are redeemed prior to the expiration of the Offer, holders
of Shares are also required to tender one Right for each Share tendered to
effect a valid tender of such Share. Until the Rights have separated from the
Shares, a tender of Shares pursuant to the Offer will constitute a tender of the
associated Rights evidenced by the certificates for such Shares. If Rights
certificates have been distributed to holders of Shares prior to the date of
tender pursuant to the Offer, Rights certificates
5
representing a number of Rights equal to the number of Shares being tendered
must be delivered to the Depositary in order for such Shares to be validly
tendered. If the Rights have separated from the Shares, but the Rights
certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares constitutes an agreement by the
tendering stockholder to deliver Rights certificates representing a number of
Rights equal to the number of Shares tendered to the Depositary within three New
York Stock Exchange ("NYSE") trading days after the date Rights certificates are
distributed. The Purchaser reserves the right to require that it receive such
Rights certificates prior to accepting Shares for payment. In all cases, payment
for Shares tendered and purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of, among other things, Rights certificates, if
such Rights certificates have been distributed to holders of Shares. If Rights
certificates are distributed, the Purchaser will deliver to holders of Shares
supplemental materials for use in connection with the tendering of Rights
certificates. Should the Rights be redeemed, the $.02 per Right redemption price
would be payable to the tendering stockholder with respect to Rights associated
with Shares accepted for payment pursuant to the Offer
BOOK-ENTRY TRANSFER: The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry transfer of the Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account in
accordance with such Book-Entry Transfer Facility's procedure for such transfer.
Even if delivery of Shares is to be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal (or a manually signed
facsimile thereof) along with any required signature guarantees and any other
required documents, or an Agent's Message, must be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover page of
this Offer to Purchase on or prior to the Expiration Date, or the stockholder
must comply with the guaranteed delivery procedure set forth below.
SIGNATURE GUARANTEES. If the Letter of Transmittal is signed by the
registered holder of the Shares tendered therewith and payment is to be made
directly to such registered holder, or if Shares are tendered for the account of
an Eligible Institution, no signature guarantee is required. In all other cases,
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. If 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 or
certificates for Shares not accepted for payment or not tendered are to be
returned to a person other than the registered holder, then certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or the names of the registered owner or owners appear on
certificates, with the signature(s) on the certificates or stock powers
guaranteed as aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such holder's certificates are not immediately available, or time
will not permit all required documents to reach the Depositary on or prior to
the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following conditions are met:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Depositary as provided below by the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof) with any required signature guarantee and any other documents
6
required by the Letter of Transmittal, or an Agent's Message, are received
by the Depositary within three NYSE trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by facsimile transmission, or by mail, to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of certificates
for such Shares (or a timely Book-Entry Confirmation), a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof) and
any other documents required by the Letter of Transmittal.
OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Purchaser
as his proxies, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and purchased by the Purchaser (and any and all other Shares
and other securities issued or issuable in respect thereof on or after October
9, 1996) prior to the time of any stockholder vote or other action. All such
proxies shall be irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts such Shares for payment. Upon such appointment, all prior
proxies given by such stockholder with respect to such purchased Shares or other
securities will be revoked and no subsequent proxies may be given. The designees
of the Purchaser will, with respect to such Shares and other securities, be
empowered to exercise all voting and other rights of such stockholder as they,
in their sole discretion, may deem proper at any annual, special or adjourned
meeting of the Company's stockholders, by written consent or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be validly
tendered, immediately upon the acceptance for payment of such Shares, the
Purchaser be able to exercise full voting and other rights of a record and
beneficial holder, including rights in respect of acting by written consent,
with respect to such Shares (and any and all other securities as set forth
above).
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING DELIVERY THROUGH A
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS TO BE BY MAIL, INSURED REGISTERED MAIL, RETURN
RECEIPT REQUESTED IS RECOMMENDED. AMPLE TIME SHOULD BE ALLOWED FOR SUCH
DOCUMENTS TO REACH THE DEPOSITARY. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION
4, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
BACK-UP FEDERAL INCOME TAX WITHHOLDING. Under the federal income tax laws,
the Depositary will be required to withhold 31% of the amount of any payments
made to certain stockholders pursuant to the Offer. To prevent such backup
federal income tax withholding, each such stockholder must provide the
Depositary with his correct taxpayer identification number and certify that such
stockholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser and Parent, in their sole
discretion, whose determination will be final and binding. The Purchaser and
Parent reserve the absolute right to reject any or all tenders determined by
them 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 and Parent
also reserve the absolute right to waive any of the conditions of the Offer or
any defect in any tender with respect to any particular Shares or any particular
stockholder. No tender of Shares will be deemed to have been validly made until
all defects and irregularities relating thereto have been cured or waived. None
of Parent, the Purchaser, the Dealer Manager, the Depositary or the Information
Agent will be obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice. The Purchaser's and Xxxxxx's interpretation of the terms and
7
conditions of the Offer (including the Letter of Transmittal and instructions
thereto) will be final and binding.
5. CERTAIN INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or for Shares pursuant to the Merger will be taxable for
federal income tax purposes and may be taxable under applicable state, local,
foreign and other tax laws. The tax consequences of such receipt may vary
depending upon, among other things, the particular circumstances of the
stockholder. In general, a stockholder will recognize gain or loss equal to the
difference between the amount of cash received and his tax basis for his Shares.
Such gain or loss will generally be capital gain or loss provided that such
stockholder held his Shares as a capital asset, and will be long-term capital
gain or loss if, on the date of sale, such Shares were held for more than one
year. Otherwise, such gain or loss will be short-term capital gain or loss.
The foregoing may not be applicable to stockholders who acquired their
Shares pursuant to the exercise of employee stock options or otherwise as
compensation or who are not citizens or residents of the United States or who
are otherwise subject to special tax treatment under the Internal Revenue Code
of 1986, as amended (the "Code") (such as life insurance companies, tax exempt
entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT HIS OWN TAX ADVISORS TO
DETERMINE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO SUCH
STOCKHOLDER, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS.
6. MARKET PRICES OF SHARES; DIVIDENDS. The Shares are traded on the NYSE
under the symbol "SFS." The following table sets forth, for the fiscal periods
shown, the range of high and low sales prices for the Shares as listed on the
NYSE for such periods, in each case as reported by published financial sources,
and the cash dividend paid by the Company for each such quarter.
QUARTERLY
HIGH LOW DIVIDEND
-------- -------- ---------
YEAR ENDED AUGUST 27, 1994
1st Quarter (12 weeks).......................... $ 13 $ 101/4 $ .09
2nd Quarter (12 weeks).......................... $ 137/8 $ 125/8 $ .09
3rd Quarter (12 weeks).......................... $ 143/8 $ 113/4 $ .09
4th Quarter (16 weeks).......................... $ 14 $ 101/2 $ .09
YEAR ENDED AUGUST 26, 1995
1st Quarter (12 weeks).......................... $ 121/4 $ 103/8 $ .095
2nd Quarter (12 weeks).......................... $ 121/4 $ 101/4 $ .095
3rd Quarter (12 weeks).......................... $ 115/8 $ 101/4 $ .095
4th Quarter (16 weeks).......................... $ 137/8 $ 101/2 $ .095
YEAR ENDING AUGUST 31, 1996
1st Quarter (12 weeks).......................... $ 121/4 $ 14 $ .095
2nd Quarter (12 weeks).......................... $ 113/4 $ 133/4 $ .10
3rd Quarter (12 weeks).......................... $ 11 $ 13 $ .10
4th Quarter (17 weeks).......................... $ 10 $ 123/4 $ .10
On October 7, 1996, the last full day of trading prior to the announcement
of the Purchaser's intention to make the Offer, the last reported sale price for
the Shares, as reported on the NYSE, was $11.25 per Share, according to
published sources. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET PRICES FOR
THE SHARES.
8
7. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may also be expected to reduce the number of holders of Shares. Such reductions
could adversely affect the liquidity and market value of the remaining Shares
held by the public, if any.
STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the NYSE for
continued listing. According to the NYSE's published guidelines, the NYSE would
consider delisting the Shares if, among other things, the number of record
holders of at least 100 Shares were to fall below 1,200, the number of publicly
held Shares (exclusive of management or other concentrated holdings) were to
fall below 600,000 or the aggregate market value of publicly held Shares were to
not exceed $5 million. According to the Company, as of October 8, 1996, there
were 10,997,448 Shares outstanding. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, the Shares no longer meet the requirements
of the NYSE for continued listing and the Shares are no longer listed, the
market for Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or through
the Nasdaq Stock Market or other sources. The extent of the public market for
the Shares and the availability of such quotations would, however, depend upon
the number of holders of Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") if the
Shares are not listed on a national securities exchange and there are fewer than
300 record holders of Shares. Termination of registration of the Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and the Commission and would make
certain provisions of the Exchange Act (such as the short-swing profit recovery
provisions of Section 16(b) and the requirement of furnishing a proxy or
information statement in connection with stockholders' meetings pursuant to
Section 14(a) or (c) and the related requirement of an annual report) no longer
applicable to the Company. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose of
such securities pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), may be impaired or,
with respect to certain persons, eliminated. If, as a result of purchases
pursuant to the Offer or otherwise, the Company is no longer required to
maintain registration of the Shares under the Exchange Act, the Purchaser
intends to cause the Company to apply for termination of such registration.
MARGIN REGULATIONS. The Shares are presently "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 such securities for the purpose of buying,
carrying or trading in securities ("Purpose Loans"). In the event that the
Shares were no longer listed on the NYSE (which depends on factors such as the
number of holders of the Shares and the number and market value of publicly-held
Shares (see "Stock Quotation" above)), it is possible the Shares may no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations and, therefore, could no longer be used as collateral for
Purpose Loans made by brokers. In addition, if registration of the Shares under
the Exchange Act were terminated, the Shares would no longer constitute "margin
securities."
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act,
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or other transactions
following the purchase of Shares pursuant to the Offer in which the
9
Purchaser seeks to acquire the remaining shares not held by it. However, Rule
13e-3 would be inapplicable if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other transactions or (ii) the Merger or
another business combination is consummated within one year after the purchase
of the Shares pursuant to the Offer and the amount paid per Share for each class
of Share in the Merger or other business combination is at least equal to the
amount paid per Share for such class of Shares in the Offer. If applicable, Rule
13e-3 requires, among other things, that certain financial information
concerning the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to the consummation of the
transaction.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 0000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxx 00000, telephone (000) 000-0000. According to information filed by
the Company with the Commission, the Company is primarily engaged in the
wholesale distribution of groceries.
Set forth below is a summary of certain selected financial information with
respect to the Company and its subsidiaries for the fiscal years ended on August
26, 1995, August 27, 1994 and August 28, 1993 and for the thirty-six weeks ended
May 4, 1996 and May 6, 1995, which has been excerpted or derived from the
audited consolidated financial statements contained in the Company's Annual
Reports on Form 10-K for the fiscal years ended on August 26, 1995, August 27,
1994 and August 28, 1993, and from unaudited consolidated financial statements
contained in the Company's Quarterly Report on Form 10-Q for the thirty-six
weeks ended May 4, 1996. More comprehensive financial information is included in
such reports and other documents filed by the Company with the Commission, and
the following summary is qualified in its entirety by reference to such
documents and all of the financial statements and related notes contained
therein.
SUPER FOOD SERVICES, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
36 WEEKS ENDED FISCAL YEAR ENDED
---------------------- ----------------------------------------
MAY 4, MAY 6, AUGUST 26, AUGUST 27, AUGUST 28,
1996 1995 1995 1994 1993
---------- ---------- ------------ ------------ ------------
(UNAUDITED)
INCOME STATEMENT DATA:
Sales and other income....................... $ 815,512 $ 792,439 $ 1,154,955 $ 1,130,095 $ 1,165,520
Total costs and expenses..................... 804,421 782,330 1,140,144 1,115,844 1,150,362
Income before income taxes................... 11,091 10,109 14,811 14,251 15,158
Net income................................... 6,846 6,170 9,065 8,827 9,216
Earnings per share........................... $ .62 $ .56 $ .83 $ .81 $ .85
Average shares outstanding................... 10,983 10,949 10,949 10,943 10,893
BALANCE SHEET DATA:
Total current assets......................... $ 174,262 $ 175,211 $ 157,325 $ 160,480 $ 157,858
Total assets................................. 274,259 276,298 256,899 259,344 248,238
Total current liabilities.................... 71,556 80,783 57,333 67,048 54,988
Long-term debt............................... 35,000 35,405 35,000 31,602 34,867
Total stockholders' equity................... 141,893 136,024 137,878 132,973 127,641
The information concerning the Company contained in this Offer to Purchase
or incorporated herein by reference has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources or was provided by the Company. Although the Purchaser has no
10
knowledge that would indicate that any statements contained herein based on such
documents and records are untrue, neither Parent nor the Purchaser can take
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information which are unknown to Parent or the Purchaser.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated 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
business, principal physical properties, capital structure, material pending
legal proceedings, operating results, financial condition, the Company's
directors and officers, their remuneration, stock options and restricted stock
granted to them, the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and other matters, is
required to be disclosed in proxy statements and annual reports distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected at the Commission's public
reference facilities at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, and
should also be available for inspection at the following regional offices of the
Commission: 0 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000; and 000
Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000; and copies may be
obtained, by mail, for prescribed rates from the principal office of the
Commission at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser
is a newly incorporated Delaware corporation and a wholly owned subsidiary of
Parent. To date, the Purchaser has engaged in no activities other than those in
connection with the Offer. The principal executive offices of the Purchaser and
Parent are located at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxxx 00000,
telephone (000) 000-0000.
The name, business address, citizenship, present principal employment or
occupation and em-ployment history for the past five years of each of the
directors and executive officers of the Purchaser and Parent are set forth in
Schedule A to this Offer to Purchase.
Parent, a Delaware corporation, was organized in 1921 as the successor to a
business founded in 1885. Parent is one of the largest food wholesalers in the
United States, serving approximately 1,400 affiliated and other independent
retail supermarkets, other retail stores and outlets, and institutional
accounts, such as military base commissaries, restaurants, schools and
hospitals, as of December 1995. Parent also owns and operates 113 of its own
supermarkets and warehouse stores, as of December 1995.
Except as set forth in this paragraph or elsewhere in this Offer to
Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge,
any of the persons listed in Schedule A hereto nor any associate or majority
owned subsidiary of any of the foregoing, beneficially owns or has a right to
acquire any equity securities of the Company, and neither the Purchaser nor
Parent nor, to the best of their knowledge, any of the persons or entities
referred to above, nor any director, executive officer or subsidiary of any of
the foregoing, has effected any transaction in such equity securities during the
past 60 days.
Except as set forth in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the best of the knowledge of Parent and the Purchaser, any of the
persons listed in Schedule A hereto, has any contract, arrangement,
understanding or relationship (whether or not legally enforceable) with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any of such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against
loss, or the giving or withholding of proxies. Except as set forth in this Offer
to Purchase, there have been no contacts, negotiations or transactions which
have occurred since August 29, 1993, between Parent, the Purchaser, or any of
Parent's other subsidiaries or, to the best of the knowledge of Parent and the
Purchaser, any of the persons listed in Schedule A hereto, on the one hand, and
the Company or its affiliates, on the other hand, concerning: a merger,
consolidation or acquisition; a tender offer or other acquisition of securities;
an
11
election of directors; or a sale or other transfer of a material amount of
assets. Except as described in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the best of the knowledge of Parent and the Purchaser, any of the
persons listed in Schedule A hereto, has since August 29, 1993 had any
transaction with the Company or any of its executive officers, directors or
affiliates which would require disclosure under the rules and regulations of the
Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, during the last five years,
neither the Purchaser nor Parent nor, to the best knowledge of Parent and the
Purchaser, have any of the persons listed on Schedule A (i) been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding been or become subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, Federal or state securities laws or finding
any violation of such laws.
Until immediately prior to the time the Purchaser purchases the Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer. Because the Purchaser is a newly formed corporation and has
minimal assets and capitalization, no meaningful financial information regarding
the Purchaser is available.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Xxxxxx's business, principal physical properties, capital structure,
material pending legal proceedings, operating results, financial condition,
directors and executive officers, their remuneration, stock options granted to
them, the principal holders of Parent's securities and any material interest of
such persons in transactions with Parent and other matters is required to be
disclosed in proxy statements and annual reports distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information may be examined, and copies may be obtained from the
Commission in the same manner set forth in Section 8 with respect to information
concerning the Company.
Set forth below is a summary of certain selected financial information of
Parent and its subsidiaries for the fiscal years ended December 30, 1995,
December 31, 1994 and January 1, 1994 and for the 24 week periods ended June 15,
1996 and June 17, 1995, which has been excerpted or derived from the audited
consolidated financial statements contained in Parent's Annual Report on Form
10-K for the fiscal years ended December 30, 1995 and December 31, 1994 and from
unaudited financial information contained in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 15, 1996. More comprehensive financial
information is included in such reports and other documents filed by Parent with
the Commission, and the following summary is qualified in its entirety by
reference to such documents and all of the financial statements and related
notes contained therein.
12
XXXX-XXXXX COMPANY
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
24 WEEKS ENDED FISCAL YEAR ENDED
-------------------------- ----------------------------------------
JUNE 15, JUNE 17, DECEMBER 30, DECEMBER 31, JANUARY 1,
1996 1995 1995 1994 1994
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
INCOME STATEMENT DATA:
Total revenues.......................... $ 1,419,736 $ 1,300,112 $2,888,836 $2,832,000 $ 2,723,535
Cost of sales........................... 1,228,460 1,109,894 2,469,841 2,410,292 2,325,249
Selling, general and administrative and
other operating expenses.............. 155,521 156,709 350,201 352,683 332,349
Interest expense........................ 6,003 5,585 10,793 11,384 10,114
Earnings before income taxes............ 14,952 14,354 28,595 25,810 26,678
Net earnings............................ 8,896 8,541 17,414 15,480 15,874
Earnings per share...................... $ 0.82 $ 0.79 $ 1.60 $ 1.42 $ 1.46
Weighted average number of common shares
outstanding........................... 10,905 10,875 10,875 10,873 10,872
BALANCE SHEET DATA (AT END OF PERIOD):
Total current assets.................... $ 360,127 $ 309,189 $ 311,690 $ 309,522 $ 294,925
Total assets............................ 616,509 524,648 514,260 531,604 521,654
Total current liabilities............... 234,998 210,586 207,688 220,065 215,021
Long-term debt.......................... 141,378 83,583 71,030 85,289 89,811
Total stockholders' equity.............. 220,403 210,902 215,313 206,269 199,264
10. BACKGROUND OF THE OFFER: On January 16, 1996, Xx. Xxxxxx X. Xxxxxx,
the President and Chief Executive Officer of Parent, was approached by Xx.
Xxxxxx X. Xxxxxx, a member of the Board of Directors of the Company, to
determine whether Parent was interested in exploring the possibility of
acquiring the Company. Xx. Xxxxxx responded that Xxxxxx was interested in
exploring such a transaction.
On January 22, 1996, Mr. Xxxx Xxxxxx, the Chairman of the Board and Chief
Executive Officer of the Company, telephoned Xx. Xxxxxx to introduce himself,
and the parties began to discuss the possibilities of a business combination
between Parent and the Company.
On February 12, 1996, Xx. Xxxxxx informed members of an ad hoc committee of
the Board of Directors of Parent of his conversations with Xx. Xxxxxx and Xx.
Xxxxxx concerning a possible acquisition of the Company.
On February 14, 1996, Xx. Xxxxxx met with representatives of KPMG Xxxx
Xxxxxxx to discuss various possible acquisition candidates for Parent, including
the Company.
On February 29, 1996, Parent and the Company executed a Confidentiality
Agreement pursuant to which, among other things, Parent agreed to maintain the
confidentiality of certain information to be provided by the Company. In
addition, Parent agreed for a period of two years not to acquire or make any
offer to acquire any securities or property of the Company without the approval
of the Board of Directors of the Company. Following the execution of the
Confidentiality Agreement, Messrs. Xxxxxx and Xxxxxx spoke briefly concerning
the possible benefits of a business combination between Parent and the Company
and Xx. Xxxxxx indicated that the Company would forward various confidential
information concerning
13
the Company to Parent for evaluative purposes. From approximately the middle of
March through early April 1996, representatives of Parent received and reviewed
confidential information concerning the Company and requested additional
information from the Company.
On April 9, 1996, at a meeting of the Board of Directors of Parent, the
Board discussed briefly the topic of a possible acquisition of the Company, but
no action of any kind was taken in connection therewith.
Throughout April and early May 1996, senior management of Parent continued
to receive, review and evaluate information concerning the Company and potential
synergies that may arise from a business combination between Parent and the
Company.
On May 7, 1996, Mr. Xxxxx Xxxxxxx, the Director of Financial Planning of
Parent, met with representatives of senior management of the Company, including
Xx. Xxxxxx, Mr. Xxxx Xxxxx, the Vice Chairman of the Board, Secretary and
General Counsel of the Company, and Xx. Xxxxxx X. Xxxxxxx, the Senior Vice
President--Finance, Treasurer and Assistant Secretary of the Company to discuss
in detail various aspects of the confidential information that had been provided
to Parent and to discuss operations of the Company.
At a meeting of the Board of Directors of Parent on May 14, 1996, Xx. Xxxxxx
advised the Board concerning the preliminary discussions and financial analyses
that had been undertaken by the senior management of Parent. Xx. Xxxxxx was
instructed by the Board of Directors of Parent to determine the valuation of the
Company and to engage independent financial advisors to assist Parent in
analyzing the value of the Company to Parent. On May 16, 1996, members of senior
management of Parent, including Xx. Xxxxxx, Xx. Xxxxxxx, Xx. Xxxx X. Xxxxxxx,
the Vice President and Chief Financial Officer of Parent, and Xx. Xxxxxx X.
Xxxxxx, the Vice President, Secretary and General Counsel of Parent, met in
Chicago, Illinois with Messrs. Xxxxxx, Demos and Xxxxxxx concerning Parent's
continuing due diligence and financial analyses concerning the possible business
combination between Parent and the Company.
In early June 1996, Xxxxxx interviewed various independent financial
advisory firms and a market survey firm to conduct a survey and market study of
the Company's customer base. In July 1996, KPMG Peat Marwick ("KPMG") was
engaged by Parent to conduct a due diligence investigation of the Company and to
advise Parent concerning the valuation of the Company and Xxxxx Xxxxxxx Inc.
("Xxxxx Xxxxxxx"), a nationally-recognized investment banking firm, was engaged
by Parent to provide various investment banking services, including, if
requested, the delivery of a fairness opinion with respect to a proposed
transaction with the Company. On July 24 and 25, 1996 representatives of KPMG
conducted due diligence investigations at the offices of the Company's
independent auditors in Cincinnati, Ohio and met with Messrs. Xxxxxxx and Demos
concerning due diligence matters. Also on July 25, 1996, Xx. Xxxxxx and Xx.
Xxxxxx had extensive discussions regarding various due diligence matters.
On July 30, 1996, representatives of KPMG, representatives of Xxxxx Xxxxxxx
and Xx. Xxxxxxx met at the offices of the Company's independent auditors in
Cincinnati to discuss various due diligence matters.
Throughout August and early September 1996, representatives of Parent and
representatives of the Company continued to discuss various due diligence
matters and potential synergies that might arise from a business combination. In
addition, senior management of Parent had various meetings with representatives
of KPMG and Xxxxx Xxxxxxx concerning the results of the due diligence
investigations and various financial and valuation analyses conducted by KPMG
and Xxxxx Xxxxxxx.
On September 4, 1996, members of senior management of Parent together with
representatives of KPMG and Xxxxx Xxxxxxx met with members of senior management
of the Company. Representatives of Xxxxxx Xxxxxx also attended the meeting. At
this meeting, representatives of Parent made a presentation to the Company
concerning the various financial and valuation analyses undertaken by Xxxxxx,
the conclusion of which was that a price of $15.10 per Share was considered by
Parent to be fair to the respective parties. Xx. Xxxxxx responded that he
believed a price of approximately $16.00 per Share was fair to the
14
respective parties. In addition to these preliminary valuation discussions, the
parties discussed various other aspects of a possible business combination,
including timing, structure, potential synergies arising from a combination,
employee benefit and severance arrangements and management following the
combination.
On September 16, 1996, members of senior management of Parent and Xx. Xxxxxx
met with representatives of various financial institutions concerning the
arranging of financing for the possible acquisition of the Company by Parent.
Also on September 16, 1996, Messrs. Xxxxxx and Xxxxxx and Xxxxxx's legal
advisors met with Messrs. Xxxxxx and Demos and the Company's legal advisors
concerning various aspects of a possible business combination, including timing,
structure, employee benefits and severance issues, continuing due diligence and
financing.
On September 19, 1996, Xx. Xxxxxx and Xx. Xxxxxx met and discussed various
aspects of the possible acquisition, including pricing, the structure of the
transaction, various employee benefits and severance issues and various due
diligence matters.
On September 24, 1996, at a meeting of the Board of Directors of Parent, the
possible acquisition of the Company by Parent was discussed at length, including
the status of the discussions between the respective companies and the status of
the financing arrangements. The Board of Directors of Parent authorized Xx.
Xxxxxx to continue discussions concerning the acquisition within the range of
prices that had been established as a result of the previous discussions between
the principals of the respective companies.
Over the next several days, Xx. Xxxxxx and Xx. Xxxxxx had various
conversations concerning various aspects of the acquisition, including pricing,
lock-up arrangements and break-up fees and expenses. As a result of these
discussions, Xx. Xxxxxx and Xx. Xxxxxx each agreed to recommend to their
respective Boards of Directors that the respective companies enter into an
Agreement and Plan of Merger providing for the acquisition of all outstanding
Shares at a price of $15.50 per Share.
On October 2, 1996, the Board of Directors of the Company met and
representatives of senior management of the Company, its legal advisors and
Lazard Freres made various presentations concerning the proposed transaction and
the status of the negotiations. The Board of Directors of the Company authorized
Xx. Xxxxxx to continue negotiations with Parent.
Throughout the first week in October, representatives of the respective
companies and their legal advisors continued to negotiate the terms of the
proposed Agreement and Plan of Merger.
On the morning of October 8, 1996, after completion of the negotiations
concerning the proposed Agreement and Plan of Merger, the Board of Directors of
the Company held a special meeting to review, with the advice and assistance of
the Company's legal advisors and Lazard Freres, the proposed Agreement and Plan
of Merger and the transactions contemplated thereby, including the Offer and the
Merger. At the meeting, counsel to the Company reviewed the terms of the Merger
Agreement and Lazard Freres presented an update of its financial analyses and
rendered to the Board its written opinion that, based upon and subject to
various considerations and assumptions set forth therein, the cash consideration
of $15.50 per Share to be received by the holders of the Shares pursuant to the
Merger Agreement is fair from a financial point of view to such stockholders.
Following a number of questions from, and discussion among the directors, the
Company's Board of Directors unanimously (i) approved the Merger Agreement and
the transactions contemplated thereby and authorized the execution and delivery
thereof, (ii) determined that the Offer and the Merger, taken together, are fair
to, and in the best interests of, the Company and its stockholders, and (iii)
recommended that the Company's stockholders accept the Offer and tender their
Shares to Purchaser.
Simultaneously with the meeting of the Board of Directors of the Company on
October 8, 1996, the Board of Directors of Parent held a special meeting to
review, with the advice and assistance of Xxxxxx's
15
financial and legal advisors, the proposed Agreement and Plan of Merger and the
transactions contemplated thereby, including the Offer and the Merger. At such
meeting, Xxxxxx's management, financial advisors and legal advisors made
presentations to the Board concerning the transaction and Xxxxxx's financial
advisor, Xxxxx Xxxxxxx, provided its written opinion to the effect that the
consideration to be paid by Parent pursuant to the Merger Agreement is fair to
Parent from a financial point of view. Following a number of questions from, and
discussion among the Directors, Xxxxxx's Board of Directors unanimously approved
the Merger Agreement and the transactions contemplated thereby, and authorized
the execution and delivery thereof.
Immediately following the respective meetings of the Board of Directors of
the Company and Parent, the Agreement and Plan of Merger was executed and
delivered by the Company, Parent and Purchaser, and the Company and Parent
issued a joint press release concerning the Offer and the Merger Agreement.
11. PURPOSE OF THE OFFER AND MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT AND STOCKHOLDER AGREEMENT. The purpose of the Offer, the Merger and
the Merger Agreement is for Parent to acquire control of, and the entire equity
interest in, the Company. The Offer is intended to increase the likelihood that
such acquisition will be effected and to permit Parent to acquire control of the
Company at the earliest practicable date. The purpose of the Merger is to
acquire all outstanding Shares not tendered and purchased pursuant to the Offer.
Except as indicated in this Offer to Purchase, the Purchaser has no present
plans or proposals which relate or would result in an extraordinary corporate
transaction, such as a merger, reorganization, liquidation, relocation of
operations, or sale or transfer of assets, involving the Company or any of its
subsidiaries, or any material changes in the Company or any of its subsidiaries,
or any material changes in the Company's corporate structure, capitalization or
business or the composition of its management or personnel. Following completion
of the Merger, Xxxx Xxxxxx, Chairman of the Board and Chief Executive Officer of
the Company, and Xxxx Xxxxx, Vice Chairman of the Board, Secretary and General
Counsel, will leave the Company, although Xx. Xxxxxx is expected to assist
Parent in the integration of the operations of the Company.
THE MERGER AGREEMENT. The Merger Agreement provides for the commencement of
the Offer as promptly as practicable, and in any event within five business
days, after the first public announcement of the Purchaser's intention to make
the Offer. The obligations of Parent to cause the Purchaser to commence the
Offer and the obligation of Parent and the Purchaser to consummate the Offer and
accept for payment or pay for any Shares tendered pursuant to the Offer is
subject only to the satisfaction of certain conditions, including the Minimum
Condition, which are described in Section 13.
The Merger Agreement provides that, subject to the terms and conditions of
the Merger Agreement and the DGCL, as soon as practicable after consummation of
the Offer, the Purchaser and the Company will be merged. At the Effective Time
each Share outstanding immediately prior to the Effective Time (other than
Shares held by Parent, the Purchaser or any of their subsidiaries or in the
treasury of the Company or by any subsidiary of the Company, all of which will
be canceled, and other than Dissenting Shares) will be converted into the right
to receive $15.50 net in cash per Share or such higher price as shall have been
paid in the Offer.
The Company is permitted to make adjustments to all outstanding Options,
whether such Options are currently exercisable or fully vested, to provide that
each such Option will be exercisable in full prior to the Effective Time. In
addition, the Company will have the right, at any time prior to the Effective
Time, to pay to each holder of an Option an amount equal to the difference
between $15.50 and the exercise price of such Option, if it is lower than
$15.50, in exchange for the surrender and cancellation of such Option. Prior to
the Effective Time, the Company may elect to accelerate the exercisability or
vesting of the Options, and the Board of Directors of the Company has indicated
that it intends to do so. At the Effective Time, any Options not exercised in
full or surrendered for cancellation will terminate.
16
The Merger Agreement provides that the Stock Purchase Agreement will be
amended to provide that each participant in the Stock Purchase Plan will
receive, in lieu of such participant's account balance, the amount determined by
dividing the account balance by $11.10 (the purchase price for Shares subscribed
for under the Stock Purchase Plan), and multiplying the result by $15.50.
The Merger Agreement contains representations and warranties by the Company
regarding, among other things, its organization, its capitalization, its
authority relative to the Merger Agreement, consents and approvals necessary for
the Offer and the Merger, the absence of certain changes in its business, its
publicly filed reports and certain employee matters, and by each of Parent and
the Purchaser regarding, among other things, its organization, its authority
relative to the Merger Agreement and the Offer, and consents and approvals
necessary for the Offer and the Merger.
The Company has also represented in the Merger Agreement that the Company's
Board of Directors, after receiving advice from a nationally recognized
investment banking firm selected by the Board of Directors, has determined that
the acquisition of the Shares by the Purchaser is at a price and on terms that
are fair to the Company's stockholders and is otherwise in the best interests of
the Company and its stockholders and has unanimously approved the Offer, the
Merger Agreement, the acquisition of the Shares and the Merger so that the
Rights issued pursuant to the Rights Agreement will not become exercisable as a
result of the Offer or the Merger. The Company has further represented in the
Merger Agreement that the Rights Agreement has been amended to provide that
neither Parent nor the Purchaser will be deemed to be an Acquiring Person or a
Beneficial Owner (as such terms are defined in the Rights Agreement). In the
Merger Agreement, the Company has agreed, if Parent so requests, to redeem the
Rights in accordance with the terms of the Rights Agreement immediately prior to
the acceptance for payment of Shares pursuant to the Offer. The Company has also
agreed that, from and after the date of the Merger Agreement, the Company will
not (i) take or fail to take any action which would permit the Rights to become
nonredeemable by the Company, (ii) except as otherwise provided in the Merger
Agreement, redeem the Rights, (iii) except as otherwise required to permit the
commencement or consummation of the Offer or consummation of the Merger, amend
the Rights Agreement, or (iv) approve any transaction, offer or agreement (other
than an Approved Offer, as defined below) with any party other than Parent and
the Purchaser under the Rights Agreement such that the Rights would not become
exercisable as a result of such transaction, offer or agreement.
The obligations of the parties to effect the Merger are subject to the
satisfaction or waiver, where permissible, of the following conditions: (i) the
Merger Agreement, the Merger and the transactions contemplated by the Merger
Agreement shall have been approved and adopted by the requisite vote of the
holders of the Shares, if such vote is required by applicable law in order to
consummate the Merger; (ii) no statute, rule, regulation, executive order,
decree or injunction shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits, restrains, enjoins or
restricts consummation of the Merger; and (iii) any waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
The Company has agreed that, prior to the Effective Time, the Company and
its subsidiaries will each conduct its operations according to its ordinary and
usual course of business and consistent with past practice and the Company will
use reasonable efforts to preserve intact in all material respects the business
organization of the Company, use reasonable efforts to keep available the
services of its current officers and key employees, and use reasonable efforts
to preserve in all material respects the good will of those having advantageous
business relationships with it and its subsidiaries, and the Company will not,
without the prior written consent of Parent, (i) issue, sell or pledge, or
authorize or propose the issuance, sale or pledge of (A) additional shares of
capital stock of any class (including the Shares), or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or grant or accelerate any right to
convert or exchange any securities of the Company for Shares, other than (1)
Shares issuable pursuant to the terms of Options outstanding on October 8, 1996
or Shares issuable pursuant to the Stock Purchase Plan, or (2) the issuance of
shares of capital stock to the Company
17
by a wholly owned subsidiary of the Company, or (B) any other securities in
respect of, in lieu of or in substitution for Shares outstanding on October 8,
1996; (ii) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any of its outstanding securities (including the Shares); (iii) split,
combine or reclassify any shares of its capital stock, declare, set aside or pay
any dividend or distribution on any shares of capital stock of the Company; (iv)
make any acquisition of a material amount of assets (by merger, consolidation or
acquisition of stock or assets) or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
enter into a material contract or release or relinquish any material contract
rights not in the ordinary course of business (except as otherwise permitted
pursuant to the Merger Agreement); (v) intentionally incur any liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary and usual course of business and either consistent with past practice
or in the reasonable business judgment of the officers of the Company (including
borrowing in the ordinary course pursuant to existing loan agreements or debt
instruments) or issue any debt securities or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other individual or entity in any case in an amount material to the Company and
its subsidiaries, taken as a whole; (vi) propose or adopt any amendments to the
Certificate of Incorporation or Bylaws of the Company; (vii) make any change in
accounting methods, principles or practices; (viii) other than as contemplated
or permitted by the Merger Agreement, (A) enter into any new employment
agreements with any officers, directors or key employees or grant any material
increases in the compensation or benefits to officers, directors and key
employees other than increases in the ordinary course of business and consistent
with past practice, (B) pay or agree to pay any pension, retirement allowance or
other employee benefit not required or permitted by any existing plan, agreement
or arrangement to any such director, officer or key employee in amounts material
to the Company and its subsidiaries, taken as a whole, (C) commit itself (other
than pursuant to any collective bargaining agreement) to any additional pension,
profit-sharing, bonus, extra compensation, incentive, defined compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or to any employment or consulting agreement with or for the
benefit of any director, officer or key employee, whether past or present, in
amounts material to the Company and its subsidiaries, taken as a whole, or (D)
except as required by applicable law, amend in any material respect any such
plan, agreement or arrangement; or (ix) agree in writing or otherwise to take
any of the foregoing actions or any action which would make any representation
or warranty in the Merger Agreement untrue or incorrect.
The Company has also agreed that neither the Company, its subsidiaries, nor
any of their respective officers, directors, employees, financial advisors,
counsel, representatives, agents and affiliates will, directly or indirectly,
encourage, solicit, initiate, or, subject to the fiduciary duties of the Board
of Directors, officers or stockholders of the Company under applicable law as
advised by outside counsel, enter into any agreement with respect to, or
participate in discussions or negotiations with, or provide any confidential
information to, any person other than Parent, Purchaser or their affiliates (a
"Third Party") concerning any tender offer (including a self-tender offer),
exchange offer, merger, sale of substantial assets, sale of securities or
similar transactions involving the Company or any of its material subsidiaries
or divisions (each proposal, announcement or transaction being referred to as an
"Acquisition Proposal"). The Company has agreed to promptly inform Parent of any
offer which it may receive in respect of an Acquisition Proposal (including the
terms thereof and the identity of the Third Party making such offer).
The Company's Board of Directors may, however, approve, accept and recommend
to its stockholders an Acquisition Proposal if (i) the Board of Directors
determines in good faith, in exercising its fiduciary duties under applicable
law and after consultation with its outside counsel and financial advisors, that
the Acquisition Proposal would be more favorable to the Company's stockholders
from a financial point of view than the Offer (such other offer, an "Approved
Offer") and (ii) Parent does not make, within five business days of Parent's
receiving notice of such Third-Party offer, an offer which the Company's Board
of Directors, after consultation with its financial advisors, determines is
superior to such Third-Party offer.
18
Parent has agreed that all rights to indemnification or exculpation now
existing in favor of the directors, officers, employees and agents of the
Company as provided in the Company's Certificate of Incorporation or Bylaws or
otherwise in effect on the date of the Merger Agreement shall survive the Merger
and continue in full force and effect for a period of six years after the
Effective Time. Parent has also agreed to maintain in effect for a period of
five years after the Effective Time the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute policies of at least the same coverage amounts containing terms
and conditions which are no less advantageous) in the amount of $15,000,000 in
the first year after the Effective Time, and $10,000,000 for years two through
five after the Effective Time, subject to an agreed upon maximum on the premiums
that Parent shall be obligated to pay.
The Merger Agreement provides that, if required by applicable law, the
Company will call a meeting of its stockholders for the purpose of voting upon
the Merger Agreement and the Merger. In connection therewith, except as
otherwise expressly permitted by the Merger Agreement, the Company will, through
its Board of Directors, recommend to its stockholders approval of such matters
and take all reasonable actions to solicit such approval, including without
limitation preparing and filing a proxy statement under the Exchange Act.
Subject to the terms and conditions of the Merger Agreement, and to the
fiduciary duties of the Company's Board of Directors, each of the parties has
also agreed to use its reasonable efforts to take, or cause to be taken, all
appropriate actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement.
Pursuant to the Merger Agreement, Parent has agreed to maintain, until the
later of 45 days after the purchase of the Shares pursuant to the Offer or
December 31, 1996, for the benefit of the officers and employees of the Company
employee benefits at least comparable in the aggregate to those provided under
the Company's benefit plans. To the extend practicable and appropriate, Parent
has agreed to continue existing Company benefit plans during such period.
Thereafter, such officers and employees will be entitled to participate in the
benefit plans maintained by Parent for its similarly situated employees, upon
the same terms and conditions that apply to such employees of Parent. Xxxxxx has
also agreed to honor all existing employment, severance, consulting or other
compensation agreements or arrangements and benefit contracts between the
Company and any officer, director or employee of the Company. Each employee of
the Company as of the Effective Time will, for purposes of determining
eligibility and vesting under any benefit plan of Parent, be given credit for
all service with the Company prior to the Effective Time.
The Merger Agreement provides that, promptly upon the acceptance for payment
of and payment by the Purchaser in accordance with the Offer for, Shares
satisfying the Minimum Condition, and from time to time thereafter, the
Purchaser will be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as will give the
Purchaser representation on the Board of Directors equal to at least that number
of directors which equals the product of the total number of directors on the
Board of Directors multiplied by the percentage that such number of Shares so
accepted for payment and paid for or owned by Parent or the Purchaser bears to
the total number of Shares outstanding; provided, however that at all times
prior to the Merger there shall be at least three members of the Board of
Directors of the Company selected by the current members of such Board. In the
Merger Agreement, the Company has agreed to cause the Purchaser's designees to
be elected to the Company's Board of Directors (including mailing to the
Company's shareholders the information required by Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder) and to increase the number of the Company's directors or
to exercise its best efforts to secure the resignations of current directors, as
may be directed by Xxxxxx and required to implement the foregoing.
19
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company: (a) by mutual written consent of the Boards of Directors of Parent,
the Purchaser and the Company; (b) by either the Company or Parent (i) if (1)
the Offer terminates or expires in accordance with its terms or if Parent
terminates the Offer as the result of the occurrence of any of the conditions
described in Annex I to the Merger Agreement, or (2) Purchaser shall not have
purchased any Shares pursuant to the Offer on or before December 31, 1996
(provided, however, that the right to terminate the Merger Agreement shall not
be available to any party whose failure to fulfill any of its obligations
thereunder or whose misrepresentation thereunder results in the cause for such
termination); (ii) if the Merger shall not have been consummated on or before
six months after the date of the Merger Agreement, unless the failure to
consummate the Merger is the result of a material breach of the Merger Agreement
by the party seeking to terminate it; or (iii) if any court of competent
jurisdiction or any other governmental body shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable; (c) by the Company if (i) the Offer
has not been timely commenced in accordance with Section 1.1 of the Merger
Agreement; or (ii) Parent or Purchaser fails to perform in any material respect
any of its respective obligations under the Merger Agreement; (d) by Parent or
Purchaser if the Company fails to perform in any material respect any of its
obligations under the Merger Agreement; or (e) by the Company if the Board of
Directors of the Company has accepted an Approved Offer in accordance with
Section 6.2 of the Merger Agreement.
EXPENSES UPON TERMINATION. If neither Purchaser nor Parent is in material
breach of any of its obligations under the Merger Agreement and, prior to
acceptance of Shares for payment pursuant to the Offer or the payment therefor,
the Merger Agreement is terminated (i) as a result of a material
misrepresentation by the Company, withdrawal or modification by the Board of
Directors of the Company of its recommendation of the Offer or the commencement
of a tender offer or acquisition of 20% or more of the Shares by another party;
or (ii) by Parent as a result of a breach by the Company; or (iii) by the
Company if it accepts an Approved Offer; then the Company shall reimburse Parent
for all reasonable out-of-pocket expenses and fees incurred by Parent in good
faith in connection with the the Merger Agreement and the financing thereof,
subject to a maximum reimbursement of $5,000,000.
TERMINATION FEES. If neither Purchaser nor Parent is in material breach of
any of its obligations under the Merger Agreement and, prior to acceptance of
Shares for payment pursuant to the Offer or the payment therefor, the Merger
Agreement is terminated (i) as a result of a material misrepresentation by the
Company, withdrawal or modification by the Board of Directors of the Company of
its recommendation of the Offer or the announcement or commencement of a tender
offer or acquisition of 20% or more of the Shares by another party or; (ii) by
Parent as a result of a breach by the Company; or (iii) by the Company if it
accepts an Approved Offer; and either prior to such termination or within twelve
(12) months thereafter, any person A) acquires the Company by merger or
otherwise; (B) acquires more than 50% in value of the total assets of the
Company and its subsidiaries taken as a whole; or (C) acquires beneficial
ownership of securities representing more than 50% of the outstanding voting
securities of the Company; or the Board of Directors of the Company accepts,
approves or recommends any third party acquisition; or the Board of Directors of
the Company shall have withdrawn or modified in any material respect its
recommendation of the Offer; then the Company shall pay Parent a termination fee
of $6,500,000 in addition to the payment of expenses described above.
STOCKHOLDER AGREEMENT. Parent and the Tendering Stockholders have entered
into the Stockholder Agreement, which provides that, not later than the fifth
business day after commencement of the Offer, each Tendering Stockholder will
tender all Shares beneficially owned by such Tendering Stockholder. Parent's
obligation under the Stockholder Agreement to accept for payment and pay for
Shares in the Offer, including the Shares beneficially owned by such Tendering
Stockholders, is subject to the terms and conditions of the Offer. If the Merger
Agreement is terminated, the Offer is terminated without the purchase of Shares
thereunder or the Minimum Condition is not satisfied (other than by waiver) upon
20
termination of the Offer, the Shares tendered pursuant to the Stockholder
Agreement by each Tendering Stockholder shall be returned to such Stockholder.
During the term of the Stockholder Agreement, and except as otherwise
provided therein or with the prior written consent of Parent, each tendering
Stockholder may not (i) sell, pledge or otherwise dispose of any of its Shares,
(ii) deposit its Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to such Shares, or
(iv) enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect sale, assignment, transfer or other
disposition of such Shares. The Stockholder Agreement requires each tendering
Stockholder to abide by the terms of the non-solicitation provisions of the
Merger Agreement summarized in "The Merger Agreement" set forth above in this
Section 11.
The Stockholder Agreement will terminate upon the earlier to occur of: (i)
the termination of the Merger Agreement, and (ii) December 31, 1996.
The preceding descriptions of the terms and provisions of the Merger
Agreement and the Stockholder Agreement are qualified in their entirety by
reference to the texts of such agreements, which are exhibits to the Tender
Offer Statement on Schedule 14D-1 filed by the Purchaser and Parent with the
Commission and which is available for inspection and copying at the principal
office of the Commission in the manner set forth in Section 9.
AMENDMENT OF EMPLOYMENT AGREEMENTS. Xx. Xxxxxx originally executed an
employment agreement with the Company in 1976. That agreement was amended in
1981, at which time the Company also entered in an employment agreement with
Xxxx Xxxxx. Prior to the execution and delivery of the Merger Agreement, the
Company entered into amendments to these employment agreements which provide for
acceleration of the benefits that would have been payable to Xx. Xxxxxx and Xx.
Xxxxx through the end of the stated termination dates of those agreements (March
2, 1999 for Xx. Xxxxxx and March 2, 1998 for Xx. Xxxxx) so that, effective upon
the acquisition by Purchaser of any shares pursuant to the Offer or, if no
Shares are purchased pursuant to the Offer prior to the Merger, the date that
the Merger is completed (such effective date being referred to as the "Payment
Date"), the Company shall pay to the respective employees the sum of: (i) the
amount of all unpaid salary and benefits accrued under the Employment Agreement
through the Payment Date that has not previously been paid, and (ii) an amount
equal to his full base salary for the period from the Payment Date through the
date the Employment Agreement would have otherwise terminated, determined
without discount. Based on an assumed Payment Date of November 15, 1996, the
amount payable to Xx. Xxxxxx would be approximately $1,206,042, and the amount
payable to Xx. Xxxxx would be approximately $263,336. Upon such payments, the
Employment Agreements will terminate with no further liability or obligation of
either party thereunder. In the event that the Merger Agreement is terminated
for any reason prior to the Payment Date, the amendments of the Employment
Agreements described above will terminate and be of no further force or effect.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all presently outstanding Shares pursuant to the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$180,000,000 million. Such funds will be obtained by the Purchaser or provided
by Parent or one or more of its subsidiaries to the Purchaser from available
cash on hand and pursuant to a $500 million credit facility (the "Credit
Facility") to be provided by a syndicate of banks (the "Banks") for whom Xxxxxx
Trust and Savings Bank acts as administrative agent (the "Administrative Agent")
and Bank of Montreal and PNC Bank, National Association, act as co-syndication
agents. The Credit Facility will be a $500 million senior unsecured revolving
facility maturing five (5) years from the date of the closing thereof, with a
mandatory commitment reduction, through subsequent debt issues or otherwise, to
$400 million by December 31, 1998. The Credit Facility contains a sublimit of
$25 million for the issuance of standby and commercial letters of credit. Any
outstanding letters of credit will reduce funds availability on a
dollar-for-dollar basis. Loans will be provided under the Credit Facility to
Parent, which
21
can advance proceeds of such loans to the Purchaser and/or any other domestic
subsidiary of Parent (the Parent, in such capacity, being hereinafter referred
to as the "Borrower").
Each loan under the Credit Facility will bear interest, at the Borrower's
option from time to time, at a rate equal to either the "Base Rate" or the
"LIBOR Rate." The "Base Rate" for any day will mean the greater of (i) the rate
of interest announced by the Administrative Agent as its prime commercial rate
for such day or (ii) the "Federal Funds Effective Rate" in effect on such day
plus one half of one percent plus the Base Rate Margin, calculated on an actual
day/365-day basis and payable quarterly in arrears. "LIBOR Rate" generally will
mean the reserve adjusted LIBOR plus a LIBOR Margin, fixed for interest periods
of one, two, three or six months, calculated on an actual day/360-day basis and
payable on the last day of the applicable interest period (but in any case, at
least quarterly). LIBOR is defined, generally, as the London Interbank Offered
Rate reflected in the Telerate Service of the British Banker's Association, or
if such rate is unavailable, the rate at which deposits of U.S. dollars are
quoted two business days before commencement of the applicable interest period.
The LIBOR Margin ranges from .200% to .700% based on the ratings assigned to the
Parent's senior unsecured non-credit enhanced long-term indebtedness ("Parent's
Debt Ratings"). The Borrower may also request that the Administrative Agent
solicit competitive bids from the Banks through an auction for short term
borrowings priced either (i) at a margin above or below LIBOR or (ii) at an
absolute interest rate. The Credit Facility will also provide for customary
provisions relating to yield protection, availability and capital adequacy.
The Credit Facility will provide for the payment by Parent of certain fees
including a (i) facility fee at a rate ranging from .100% to .300% per annum
based on the Parent's Debt Ratings, (ii) certain structuring, underwriting and
administrative fees and (iii) certain letter of credit fees ranging from .200%
to .700% per annum (based on the Parent's Debt Ratings) applied to the face
amount of each letter of credit, a letter of credit fronting fee of one-tenth of
1% of the face amount of each standby letter of credit and customary fees in
connection with commercial letters of credit and standby letters of credit.
The Credit Facility will have customary conditions to borrowing,
representations and warranties, covenants and events of default. Without
limiting the generality of the foregoing, the Banks' obligation to fund shall be
conditioned upon the satisfaction of the Minimum Condition.
The subsidiaries of Parent (including the Purchaser and, upon consummation
of the Offer or the Merger, the Company and its subsidiaries) will
unconditionally guarantee the indebtedness, obligations and liabilities of the
Borrower under the Credit Facility.
The commitment of the Banks under the Credit Facility will expire five (5)
years from the date of its commencement. It is anticipated that borrowings under
the Credit Facility will be repaid from funds generated internally by Parent and
its subsidiaries (including the Company) and from other sources, which may
include debt or other bank financings.
13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions
of the Offer and in addition to (and not in limitation of) Parent's right to
extend and amend the Offer (subject to the terms of the Merger Agreement),
Parent shall not be required to accept for payment or pay for, subject to Rule
14e-l(c) of the Exchange Act, any Shares not theretofore accepted for payment or
paid for and may terminate or amend the Offer (subject to the terms of the
Merger Agreement) as to such Shares if (i) the Minimum Condition shall not have
been satisfied or (ii) at any time on or after the date of commencement of the
Offer and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exist or shall occur and remain in
effect:
(a) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States
(whether or not mandatory), (ii) a formal declaration of war or national or
international calamity directly or indirectly involving the United States,
(iii) any limitation (whether or not mandatory) by any United States
governmental authority on the extension of credit by banks or other
financial institutions that materially affects the extension
22
of credit by banks or other lending institutions, or (iv) in the case of any
of the foregoing existing at the time of commencement of the Offer, a
material acceleration or worsening thereof; or
(b) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted issued or deemed applicable to the Offer or the Merger by any court,
government or governmental authority or agency, domestic or foreign, which
(i) prohibits Parent's ownership or operation of all or a material portion
of its or the Company's (or any of their respective subsidiaries') business
or assets, or compels Parent to dispose of or hold separate all or a
material portion of its or the Company's (or any of their respective
subsidiaries') business or assets as a result of the Offer or the Merger,
(ii) prohibits, or makes illegal the acceptance for payment or payment for
Shares or the consummation of the Offer or the Merger, or (iii) imposes
material limitations on the ability of Parent or Purchaser effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Purchaser on all
matters properly presented to the Company's stockholders; provided, however,
that with respect to any action, ruling or order taken or made by any court,
government or governmental authority or agency that is preliminary, until
such action, ruling or order becomes final, Parent may not terminate the
Offer, but shall extend the expiration of the Offer and shall postpone
acceptance for payment or purchase of, or payment for, any Shares pursuant
to this paragraph (b); further provided, however, that in no event shall
Parent be obligated to attempt to cause any such decree, order or injunction
to be vacated or reversed or to extend the Offer beyond December 31, 1996;
or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties of the Company set forth
in the Merger Agreement were inaccurate when made or became inaccurate at
any time thereafter (other than (i) any misrepresentations that, in the
aggregate, do not have a material adverse effect on the Company or (ii) any
misrepresentations that the Company cures within five (5) business days
after notice thereof is given by Parent (except that no cure period shall be
provided for a breach by the Company which, by its nature, cannot be cured))
or the Company shall have failed in any material respect to perform any
material obligation or covenant required by the Merger Agreement to be
performed or complied with by it which failure would have a material adverse
effect on the Company; or
(e) the Board of Directors of the Company shall have withdrawn or
modified in any material respect its recommendation of the Offer; provided,
however, that this condition shall not be deemed to exist, and Purchaser
shall have no right to terminate the Offer or not accept for payment or pay
for Shares, if as a result of the Company's receipt of a proposal for the
acquisition of all or a material portion of the business or assets of the
Company or the Shares, the Company withdraws, modifies or amends its
approval or recommendation of the Offer, the Merger or the Merger Agreement
by reason of taking and disclosing to the Company's stockholders a position
contemplated by Rule 14e-2(a)(2) or (3) promulgated under the Exchange Act
with respect to such proposal, the Offer, the Merger or the Merger Agreement
and if within five (5) business days of taking and disclosing to its
stockholders the aforementioned position, the Company publicly reconfirms
its recommendation of the Offer, the Merger and the Merger Agreement; or
(f) the waiting period (and any extension thereof) applicable to the
consummation of the Offer under the HSR Act shall not have expired or been
terminated; provided, however, that (i) until such HSR Act waiting periods
expire or terminate, Parent may not terminate the Offer (but shall extend
the expiration of the Offer and shall postpone acceptance for payment or
purchase of, or payment for, any Shares pursuant to this paragraph (f));
further provided, however, that in no event shall Parent be obligated to
extend the Offer beyond December 31, 1996 and (ii) unless Parent theretofore
shall have terminated the Offer in accordance with the terms of the Merger
Agreement, Parent shall continue to seek to resolve any action or proceeding
in accordance with the provisions of the Merger Agreement; or
23
(g) (i) a tender or exchange offer for 20% or more of the Shares shall
have been publicly proposed to be made by another person or shall have been
publicly disclosed, (ii) a tender or exchange offer for 20% or more of the
Shares shall have been made by another person or (iii) Parent shall have
learned that any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act), shall beneficially own (as that term is used
in Section 13(d)(3) of the Exchange Act), or shall have acquired, 20% or
more of the Shares, or shall have been granted any option or right,
condition or otherwise, to acquire 20% or more of the Shares;
which, in the reasonable judgment of Parent, in any case, and regardless of the
circumstances giving rise to any such condition, makes it inadvisable to proceed
with the Offer or with such acceptance for payment, purchase of, or payment for
Shares.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition and may be waived by Parent, in whole or in part, at any time and from
time to time, in the sole discretion of Parent. The failure by Parent at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
right and each right will be deemed an ongoing right which may be asserted at
any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
14. DIVIDEND AND DISTRIBUTIONS. If, on or after October 8, 1996, the
Company should (i) split, combine or otherwise change the Shares or the
Company's 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 (except for Shares issuable upon the exercise of employee stock
options outstanding on the date of the Merger Agreement), (iii) acquire
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares, or (iv) disclose that it has taken any such action, then,
without prejudice to Purchaser's rights under Sections 1 and 13, the Purchaser
may, in its sole discretion, make such adjustments as it deems appropriate to
reflect such split, combination or other change in the purchase price and the
other terms of the Offer or the Merger (including, without limitation, the
number and type of securities offered to be purchased, the amounts payable
therefor and the fees payable hereunder).
If, on or after October 8, 1996, the Company should declare or pay any cash
or stock dividend or other distribution or issue any rights with respect to the
Shares, payable or distributable to stockholders 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 accepted for payment pursuant to
the Offer, then, without prejudice to the Purchaser's rights under Sections 1
and 13 and without limiting the rights of the Purchaser described in the
preceding paragraph of this Section 14, any such dividend, distribution or right
to be received by the tendering stockholders will be received and held by the
tendering stockholder for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation and transfer. Pending such remittance, the Purchaser will be
entitled to all rights and privileges as owner of any such dividend,
distribution or right and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
15. CERTAIN LEGAL MATTERS. Except as set forth in this Section 15, based
on a review of publicly available filings by the Company with the Commission and
other information concerning the Company provided to Parent, the Purchaser is
not aware of any license or other regulatory permit which appears to be material
to the business of the Company and that might be adversely affected by the
Purchaser's acquisition of Shares pursuant to the Offer (and the indirect
acquisition of the stock of the Company's subsidiaries), or of any approval or
other action by any domestic or foreign governmental or administrative agency
that would be required prior to the acquisition of Shares by the Purchaser
pursuant to the Offer. Should any such approval or other action be required, it
is the Purchaser's present intention that such
24
additional approval or action would be sought. While the Purchaser does not
presently intend to delay the purchase of Shares tendered pursuant to the Offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, could be obtained without substantial conditions or that adverse
consequences might not result to the Company's or Parent's business, or that
certain parts of the Company's or Parent's business might not be required to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval or action or in the event that such approvals were
not obtained or such actions were not taken. The Purchaser's obligation to
purchase and pay for Shares is subject to certain conditions relating to the
legal matters discussed in this Section 15. See Section 13.
ANTITRUST. Under the HSR Act, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the Federal
Trade Commission ("FTC") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer and the Merger
Agreement is subject to such requirements. On or about October 9, 1996, Parent
expects to file with the Antitrust Division and the FTC a Notification and
Report Form with respect to the Offer and the Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated prior to the expiration of a
15-calendar day waiting period following the filing by Parent, unless earlier
terminated. Accordingly, the Parent expects the waiting period applicable to the
Offer will expire at 11:59 p.m., New York City time, on or about October 24,
1996, unless Xxxxxx receives a request from either the FTC or the Antitrust
Division for additional information or documentary material, or the Antitrust
Division and the FTC terminate the waiting period prior thereto. If, within such
15-day waiting period either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of the Purchaser. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. Although the
Company may be required to file certain information and documentary material
with the Antitrust Division and the FTC in connection with the Offer and the
Merger, neither the Company's failure to make such filings nor a request made to
the Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the Offer period with respect to the purchase
of Shares pursuant to the Offer and the Merger Agreement. The Purchaser will not
accept for payment Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 13.
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, at the discretion of the Purchaser, 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 by
Parent, unless the ten-day extended period expires on or before the date when
the initial waiting period would otherwise have expired or unless the waiting
period is sooner terminated by the FTC and the Antitrust Division. See Section
2. Unless the Offer is extended, any extension of the waiting period will not
give rise to any additional withdrawal rights. See Section 3.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At
25
any time before or after the Purchaser's purchase of Shares, the Antitrust
Division or the FTC could take such action under the antitrust laws as either
deems necessary or desirable in the public interest, including seeking to enjoin
the purchase of Shares pursuant to the Offer and the Merger or seeking
divestiture of Shares purchased thereunder or the divestiture of assets of the
Company, the Purchaser, Parent or any of their respective subsidiaries or
affiliates. Private parties as well as state attorneys general may also bring
legal actions under the antitrust laws under certain circumstances. If any such
action by the FTC, the Antitrust Division or any other person should be
instituted, the Purchaser could decline to accept for payment any Shares
tendered. See Section 13 for certain conditions to the Offer. Based upon an
examination of information relating to the businesses in which Parent and the
Company are engaged, Xxxxxx believes that the consummation of the Offer would
not violate any antitrust laws. However, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if a challenge
is made, what the result will be.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. Section 203 of the DGCL (the "Business Combinations Statute")
generally prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" (defined generally as
any person that directly or indirectly owns 15% or more of the outstanding
voting stock of the subject corporation) for a period of three years after the
date of the transaction in which the person became an interested stockholder,
unless certain exceptions apply, including that a majority of disinterested
directors approved in advance the transaction in which the interested
stockholder became an interested stockholder. The Board of Directors of the
Company has unanimously approved the acquisition of Shares pursuant to the Offer
and the Merger Agreement so that Section 203 of the DGCL is not applicable to
the transactions contemplated by the Merger Agreement. The foregoing is a
summary of the provisions of the DGCL which are applicable to the Offer, does
not purport to be complete and is qualified in its entirety by reference to the
provisions of the DGCL.
A number of states have adopted takeover laws which purport, to varying
degrees, to be applicable to attempts to acquire securities of corporations
which are incorporated in such states or which have substantial assets, security
holders, principal executive offices or principal places of business therein. To
the extent that certain provisions of certain of these state takeover statutes
purport to apply to the Offer or the Merger, the Purchaser believes that such
laws conflict with federal law and constitute an unconstitutional burden on
interstate commerce. In 1982, the Supreme Court of the United States, in XXXXX
X. MITE CORP., held that the Illinois Business Takeovers Statute, which as a
matter of state securities law made takeovers of corporations meeting certain
requirements more difficult, imposed a substantial burden on interstate commerce
and therefore was unconstitutional. In 1987, however, in CTS CORP. V. DYNAMICS
CORP. OF AMERICA, the Supreme Court of the United States held that the State of
Indiana could, as a matter of corporate law and, in particular, those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of stockholders in the state and were incorporated therein. Subsequently, a
number of federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
Except as described herein, the Purchaser does not know whether the Offer is
subject to any state takeover statutes and neither Parent nor the Purchaser has
attempted to comply with any state takeover statutes in connection with the
Offer other than as indicated below. Should any person seek to apply any such
statute to the Offer, Parent and the Purchaser reserve the right to challenge
the validity or applicability of any state law allegedly applicable to the Offer
and nothing in this Offer to Purchase nor any
26
action taken in connection herewith is intended as a waiver of that right. In
the event that any additional state takeover statute is found applicable to the
Offer and an appropriate court does not determine that such laws are
inapplicable or invalid as applied to the Offer, the Purchaser may be required
to file certain information with, or receive approvals from, the relevant state
authorities, or the Purchaser might be unable to purchase and accept for payment
or pay for Shares tendered pursuant to the Offer or be delayed in continuing
or-consummating the Offer. In the circumstances described above, the Purchaser
may not be obligated to accept for purchase and payment or pay for any Shares
tendered.
Although the Company is a Delaware corporation, its principal place of
business is in Ohio. Section 1707.041 of the Ohio Securities Law requires that
no control bid for any securities of a "subject company" shall be made pursuant
to a tender offer until the offeror files certain information with the Ohio
Division of Securities. As defined in the statute, "subject company" means an
issuer (i) that has its principal place of business or principal executive
office in Ohio or owns or controls assets within Ohio having a fair market value
of at least $1 million, and (ii) more than 10% of whose beneficial or record
equity security holders reside in Ohio. Because the Company falls within the
description of a "subject company" it has filed a Form 041 with the Ohio
Division of Securities providing the requisite information. The Company also has
facilities in Michigan and Kentucky. The laws of these states, however, do not
require comparable filings by foreign corporations in control bid acquisitions.
SUPER-MAJORITY VOTING PROVISION. The Board of Directors of the Company has
also taken actions to exempt the Company from the super-majority stockholder
vote provision of Article Sixth of the Company's Certificate of Incorporation,
which requires that the affirmative vote of the holders of at least 70% of the
total voting power of all outstanding shares must approve any merger of the
Company unless such merger has been approved by at least two-thirds of the then
authorized number of directors.
16. EXTENSION OF TENDER PERIOD, TERMINATION AND AMENDMENTS. The Merger
Agreement provides that the Offer may not be amended to reduce the price to be
paid per Share, change the form of consideration to be paid in the Offer or the
Merger, increase or waive the Minimum Condition, extend the Expiration Date, or
amend the terms of the Offer in a manner that is materially adverse to the
holders of the Shares. Subject to such restrictions, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period during which the Offer is open by giving oral or written
notice of such extension to the Depositary. If the Purchaser shall decide, in
its sole discretion, to increase the consideration offered in the Offer to
holders of Shares or make any other material change in the terms of the Offer
(including the Minimum Condition) or the information concerning the Offer, the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange
Act. The minimum period during which the Offer must remain open following
material changes in the terms of the Offer or information concerning the Offer,
other than a change in price or a change in percentage of securities sought,
will depend upon the facts and circumstances, including the relative materiality
of the terms or information. With respect to a change in price or a change in
percentage of securities sought, a minimum 10-business day period from the date
of announcement thereof is required to allow for adequate dissemination to
stockholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all stockholders whose Shares are
accepted for payment pursuant to the Offer. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
The Purchaser also expressly reserves the right (i) to delay payment for any
Shares, regardless of whether such Shares were theretofore accepted for payment,
or to terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted or paid for, upon the occurrence of any of the conditions
specified in Section 13 by giving oral notice thereof to the Depositary; and
(ii) subject to the restrictions set forth in the Merger Agreement, at any time
or from time to time, to amend the Offer in any respect. See Section 13. Any
extension, delay, termination, waiver or amendment of the Offer will be
followed, as soon as practicable, by public announcement thereof, and such
announcement in the case of
27
an extension will be made in accordance with Rule 14e-1(d) no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date. Without limiting the manner in which the Purchaser
may choose to make any public announcement, the Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to either the Dow Xxxxx or Reuters
News Services and making any appropriate filings with the Commission.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
17. CERTAIN FEES AND EXPENSES. Xxxxx Xxxxxxx Inc. is acting as Dealer
Manager for the Offer and as financial advisor to Parent in connection with the
transactions described in this Offer to Purchase. Pursuant to an engagement
letter dated July 19, 1996 and a Dealer Manager Agreement dated as of October 8,
1996, Parent has agreed to pay Xxxxx Xxxxxxx an aggregate amount of $900,000
upon consummation of an acquistion of the Company. Of this amount, Parent has
paid Xxxxx Xxxxxxx a cash retainer of $75,000 and has agreed to pay Xxxxx
Xxxxxxx an additional cash retainer of $25,000 if Parent is still in discussions
with the Company in regards to a transaction with the Company as of October 17,
1996 and a cash fee of $500,000 upon the rendering of its fairness opinion to
the Board of Directors of Parent. Parent has further agreed to pay Xxxxx Xxxxxxx
the remaining $300,000 as a cash success fee upon the consummation by Parent of
an acquisition of the Company. In the event Parent does not consummate an
acquisition of the Company but receives any form of gain, compensation or
non-expense reimbursement in connection with its attempt to complete an
acquisition of the Company, Parent has agreed to pay Xxxxx Xxxxxxx 10% of any
such gain, compensation or reimbursement, not to exceed $150,000. In addition,
Xxxxxx has agreed to reimburse Xxxxx Xxxxxxx for its reasonable out-of-pocket
expenses, including fees and disbursements of Xxxxx Xxxxxxx'x legal counsel,
whether or not an acquisition of the Company is consummated, and has agreed to
indemnify Xxxxx Xxxxxxx against certain liabilities and expenses in connection
with its engagement.
The Purchaser has retained X.X. Xxxx & Co. to act as Information Agent and
Norwest Bank Minnesota, N.A. to act as Depositary in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interview and may request brokers, dealers and other
nominee stockholders to forward material relating to the Offer to beneficial
owners. The Information Agent and the Depositary will receive reasonable and
customary compensation for services relating to the Offer in addition to
reimbursement of reasonable out-of-pocket expenses. The Purchaser has agreed to
indemnify the Information Agent and the Depositary against certain liabilities
and expenses in connection with the Offer including certain liabilities under
the federal securities laws.
Neither Parent nor the Purchaser will pay any fees or commissions to any
broker, dealer or other person (other than the above-described fees to Xxxxx
Xxxxxxx) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by the Purchaser for reasonable and necessary costs and expenses incurred by
them in forwarding materials to their customers.
18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. If the
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, the Purchaser will make a good
faith
28
effort to comply with any such law. If, after good faith effort, the Purchaser
cannot comply with any such law, the Offer will not be made to, nor will tenders
be accepted from or on behalf of, holders of Shares residing in any jurisdiction
in which the making of the Offer or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction. In
any jurisdiction in which the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Purchaser by the Dealer Manager or by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Tender Offer Statement and any amendments thereto, including
exhibits, may be obtained in the manner described in Section 8 with respect to
information concerning the Company, except that such information 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 PARENT 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.
NFC ACQUISITION CORPORATION
29
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The names, ages, present
principal occupation or employment and five-year employment history of each
director and executive officer of Parent are set forth below. Unless otherwise
indicated, all persons have held their current occupation or employment for at
least the last five years. The business address of each such person is 0000
Xxxxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxxx 00000. All persons listed below are
citizens of the United States of America.
YEAR FIRST ELECTED
OR APPOINTED AS AN PRESENT PRINCIPAL OCCUPATION
EXECUTIVE OFFICER OR EMPLOYMENT; FIVE-YEAR
NAME AND AGE OR DIRECTOR EMPLOYMENT HISTORY
------------------------------- ------------------- -------------------------------------------------------------
EXECUTIVE OFFICERS:
Xxxxxx X. Xxxxxx (61) 1991 President and Chief Executive Officer. Xx. Xxxxxx was elected
Chief Executive Officer in November 1994. His election as
President and Chief Operating Officer was effective in
November 1991. He had been elected Executive Vice President,
Sales and Operations of Xxxx Xxxxx in February 1991.
Xxxxxxx X. Xxxxxx (56) 1994 Senior Vice President, Sales and Logistics. Xx. Xxxxxx was
elected as Senior Vice President, Sales and Logistics
effective in December 1994 after joining the Company in the
same month. He was previously employed by Xxxxxxxx, Inc., a
wholesale and retail food distribution company located in
Oklahoma City, Oklahoma, serving as its President and Chief
Operating Officer from 1987 to 1994.
Xxxxxx X. Xxxxxx (55) 1986 Vice President, Secretary and General Counsel.
Xxxxxxxx X. Xxxxxxx (59) 1988 Vice President, Management Information Systems.
Xxxxxxx X. Xxxxxxxxxx (54) 1991 Vice President, Marketing.
Xxxxxx X. Xxxxxxx (51) 1992 Vice President, Warehouse and Transportation. Xx. Xxxxxxx was
elected Vice President, Warehouse and Transportation in May
1992. He previously served as Director, Warehouse and
Transportation from May 1990 to May 1992.
Xxxxxx X. Xxxxxxx (63) 1993 Vice President, Store Development. Xx. Xxxxxxx was elected
Vice President, Store Development in May 1993. He previously
served as operating Vice President, Central Division for more
than five years.
A-1
Xxxx X. Xxxxxxx (46) 1994 Vice President and Chief Financial Officer. Xx. Xxxxxxx was
appointed as Chief Financial Officer in November 1995. His
election as Vice President was effective in December 1994,
and he served as Vice President, Planning and Financial
Services from December 1994 to November 1995. He previously
served as Director of Strategic Planning and Financial
Services from April 1994 to December 1994, and Director of
Planning and Budgets from January 1988 through April 1994.
Xxxxxxx X. Xxxxxx (48) 1995 Vice President, Corporate Retail Operations. Xx. Xxxxxx was
elected as Vice President, Corporate Retail Operations
effective in October 1994. He previously served as operating
Vice President, Iowa Division from May 1993 to October 1994
and Iowa Division Manager from June 1991 to May 1993.
Xxxxx X. Xxxxxxxxxx (49) 1995 Vice President, Human Resources. Xx. Xxxxxxxxxx was elected
as Vice President, Human Resources in November 1995. He
previously served as Director of Human Resources from January
1993, and Director of Training and Management Development
from February 1988 to January 1993.
Xxxxx X. Xxxxxxxx (48) 1996 Vice President, Corporate Retail Stores. Xx. Xxxxxxxx was
elected Vice President, Corporate Retail Stores in July 1996,
having previously served as operating Vice President,
Southeast Division from December 1994 to July 1996. He was
previously employed by Xxxxxxxx, Inc., serving as Senior Vice
President, Store Development from July 1992 to August 1994
and as Executive Vice President, Retail Operations from
January 1991 to July 1992.
Xxxxxxx X. Xxx, Xx. (48) 1996 Vice President, Strategic Technology Programs and Marketing
Services. Mr Xxx was elected as Vice President, Strategic
Technology Programs and Marketing Services in July 1996.
Previously, he was employed by Spartan Stores in Grand
Rapids, Michigan, having served as Senior Vice President,
Distribution, Procurement, MIS and Customer Service from July
1988 to June 1996.
Xxxx X. XxXxxxx (47) 1996 Vice President, Independent Store Operations. Xx. XxXxxxx was
elected Vice President, Independent Store Operations in May
1996. He previously served as Director, Independent Store
Operations from August 1993 to May 1996, as Director of
Grocery and Marketing from April 1993 to August 1993 and as
Distribution Center Manager, Sioux Falls, South Dakota from
January 1991 to April 1993.
Xxxxxxxx X. Xxxxxxxxx (51) 1990 Controller.
A-2
Xxxxxxx X. Xxxxx (32) 1996 Treasurer. Xx. Xxxxx was elected as Treasurer effective as of
January 1996. She previously served as Assistant Treasurer
from May 1995, Treasury Manager from January 1993 to May
1995, and Treasury Assistant from September 1987 to January
1993.
DIRECTORS:
Xxxxxx X. Xxxxxx (50) 1993 President and Chief Executive Officer of Xxxxxx Xxxxxxxx,
Inc., an operator of retail supermarkets located in Butler,
Pennsylvania.
Xxxxxxx X. Xxxxxx (66) 1984 Retired Vice President -- Finance and Treasurer of Network
Systems Corporation, a manufacturer of data communications
system located in Brooklyn Park, Minnesota. Xx. Xxxxxx
retired in December 1992 as Vice President -- Finance and
Treasurer of Network Systems Corporation, a position he had
held for more than five years.
Xxxxxx X. Xxxxxx (61) 1990 President and Chief Operating Officer of Parent.
Xxxxxxxx X. Xxxxxx (60) 1992 Chairman and Chief Executive Officer of the Oshawa Group
Limited, a food and pharmaceutical distributor in Toronto
Canada.
Xxxx X. Xxxxxxxxx (60) 1992 Executive Vice President, Finance and Administration, Polaris
Industries, Inc., a manufacturer of recreational equipment
located in Plymouth, Minnesota. Xx. Xxxxxxxxx has served as
Executive Vice President, Finance and Administration of
Polaris Industries since September 1993. He previously served
as Executive Vice President, Chief Financial Officer and
Secretary of Pentair, Inc. for more than five years, a
position from which he retired in June 1993.
Xxxxxxx X. Xxxxxx (68) 1984 Partner, Xxxxxxxxxxx Xxxxx & Xxxxxxxx, a law firm located in
Minneapolis, Minnesota. Xx. Xxxxxx has been a partner in the
law firm of Xxxxxxxxxxx Xxxxx & Xxxxxxxx for over 30 years.
Xxxxxxx X. Xxxxxx (70) 1974 Retired President and Chief Operating Officer of Parent. Xx.
Xxxxxx resigned in November 1991 as President and Chief
Operating Officer of Xxxx Xxxxx, a position that he had held
for more than five years, in anticipation of his planned
retirement which was effective January 1, 1992.
Xxx X. Xxxxx (58) 1995 Chairman of the Board, President and Chief Executive Officer
of Xxxxx Supermarkets, Inc., a supermarket and convenience
store chain operator located in Indianapolis, Indiana.
Xxxxxx X. Xxxxxx (69) 1978 Management Consultant.
A-3
Xxxxxx X. Xxxx (62) 1968 Retired Vice President and Treasurer of Parent. Xx. Xxxx
retired in January 1996 as Vice President & Treasurer of Xxxx
Xxxxx, a position he had held for more than five years.
Xxxxxx X. Xxxxxxxx (67) 1974 Retired Senior Vice President of Parent. Xx. Xxxxxxxx retired
in January 1994 as Senior Vice President, Store Development
and Construction of Xxxx Xxxxx, a position he had held for
more than five years.
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The names, ages,
present principal occupation or employment with the Purchaser of each of the
directors and executive officers of the Purchaser are set forth below. The
business address of each such person is 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx,
Xxxxxxxxx 00000. All persons listed below are citizens of the United States of
America. For information regarding the five-year employment history of such
persons, see "Directors and Executive Officers of Parent."
YEAR FIRST ELECTED
OR APPOINTED AS AN PRESENT PRINCIPAL OCCUPATION
EXECUTIVE OFFICER OR EMPLOYMENT WITH PURCHASER;
NAME (AGE) OR DIRECTOR FIVE-YEAR EMPLOYMENT HISTORY
---------------------------------------------- ------------------- ----------------------------------------------
Xxxxxx X. Xxxxxx (61) 1996 President and a Director.
Xxxxxx X. Xxxxxx (55) 1996 Secretary and a Director.
Xxxx X. Xxxxxxx (45) 1996 Treasurer and a Director.
A-4
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
---------------------
BY MAIL: BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION:
Norwest Shareowner Services Norwest Shareowner Services (For Eligible Institutions
P.O. Box 64858 161 North Concord Exchange Only)
St. Xxxx, MN 55164-0858 Stock Transfer Department (612) 450-0000
Xxxxx Xx. Xxxx, XX 00000 Confirm Facsimile By
Telephone:
(000) 000-0000
BY HAND:
Norwest Shareowner Services Norwest Trust Company of New York
000 Xxxxx Xxxxxxx Xxxxxxxx XX 0 Xxx Xxxx Xxxxx
2nd Floor 15th Floor
Xxxxx Xx. Xxxx, XX 00000 Xxx Xxxx, XX 00000
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, commercial bank or trust company or
nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
X.X. XXXX & CO., INC.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (collect)
or
Call Toll Free: 0-000-000-0000
THE DEALER MANAGER FOR THE OFFER IS:
XXXXX XXXXXXX INC.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Call Toll Free: 0-000-000-0000, Ext. 6373
