OFFER TO PURCHASE FOR CASH
ANY AND ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
NATIONAL-STANDARD COMPANY
AT
$1.00 NET PER SHARE
BY
NS ACQUISITION CORP.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON AUGUST 4, 2000, UNLESS THE OFFER IS EXTENDED.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OR WAIVER BY
PURCHASER OF THE FOLLOWING CONDITIONS: (I) NATIONAL-STANDARD COMPANY (THE
"COMPANY") SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS ALL OF ITS OBLIGATIONS
UNDER THE AGREEMENT AND PLAN OF MERGER, DATED AS OF JUNE 26, 2000 BETWEEN NS
ACQUISITION CORP. ("PURCHASER"), HEICO HOLDING, INC. ("PARENT") AND THE COMPANY
(THE "MERGER AGREEMENT") REQUIRED TO BE PERFORMED BY IT AT OR PRIOR TO THE
SCHEDULED OR EXTENDED EXPIRATION OF THE OFFER; (II) THE REPRESENTATIONS AND
WARRANTIES OF THE COMPANY CONTAINED IN THE MERGER AGREEMENT SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS; (III) THERE SHALL NOT HAVE BEEN INSTITUTED OR
PENDING ANY ACTION OR PROCEEDING BY ANY GOVERNMENTAL AUTHORITY SEEKING TO
RESTRAIN, PROHIBIT OR OTHERWISE INTERFERE WITH THE OFFER OR THE MERGER;
(IV) THERE SHALL NOT HAVE BEEN ANY STATUTE, RULE, REGULATION, INJUNCTION, ORDER
OR DECREE, ENACTED, ENFORCED, PROMULGATED, ENTERED, ISSUED OR DEEMED APPLICABLE
TO THE OFFER OR THE MERGER; (V) SINCE THE DATE OF THE MERGER AGREEMENT, THERE
SHALL NOT HAVE OCCURRED A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE COMPANY,
AND THERE SHALL NOT HAVE OCCURRED A CHANGE OR EVENT WHICH WOULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY; (VI) THE CONSENT AND
WAIVER OF FOOTHILL CAPITAL CORPORATION ("FOOTHILL") WITH RESPECT TO THE OFFER
AND THE MERGER AND THE TERMINATION OF THE COMPANY WARRANT ISSUED TO FOOTHILL
(THE "FOOTHILL CONSENT") SHALL HAVE BEEN OBTAINED AT THE EXPIRATION OF THE
OFFER; (VII) THERE SHALL NOT HAVE BEEN A SUBSEQUENT DEVELOPMENT (INCLUDING ANY
SETTLEMENT OR FINAL SETTLEMENT OFFER FROM COUNSEL FOR THE PLAINTIFFS) IN ANY
ACTION OR PROCEEDING PENDING ON THE DATE OF THE MERGER AGREEMENT AND THERE SHALL
NOT HAVE BEEN INSTITUTED ANY ACTION OR PROCEEDING SUBSEQUENT TO THE DATE OF THE
MERGER AGREEMENT THAT WOULD HAVE CERTAIN SPECIFIED ADVERSE EFFECTS ON THE
COMPANY, THE OFFER OR THE MERGER; (VIII) THE COMPANY SHALL NOT HAVE FILED FOR,
ADMITTED OR CONSENTED TO BANKRUPTCY OR INSOLVENCY OR BEEN ADJUDICATED BANKRUPT
OR INSOLVENT OR BECOME UNABLE TO CONDUCT ITS BUSINESS, TAKEN AS A WHOLE,
SUBSTANTIALLY AS CURRENTLY CONDUCTED; (IX) THE MERGER AGREEMENT SHALL NOT HAVE
BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS; AND (X) THERE SHALL HAVE BEEN
VALIDLY TENDERED AND NOT WITHDRAWN AT THE EXPIRATION OF THE OFFER, A NUMBER OF
SHARES OF COMPANY COMMON STOCK EQUAL TO AT LEAST A MAJORITY OF THE THEN
OUTSTANDING SHARES OF COMPANY COMMON STOCK. THE OFFER IS ALSO SUBJECT TO OTHER
TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE.
THE COMPANY'S BOARD OF DIRECTORS, BY UNANIMOUS VOTE OF ALL DIRECTORS PRESENT
AT A MEETING DULY CALLED AND HELD ON JUNE 26, 2000, HAS (I) DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE OFFER
AND THE MERGER) ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE
COMPANY'S STAKEHOLDERS, INCLUDING SHAREHOLDERS, (II) APPROVED AND ADOPTED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE OFFER
AND THE MERGER), AND (III) RESOLVED TO RECOMMEND THAT THE COMPANY SHAREHOLDERS
ACCEPT THE OFFER AND VOTE FOR THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT
AND THE MERGER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IMPORTANT
Any holder of shares of common stock of National-Standard Company desiring
to tender all or any portion of the shares owned by such holder should either
(i) complete and sign the Letter of Transmittal (as defined in this Offer to
Purchase) or a copy thereof in accordance with the instructions in the enclosed
Letter of Transmittal and mail or deliver it, together with the certificate(s)
evidencing tendered shares, and any other required documents, to the Depositary
(as defined in this Offer to Purchase), (ii) where applicable, cause the
holder's broker, dealer, commercial bank, trust company or custodian to tender
the shares pursuant to the procedures for book-entry transfer of shares or
(iii) comply with the guaranteed delivery procedures, in each case upon the
terms set forth in "Procedures for Tendering Shares." Any holder whose shares
are registered in the name of a broker, dealer, commercial bank, trust company
or custodian must contact the holder's broker, dealer, commercial bank, trust
company or custodian if such holder desires to tender the shares. See
"Procedures for Tendering Shares"
Any holder who desires to tender shares of common stock of National-Standard
Company and whose certificates(s) evidencing the shares are not immediately
available, or who cannot comply with the procedures for book-entry transfer
described in this Offer to Purchase on a timely basis, may tender such shares by
following the procedures for guaranteed delivery set forth in "Procedures for
Tendering Shares."
Questions and requests for assistance may be directed to Xxxxxx & Co., Inc.
(the "Information Agent"), Telephone: (000) 000-0000. Additional copies of this
Offer to Purchase, the Letter of Transmittal or other related tender offer
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
THE DATE OF THIS OFFER TO PURCHASE IS JULY 10, 2000.
QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER
Q: WHO IS OFFERING TO BUY MY SECURITIES?
A: The offer is being made by NS Acquisition Corp., a newly formed Delaware
corporation (the "Purchaser"). The Purchaser is a wholly-owned subsidiary of
Heico Holding, Inc. ("Parent"), a Delaware corporation that is a holding
company. Parent is controlled by Xxxxxxx X. Xxxxxxx, Xx. and his family. See
"Certain Information Concerning Purchaser and Parent."
Q: WHAT SECURITIES ARE SOUGHT IN THE OFFER?
A: We are making the offer for any and all shares of common stock of the
Company. See "Introduction."
Q: HOW MUCH IS THE PURCHASER OFFERING TO PAY AND WHAT IS THE FORM OF
PAYMENT?
A: We are offering to pay $1.00 per share in cash, without interest. See
"Introduction."
Q: DOES THE PURCHASER HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
A: Yes. Parent will make the funds available to Purchaser necessary to
acquire the shares in the offer. See "Source and Amount of Funds."
Q: IS THE PURCHASER'S FINANCIAL CONDITION RELEVANT TO MY DECISION ON WHETHER
TO TENDER IN THE OFFER?
A: No. Since we are paying you cash for your shares and the offer is not
subject to any financing condition, we do not believe that the financial
condition of the Purchaser or the Parent is important to your decision to tender
in the offer. See "Source and Amount of Funds."
Q: HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
A: You have until 12:00 midnight, New York City time, on the expiration date
of August 4, 2000 to tender your shares. We will purchase all properly tendered
shares promptly following the expiration date if the conditions to our offer are
then met. After making these purchases, we may continue for a limited period of
time to purchase shares submitted to us. On the other hand, if the conditions to
our offer are not met on the expiration date, we may extend the offer. See
"Terms of the Offer."
Q: HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
A: If the offer is extended past August 4, 2000, we will make a public
announcement of the new expiration date. See "Terms of the Offer."
Q: WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
A: We are not obligated to purchase any shares which are validly tendered
unless that number of shares represents at least a majority of the shares then
outstanding. Furthermore, we are not obligated to purchase any shares which are
validly tendered if, among other things, there has occurred a material adverse
change in the condition of the Company, if the Company has filed for, admitted
or consented to bankruptcy or insolvency or been adjudicated bankrupt or
insolvent, the Company has materially breached its obligations, covenants or
agreements under the Agreement and Plan of Merger, dated June 26, 2000, between
the Purchaser, Parent, and the Company (the "Merger Agreement"), if the consent
and waiver of Foothill Capital Corporation shall not have been obtained, or if
there has occurred a material breach of any representation or warranty of the
Company contained in the Merger Agreement. See "Certain Conditions of the
Offer."
Q: HOW DO I TENDER MY SHARES?
A: If you hold your shares "of record," you can tender your shares by
sending the enclosed letter of transmittal together with your certificates
evidencing your shares to the depositary, EquiServe Trust Company at the address
listed on the enclosed letter of transmittal. See "Procedures for Tendering
Shares."
If your broker holds your shares in "street name" for you, you must direct
your broker to tender. Please contact your broker.
Q: UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
A: You can withdraw tendered shares at any time prior to 12:00 midnight, New
York City time, on the expiration date of August 4, 2000. If the expiration date
is extended, you can withdraw tendered shares at any time prior to the new
expiration date. See "Withdrawal Rights."
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Q: HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
A: You can withdraw shares that you have already tendered by sending a
notice of withdrawal to the Depositary. See "Withdrawal Rights."
Q: WHAT DOES MY BOARD OF DIRECTORS THINK OF THE OFFER?
A: The Company's Board of Directors, by unanimous vote of all directors
present at a meeting on June 26, 2000, approved the Merger Agreement and
determined that the Offer and the Merger are fair to and in the best interests
of the shareholders of the Company (other than Parent and its subsidiaries) and
recommended that all shareholders of the Company accept the Offer and tender all
their Shares pursuant to the Offer. See "Introduction."
Q: WILL THE COMPANY CONTINUE AS A PUBLIC COMPANY?
A: No. If the offer is consummated, the Purchaser intends to conclude a
proposed second step merger with the Company in which the Company would become a
wholly owned subsidiary of Parent and all shareholders of the Company who did
not tender their shares would receive $1.00 in cash for each share. See "Purpose
and Structure of the Offer and the Merger; Plans for the Company."
You should also be aware that, if the offer is consummated, the number of
shareholders of the Company may be so small that the Company shares may not be
eligible for trading on the American Stock Exchange or any other national
securities exchange. Also, depending on the remaining number of shareholders,
the Company may cease to comply with SEC rules governing publicly-held
companies.
Q: IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
A: Shareholders not tendering in the Offer will receive in the Merger the
same amount of cash per share which they would have received had they tendered
their shares in the Offer or if dissenter's rights are available, and if you
choose to exercise your dissenter's rights and you comply with the applicable
legal requirements, you will be entitled to the fair value of your shares.
Therefore, if the Merger takes place, the difference to you between tendering
your shares and not tendering your shares is that you will be paid earlier if
you tender your shares in the Offer. If the Offer is consummated and the number
of shares acquired by Purchaser pursuant to the Offer is at least 90% of the
outstanding shares, Purchaser will immediately commence a merger of the
Purchaser with and into the Company under Delaware and Indiana law without
soliciting approval of the Company's shareholders. See "Purpose and Structure of
the Offer and the Merger; Plans for the Company."
Q: WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
A: On June 26, 2000, the last trading day before we announced the Merger
Agreement, the last sale price of the Company's common stock reported on the
American Stock Exchange was $1 3/4 per share. We advise you to obtain a recent
quotation for the Company's common stock in deciding whether to tender your
shares. See "Price Range of Shares".
Q: IF I OBJECT TO THE PRICE BEING OFFERED, WILL I HAVE APPRAISAL RIGHTS?
A: No. Dissenter's rights are not available in the Offer. However, if you
choose not to tender and the Offer is consummated, dissenter's rights may be
available in the proposed Merger of Purchaser and the Company if, at the date
fixed to determine the shareholders entitled to notice of and to vote on the
proposed Merger, the Common Stock is not registered on a national securities
exchange or traded on the Nasdaq National Market. If dissenter's rights are
available, you choose to exercise your dissenter's rights and you comply with
the applicable legal requirements, you will be entitled to the fair value of
your shares. The fair value may be more or less than $1.00 per share. See
"Certain Legal Matters; Regulatory Approvals."
Q: WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
A: If you have more questions about the tender offer, you should contact:
XXXXXX & CO., INC.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Call Collect: (000) 000-0000
Banks and Brokerage Firms Call: (000) 000-0000
SHAREHOLDERS PLEASE CALL: (000) 000-0000
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TABLE OF CONTENTS
PAGE
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QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER.............. i
INTRODUCTION...................................................... 1
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedures for Tendering Shares............................. 5
4. Withdrawal Rights........................................... 7
5. Certain Federal Income Tax Consequences..................... 8
6. Price Range Of Shares....................................... 9
7. Effect of the Offer on the Market for the Common Stock;
Exchange Act Registration; Margin Regulations............. 9
8. Certain Information Concerning the Company.................. 10
9. Certain Information Concerning Purchaser and Parent......... 11
10. Background of the Offer and the Merger; Contacts with the
Company................................................... 12
11. Purpose and Structure of the Offer and the Merger; Plans for
the Company............................................... 15
12. Source and Amount of Funds.................................. 25
13. Dividends and Distributions................................. 26
14. Certain Conditions of the Offer............................. 26
15. Certain Legal Matters; Regulatory Approvals................. 27
16. Fees and Expenses........................................... 31
17. Miscellaneous............................................... 31
SCHEDULE I--INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF PARENT AND PURCHASER................ I-1
iii
To the Holders of Common Stock of
National-Standard Company:
INTRODUCTION
NS Acquisition Corp., a Delaware corporation ("Purchaser"), hereby offers to
purchase any and all of the issued and outstanding shares of common stock, par
value $0.01 per share (the "Shares" or "Common Stock"), of National-Standard
Company, an Indiana corporation (the "Company"), at a price of $1.00 per Share,
net to the seller in cash without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which, as they may be amended and
supplemented from time to time, together constitute the "Offer").
Holders of Shares whose Shares are registered in their own name and who
tender directly to EquiServe Trust Company, N.A., as Depositary (the
"Depositary"), will not be obligated to pay brokerage fees or commissions or,
except as set forth in Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer.
Purchaser will pay all charges and expenses incurred in connection with the
Offer. See "Fees and Expenses."
The Purchaser is a wholly-owned subsidiary of Heico Holding, Inc., a
Delaware corporation ("Parent"). Parent is controlled by Xxxxxxx X. Xxxxxxx, Xx.
and his family.
As of June 23, 2000, there were 5,788,569 Shares outstanding.
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated as of June 26, 2000 (the "Merger Agreement"), between Purchaser,
Parent and the Company. The Merger Agreement provides that, among other things,
as promptly as practicable after the expiration of the Offer and the
satisfaction of the other conditions contained in the Merger Agreement,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving Corporation").
At the effective time of the Merger (the "Effective Time"), except for Shares
held by holders exercising their rights to dissent, if any, in accordance with
Chapter 44 of the Indiana Business Corporation Law (the "IBCL") and Shares held
by Parent or a subsidiary of Parent, each then outstanding Share will, by virtue
of the Merger and without any action on the part of the holder thereof, be
cancelled and be converted into the right to receive an amount per Share (the
"Merger Consideration") equal to the Offer Price, without interest. The terms
and conditions of the Merger Agreement are more fully described in "Purpose and
Structure of the Offer and the Merger; Plans for the Company."
Subject to dissenters' rights under the IBCL, upon consummation of the
Merger, Shares not tendered in the Offer shall be converted into the right to
receive the Merger Consideration, without interest. If the Common Stock is not
then listed, Shareholders who hold their Shares at the time of the Merger and
who fully comply with the statutory dissenters' procedures set forth in the
IBCL, if available, will be entitled to dissent from the Merger and have the
fair value of their Shares (which may be more than, equal to, or less than the
Merger Consideration) judicially determined and paid to them in cash pursuant to
the procedures prescribed by the IBCL. You should also be aware that, if the
Offer is consummated, the number of shareholders of the Company may be so small
that the Company shares may not be eligible for trading on the American Stock
Exchange or any other national securities exchange. Also, depending on the
remaining number of shareholders, the Company may cease to comply with SEC rules
governing publicly-held companies. NO DISSENTERS RIGHTS ARE AVAILABLE TO
SHAREHOLDERS IN CONNECTION WITH THE OFFER. See "Certain Legal Matters;
Regulatory Approvals."
The Offer is conditioned upon the satisfaction of certain conditions
described in "Certain Conditions of the Offer."
The Company's Board of Directors (the "Board of Directors"), by unanimous
vote of all directors present at a meeting duly called and held on June 26,
2000, has (i) determined that the Merger Agreement and the transactions
contemplated thereby (including the Offer and the Merger) are advisable, fair to
and in the best interests of the Company's stakeholders, including shareholders,
(ii) approved and adopted the Merger Agreement and the transactions contemplated
thereby (including the Offer and the Merger), and (iii) resolved to recommend
that the Company shareholders accept the Offer and vote for the approval and
adoption of the Merger Agreement and the Merger. The Merger Agreement provides
that the Company's Board of Directors has agreed to continue to recommend that
the Company shareholders accept the Offer and vote for the approval and adoption
of the Merger Agreement and the Merger, subject to their fiduciary duties in
accordance with certain provisions in the Merger Agreement.
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The Company has advised Purchaser that U.S. Bancorp Xxxxx Xxxxxxx Inc.
("U.S. Bancorp Xxxxx Xxxxxxx"), financial advisor to the Board of Directors, has
delivered to the Board of Directors its written opinion, dated June 26, 2000, to
the effect that, as of that date and based on and subject to the matters
described in the opinion, the $1.00 per Share cash consideration to be received
in the Offer and the Merger by the holders of Shares was fair, from a financial
point of view, to such holders. A copy of U.S. Bancorp Xxxxx Xxxxxxx'x opinion,
which sets forth the assumptions made, procedures followed, matters considered
and limitations on the review undertaken by U.S. Bancorp Xxxxx Xxxxxxx, is
included as Annex A to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") filed with the Securities and Exchange
Commission (the "Commission"). The Schedule 14D-9 is being mailed to the
shareholders concurrently with the mailing of this Offer to Purchase. The
Schedule 14D-9 may be inspected at, and copies may be obtained from, the same
places and in the manner set forth in "Certain Information Concerning the
Company." Holders of Shares are urged to read the opinion carefully in its
entirety.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
2
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for any and all Shares
validly tendered prior to the Expiration Date and not withdrawn in accordance
with the procedures set forth below in "Withdrawal Rights" as soon as
practicable after the Expiration Date. The term "Expiration Date" means 12:00
midnight, New York City time, on August 4, 2000, unless and until Purchaser, in
its sole discretion (but subject to the terms of the Merger Agreement), shall
have extended the period of time during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in "Certain Conditions
of the Offer" (the "Offer Conditions"). If the Offer Conditions are not
satisfied, Purchaser, subject to the terms of the Merger Agreement, expressly
reserves the right (but is not obligated) to (i) terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
shareholders, (ii) waive all the unsatisfied conditions and, subject to
complying with the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn,
(iii) extend the Offer and, subject to the right of shareholders to withdraw
Shares until the Expiration Date, retain the Shares that have been tendered
during the period or periods for which the Offer is extended or (iv) amend the
Offer.
Subject to the terms of the Merger Agreement, the applicable rules and
regulations of the Commission and applicable law, Purchaser expressly reserves
the right, in its sole discretion, at any time and from time to time, to waive
any Offer Condition or otherwise amend the Offer in any respect by giving oral
or written notice of such waiver or amendment to the Depositary. Notwithstanding
the foregoing, Purchaser has agreed that, without the prior written consent of
the Company, no changes may be made that (i) reduce the maximum number of Shares
subject to the Offer, (ii) decrease the Offer Price, (iii) change the form of
consideration payable in the Offer, (iv) amend or modify the Offer Conditions in
any manner adverse to the holder of Shares or (v) waive the requirement for the
consent of Foothill Capital Corporation ("Foothill") to have been obtained at
the Expiration Date.
In the Merger Agreement, Purchaser may, without the consent of the Company,
extend the Offer at any time from time to time: (i) if at the then scheduled
Expiration Date of the Offer any of the Offer Conditions shall not have been
satisfied or waived, until such time as all such conditions shall have been
satisfied or waived; (ii) for any period required by any statute or rule,
regulation, interpretation or position of the Commission applicable to the
Offer; (iii) for any period required by applicable law in connection with an
increase in the consideration to be paid pursuant to the Offer; and (iv) from
time to time, for an aggregate period of not more than ten business days (for
all such extensions under this clause (iv)) beyond the latest expiration date
that would be permitted under clause (i), (ii) or (iii) of this sentence. During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer. Tendering shareholders will continue to have the right to
withdraw any tendered Shares during any such extension. See "Withdrawal Rights."
Under no circumstances will interest be paid on the purchase price for tendered
Shares, whether or not the Offer is extended.
Any such extension, delay, termination, waiver or amendment will be
followed, as promptly as practicable, by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m.,
Eastern time, on the next business day after the previously scheduled Expiration
Date in accordance with the public announcement requirements of Rule 14e-1 of
the Exchange Act. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to stockholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which Purchaser may
choose to make any public announcement, Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the Dow Xxxxx News Service or as otherwise
may be required by applicable law.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material Offer Condition,
Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following material changes in the terms of the offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of
3
securities sought, a minimum period of ten business days is generally required
to allow for adequate dissemination to stockholders and investor response.
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, provide a subsequent offering period ranging from three
business days to twenty business days in length following the purchase of Shares
on the initial Expiration Date (the "Subsequent Offering Period"). Purchaser
currently intends to provide a Subsequent Offering Period of at least three
business days if Purchaser own less than 90% of the outstanding Shares following
expiration of the initial offering period. Purchaser may extend the Subsequent
Offering Period until the earlier of (i) twenty business days from the initial
Expiration Date and (ii) the time at which Parent and Purchaser become the owner
of at least 90% of the outstanding Shares. A Subsequent Offering Period is an
additional period of time, following the expiration of the Offer and the
purchase of Shares in the Offer, during which shareholders may tender Shares
that were not tendered prior to the expiration of the Offer. A Subsequent
Offering Period is not an extension of the Offer, which already will have been
completed.
During a Subsequent Offering Period, tendering shareholders will not have
withdrawal rights and Purchaser will promptly purchase and pay for any Shares
tendered at the same price paid in the Offer. Rule 14d-11 provides that
Purchaser may provide a Subsequent Offering Period so long as, among other
things, (i) the initial twenty business day period of the Offer has expired;
(ii) the Purchaser offers the same form and amount of consideration for Shares
in the Subsequent Offering Period as in the Offer; (iii) Purchaser accepts and
promptly pays for all Shares tendered during the Offer prior to the Expiration
Date; (iv) Purchaser announces the results of the Offer, including the
approximate number and percentage of Shares deposited in the Offer, no later
than 9:00 a.m. Eastern time on the next business day after the Expiration Date
and immediately begins the Subsequent Offering Period; and (v) Purchaser
immediately accepts and promptly pays for Shares as they are tendered during the
Subsequent Offering Period. In the event Purchaser elects to extend the
Subsequent Offering Period, it will notify shareholders of the Company
consistent with the requirements of the Commission.
PURSUANT TO RULE 14D-7 UNDER THE EXCHANGE ACT, NO WITHDRAWAL RIGHTS APPLY TO
SHARES TENDERED DURING THE SUBSEQUENT OFFERING PERIOD. THE OFFER PRICE WILL BE
PAID TO SHAREHOLDERS TENDERING SHARES IN THE SUBSEQUENT OFFERING PERIOD.
The Company has provided Purchaser with the Company's shareholder lists and
security position listings in respect of the Shares for the purpose of
disseminating this Offer to Purchase, the Letter of Transmittal and other
relevant materials to shareholders. This Offer to Purchase, the Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares whose names appear on the Company's list of shareholders and will be
furnished, for subsequent transmittal to beneficial owners of Shares, to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's list of
shareholders or, where applicable, who are listed as participants in the
security position listing of The Depository Trust Company.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered prior to the Expiration Date (and not
properly withdrawn in accordance with "Withdrawal Rights") as promptly as
practicable after the Expiration Date. Subject to applicable rules of the
Commission and the terms of the Merger Agreement, Purchaser expressly reserves
the right, in its discretion, to delay acceptance for payment of, or payment
for, Shares in order to comply, in whole or in part, with any applicable law.
See "Terms of the Offer," and "Certain Legal Matters; Regulatory Approvals."
The reservation by Purchaser of the right to delay the acceptance or
purchase of, or payment for, the Shares is subject to the provisions of
Rule 14e-1(c) under the Exchange Act, which requires the Purchaser to pay the
consideration offered or to return the Shares deposited by, or on behalf of,
shareholders, promptly after the termination or withdrawal of the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by The Depository Trust Company of (i) the
certificates evidencing such Shares (the "Certificates") or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in "Procedures for Tendering
Shares", (ii) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed with any required signature
guarantees, or an Agent's Message (as defined below) in connection with a
4
book-entry transfer and (iii) any other documents required to be included with
the Letter of Transmittal under the terms and subject to the conditions thereof
and of this Offer to Purchase.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant in the Book-Entry Transfer
Facility tendering the Shares that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that Purchaser may
enforce such agreement against such participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares. Upon the terms
and subject to the conditions of the Offer, payment for Shares accepted pursuant
to the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payments from Purchaser and transmitting payments to such tendering
shareholders whose Shares have been accepted for payment.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT OR EXTENSION
OF THE EXPIRATION DATE.
If any validly tendered Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer, or if Certificates are
submitted evidencing more Shares than are tendered, certificates evidencing
Shares not purchased will be returned, without expense, to the tendering
shareholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedure set forth in "Procedures for Tendering Shares", such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration or termination of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, PURCHASER INCREASES THE CONSIDERATION TO
BE PAID PER SHARE PURSUANT TO THE OFFER, PURCHASER WILL PAY SUCH INCREASED
CONSIDERATION FOR ALL SUCH SHARES PURCHASED PURSUANT TO THE OFFER, WHETHER OR
NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN CONSIDERATION.
Purchaser reserves the right to assign to any direct or indirect wholly
owned subsidiary of Purchaser the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES
VALID TENDER OF SHARES. In order for Shares to be validly tendered pursuant
to the Offer, a shareholder must, prior to the Expiration Date, either
(i) deliver to the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase (a) a properly completed and duly executed
Letter of Transmittal with any required signature guarantees, (b) the
Certificates representing Shares to be tendered and (c) any other documents
required to be included with the Letter of Transmittal under the terms and
subject to the conditions thereof and of this Offer to Purchase, (ii) cause such
shareholder's broker, dealer, commercial bank or trust company to tender
applicable Shares pursuant to the procedures for book-entry transfer described
below or (iii) comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Shares by (i) causing such securities to be
transferred in accordance with the Book-Entry Transfer Facility's procedures
into the Depositary's account and (ii) causing the Letter of Transmittal to be
delivered to the Depositary
5
by means of an Agent's Message. Although delivery of Shares may be effected
through book-entry transfer, either the Letter of Transmittal, properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must, in any case, be transmitted to and received by the Depositary
prior to the Expiration Date at one of its addresses set forth on the back cover
of this Offer to Purchase, or the tendering shareholder must comply with the
guaranteed delivery procedures described below. Delivery of documents or
instructions to the Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
SIGNATURE GUARANTEE. All signatures on a Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other firm which is a bank, broker, dealer, credit
union or savings association (each of the foregoing being referred to as an
"Eligible Institution" and collectively as "Eligible Institutions"), unless the
Shares tendered thereby are tendered (i) by the registered holder of the Shares,
if the holder has not completed the box labeled "Special Delivery Instructions"
or the box labeled "Special Payment Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. See Instruction 1 to the
Letter of Transmittal.
If a Certificate is registered in the name of a person other than the signer
of the Letter of Transmittal, or if payment is to be made, or a Certificate not
accepted for payment or not tendered is to be returned to, a person other than
the registered holder(s), then the Certificate must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Certificate, with the signature(s) on such
certificate or stock powers guaranteed as described above. See Instructions 1, 5
and 7 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Certificates are not immediately available or
time will not permit all required documents to reach the Depositary on or prior
to the Expiration Date or the procedures for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all the
following guaranteed delivery procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary as provided below prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer, together with a properly completed and duly executed Letter of
Transmittal with any required signature guarantee (or, in the case of a
book-entry transfer, a Book-Entry Confirmation along with an Agent's
Message) and any other documents required by such Letter of Transmittal, are
received by the Depositary within three Trading Days after the date of
execution of the Notice of Guaranteed Delivery. A "Trading Day" is any day
on which the American Stock Exchange is open for business.
Any Notice of Guaranteed Delivery may be delivered by hand, transmitted by
facsimile transmission or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
OTHER REQUIREMENTS. Notwithstanding any other provision hereof, payment for
Shares accepted for payment pursuant to the Offer will, in all cases, be made
only after timely receipt by the Depositary of (i) certificates evidencing such
Shares or a Book-Entry Confirmation of the delivery of such Shares (unless
Purchaser elects, in its sole discretion, to make payment for such Shares
pending receipt of the Certificates or a Book-Entry Confirmation, if available,
with respect to such Certificates), (ii) a properly completed and duly executed
Letter of Transmittal with any required signature guarantees (or, in the case of
a book-entry transfer, an Agent's Message) and (iii) any other documents
required by the Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY PURCHASER, REGARDLESS OF
ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
TENDER CONSTITUTES AN AGREEMENT. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering shareholder and Purchaser on the terms and subject to the
conditions of the Offer.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including, but not limited to, time of receipt) and acceptance for
payment of any tendered Shares pursuant to any of the procedures described above
will be determined by Purchaser, in its sole discretion, whose determination
will be final and binding on all parties. Purchaser
6
reserves the absolute right to reject any or all tenders of any Shares
determined by it not to be in proper form or if the acceptance for payment of,
or payment for, such Shares may, in the opinion of Purchaser's counsel, be
unlawful. Purchaser also reserves the absolute right, in its sole discretion, to
waive any of the Offer Conditions (subject to the terms of the Merger Agreement)
or any defect or irregularity in any tender with respect to Shares of any
particular shareholder, whether or not similar defects or irregularities are
waived in the case of other shareholders. No tender of Shares will be deemed to
have been validly made until all defects and irregularities have been cured or
waived. None of Parent, Purchaser or any of their respective affiliates, the
Depositary, or any other person or entity will be under any duty to give any
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal (or delivering
an Agent's Message) as set forth above, a tendering shareholder irrevocably
appoints each designee of Purchaser as such shareholder's attorney-in-fact and
proxy, with full power of substitution, to vote in such manner as such
attorney-in-fact and proxy (or any substitute thereof) shall deem proper in its
sole discretion, and to otherwise act (including pursuant to written consent) to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by Purchaser (and any and all
dividends, distributions, rights or other securities issued or issuable in
respect of such Shares on or after August 4, 2000). All such proxies shall be
considered coupled with an interest in the tendered Shares and shall be
irrevocable. This appointment will be effective if, when, and only to the extent
that, Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
acceptance for payment, all prior proxies given by such shareholder with respect
to such Shares and other securities will, without further action, be revoked,
and no subsequent proxies may be given (and, if given, will not be deemed
effective). The designees of Purchaser will, with respect to the Shares and
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of such shareholder as they in their sole
discretion may deem proper at any annual, special, adjourned or postponed
meeting of the Company's shareholders, by written consent in lieu of any such
meeting or otherwise. Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon Purchaser's acceptance
for payment of such Shares, Purchaser must be able to exercise all rights
(including, without limitation, all voting rights) with respect to such Shares
and receive all dividends and distributions.
BACKUP WITHHOLDING. Under United States federal income tax law, the amount
of any payments made by the Depositary to shareholders (other than corporate and
certain other exempt shareholders) pursuant to the Offer may be subject to
backup withholding tax at a rate of 31%. To avoid such backup withholding tax
with respect to payments made pursuant to the Offer, a non-exempt, tendering
shareholder must provide the Depositary with such shareholder's correct taxpayer
identification number and certify under penalties of perjury that such
shareholder is not subject to backup withholding tax by completing the
Substitute Form W-9 included as part of the Letter of Transmittal. If backup
withholding applies with respect to a shareholder or if a shareholder fails to
deliver a completed Substitute Form W-9 to the Depositary or otherwise establish
an exemption, the Depositary is required to withhold 31% of any payments made to
such shareholder. See "Certain Federal Income Tax Consequences of the Offer" in
this Offer to Purchase and the information set forth under the heading
"Important Tax Information" contained in the Letter of Transmittal.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after September 7, 2000, or at such later time as
may apply if the Offer is extended.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
shareholders are entitled to withdrawal rights as described below. Any such
delay will be an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn, and the name of the registered
holder of such Shares, if different from that of the person who tendered such
Shares. If Certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the
7
Depositary, then, prior to the physical release of such Certificates, the serial
numbers shown on such Certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares have been tendered for the account of an
Eligible Institution. Shares tendered pursuant to the procedure for book-entry
transfer as set forth in "Procedures for Tendering Shares" may be withdrawn only
by means of the withdrawal procedures made available by the Book-Entry Transfer
Facility, must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares and must otherwise
comply with the Book-Entry Transfer Facility's procedures.
Withdrawals of tendered Shares may not be rescinded without Purchaser's
consent and any Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by
Purchaser in its sole discretion, which determination will be final and binding.
None of Parent, Purchaser or any of their affiliates, the Depositary, or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
Any Shares properly withdrawn may be re-tendered at any time prior to the
Expiration Date by following any of the procedures described in "Procedures for
Tendering Shares."
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO HOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER
OR WHOSE SHARES ARE CONVERTED INTO THE RIGHT TO RECEIVE CASH IN THE MERGER. THE
SUMMARY IS BASED ON THE PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), APPLICABLE CURRENT AND PROPOSED UNITED STATES TREASURY
REGULATIONS ISSUED THEREUNDER, JUDICIAL AUTHORITY AND ADMINISTRATIVE RULINGS AND
PRACTICE, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY WITH RETROACTIVE EFFECT,
AT ANY TIME AND, THEREFORE, THE FOLLOWING STATEMENTS AND CONCLUSIONS COULD BE
ALTERED OR MODIFIED. THE DISCUSSION DOES NOT ADDRESS HOLDERS OF SHARES IN WHOSE
HANDS SHARES ARE NOT CAPITAL ASSETS, NOR DOES IT ADDRESS HOLDERS WHO HOLD SHARES
AS PART OF A HEDGING, "STRADDLE," CONVERSION OR OTHER INTEGRATED TRANSACTION, OR
WHO RECEIVED SHARES UPON CONVERSION OF SECURITIES OR EXERCISE OF WARRANTS OR
OTHER RIGHTS TO ACQUIRE SHARES OR PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK
OPTIONS OR OTHERWISE AS COMPENSATION, OR TO HOLDERS OF SHARES WHO ARE IN SPECIAL
TAX SITUATIONS (SUCH AS INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, FINANCIAL
INSTITUTIONS, UNITED STATES EXPATRIATES OR NON-U.S. PERSONS). FURTHERMORE, THE
DISCUSSION DOES NOT ADDRESS THE TAX TREATMENT OF HOLDERS WHO EXERCISE
DISSENTERS' RIGHTS IN THE MERGER, NOR DOES IT ADDRESS ANY ASPECT OF FOREIGN,
STATE OR LOCAL TAXATION OR ESTATE AND GIFT TAXATION.
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL
INFORMATIONAL PURPOSES ONLY. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH
HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE
APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH SHAREHOLDER AND THE
PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION
AND EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash in exchange for Shares pursuant to the Offer, the
proposed Merger or upon the exercise of dissenter's rights will be taxable for
federal income tax purposes and may also be taxable under applicable state,
local or foreign tax laws. A shareholder who receives cash will generally
recognize gain or loss for federal income tax purposes in an amount equal to the
difference, if any, between the amount of cash received by the shareholder and
the shareholder's adjusted tax basis in the Shares exchanged therefor. Gain or
loss must be determined separately for each block of Shares exchanged (for
example, Shares acquired at the same cost in a single transaction). Such gain or
loss will be capital gain or loss (provided that the Shares are held as capital
assets) and any such capital gain or loss will be long term if, as of the date
of the exchange, the Shares were held for more than one year.
The foregoing discussion may not be applicable to certain types of
shareholders or Shares, including shareholders who acquired Shares pursuant to
the exercise of options or otherwise as compensation, individuals who are not
citizens or residents of the United States, and foreign corporations, Shares
held as part of a straddle, hedge, conversion transaction, synthetic security or
other integrated investment, or entities that are otherwise subject to
8
special tax treatment under the Code (such as dealers in securities or foreign
currency, insurance companies, regulated investment companies, tax-exempt
entities, financial institutions, and investors in pass-through entities).
All shareholders tendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to Purchaser and the Depositary). Noncorporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
6. PRICE RANGE OF SHARES
The primary market for the Shares is the American Stock Exchange. The ticker
symbol for the Shares is "NSD." The following table sets forth, for the
Company's fiscal periods indicated, the high and low sales prices per share of
Common Stock as reported on the American Stock Exchange Composite Transaction
Reporting System. The Company did not pay cash dividends on its Common Stock
during the periods set forth below.
HIGH LOW
------------------ ------------------
1998:
First Quarter............................................. 8 1/16 5 1/8
Second Quarter............................................ 6 7/8 5 5/16
Third Quarter............................................. 6 1/8 4 13/16
Fourth Quarter............................................ 5 3 1/16
1999:
First Quarter............................................. 3 15/16 2 1/2
Second Quarter............................................ 4 1/8 3
Third Quarter............................................. 6 7/16 2 7/8
Fourth Quarter............................................ 5 7/8 2 3/8
2000:
First Quarter............................................. 4 1/16 2 1/2
Second Quarter............................................ 3 1/2 1 3/4
Third Quarter............................................. 2 1/2 7/8
Fourth Quarter (through July 7, 2000)..................... 15/16 7/8
On June 26, 2000, the last full trading day prior to the public announcement
of the Offer, the closing market price per Share on the American Stock Exchange
was $1 3/4. On July 7, 2000, the last full trading day prior to the date of this
Offer to Purchase, the closing market price per Share on the American Stock
Exchange was $ 7/8. Shareholders are urged to obtain current market quotations
for the Company's Common Stock prior to tendering any Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON STOCK; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
MARKET FOR SHARES. The purchase of Shares pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and could adversely
affect the liquidity and market value of the remaining Shares held by the
public.
STOCK QUOTATION. Shares are traded primarily on the American Stock
Exchange. According to published guidelines of the American Stock Exchange, the
Shares might no longer be eligible for quotation on the American Stock Exchange
if, among other things, the number of Shares publicly held was less than
200,000, there were fewer than 300 holders of round lots, the aggregate market
value of the publicly held Shares was less than $1,000,000, or the total
Stockholders' Equity was less than $2,000,000 if Company had losses in 2 of the
most recent 3 years or $4,000,000 if losses in 3 of the most recent 4 years.
Shares held directly or indirectly by directors, officers or beneficial owners
of more than 10 percent of the Shares are not considered as being publicly held
for this purpose. According to the Company, as of July 7, 2000, there were 1,595
holders of record of Shares (not including beneficial holders of Shares in
street name), and as of July 7, 2000, there were 5,788,569 Shares outstanding.
You should also be aware that, if the Offer is consummated, the number of
shareholders of the Company may be so small that the Company shares may not be
eligible for trading on the American Stock Exchange or any other national
securities exchange.
If the Shares were to cease to be quoted on the American Stock Exchange, the
market for the Shares could be adversely affected. It is possible that the
Shares would be traded or quoted on other securities exchanges or in the
over-the-counter market, and that price quotations would be reported by such
exchanges, or through Nasdaq or other
9
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of shareholders and/or
the aggregate market value of the Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act and other
factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration under the Exchange Act may be terminated upon
application of the Company to the Commission if the Shares are neither listed on
a national securities exchange nor held by 300 or more holders of record.
Termination of registration under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its shareholders and
to the Commission and would make certain provisions of the Exchange Act no
longer applicable to the Company, such as the short-swing profit recovery
provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a
proxy statement pursuant to Section 14(a) of the Exchange Act in connection with
shareholders' meetings, the related requirement of furnishing an annual report
to shareholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act may be impaired or eliminated. Parent intends to seek to cause
the Company to apply for termination of registration of the Common Stock under
the Exchange Act as soon after the consummation of the Offer as the requirements
for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities," as such
term is defined under the regulations of the Federal Reserve Board, which has
the effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
the Offer, the Shares would no longer constitute "margin securities" for the
purposes of the margin regulations of the Federal Reserve Board and therefore
could no longer be used as collateral for loans made by brokers. In any event,
the Shares will cease to be "margin securities" if registration of the Shares
under the Exchange Act is terminated.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company and its subsidiaries currently operate in the wire and
engineered products segments. The Company produces tire bead wire, welding wire,
stainless steel spring and specialty wire, and plated wire. These wire products
are supplied to major markets consisting of tire, spring, automotive component,
electric component, telecommunications and fabricated metal products. The
Company also produces wire cloth, nonwoven metal fiber materials, filters and
inflator housings for automotive air bag inflators, which are sold primarily to
automotive air bag manufacturers. The principal address of the Company is
0000 Xxxxxxxx Xxxx, Xxxxx, Xxxxxxxx 00000. The Company's telephone number is
(000) 000-0000.
AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities, any material interests
of such persons in transactions with the Company and other matters is required
to be disclosed in reports filed with the Commission. These reports and other
information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, and also should be available for inspection and copying
at prescribed rates at regional offices of the Commission located at Seven World
Trade Center, New York, New York 00000 xxx 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000. Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. Electronic filings
filed through the Commission's Electronic Data Gathering, Analysis and
Retrieval, or XXXXX, system, including those made by or in respect of the
Company, are publicly available through the Commission's home page on the
Internet at xxxx://xxx.xxx.xxx.
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9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT
PURCHASER. Purchaser, a newly incorporated Delaware corporation, has not
conducted any business other than in connection with the Offer and the Merger
Agreement. All of the issued and outstanding shares of capital stock of
Purchaser are held by Parent. The principal address of Purchaser is c/o Heico
Holding, Inc., 0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000. The
telephone number is (000) 000-0000.
PARENT. Parent, a Delaware corporation, is a privately owned holding
company headquartered in Chicago, Illinois. Activities include construction
equipment and services, heavy machinery, materials handling, and other
interests. The principal executive offices of Parent are located at 0000 Xxxxx
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000. The telephone number is
(000) 000-0000.
Because the consideration offered consists solely of cash, the Offer is not
subject to any financing condition, and the offer is for all of the outstanding
Shares, Purchaser believes the financial condition of Parent, Purchaser and
their affiliates is not material to a decision by a holder of Shares whether to
sell, tender or hold Shares pursuant to the Offer.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Purchaser and Parent are set forth in Schedule I to this
Offer to Purchase.
During the last five years, none of Purchaser or Parent, or, to the best of
their knowledge, any of the persons listed in Schedule I to this Offer to
Purchase (i) has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors) or (ii) was a party to any judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
Except as described in this Offer to Purchase (i) none of Purchaser or
Parent, or, to the best of their knowledge, any of the persons listed in
Schedule I to this Offer to Purchase, or any associate or majority-owned
subsidiary of Parent, Purchaser or the Company, beneficially owns or has any
right to acquire, directly or indirectly, any equity securities of the Company
and (ii) none of Purchaser or Parent, or to the best of their knowledge, any of
the persons or entities referred to above has effected any transaction in such
equity securities during the past 60 days.
Except as described in this Offer to Purchase, none of Purchaser or Parent,
or, to the best of their knowledge, any of the persons listed in Schedule I to
this Offer to Purchase has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or voting of such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, since January 1, 1998, none of Purchaser or
Parent, or to the best of their knowledge, any of the persons listed on
Schedule I to this Offer to Purchase has had any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since January 1, 1998, there have been no contacts, negotiations or
transactions between any of Purchaser, Parent, or their affiliates or, to the
best of their knowledge, any of the persons listed in Schedule I to this Offer
to Purchase, on the one hand, and the Company or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
AVAILABLE INFORMATION. None of Purchaser or Parent is subject to the
informational reporting requirements of the Exchange Act, nor are any of them
required to file reports and other information with the Commission relating to
its businesses, financial condition or other matters. Except as otherwise
disclosed in this Offer to Purchase, none of Purchaser or Parent have made, or
are making, any provision in connection with the Offer or the Merger to grant
unaffiliated security holders access to the files of any of Purchaser or Parent.
INTEREST IN SECURITIES OF THE SUBJECT COMPANY. The Heico Companies, L.L.C.,
a Delaware limited liability company and an affiliate of Parent ("Heico"), is
the beneficial owner of 25,500 Shares (representing 0.4% of the outstanding
Shares). Xxxxxxx X. Xxxxxxx, Xx. is the President and Chief Executive Officer of
Heico. Except for Heico (i) none of Purchaser or Parent, or, to the best of
their knowledge, any of the persons listed in Schedule I to this Offer to
Purchase, or any associate or majority-owned subsidiary of Parent, Purchaser or
the Company, beneficially owns or has any right to acquire, directly or
indirectly, any equity securities of the Company and (ii) none of Purchaser or
Parent, or to the best of their knowledge, any of the persons or entities
referred to above has effected any transaction
11
in such equity securities during the past 60 days. The Shares owned by Heico
shall be cancelled upon the occurrence of the Merger.
The address of Heico is 0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000. The telephone number is (000) 000-0000.
10. BACKGROUND OF THE OFFER AND THE MERGER; CONTACTS WITH THE COMPANY
BACKGROUND
In September 1998, the Company engaged U.S. Bancorp Xxxxx Xxxxxxx to
evaluate strategic alternatives available to the Company. In October 1998,
U.S. Bancorp Xxxxx Xxxxxxx presented an analysis of a proposal it had received
from Heico in which Xxxxx Wire Corporation ("Xxxxx Wire"), a subsidiary of
Heico, would acquire control of the Company, with shareholders of the Company
having the option to either retain shares in a new entity formed by the merger
of Xxxxx Wire and the Company, or receive $5.00 per share in cash. The Board of
Directors determined at that time that the Company should remain independent,
and the Company did not pursue Heico's proposal.
The Company continued to implement its strategy of focusing on its core
businesses and seeking to improve its financial structure through cost
reductions, increased productivity and the sale of non-core assets. The Company
was able to pay down significant amounts of debt through these sales. However,
adverse pricing developments at both the supplier and customer levels continued
to have a negative effect on earnings and cash flow, while putting a strain on a
reduced borrowing base.
On December 23, 1999, Xxxxxx X. Xxxxxx, President and Chief Executive
Officer of the Company, received a letter from Xxxxxxx X. Xxxxxxx of First San
Francisco Corporation, an investment banker representing Heico. The letter
stated that Xx. Xxxxxxx believed a possible business combination consistent with
Heico's October 1998 proposal continued to have economic merit. On January 4,
2000, Xx. Xxxxxx received a telephone call from Xx. Xxxxxxx and advised him that
his inquiry would be reported to the Board of Directors of the Company at its
next scheduled meeting on January 27, 2000. Following a discussion of these
contacts at that Board of Directors meeting, the Board of Directors authorized
Xx. Xxxxxx to pursue exploratory discussions.
On February 10, 2000, Xx. Xxxxxx met with Xx. Xxxxxxx and Xx. Xxxxxxx at the
Company's executive offices. They discussed the Company's capital needs and
different possible structures for a transaction.
On February 11, 2000, Xx. Xxxxxx reported on this meeting to the Executive
Committee of the Board of Directors (Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx and
Xx. Xxxxxx). The Executive Committee authorized Xx. Xxxxxx to pursue the matter
further with the Parent.
On February 13, 2000, at an American Wire Producers Association Meeting in
San Diego, California, Xx. Xxxxxx held informal discussions with the chief
executive officer of another company which had earlier (in 1997) expressed an
interest in a business combination with the Company. Such chief executive
officer indicated that any merger discussions with the Company should be
deferred to a future date.
On February 18, 2000, Xx. Xxxxxx sent a confidentiality agreement to
Xxxxxx X. Xxxxxxx, a representative of the Parent. The confidentiality agreement
was executed and returned on February 24, 2000.
On March 7, 2000, Xx. Xxxxxx, Xxxxxxx X. Xxxx, Vice President and Chief
Financial Officer of the Company, and Xxx Xxxxxxxxx, Director of Accounting at
the Company, met in Chicago with Xx. Xxxxxxx and X. X. Xxxxxxxxxxx, President of
Davis Wire. At this meeting each party presented summary financial information.
The parties agreed that there was enough economic potential in the possible
combination of the businesses to warrant further mutual due diligence.
From March 15 to March 17, 2000, representatives of Xxxxx Wire conducted
plant visits at the Company's Niles, Michigan and Stillwater, Oklahoma plants.
On March 17, 2000, Xx. Xxxxxx and Xxx Xxxxxxxxxx, General Manager of the
Company's Bead Wire Group, and Xxxxx Xxxxxx, General Manager of the Company's
Weld Wire Group, visited Xxxxx Wire's Kent, Washington facility. They met there
with Xxxx Xxxxx, Vice President and General Manager of Xxxx Xxxxx Wire, and Xxx
Xxxxxx, Vice President of Sales for Xxxx Xxxxx Wire.
On March 20, 2000, Xx. Xxxxxx received from Xx. Xxxxxxxxxxx a due diligence
request list.
On March 21, 2000, Xx. Xxxxxx participated in a conference call with
Xx. Xxxxxxxxxxx and Xxxxxxx X. Xxxxxxx, Director and Assistant Secretary of the
Parent, addressing the conduct of further due diligence and the possible
structure of a transaction.
12
At a regularly scheduled meeting of the Board of Directors on March 22,
2000, Xx. Xxxxxx updated the Board of Directors on details of discussions to
date with the Parent. The Board authorized Xx. Xxxxxx to continue discussions.
From April 3 to April 7, 2000, representatives of Xxxxx Wire conducted
financial due diligence at the Company's headquarters. At an April 5, 2000
meeting of the Executive Committee of the Board, Xx. Xxxxxx reported the results
of discussions with Xxxxx Wire to date and was authorized to continue such
discussions.
On May 1, 2000, Xx. Xxxxxx met with Xx. Xxxxxxxxxxx. Xx. Xxxxxxxxxxx
reviewed various alternative transactions involving a combination of Xxxxx Wire
and the Company. In addition, the preliminary results of an environmental study
that Xxxxx Wire had conducted were reviewed. This study suggested possible
environmental liabilities significantly in excess of amounts the Company
considered appropriate.
From May 2 to May 13, 2000, Xx. Xxxxxx and Xx. Xxxxxxxxxxx had several
communications regarding the valuations of the Company and Xxxxx Wire and assets
and liabilities of these companies.
From May 15 to May 19, 2000, financial, operational, legal and environmental
representatives of the Company conducted due diligence reviews at the Xxxxx Wire
Facilities in Irwindale, California, Hayward, California, and Kent, Washington.
On May 23, 2000, Xx. Xxxxxx and Xx. Xxxx met with Xx. Xxxxxxx and
Xx. Xxxxxxxxxxx at the Parent's offices in Chicago. At that meeting,
representatives of the Parent, after expressing continued concern over future
environmental liabilities of the Company, proposed a transaction in which the
Company and Xxxxx Wire (which for purposes of the proposed transactions would
include Xxxxx Wire's affiliates, Jaenson Wire Corporation and Xxxxx Wire Pueblo
Corporation) would merge, with Company shareholders receiving stock in the
surviving company, with no option to receive cash. Heico's proposal provided for
a formula to determine the percentage of shares to be held by Company
shareholders based on each entity's earnings before interest, taxes,
depreciation and amortization ("EBITDA"), and liabilities. At that time, the
proposal contemplated Company shareholders receiving between 8% and 13% of the
surviving company. On that date, Xxxxx Wire gave Xx. Xxxxxx a letter summarizing
these terms.
At a meeting on May 24, 2000, Xx. Xxxxxx reported to the Board on the
background leading up to the latest proposal from the Parent and the
alternatives management had explored, and summarized the Parent's proposal. The
Company's board of directors authorized management to pursue a transaction with
the Parent.
On May 26, 2000, Xx. Xxxxxx, Xxxxxxx X. Xxxxxx, General Counsel and
Secretary of the Company, and Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx of Xxxx, Xxxx &
Xxxxx LLC, the Company's outside counsel ("Xxxx Xxxx"), participated in a
conference telephone call with Xx. Xxxxxxx and Xxxxx Xxxxxxx of XxXxxxxxx,
Xxxx & Xxxxx, the Parent's outside counsel ("XxXxxxxxx"). During that call
Xx. Xxxxxxx and Xx. Xxxxxxx indicated that, in order to make the transaction
more tax-efficient for the Parent and certain of its affiliates, the Parent was
suggesting a revised structure in which Company shareholders would receive
shares in a corporation that would manage, and whose sole asset would be an
ownership interest in, a limited liability company, which would in turn own and
operate the businesses of Xxxxx Wire, Xxxxxxx Corporation, Xxxxx Wire Pueblo
Corporation and the Company. During that call, the Parent's representatives
indicated that a draft merger agreement would be provided to the Company by the
end of the following week.
Also on May 26, the Company renewed its engagement of U.S. Bancorp Xxxxx
Xxxxxxx.
On June 2, 2000, one of the Company's principal suppliers suspended
production of the Company's order because it believed the Company was not in
compliance with its current payment obligations. After discussions with the
Company, the supplier resumed production; however, management of the Company
determined that it would be desirable to announce a transaction as soon as
possible in order to reassure suppliers as to the Company's continued viability.
Xx. Xxxxxx contacted Xx. Xxxxxxxxxxx to suggest that the parties execute a
letter of intent pending the completion of a definitive merger agreement.
Xx. Xxxxxxxxxxx indicated that might be possible, and therefore on June 2, 2000,
Xxxx Xxxx prepared and delivered to Xx. Xxxxxxxxxxx and Xx. Xxxxxxx a draft
letter of intent. Also on June 2, 2000, XxXxxxxxx forwarded to the Company and
Xxxx Xxxx a draft merger agreement.
On June 7, 2000, Xxxx Xxxx provided comments on the first draft of the
merger agreement to XxXxxxxxx. On June 8, 2000, XxXxxxxxx provided its version
of a letter of intent to the Company and Xxxx Xxxx.
On June 9, 2000, Xx. Xxxxxx, Xxxxxxx Xxxxxx of the Advisor, and
Xxxxxx. Xxxxxxx and Xxxxxx of Xxxx Xxxx met with Xx. Xxxxxxx, Xx. Xxxxxxx and
Xxxx Xxxxx of XxXxxxxxx. After a discussion of each party's proposed version of
a letter of intent, the Company's representatives determined that the provisions
the Parent would require in a letter of intent (including, among other things, a
break-up fee of $2,000,000) were not acceptable. The parties agreed instead
13
to proceed directly to negotiate and sign a definitive agreement as promptly as
practicable. The parties then negotiated with respect to the draft merger
agreement.
On June 12, 2000, XxXxxxxxx provided the Company and Xxxx Xxxx with a
revised draft of the merger agreement.
On June 13, 2000, Xx. Xxxxxxxxxxx and Xxxx Xxxxx, Chief Financial Officer of
Davis Wire, and Xxxx Xxxxx a representative of Parent, met with Xx. Xxxxxx,
Xx. Xxxx and representatives of the Advisor at the Company's offices in Niles,
Michigan. At this meeting, the Parent's representatives indicated that their
pricing formula was then indicating that Company shareholders would receive only
4-5% of the stock in the new merged entity. The representatives of the Advisor
indicated that they would need more information regarding Xxxxx Wire, as well as
a more definitive understanding of the consideration to be received by Company
shareholders, for the Board to evaluate the transaction.
On June 14, 2000, Xxxx Xxxx provided XxXxxxxxx with comments on the most
recent draft merger agreement. Among other things, these comments reflected
various concerns the Company and its counsel had with the proposed structure of
the transaction and with the Parent's proposal that the consideration to be
received by Company shareholders not be fixed at the time of signing, but would
be subject to adjustment prior to closing. In light of those concerns,
Xx. Xxxxxx of the Advisor contacted Xx. Xxxxxxx on June 13, 2000 and again the
next day to discuss those concerns and to ask whether the Parent would consider
a cash transaction. Xx. Xxxxxx and Xx. Xxxxxxx had several subsequent
discussions concerning the consideration in a cash transaction, with
Xx. Xxxxxxx indicating that the price would be less than $1.00 per share, and
Xx. Xxxxxx requesting that the Parent consider a price closer to then-current
trading prices of the Common Stock. On June 16, 2000, Xx. Xxxxxxx told
Xx. Xxxxxx that he would make a proposal for a cash transaction on June 19,
2000. Also on June 16, 2000, the Company provided disclosure schedules related
to the draft merger agreement to the Parent.
In addition, during the week of June 12 to June 16, 2000, management of the
Company had discussions with the Company's lender, Foothill Capital Corporation
("Foothill") in which Foothill indicated that the Company had reached the limits
of its borrowing capacity under its current arrangements, and that Foothill
would not consider providing any additional financing unless the Company
executed an agreement providing for some form of restructuring or business
combination.
On June 19, 2000, the Parent sent a proposed letter of intent to the Company
suggesting a cash merger at $1.00 per share. Management directed Xx. Xxxxxx to
attempt to negotiate a higher price, and directed Xxxx Xxxx to ask XxXxxxxxx to
provide a draft agreement reflecting the new structure. On June 22, 2000,
XxXxxxxxx provided a new draft agreement contemplating a cash merger at $1.00
per share.
During the week of June 19 to June 23, 2000, Xx. Xxxxxx and Xx. Xxxx held
discussions with the other company that in February had requested that any
merger discussions be deferred. While that company indicated that it continued
to be interested in a possible transaction with the Company, it also indicated
that it would not be able to consider a transaction on a timetable that came at
all close to what the Company's management believed was required.
On the morning of June 23, 2000, the Board of Directors met to further
consider the proposed transaction. All of the directors were present except for
Xx. Xxxxx, who was out of the country and unreachable. Xx. Xxxxxx participated
by telephone. The directors were provided with copies of the draft merger
agreement as well as related materials. Management made presentations concerning
the Company's financial situation and the background of the transaction. Xxxx
Xxxx explained the terms of the transaction and reviewed related legal issues.
Representatives of U.S. Bancorp Xxxxx Xxxxxxx then presented materials to the
directors analyzing the financial aspects of the transaction, and indicated that
they were prepared to deliver a fairness opinion concerning the transaction as
proposed. After further discussion among the directors, management was directed
to attempt to finalize the transaction, but to continue to seek a higher price,
all subject to director review over the weekend of the materials received at the
meeting.
Later that afternoon, Xx. Xxxxxx conveyed to Xx. Xxxxxxx the Board's desire
for a higher price. Xx. Xxxxxxx responded that Parent would not increase its
$1.00 per share offer. Also later that afternoon, Xx. Xxxxxxx of XxXxxxxxx
informed Xxxx Xxxx that the Parent now wished to pursue a cash tender offer
structure. Still later on June 23, 2000, Xxxx Xxxx sent a marked copy of the
latest draft of the merger agreement to XxXxxxxxx.
14
On June 24, 2000, representatives of XxXxxxxxx and Xxxx Xxxx negotiated by
phone concerning the Company's latest comments on the merger agreement. Later on
June 24, 2000, XxXxxxxxx distributed a revised draft of the merger agreement
reflecting the tender offer structure.
On the morning of June 26, 2000, representatives of Xxxx Xxxx and XxXxxxxxx
negotiated concerning the provisions of the final version of the merger
agreement. A meeting of the Board of Directors of the Company was held by
telephone conference call at 3:00 p.m. Central time on June 26 (with all
directors present except Xx. Xxxxx, who was still out of the country and
unreachable), at which the revised terms of the transaction (including the
tender offer structure and its effects) were discussed. After this discussion
the Advisor delivered its fairness opinion. The Board then (i) determined that
the Merger Agreement and the transactions contemplated thereby (including the
Offer and the Merger) are advisable, fair to and in the best interests of the
Company's stakeholders, including shareholders, (ii) approved and adopted the
Merger Agreement and the transactions contemplated thereby (including the Offer
and the Merger), subject to finalization of definitive terms, and
(iii) resolved to recommend that the Company shareholders accept the Offer and
vote for the approval and adoption of the Merger Agreement and the Merger. After
further negotiations between Xxxx Xxxx and XxXxxxxxx that afternoon and evening,
the Merger Agreement was finalized and executed by the parties that night.
The Company announced the execution of the Merger Agreement before the
opening of the market on the morning of June 27, 2000.
11. PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY
PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER. The purpose of the Offer
and the Merger is to enable Parent, through Purchaser, to acquire the entire
equity interest in the Company. The Offer will enable Parent to acquire as many
outstanding Shares as possible as a first step in acquiring the entire equity
interest in the Company. Through the Merger, Parent will acquire all Shares not
purchased pursuant to the Offer. Upon consummation of the Merger, the Company
will be entirely owned by Parent.
Under the IBCL, the approval of the Board of Directors and the affirmative
vote of the holders of a majority of the outstanding Common Stock is required to
approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger. The approval of the shareholders can be received
either by vote or by consent of the majority of the outstanding Common Stock.
Furthermore, if the Offer is consummated and Purchaser acquires at least 90% of
the outstanding Shares pursuant to the Offer or otherwise, Purchaser would be
able to effect the Merger pursuant to the "short-form" merger ("Short-Form
Merger") provisions of Chapter 23-1-40-4 of the IBCL, without any action by any
other shareholder of the Company or the Board of Directors. In such event,
Purchaser intends to effect a Short-Form Merger as promptly as practicable
following the purchase of Shares in the Offer.
If the number of Shares tendered in the Offer represents less than a
majority of the Company's outstanding Common Stock, the Purchaser will not be
obligated to purchase the tendered Shares or proceed with the Merger. However,
Purchaser may waive the condition to the Offer that the number of Shares
tendered represents at least 50% of the Company's outstanding Common Stock.
Purchaser may then submit the Merger Agreement and the consummation of the
transactions contemplated thereby for approval and adoption by a vote of the
shareholders of the Company. If Purchaser acquires more than 50% of the
outstanding Common Stock, Purchaser's vote in favor of the approval and adoption
of the Merger Agreement and the transactions contemplated thereby would be
sufficient to satisfy the requirements under the IBCL to effect the Merger.
PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER. Pursuant to the
Merger Agreement, upon completion of the Offer, Parent and Purchaser intend to
effect the Merger in accordance with the Merger Agreement.
Upon consummation of the Merger, the Company will become a privately held
corporation. Accordingly, public shareholders will not have the opportunity to
participate in the earnings and growth of the Surviving Corporation after the
consummation of the Merger and will not have any right to vote on corporate
matters. In addition, public shareholders will not be entitled to share in any
premium which might be payable by an unrelated third-party acquiror of all of
the issued and outstanding shares of Common Stock in a sale transaction, if any,
occurring after the consummation of the Merger. No such transactions are pending
at this time. However, such public shareholders will not face the risk of losses
generated by the Surviving Corporation's operations or any decrease in the value
of the Surviving Corporation after the consummation of the Merger.
The Shares are currently traded on the American Stock Exchange. However, as
a result of the Merger, the Company will be entirely owned by Parent and there
will be no public market for the Shares. Following the
15
consummation of the Merger, Shares will no longer be quoted on the American
Stock Exchange and Purchaser intends to terminate the registration of the Shares
under the Exchange Act. Accordingly, after the Merger there will be no publicly
traded equity securities of the Company. Moreover, the Company will no longer be
required to file periodic reports with the Commission under the Exchange Act,
and will no longer be required to comply with the proxy rules of Regulation 14A
under Section 14 under the Exchange Act. In addition, the Company's officers,
directors and 10% shareholders will be relieved of the reporting requirements
and restrictions on "short-swing" trading contained in Section 16 of the
Exchange Act with respect to the Shares. See "Effect of the Offer on the Market
for the Common Stock; Exchange Act Registration; Margin Regulations." It is
expected that, if Shares are not accepted for payment by Purchaser pursuant to
the Offer and the Merger is not consummated, the Company's current management,
under the general direction of the Board of Directors, will continue to manage
the Company as an ongoing business.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time, and the officers of the Company immediately prior
to the Effective Time, will be the directors and the officers, respectively, of
the Surviving Corporation after the Merger, until their respective successors
are elected or appointed and qualified in accordance with applicable law.
In addition, the Merger Agreement provides that promptly upon the purchase
of and payment for any Shares by Purchaser which represent at least a majority
of the outstanding Shares, Purchaser shall be entitled to designate such number
of directors, rounded up to the next whole number, on the Board of Directors as
is equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Parent pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Purchaser bears to the total number of Shares then outstanding. The
Company shall, upon request of Purchaser, use its reasonable best efforts
promptly either to increase the size of its Board of Directors, including by
amending the By-laws of the Company if necessary to so increase the size of such
Board of Directors, or secure the resignations of such number of its incumbent
directors, or both, as is necessary to enable Purchaser's designees to be so
elected or appointed to the Board of Directors, and shall use its reasonable
best efforts to cause Purchaser's designees to be so elected or appointed at
such time. At such time, the Company shall, upon the request of Purchaser, also
cause persons designated by Purchaser to constitute the same percentage (rounded
up to the next whole number) as is on the Board of Directors of (i) each
committee of the Company's Board of Directors, (ii) each board of directors (or
similar body) of each subsidiary of the Company, and (iii) each committee (or
similar body) of each such board. The Company's obligations to appoint designees
to the Board of Directors shall be subject to Section 14(f) of the Exchange Act.
The Company shall take, at its expense, all action necessary to effect any such
election, and shall include in the Schedule 14D-9 the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder.
It is currently expected that the business and operations of the Surviving
Corporation after the Merger will be conducted substantially as they are
currently being conducted by the Company. Other than by virtue of the Merger and
the other transactions contemplated by the Merger Agreement and except as
otherwise described above or elsewhere in this Offer to Purchase, Parent and
Purchaser have no current plans or proposals that relate to or would result in:
(i) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Surviving Corporation or any of its subsidiaries;
(ii) a sale or transfer of a material amount of assets of the Surviving
Corporation or any of its subsidiaries; (iii) any material change in the
Surviving Corporation's capitalization or dividend policy or indebtedness;
(iv) any change in the management of the Surviving Corporation, the composition
of the Board of Directors or any change in any material term of the employment
contract of any executive officer; or (v) any other material change in the
Surviving Corporation's corporate structure or business. However, the Surviving
Corporation's management will review proposals or may propose the acquisition or
disposition of assets or other changes in the Surviving Corporation's business,
corporate structure, capitalization, management or policy that it considers to
be in the best interests of the Surviving Corporation and its shareholders.
Management may, from time to time, evaluate and revise the Surviving
Corporation's business, operations and properties and make such changes as are
deemed appropriate.
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement,
which is incorporated herein by reference and a copy of which has been included
as an exhibit to the Schedule TO. The Merger Agreement may be inspected at, and
copies may be obtained from, the same places and in the manner set forth in
"Certain Information Concerning the Company".
16
THE OFFER. The Merger Agreement provides for the commencement of the Offer.
The obligation of Purchaser to commence the Offer and to accept for payment, and
to pay for, any shares of Common Stock tendered pursuant to the Offer, is
subject to the satisfaction of certain conditions that are set forth below the
caption "Certain Conditions of the Offer" (such conditions, the "Offer
Conditions"). Purchaser may waive any of the Offer Conditions or make any other
changes in the terms and conditions of the Offer without the prior written
consent of the Company. Notwithstanding the foregoing, Purchaser has agreed
that, without the prior written consent of the Company, no changes may be made
that (i) reduce the maximum number of Shares subject to the Offer,
(ii) decrease the Offer Price, (iii) change the form of consideration payable in
the Offer, or (iv) amend or modify the Offer Conditions in any manner adverse to
the holders of Shares, or (v) waive the requirement for the Foothill Consent to
have been obtained at the expiration of the Offer. Under the terms of the Merger
Agreement, Purchaser may, without the consent of the Company, extend the Offer
at any time from time to time: (i) if at the then scheduled expiration date of
the Offer any of the Offer Conditions shall not have been satisfied or waived,
until such time as all such conditions shall have been satisfied or waived;
(ii) for any period required by any statute or rule, regulation, interpretation
or position of the Commission applicable to the Offer; (iii) for any period
required by applicable law in connection with an increase in the consideration
to be paid pursuant to the Offer; and (iv) from time to time, for an aggregate
period of not more than ten business days (for all such extensions under this
clause (iv)) beyond the latest expiration date that would be permitted under
clause (i), (ii) or (iii) of this sentence. If at the scheduled Expiration Date
of the Offer, all of the Offer Conditions have been satisfied, Purchaser shall
immediately accept and promptly pay for all Shares tendered.
THE MERGER. The Merger Agreement provides that, subject to the terms and
conditions set forth in the Merger Agreement and the applicable provisions of
the IBCL, Purchaser will be merged with and into the Company and the separate
existence of Purchaser will cease. The Company will be the Surviving Corporation
of the Merger and will be entirely owned by Parent. In the Merger, each share of
common stock of Purchaser outstanding immediately prior to the Effective Time
will be converted into and exchanged for one validly issued, fully paid and
non-assessable share of Common Stock, $.01 par value per share, of the Surviving
Corporation. At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Parent or
Purchaser or held by the Company, all of which shall be cancelled, and Shares
held by shareholders who perfect appraisal rights under the IBCL) will, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into the right to receive the Merger Consideration. At and after
the Effective Time, any outstanding option to purchase shares of Common Stock
(each a "Company Stock Option") or other stock-based awards of the Company
granted under the Company's plans or agreements pursuant to which stock options
or restricted stock awards or other stock-based awards of the Company have been
or may be granted (collectively, the "Company Stock Plans") and any outstanding
warrant or other right convertible or exchangeable into shares of capital stock
of the Company (each a "Company Warrant") will, in accordance with the terms of
the applicable Company Stock Plan or Company Warrant, by virtue of the Merger
and without any further action on the part of the Company, Parent, Purchaser or
the holder of any such Company Stock Option or Company Warrant, be automatically
converted into the right to receive an amount per share of Common Stock into
which such Company Stock Option (regardless of any vesting schedule) or Company
Warrant is exercisable or convertible equal to (i) the Merger consideration LESS
(ii) any applicable exercise price or conversion price with respect to such
Company Stock Option or Company Warrant as of the Effective Time. At the
Effective Time, all outstanding Company Stock Options shall be cancelled and all
Company Stock Plans shall be terminated and of no further force or effect. The
Merger Agreement provides that (subject to the provisions of the Merger
Agreement and the applicable provisions of the IBCL) the closing of the Merger
shall occur promptly following the satisfaction or, to the extent permitted
under the Merger Agreement, waiver of the conditions to the Merger set forth in
the Merger Agreement.
TREATMENT OF RESTRICTED STOCK. The Merger Agreement provides that at and
after the Effective Time, any outstanding restricted stock awards of the Company
(each a "Company Restricted Stock Award") granted under any Company Stock Plan
will, by virtue of the Merger and without any further action on the part of the
Company, Parent, Purchaser or the holder of such Company Restricted Stock Award,
entitle the holder thereof to receive an amount per share of Common Stock
covered by such Restricted Stock Award equal to the Merger Consideration and all
restrictions under such awards shall lapse as of the Effective Time.
SHAREHOLDER MEETING. The Merger Agreement provides that unless shareholder
action is taken by written consent, the Company shall call and hold a meeting of
its shareholders (the "Company Meeting") as promptly as practicable following
the purchase of Shares by Purchaser pursuant to the Offer for the purpose of
voting upon the approval of the Merger, and the Company shall use its reasonable
best efforts to hold the Company Meeting as soon as practicable after such date.
The Company shall set the record date for the Company Meeting or any action
taken by written consent for the approval of the Merger as the date on which
Purchaser becomes the record holder of all
17
Xxxxxx purchased pursuant to the Offer. Parent shall cause all Shares purchased
by Purchaser pursuant to the Offer and all other Shares owned by Parent or any
other subsidiary or affiliate of Parent to be voted in favor of the approval of
the Merger.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties by the Company with respect to (i) the due
organization, existence and the qualification, good standing, corporate power
and authority of the Company and its subsidiaries; (ii) the due authorization,
execution, and delivery of the Merger Agreement and certain ancillary documents
executed in connection therewith and the consummation of the transactions
contemplated thereby, and the validity and enforceability thereof except for any
required approval under the IBCL and the Board of Directors approval and
adoption of the Merger Agreement and the ancillary documents executed therewith
and the consummation of the transactions contemplated thereby and the Board of
Directors resolution to recommend that the shareholders accept the Offer and
vote for the approval and adoption of the Offer and the Merger; (iii) the
compliance by the Company and its subsidiaries with all applicable foreign,
federal, state or local laws, statutes, ordinances, rules, regulations, orders,
judgments, rulings and decrees of any foreign, federal, state or local judicial,
legislative, executive, administrative or regulatory body or authority, or any
court, arbitration, board or tribunal; (iv) the absence of consents and
approvals necessary for consummation by the Company of the Merger and the
absence of any violations, breaches or defaults which would result from
compliance by the Company with any provision of the Merger Agreement; (v) the
capitalization of the Company, including the number of shares of capital stock
of the Company outstanding; (vi) compliance with the Securities Act of 1933, as
amended (the "Securities Act") and the Exchange Act, in connection with each
registration statement, report, proxy statement or information statement (as
defined under the Exchange Act) prepared by the Company since September 30,
1997, the Schedule 14D-9, the information statement, if any, filed by the
Company in connection with the Offer pursuant to Rule 14f-1 under the Exchange
Act and any schedule required to be filed by the Company with the Commission or
any amendment or supplement thereto; (vii) compliance with generally accepted
accounting principles in connection with the audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company; (viii) the absence of untrue statements or omission of material facts;
(ix) the absence of certain changes or effects; (x) the absence of undisclosed
liabilities; (xi) the absence of pending or (to the knowledge of the Company)
threatened claims, actions, suits, proceedings, arbitrations, investigations or
audits; (xii) in connection with the Company's tax preparation, compliance with
all applicable tax laws, payment and filing of all taxes and no undisclosed tax
liability; (xiii) employee benefit plans; (xiv) compliance with any applicable
provision of any law, statue, ordinance or regulation; (xv) certain fees in
connection with the transactions contemplated by the Merger Agreement;
(xvi) environmental matters; (xvii) the Company and its subsidiaries are in
possession of all permits necessary for the Company or its subsidiaries to lease
and operate its properties or to carry out the business of the Company;
(xviii) in connection with material contracts, all of the contracts are valid
and in full force; (xix) receipt of the opinion of U.S. Bancorp Xxxxx Xxxxxxx;
(xx) state takeover statutes; (xxi) intellectual property matters;
(xxii) maintenance of insurance; (xxiii) the Company and its subsidiaries have
good and marketable title to their assets; (xxiv) the absence of untrue
statements of a material fact or omission of material facts in connection with
the Schedule 14D-9 to be filed by the Company; and (xxv) the absence of untrue
statements of a material fact or omission of a material fact from the
representations and warranties made by the Company in the Merger Agreement,
statements or information contained in the Company disclosure schedule or in any
information furnished by the Company to Parent pursuant to the provisions of the
Merger Agreement.
Parent has also made certain representations and warranties, including with
respect to (i) the due incorporation, existence, good standing and, subject to
certain limitations, corporate power and authority of Parent and Purchaser;
(ii) the due authorization, execution and delivery of the Merger Agreement and
certain ancillary documents executed in connection therewith and the
consummation of the transactions contemplated thereby, and the validity and
enforceability thereof; (iii) subject to certain exceptions and limitations, the
compliance by the Parent and Purchaser with any governmental body, agency,
official or authority; (iv) subject to certain exceptions and limitations, the
absence of consents and approvals necessary for consummation of the transactions
contemplated by the Merger Agreement by Parent and Purchaser and the absence of
any violations, breaches or defaults which would result from compliance by
Parent and Purchaser with any provision of the Merger Agreement; (v)subject to
certain exceptions and the absence of untrue statements of a material fact or
omission to state any material fact in connection with the information supplied
by Parent; (vi) the absence of any finders' or advisor's fees; (vii) subject to
certain exception and limitations, in connection with the Offer, the absence of
untrue statements of a material fact or omission of a material fact;
(viii) absence of any material misstatements or omissions in this Offer to
Purchase, the Schedule TO and the exhibits thereto and (ix) the sufficiency of
funds available to Purchaser for the consummation of the Offer and the Merger.
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CONDUCT UNTIL THE MERGER. The Company has agreed that from the date of the
Merger Agreement until the Effective Time, the Company and its subsidiaries
shall conduct their business in the ordinary course consistent with past
practice and shall use their reasonable best efforts to preserve intact their
business organizations and relationships with third parties. Without limiting
the generality of the foregoing, from the date of the Merger Agreement until the
Effective Time, without the prior written consent of Parent:
(i) the Company will not, and will not permit any of its subsidiaries
to, adopt or propose any change in its certificate or articles of
incorporation or by-laws;
(ii) the Company will not, and will not permit any subsidiary of the
Company to, adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than
transactions between direct and/or indirect wholly owned subsidiaries of the
Company);
(iii) the Company will not, and will not permit any subsidiary of the
Company to, issue, sell, transfer, pledge, dispose of or encumber any shares
of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of
capital stock of any class or series of the Company or any of its
subsidiaries other than issuances of Common Stock pursuant to the exercise
of Company Stock Options that are outstanding on the date of the Merger
Agreement;
(iv) the Company will not (i) split, combine, subdivide or reclassify
its outstanding shares of capital stock, or (ii) declare, set aside or pay
any dividend or other distribution payable in cash, stock or property with
respect to its capital stock;
(v) the Company will not, and will not permit any subsidiary of the
Company to, redeem, purchase or otherwise acquire directly or indirectly any
of the Company's capital stock, Company Stock Options or Company Warrants or
Company subsidiary stock options or warrants, except for repurchases,
redemptions or acquisitions required by or in connection with the terms of
any Company Stock Plan;
(vi) the Company will not amend the terms (including the terms relating
to accelerating the vesting or lapse of repurchase rights or obligations) of
any employee or director stock options or other stock based awards or any
warrants;
(vii) the Company will not, and will not permit any subsidiary of the
Company to, (i) grant any severance or termination pay to (or amend any such
existing arrangement with) any director, officer or employee of the Company
or any of its subsidiaries, (ii) enter into any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the Company or
any of its subsidiaries, (iii) increase any benefits payable under any
existing severance or termination pay policies or employment agreements,
(iv) increase, other than customary periodic increases in the ordinary
course of business, (or amend the terms of) any compensation, bonus or other
benefits payable to directors, officers or employees of the Company or any
of its subsidiaries or (v) permit any director, officer or employee who is
not already a party to an agreement or a participant in a plan providing
benefits upon or following a "change in control" to become a party to any
such agreement or a participant in any such plan;
(viii) the Company will not, and will not permit any of its subsidiaries
to, acquire a material amount of assets or property of any other person,
other than the purchase of inventory in the ordinary course of business;
(ix) the Company will not, and will not permit any of its subsidiaries
to, sell, lease, license or otherwise dispose of any material amount of
assets or property except pursuant to existing contracts or commitments or
otherwise in the ordinary course of business;
(x) except for any such change which is required by reason of a
concurrent change in GAAP, the Company will not, and will not permit any
subsidiary of the Company to, change any method of accounting or accounting
practice used by it;
(xi) the Company will not, and will not permit any subsidiary of the
Company to, enter into any joint venture, partnership or other similar
arrangement;
(xii) the Company will not, and will not permit any of its subsidiaries
to, take any action that would make any representation or warranty of the
Company in the Merger Agreement inaccurate in any material respect at, or as
of any time prior to, the Effective Time;
19
(xiii) the Company will not make or change any Tax election, settle any
audit or file any amended Tax Returns, except in the ordinary course of
business consistent with past practice; and
(xiv) the Company will not, and will not permit any of its subsidiaries
to, agree or commit to do any of the foregoing.
ACCESS TO INFORMATION. From the date of the Merger Agreement to the
Effective Time, to the extent permitted by applicable law, the Company will upon
reasonable request give Parent, its counsel, financial advisors, auditors and
other authorized representatives access to the offices, properties, books and
records of the Company and its subsidiaries during normal business hours,
furnish to Parent, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct its own
employees, counsel and financial advisors to cooperate with Parent in its
investigation of the business of the Company; provided that no investigation of
the Company's business shall affect any representation or warranty given by the
Company hereunder, and the Company shall not be required to provide any such
information if the provision of such information may cause a waiver of an
attorney-client privilege.
NO SOLICITATION. The Company has agreed in the Merger Agreement that the
Company and its subsidiaries will not, and will use its reasonable best efforts
to cause its respective officers, directors, employees, investment bankers,
consultants, attorneys, accountants, agents and other representatives not to,
directly or indirectly, take any action to solicit, initiate, encourage or
facilitate the making of any Acquisition Proposal or any inquiry with respect
thereto or engage in substantive discussions or negotiations with any Person
with respect thereto, or in connection with any Acquisition Proposal or
potential Acquisition Proposal, disclose any nonpublic information relating to
it or its subsidiaries or afford access to the properties, books or records of
it or its subsidiaries to, any Person that has made, or to such party's
knowledge, is considering making, any Acquisition Proposal; provided, however,
that, in the event that (X) the Company shall receive a Superior Proposal that
was not solicited by it and did not otherwise result from a breach under the no
solicitation provision of the Merger Agreement, (Y) prior to receipt of Company
Shareholder Approval, the Board of Directors determines in its good faith
judgment, after receiving the advice of outside counsel, that, in light of this
Superior Proposal, if the Company fails to participate in such discussions or
negotiations with, or provide such information to, the party making the Superior
Proposal, there is a reasonable possibility that such Board of Directors would
be in violation of its fiduciary duties under applicable law, and (Z) after
giving Parent three business day's notice of its intention to do so, the Company
may (i) furnish information with respect to it and its subsidiaries to the
person making such Superior Proposal pursuant to a customary confidentiality
agreement containing terms generally no less restrictive than the terms
contained in the confidentiality agreement (but not containing any exclusivity
provision and permitting the person to submit to the Board of Directors
Acquisition Proposals with respect to the Company provided that any such
Acquisition Proposal is subject to the approval of the Board of Directors)
provided that a copy of all such written information is simultaneously provided
to Parent and (ii) participate in discussions and negotiations regarding such
Superior Proposal.
The Merger Agreement provides that it does not prevent the Board of
Directors from complying with Rule 14e-2 under the Exchange Act with regard to
an Acquisition Proposal; provided that the Board of Directors shall not
recommend that the shareholders of the Company tender their shares in connection
with a tender offer except to the extent, after receiving a Superior Proposal,
the Board of Directors determines in its good faith judgment, after receiving
the advice of outside legal counsel, that, in light of the Superior Proposal,
there is a reasonable possibility that the Board of Directors would be in
violation of its fiduciary duties under applicable law if it fails to make such
a recommendation.
The Company has agreed to (A) promptly (and in no event later than 48 hours
after receipt of any Acquisition Proposal) notify (which notice shall be
provided orally and in writing and shall identify the person making the
Acquisition Proposal and set forth the material terms thereof) the Parent after
receipt of any Acquisition Proposal, or any request for nonpublic information
relating to the Company or any subsidiary of the Company or for access to the
properties, books or records of the Company or any subsidiary of the Company by
any person that has made, or to such party's knowledge may be considering
making, an Acquisition Proposal, and (B) will keep the Parent reasonably
informed of any changes to the material terms of any such Acquisition Proposal
or request. The Company has agreed to, and shall cause its subsidiaries to,
immediately cease and cause to be terminated, and use reasonable best efforts to
cause its officers, directors, employees, investment bankers, consultants,
attorneys, accountants, agents and other representatives to, immediately cease
and cause to be terminated, all discussions and negotiations, if any, that have
taken place prior to the date hereof with any persons with respect to any
Acquisition Proposal.
Under the Merger Agreement, "Acquisition Proposal" means any written offer
or proposal for, or any written indication of interest in, any (i) direct or
indirect acquisition or purchase of a business or asset of the Company or any
20
of its subsidiaries that constitutes 20% or more of the net revenues, net income
or assets of the Company and its subsidiaries, taken as a whole; (ii) direct or
indirect acquisition or purchase of 20% or more of any class of equity
securities of the Company or any of its subsidiaries whose business constitutes
20% or more of the net revenues, net income or assets of the Company and its
subsidiaries, taken as a whole; (iii) tender offer or exchange offer that, if
consummated, would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of its subsidiaries whose
business constitutes 20% or more the net revenues, net income or assets of the
Company and its subsidiaries, taken as a whole; or (iv) merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its subsidiaries whose business
constitutes 20% or more of the net revenue, net income or assets of the Company
and its subsidiaries, taken as a whole, other than the transactions contemplated
by this Agreement. Under the Merger Agreement, "Superior Proposal" means any
bona fide written Acquisition Proposal for or in respect of all of the
outstanding shares of the Common Stock (i) on terms that the Board of Directors
determines in its good faith judgment (after consultation with U.S. Bancorp
Xxxxx Xxxxxxx or another financial advisor of nationally recognized reputation
and taking into account all the terms and conditions of the Acquisition Proposal
deemed relevant by such Board of Directors, including any break-up fees, expense
reimbursement provisions, conditions to consummation, and the ability of the
party making such proposal to obtain financing for such Acquisition Proposal)
are more favorable from a financial point of view to its shareholders than the
Merger; and (ii) that constitutes a transaction that, in such Board of
Directors' judgment, is reasonably likely to be consummated on the terms set
forth, taking into account all legal, financial, regulatory and other aspects of
such proposal.
The Company agrees that it will take the necessary steps promptly to inform
its officers, directors, investment bankers, consultants, attorneys,
accountants, agents and other representatives of the obligations undertaken in
the no solicitation provision of the Merger Agreement.
FEES AND EXPENSES. Except as set forth below or as otherwise provided in
the Merger Agreement, whether or not the Offer or the Merger is consummated, all
fees, costs and expenses incurred in connection with the Merger Agreement and
the transactions contemplated by the Merger Agreement will be paid by the party
incurring such fees, costs and expenses. The Company shall pay the expenses
related to printing, filing and mailing of the proxy statements.
REASONABLE BEST EFFORTS; FURTHER ASSURANCES. The Merger Agreement provides
that,
(a) the Company and Parent shall each cooperate with the other and use
(and shall cause their respective subsidiaries to use) their respective
reasonable best efforts to promptly (i) take or cause to be taken all
necessary actions, and do or cause to be done all things, necessary, proper
or advisable under the Merger Agreement and applicable laws to consummate
and make effective the Offer and the Merger and the other transactions
contemplated by the Merger Agreement as soon as practicable, including,
without limitation, preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and
other documents and (ii) obtain all approvals, consents, registrations,
permits, authorizations and other confirmations required to be obtained from
any third party necessary, proper or advisable to consummate the Offer and
the Merger and the other transactions contemplated by the Merger Agreement.
Subject to applicable laws relating to the exchange of information, the
Company and Parent shall have the right to review in advance, and to the
extent practicable each will consult the other on, all the information
relating to the Company and its subsidiaries or Parent and its subsidiaries,
as the case may be, that appears in any filing made with, or written
materials submitted to, any third party and/or any governmental authority in
connection with the Offer and the Merger and the other transactions
contemplated by the Merger Agreement.
(b) At and after the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and deliver, in the name
and on behalf of the Company or Purchaser, any deeds, bills of sale,
assignments or assurances and to take any other actions and do any other
things, in the name and on behalf of the Company or Purchaser, reasonably
necessary to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
21
CONDITIONS TO THE MERGER.
I. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of the
Company, Parent and Purchaser to consummate the Merger are subject to the
satisfaction (or, to the extent legally permissible, waiver) of the following
conditions:
(a) the Merger Agreement and the Merger shall have been approved and
adopted by the shareholders of the Company in accordance with Indiana Law
and the Company shall have complied with the information and notice
requirements of Rule 14c-2 of the Exchange Act, if applicable;
(b) any applicable waiting period (including any extension thereof)
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 (the "HSR
Act"), as amended, relating to the Merger shall have expired or been
terminated;
(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit or enjoin the consummation of the
Merger;
(d) (i) all required approvals or consents of any governmental authority
(whether domestic, foreign or supranational) in connection with the Merger
and the consummation of the other transactions contemplated thereby shall
have been obtained (and all relevant statutory, regulatory or other
governmental waiting periods, whether domestic, foreign or supranational,
shall have expired) unless the failure to receive any such approval or
consent would not, and would not be reasonably expected to, have a material
adverse effect on Parent at or after the Effective Time and (ii) all such
approvals and consents which have been obtained shall be on terms that would
not, and would not reasonably be expected to, have a material adverse effect
on Parent at or after the Effective Time.
II. CONDITIONS TO THE OBLIGATIONS OF PARENT AND PURCHASER. The obligations
of Parent and Purchaser to consummate the Merger are subject to the satisfaction
(or, to the extent legally permissible, waiver) of the following further
conditions:
(a) (i) the Company shall have performed in all material respects all of
its obligations under the Merger Agreement required to be performed by it at
or prior to the Effective Time, (ii) the representations and warranties of
the Company contained in the Merger Agreement and in any certificate or
other writing delivered by the Company pursuant thereto shall be true and
correct in all material respects at and as of the Effective Time as if made
at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such earlier date), and (iii) Parent shall have
received a certificate signed by an executive officer of the Company to the
foregoing effect;
(b) there shall not be instituted or pending any action or proceeding by
any governmental authority (whether domestic, foreign or supranational)
before any court or governmental authority or agency, domestic, foreign or
supranational, seeking to (i) restrain, prohibit or otherwise interfere with
the ownership or operation by Parent or any subsidiary of Parent of all or
any portion of the business of the Company or any of its subsidiaries or of
Parent or any of its subsidiaries or to compel Parent or any subsidiary of
Parent to dispose of or hold separate all or any portion of the business or
assets of the Company or any of its subsidiaries or of Parent or any of its
subsidiaries; (ii) to impose or confirm limitations on the ability of Parent
or any subsidiary of Parent effectively to exercise full rights of ownership
of the shares of the Common Stock (or shares of stock of the Surviving
Corporation) including, without limitation, the right to vote any shares of
the Common Stock (or shares of stock of the Surviving Corporation) on any
matters properly presented to shareholders; or (iii) seeking to require
divestiture by Parent or any subsidiary of Parent of any shares of the
Common Stock (or shares of stock of the Surviving Corporation), if any such
matter referred in subclauses (i), (ii) and (iii) would, or would reasonably
be expected to, have a material adverse effect on Parent at or after the
Effective Time;
22
(c) there shall not be any statute, rule, regulation, injunction, order
or decree, enacted, enforced, promulgated, entered, issued or deemed
applicable to the Merger and the other transactions contemplated pursuant to
the Merger Agreement (or in the case of any statute, rule or regulation,
awaiting signature or reasonably expected to become law), by any court,
government or governmental authority or agency or legislative body,
domestic, foreign or supranational, that would, or would reasonably be
expected to, have a material adverse effect on Parent at or after the
Effective Time;
(d) since the date of the Merger Agreement, there shall not have
occurred a material adverse effect with respect to the Company, nor shall
there have occurred a change or event which would reasonably be expected to
have a material adverse effect on the Company;
(e) the Foothill consent shall have been obtained;
(f) there shall not have been a subsequent development (including any
settlement or final settlement offer from counsel for the plaintiffs) in any
action or proceeding pending on the date of the Merger Agreement relating to
the Company or any of its subsidiaries or there shall not have been
instituted any action or proceeding subsequent to the date of the Merger
Agreement that would (i) have a material adverse effect on the Company, or
(ii) make materially more costly (A) the making of the Offer, (B) the
acceptance for payment of, or payment for, some or all of the shares
pursuant to the Offer, (C) the purchase of shares pursuant to the Offer, or
(D) the consummation of the Merger; or
(g) the Company shall not have (i) petitioned or applied to any tribunal
for or consented to the appointment of a receiver, (ii) admitted in writing
its inability to pay its debts as they mature, (iii) made an assignment for
the benefit of creditors, (iv) been adjudicated bankrupt or insolvent,
(v) filed voluntarily or had filed against it a petition in bankruptcy or a
petition or an answer seeking reorganization or any arrangement with
creditors or to take advantage of any bankruptcy, reorganization,
insolvency, dissolution or liquidation law or statute, or (vi) become unable
to conduct its business, taken as a whole, substantially as currently
conducted (including the purchase of inventory and supplies and the payment
of liabilities).
III. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligation of the
Company to consummate the Merger is subject to the satisfaction (or, to the
extent legally permissible, waiver) of the following further conditions:
(a) (i) Each of Parent and Purchaser shall have performed in all
material respects all of its obligations under the Merger Agreement required
to be performed by it at or prior to the Effective Time, (ii) the
representations and warranties of Parent and Purchaser contained in the
Merger Agreement and in any certificate or other writing delivered by Parent
or Purchaser pursuant thereto shall be true and correct in all material
respects at and as of the Effective Time as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as
of such earlier date), and (iii) the Company shall have received a
certificate signed by an executive officer of Parent to the foregoing
effect;
(b) there shall not be any statute, rule, regulation, injunction, order
or decree, enacted, enforced, promulgated, entered, issued or deemed
applicable to the Merger and the other transactions contemplated thereby (or
in the case of any statute, rule or regulation, awaiting signature or
reasonably expected to become law), by any court, government or governmental
authority or agency or legislative body, domestic, foreign or supranational,
that would, or would reasonably be expected to, have a material adverse
effect on the business of the Surviving Corporation at or after the
Effective Time; and
(c) the Foothill Consent shall have been obtained.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the Merger by the
shareholders of the Company and Parent:
(a) by mutual consent of the Parent and the Company;
(b) (i) by Parent (provided that Parent is not then in material breach
of any representation, warranty, covenant or other agreement contained in
the Merger Agreement), if there has been a breach by the Company of any of
its representations, warranties, covenants or agreements contained in the
Merger Agreement in any material respect, or any such representation and
warranty shall have become untrue, in any such case such that the provision
regarding conditions to the obligations of Parent and Purchaser contained in
the Merger Agreement will not be satisfied and such breach or condition has
not been promptly cured within 30 days following receipt by the Company of
written notice of such breach;
23
(ii) by the Company (provided that the Company is not then in
material breach of any representation, warranty, covenant or other
agreement contained herein), if there has been a breach by Parent of any
of its representations, warranties, covenants or agreements contained in
this Agreement in any material respect, or any such representation and
warranty shall have become untrue, in any such case such that the
provision regarding conditions to the obligations of the Company in the
Merger Agreement will not be satisfied and such breach or condition has
not been promptly cured within 30 days following receipt by Parent of
written notice of such breach;
(c) by either Parent or the Company if any decree, permanent injunction,
judgment, order or other action by any court of competent jurisdiction or
any governmental entity preventing or prohibiting consummation of the Offer
or the Merger shall have become final and nonappealable;
(d) by either Parent or the Company if (i) the Offer shall not have been
consummated before October 23, 2000 or (ii) the Merger shall not have been
consummated before December 22, 2000, unless the failure of the Closing to
occur by such date shall be due to the failure of the party seeking to
terminate the Merger Agreement to perform or observe in all material
respects the covenants and agreements of such party set forth herein;
provided, however, that this Agreement may be extended not more than
60 days by Parent or the Company by written notice to the other party if the
Merger shall not have been consummated as a direct result of (i) the Company
or Parent having failed to receive all regulatory approvals or consents
required to be obtained by the Company or Parent with respect to the Offer
or Merger or (ii) the existence of litigation or any governmental proceeding
seeking to prevent or prohibit consummation of the Offer or the Merger;
PROVIDED FURTHER, that this Agreement may be extended up to 90 days by
Parent (and the Company agrees to such extension), in its sole discretion,
in the event the Foothill Consent shall not have been obtained prior to the
dates set forth in section (d) of the provision regarding termination in the
Merger Agreement; provided further, that the Company may not terminate this
Agreement due to the failure to obtain the Foothill Consent prior to the
expiration of the period referred to in the immediately preceding proviso.
(e) by the Company if it determines to accept a Superior Proposal;
provided that such termination under clause (e) shall not be effective
unless the Company gives notice to the Parent at least three business day
prior to acceptance of a Superior Proposal and shall not be effective until
the Company has delivered the Company breakup fee as set forth in the
provision regarding the effect of termination in the Merger Agreement
resulting in the breakup fee. The Company shall not accept a Superior
Proposal unless it terminates this Agreement.
(f) by Parent, if the Board of Directors of the Company shall have
failed to recommend or withdrawn or modified or changed in a manner adverse
to Parent its approval or recommendation of the Merger Agreement, the Offer
or the Merger, whether or not permitted by the terms hereof, or shall have
failed to call the Company Shareholder Meeting, or shall have recommended a
Superior Proposal (or the Board of Directors shall resolve to do any of the
foregoing);
(g) by Parent if the Merger Agreement shall fail to receive the
requisite vote for approval and adoption by the shareholders of the Company
at the Company's Shareholder Meeting or any adjournment or postponement
thereof (except in connection with a breach by Parent of its covenants under
the Merger Agreement).
(h) by the Company if the Agreement shall fail to receive the requisite
vote for approval and adoption by the shareholders of the Company at the
Company's Shareholder Meeting or any adjournment or postponement thereof
(except in connection with a breach by the Company of its covenants under
the Merger Agreement).
(i) by Parent if Parent or Purchaser, as the case may be, shall have
terminated the Offer, or the Offer shall have expired, without Parent or
Purchaser, as the case may be, purchasing any shares of the Common Stock
thereunder.
EFFECT OF TERMINATION. (a) In the event of the termination of the Merger
Agreement by either the Company or Parent pursuant to the provision regarding
termination under the Merger Agreement, the Merger Agreement shall forthwith
become void, there shall be no liability under the Merger Agreement on the part
of Parent or the Company, other than as provided under the sections of the
Merger Agreement regarding effect of termination, fees and expenses, the
confidentiality provisions, and except to the extent that such termination
results from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in the Merger
Agreement.
(b) In the event of termination of the Merger Agreement without
consummation of the transactions contemplated thereby by the Company
pursuant to termination by the Company if it accepts a Superior Proposal
24
then the Company shall make payment to Parent simultaneously therewith by
wire transfer of immediately available funds of a breakup fee in the amount
of $1,250,000 (the "Company Breakup Fee") plus all expenses incurred by
Parent in connection with the transactions contemplated thereby (which
expenses shall not exceed $500,000 in the aggregate).
(c) If (i) the Merger Agreement is terminated without consummation of
the transactions contemplated in the Merger Agreement by the Company if the
Agreement shall fail to receive the requisite vote for approval and adoption
by the shareholders and (ii) at the time of the vote on the Merger by the
shareholders of the Company at the Company's Shareholder Meeting or
adjournment or postponement thereof (except in connection with a breach by
the Company of its covenants under the Merger Agreement), an unsolicited
Acquisition Proposal shall have been proposed, then the Company shall
immediately make payment of the Company Breakup Fee plus all expenses
incurred by Parent in connection with the transactions contemplated thereby
(which expenses shall not exceed $500,000 in the aggregate) to the Parent by
wire transfer of immediately available funds upon consummation of an
Acquisition Proposal if such Acquisition Proposal is consummated within
twelve (12) months from the time of the vote of the shareholders of the
Company on the Merger and such consummated Acquisition Proposal is with the
party (or an affiliate of the party) which had proposed an unsolicited
Acquisition Proposal which was received by the Company prior to the
Company's shareholders' vote on the Merger.
INDEMNIFICATION. The Merger Agreement provides that the Parent will
maintain in effect for not less than six years after the Effective Time the
Company's current directors and officers insurance policies, if such insurance
is obtainable (or policies of at least the same coverage containing terms and
conditions no less advantageous to the current and all former directors and
officers of the Company), with respect to acts or failures to act prior to the
Effective Time, including acts relating to the transactions contemplated by the
Merger Agreement; provided, however, that in order to maintain or procure such
coverage, the Parent shall not be required to maintain or obtain policies
providing such coverage except to the extent such coverage can be provided at an
annual cost of no greater than 150% of the most recent annual premium paid by
the Company prior to the date of the Merger Agreement (the "Cap"); and provided,
further, that if equivalent coverage cannot be obtained, or can be obtained only
by paying an annual premium in excess of the Cap, the Parent will only be
required to obtain only as much coverage as can be obtained by paying an annual
premium equal to the Cap. Parent agrees that all rights to indemnification for
acts or omissions occurring prior to the Effective Time now existing in favor of
the current or former directors or officers of the Company and its subsidiaries
(the "Indemnified Parties") as provided in their respective articles of
incorporation or by-laws (or similar organizational documents) shall survive the
Effective Time and shall continue in full force and effect in accordance with
their respective terms. The provisions of the Merger Agreement regarding
Director and Officer liability are intended to be for the benefit of, and shall
be enforceable by, each of the Indemnified Parties, their heirs and their
representatives.
AMENDMENT. Any provision of the Merger Agreement (including the exhibits
and schedules thereto) may be amended or waived prior to the Effective Time at
any time prior to or after the receipt of the shareholder approval of the
Merger, if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Company, Parent and Purchaser, or in the case
of a waiver, by the party against whom the waiver is to be effective; provided
that after the receipt of any such approval, if any such amendment or waiver
shall by law or in accordance with the rules and regulations of the American
Stock Exchange require further approval of shareholders, the effectiveness of
such amendment or waiver shall be subject to the necessary shareholder approval.
No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
12. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The amount of
funds required by Purchaser to purchase all of the outstanding Common Stock
pursuant to the Offer and to pay related fees and expenses is expected to be
approximately $6,270,000. Purchaser will obtain these funds from Parent. To the
extent the needed funds are not available from working capital, Parent will
borrow under the loan agreement described below.
On March 31, 2000, The Heico Companies, L.L.C. and Parent (collectively, the
"Borrowers") entered into a second amended and restated credit agreement ("2000
Credit Agreement") with a group of banks. Under the terms of the 2000 Credit
Agreement, the lenders agreed to provide revolving loans from time to time of up
to $250 million, due July 30, 2003, to be used for working capital and for other
general corporate purposes. Up to $50 million of the
25
revolving credit facility can be used to support outstanding letters of credit.
Interest on the loans under the 2000 Credit Agreement is based on the agent
bank's reference rate or the Eurodollar rate plus a factor which depends on the
Borrowers' consolidated ratio of funded debt to earnings before taxes, interest,
depreciation and amortization. In addition, Borrowers pay a commitment fee on
the unused amounts of the credit facility. The revolving loans under the 2000
Credit Agreement are guaranteed by certain restricted subsidiaries of the
Borrowers and are otherwise unsecured, subject to a negative pledge covenant.
The 2000 Credit Agreement contains certain financial covenants restricting
dividend payments, repurchase of shares, investments, issuance of additional
debt, among other matters. Under the terms of the 2000 Credit Agreement,
$185.9 million was available for investments at March 31, 2000. As of March 31,
2000, the Company had outstanding letters of credit of $8 million used
principally to support insurance and bonding programs.
The margin regulations promulgated by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") place restrictions on the amount of
credit that may be extended for the purposes of purchasing margin stock,
including if such credit is secured directly or indirectly by margin stock.
Purchaser believes that the financing of the acquisition of the Shares will be
in full compliance with the margin regulations.
13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the Merger Agreement, the Company has agreed that from the date
of the Merger Agreement until the Effective Time, without the prior written
consent of Parent, it will not (i) split, combine, subdivide or reclassify its
outstanding shares of capital stock or (ii) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement, Parent
or Purchaser, as the case may be, shall not be required to accept for payment or
to pay for any shares of the Common Stock not theretofore accepted for payment
or paid for, and may terminate (subject to certain exceptions) or amend the
Offer if at any time on or after the date of the Merger Agreement and before the
acceptance of such Shares for payment or the payment therefor, any of the
following conditions exist or shall occur and remain in effect:
(a) (i) the Company shall not have performed in all material respects
all of its obligations under the Merger Agreement required to be performed
by it at or prior to the scheduled or extended expiration of the Offer,
(ii) the representations and warranties of the Company contained in the
Merger Agreement and in any certificate or other writing delivered by the
Company pursuant thereto shall not be true and correct in all material
respects at and as of the scheduled or extended expiration of the Offer as
if made at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such earlier date), and (iii) Parent shall
not have received a certificate signed by an executive officer of the
Company to the foregoing effect;
(b) there shall have been instituted or pending any action or proceeding
by any governmental authority (whether domestic, foreign or supranational)
before any court or governmental authority or agency, domestic, foreign or
supranational, seeking to (i) restrain, prohibit or otherwise interfere with
the ownership or operation by Parent or any subsidiary of Parent of all or
any portion of the business of the Company or any of its subsidiaries or of
Parent or any of its subsidiaries or to compel Parent or any subsidiary of
Parent to dispose of or hold separate all or any portion of the business or
assets of the Company or any of its subsidiaries or of Parent or any of its
subsidiaries; (ii) to impose or confirm limitations on the ability of Parent
or any subsidiary of Parent effectively to exercise full rights of ownership
of the shares of the Common Stock (or shares of stock of the Surviving
Corporation) including, without limitation, the right to vote any shares of
the Common Stock (or shares of stock of the Surviving Corporation) on any
matters properly presented to shareholders; or (iii) seeking to require
divestiture by Parent or any subsidiary of Parent of any shares of the
Common Stock (or shares of stock of the Surviving Corporation), if any such
matter referred in subclauses (i), (ii) and (iii) would, or would reasonably
be expected to, have a material adverse effect on Parent at or after the
scheduled or extended expiration of the Offer;
(c) there shall have been any statute, rule, regulation, injunction,
order or decree, enacted, enforced, promulgated, entered, issued or deemed
applicable to the Offer or the Merger and the other transactions
contemplated hereby (or in the case of any statute, rule or regulation,
awaiting signature or reasonably expected to become law), by any court,
government or governmental authority or agency or legislative body,
domestic,
26
foreign or supranational, that would, or would reasonably be expected to,
have a material adverse effect on Parent at or after the scheduled or
extended expiration of the Offer;
(d) since the date of the Merger Agreement, there shall have occurred a
material adverse effect with respect to the Company, or there shall have
occurred a change or event which would reasonably be expected to have a
material adverse effect on the Company;
(e) the consent and waiver of Foothill with respect to the Offer and the
Merger and the termination of the Company Warrant issued to Foothill shall
not have been obtained at the expiration of the Offer;
(f) there shall have been a subsequent development (including any
settlement or final settlement offer from counsel for the plaintiffs) in any
action or proceeding pending on the date of the Merger Agreement relating to
the Company or any of its subsidiaries or there shall have been instituted
any action or proceeding subsequent to the date of the Merger Agreement that
would (i) have a material adverse effect on the Company, or (ii) make
materially more costly (A) the making of the Offer, (B) the acceptance for
payment of, or payment for, some or all of the shares pursuant to the Offer,
(C) the purchase of shares pursuant to the Offer, or (D) the consummation of
the Merger;
(g) the Company shall have (i) petitioned or applied to any tribunal for
or consented to the appointment of a receiver, (ii) admitted in writing its
inability to pay its debts as they mature, (iii) made an assignment for the
benefit of creditors, (iv) been adjudicated bankrupt or insolvent,
(v) filed voluntarily or had filed against it a petition in bankruptcy or a
petition or an answer seeking reorganization or any arrangement with
creditors or to take advantage of any bankruptcy, reorganization,
insolvency, dissolution or liquidation law or statute, or (vi) become unable
to conduct its business, taken as a whole, substantially as currently
conducted (including the purchase of inventory and supplies and the payment
of liabilities);
(h) the Merger Agreement shall have been terminated in accordance with
its terms;
(i) Parent and the Company shall have agreed that Parent or Purchaser,
as the case may be, shall terminate the Offer or postpone the acceptance for
payment of or payment for Shares thereunder; or
(j) there shall not have been validly tendered and not withdrawn at the
expiration of the Offer, a number of shares of the Common Stock equal to at
least a majority of the then outstanding shares of the Common Stock.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Parent and Purchaser, in
whole or in part, at any time and from time to time, in the discretion of Parent
and Purchaser. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights will not be deemed a waiver of any right, the waiver of
such right with respect to any particular facts or circumstances shall not be
deemed a waiver with respect to any other facts or circumstances, and each right
will be deemed an ongoing right which may be asserted at any time and from time
to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered shares of the Common Stock not theretofore accepted for payment shall
promptly be returned by the Depositary to the tendering shareholders.
If the Offer Condition specified in section (g) above shall not be satisfied
due to the filing of an involuntary petition against the Company seeking the
relief specified in such section (g), Parent and Purchaser may not terminate the
Offer until thirty (30) days after the filing of such involuntary petition if
the involuntary petition shall not have been dismissed prior to that time.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
GENERAL. Except as otherwise disclosed herein, neither Parent nor Purchaser
is aware of (i) any license or regulatory permit that appears to be material to
the business of the Company and its subsidiaries, taken as a whole, that might
be adversely affected by the acquisition of Shares by Purchaser pursuant to the
Offer or the Merger or otherwise or (ii) any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser as contemplated herein. Should any such approval or other action be
required, Purchaser currently contemplates that it would seek such approval or
action. Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See "Certain Conditions of the Offer."
While, except as described in this Offer to Purchase, Purchaser does not
currently intend to delay the acceptance for payment of Shares tendered pursuant
to the Offer pending the outcome of any such matter, there can be no assurance
that any such approval or action, if needed, would
27
be obtained or would be obtained without substantial conditions, that adverse
consequences might not result to the business of the Company, Parent or
Purchaser or that certain parts of the businesses of the Company, Parent or
Purchaser might not have to be disposed of in the event that such approvals were
not obtained or any other actions were not taken.
INDIANA BUSINESS COMBINATION LAW
Chapter 43 of the IBCL establishes a five-year period beginning with the
acquisition of 10% of the voting power of the outstanding voting shares of a
"resident domestic corporation" (which definition includes the Company) during
which certain business transactions involving the acquiring shareholder are
prohibited unless, prior to the acquisition of such interest, the board of
directors of the resident domestic corporation approves the acquisition of such
interest or the proposed business combination. The Board of Directors has
approved the Merger Agreement and Purchaser's acquisition of Shares pursuant to
the Offer. Therefore, Chapter 43 does not apply to the Merger Agreement.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not believe that any state takeover statutes apply to the
Offer. Purchaser has not currently complied with any state takeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Offer or the Merger and
nothing in this Offer to Purchase or any action taken in connection with the
Offer or the Merger is intended as a waiver of such right. In the event it is
asserted that one or more state takeover laws is applicable to the Offer or the
Merger, and an appropriate court does not determine that it is inapplicable or
invalid as applied to the Offer or the Merger, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See "Conditions of the
Offer."
The Board of Directors has taken or will take the necessary action to render
control share acquisitions provisions and business combinations provisions of
Indiana Law, and any other potentially applicable anti-takeover or similar
statute or regulation inapplicable to the Merger Agreement and the transactions
contemplated hereby.
CONTROL SHARE STATUTE
A number of states (including Indiana, where the Company is incorporated)
have adopted laws and regulations applicable to attempts to acquire securities
of corporations which are incorporated, or have substantial assets,
stockholders, principal executive offices or principal places of business, or
whose business operations otherwise have substantial economic effects, in such
states. In XXXXX X. MITE CORP., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS CORP. V.
DYNAMICS CORP. OF AMERICA, the Supreme Court held that the State of Indiana may,
as a matter of corporate law and, in particular, with respect to those aspects
of corporate law concerning corporate governance, constitutionally disqualify a
potential acquirer from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders. The state law before the
Supreme Court was by its terms applicable only to corporations that had a
substantial number of holders in the state and were incorporated there.
Under Chapter 42 of the IBCL, with certain exceptions, a person proposing to
acquire or acquiring voting shares of an "issuing public corporation" (which
definition includes only corporations having at least 100 shareholders,
principal place of business, office or substantial assets within Indiana, and in
which more than 10% of its shareholders are Indiana residents, more than 10% of
its shares are owned by Indiana residents, or which have 10,000 or more
shareholders who are Indiana residents) sufficient to entitle that person to
exercise voting power within any of the ranges of one-fifth to one-third of all
voting power, more than one-third but less than one-half of all voting power, or
a majority or more of all voting power (a "control share acquisition") may give
a notice of such fact to the corporation containing certain specified data. The
acquiring person may request that the directors call a special meeting of
shareholders for the purpose of considering the voting rights to be accorded the
shares so acquired ("control shares"), and the control shares have voting rights
only to the extent granted by a resolution approved by the shareholders. The
resolution must be approved by a majority of the votes entitled to be cast by
each voting group entitled to vote separately on the proposal, excluding shares
held by the acquiring person and shares held by management. Control shares as to
which the required notice has not been filed and any control shares not accorded
full voting rights by the shareholders may be redeemed at fair market value by
the corporation if it is authorized to do so by its articles of incorporation or
bylaws before a control share acquisition has occurred (the Company is
authorized to make such a
28
redemption). Shareholders are entitled to dissenter's rights with respect to the
control share acquisition in the event that the control shares are accorded full
voting rights and the acquiring person has acquired control shares with a
majority of all voting power. The Company Board can "opt out" of the Control
Share Statute through an amendment to the By-laws.
The Company has taken action necessary to render Chapter 42 inapplicable to
the Offer. Therefore, the Purchaser believes Chapter 42 of the IBCL will not be
an impediment to consummating the proposed Merger.
DISSENTER'S RIGHTS
Chapter 44 of the IBCL sets forth certain procedures that must be followed
by any shareholder who opposes a corporation's merger and does not accept the
cash payment for the shareholder's shares provided for in the merger agreement.
By following those procedures, a shareholder may obtain a court determination of
the fair value such shares. No dissenter's rights would be available to
shareholders of the Company unless the Offer is consummated and the Parent then
seeks to consummate the Merger. Even if the Parent seeks to consummate the
Merger, dissenter's rights would not be available if the Common Stock is
registered on a national securities exchange or traded on the Nasdaq National
Market at the date fixed to determine shareholders entitled to notice of, and to
vote on, the Merger or if the Merger is consummated as a Short-Form Merger.
In order to assert dissenter's rights, the shareholder must give written
notice to the Company indicating that the shareholder intends to demand payment
for the shareholder's shares if the proposed action is taken. This notice must
be delivered before the vote is taken on the proposed Merger, and the
shareholder must not vote in favor of the proposed Merger.
Following the shareholders' meeting at which a vote is taken on the Merger
or in the event action is taken by written consent, the corporation must deliver
a written dissenter's notice to each shareholder who notified the corporation
that he or she intends to demand payment for such shares and who did not vote in
favor of the Merger. This dissenter's notice must be sent no later than 10 days
after shareholder approval of the Merger is received and must (i) state where
the payment demand must be sent and where and when share certificates must be
deposited, (ii) supply a form for demanding payment for the shares that includes
the date of the first announcement to the news media or to shareholders of the
terms of the Merger and that requires the shareholder asserting dissenter's
rights to certify whether or not the beneficial ownership of the shares was
acquired before that date; (iii) set a date by which the corporation must
receive the payment demand, which must be between 30 and 60 days after the
dissenter's notice is delivered; and (iv) be accompanied by a copy of Chapter 44
of the IBCL. A dissenting shareholder must demand payment, certify whether
beneficial ownership of the shares was acquired before the date set forth in the
dissenter's notice and deposit the shareholder's share certificates in
accordance with the terms of the dissenter's notice, to retain all other rights
as a shareholder until those rights are canceled or modified by the effect of
the Merger. A shareholder who fails to demand payment or to deposit share
certificates as required by the dissenter's notice by the respective dates set
forth therein is not entitled to receive payment for the shareholder's shares
and is considered to have voted in favor of the Merger.
If a dissenting shareholder was the beneficial owner of shares on or before
the date of the first announcement to the news media or to shareholders of the
terms of a proposed merger (a "Pre-Announcement Shareholder"), the IBCL requires
the corporation to pay that shareholder the amount that the corporation
estimates to be the fair value of the shareholder's shares. Payment is to be
made as soon as the Merger is consummated and must be accompanied by the
corporation's most recent year-end and interim financial statements, a statement
of the corporation's estimate of the fair value of the shares and a statement of
the dissenting shareholder's right to demand payment under the IBCL.
If a dissenting shareholder was not the beneficial owner of shares before
the date of the first announcement to news media or to shareholders of the terms
of the Merger (a "Post-Announcement Shareholder"), the corporation may elect to
withhold payment of the fair value of the dissenting shareholder's shares. To
the extent that payment is withheld, the corporation is required to estimate the
fair value of the dissenting shareholder's shares and to offer to pay this
amount to each Post-Announcement Shareholder who agrees to accept it in full
satisfaction of the dissenter's demand. The offer must be accompanied by a
statement of the corporation's estimate of the fair value of the shares and a
statement of the dissenting shareholder's right to demand payment under the
IBCL.
The IBCL provides that a dissenting shareholder may notify the corporation
in writing of the dissenter's own estimate of the fair value of such shares and
demand payment of the amount of that estimate (less any payment already made by
the corporation), or reject the offer (if a Post-Announcement Shareholder) and
demand payment of
29
the fair value of the shares if (i) the dissenter believes the amount paid or
offered is less than the fair value of the shares, (ii) the corporation fails to
pay Pre-Announcement Shareholders within 60 days after the date set for
demanding payment, or (iii) if the merger is not consummated, the corporation
fails to return the deposited share certificates within 60 days after the date
set for demanding payment. In order to exercise the rights granted by the IBCL,
a dissenter must notify the corporation in writing within 30 days after the
corporation made or offered payment of the dissenter's shares.
If a demand for payment by a dissenting shareholder remains unsettled within
60 days after receipt by the corporation of the payment demand, the corporation
must commence a proceeding in the circuit or superior court of the county where
its principal office is located and petition the court to determine the fair
value of the subject shares. If such a proceeding is not commenced within the
60-day period, the corporation must pay each dissenting shareholder whose demand
remains unsettled the amount demanded. All dissenting shareholders whose demands
remain unsettled must be made parties to the proceeding and must be served with
a copy of the petition. The court may appoint one or more persons as appraisers
to receive evidence and recommend a decision on the question of fair value. In
any such proceeding, each dissenting shareholder made a party is entitled to a
judgment in the amount of the difference if any between the fair value found by
the court and the amount determined by the corporation, plus interest on that
difference, in the case of a Pre-Announcement Shareholder; or the fair value,
plus accrued interest, of the dissenting shareholder's shares for which the
corporation elected to withhold payment, in the case of a Post-Announcement
Shareholder. The court in an appraisal proceeding has the authority to determine
and assess the costs of the proceeding, including the compensation and expenses
of court-appointed appraisers, in those amounts and against those parties it
deems equitable. The court also may assess fees and expenses of counsel and
experts for the parties against the corporation if the court finds that the
corporation did not substantially comply with the requirements of the IBCL, or
against any party if the court finds that the party acted arbitrarily,
vexatiously or not in good faith. The IBCL also provides for compensation of
counsel for any dissenting shareholder whose services benefited other dissenting
shareholders similarly situated, to be paid out of the amounts awarded the
dissenting shareholders who were benefited, if not assessed against the
corporation.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS UNDER THE
IBCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY SHAREHOLDERS DESIRING TO EXERCISE ANY DISSENTER'S RIGHTS AVAILABLE
UNDER THE IBCL. THE PRESERVATION AND EXERCISE OF DISSENTER'S RIGHTS REQUIRE
STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE IBCL.
ANTITRUST. Under the HSR Act, and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain transactions may
not be consummated unless certain information has been furnished to the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
the FTC and certain waiting period requirements have been satisfied. The
acquisition of Shares pursuant to the Offer is subject to these requirements.
A Notification and Report Form with respect to the Offer is expected to be
filed under the HSR Act as soon as practicable following commencement of the
Offer. Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar-day waiting period following the filing by the Parent, unless the
Antitrust Division and the FTC terminate the waiting period prior thereto. In
addition, the Antitrust Division or the FTC may extend such waiting period by
requesting additional information or documentary material from Parent. If such a
request is made with respect to the Offer, the waiting period related to the
Offer will expire at 11:59 p.m., Washington, D.C. time, on the 10th day after
substantial compliance by Parent with such request. With respect to each
acquisition, the Antitrust Division or the FTC may issue only one request for
additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. Expiration or
termination of applicable waiting periods under the HSR Act is a condition to
Purchaser's obligation to accept for payment and pay for Shares tendered
pursuant to the Offer.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of
the Company. At any time before or after Purchaser's purchase of Shares pursuant
to the Offer, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or the
consummation of the Merger or seeking the divestiture of Shares acquired by
Purchaser or the divestiture of substantial assets of Parent or its
subsidiaries, or the Company or its subsidiaries. Private parties may also bring
legal action under the antitrust laws under certain circumstances. There can be
no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, of the results thereof.
30
16. FEES AND EXPENSES
Except as set forth in this Offer to Purchase, neither Parent nor Purchaser
will pay any fees or expenses to any broker, dealer or other person for
soliciting tenders of Shares pursuant to the Offer.
Purchaser and Parent have retained EquiServe Trust Company, N.A. as the
Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the United States federal securities laws.
Purchaser and Parent have also retained Xxxxxx & Co., Inc., as the
Information Agent. The Information Agent has been retained to make solicitations
or recommendations in its role as Information Agent. The Information Agent will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the United States federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering material to their customers.
17. MISCELLANEOUS
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with such state statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with any such state statute, the Offer will not be made
to (and tenders will not be accepted from or on behalf of) the shareholders in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by one or more registered brokers or
dealers which are licensed under the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Parent or Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
Parent and Purchaser have filed with the Commission the Schedule TO,
together with exhibits, pursuant to Rule 14d-3 of the Exchange Act promulgated
thereunder, furnishing certain additional information with respect to the Offer,
and may file amendments thereto. The Schedule TO and any amendments thereto,
including exhibits, may be inspected at, and copies may be obtained from, the
same places and in the manner set forth in "Certain Information Concerning the
Company" (except that they will not be available at the regional offices of the
Commission).
July 10, 2000
NS Acquisition Corp.
31
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
HEICO HOLDING, INC. AND NS ACQUISITION CORP.
1. DIRECTORS AND EXECUTIVE OFFICERS OF HEICO HOLDING, INC.
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each director and executive officer of Heico Holding, Inc. The principal
address of Heico Holding, Inc. and the current business address for each
individual listed below is c/o Heico Holding, Inc., 0000 Xxxxx Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000. Telephone: (000) 000-0000. Unless otherwise
noted, each individual listed below is a citizen of the United States.
NAME AGE POSITION
---- -------- -----------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx......................... 63 Director, President and Chief Executive Officer
Xxxxxxx X. Xxxxxxx, Xx......................... 38 Director
Xxxxx Xxxxxxx Xxxxxxxx......................... 36 Director
Xxxxxxx X. Xxxxxxx............................. 55 Director; Assistant Secretary
Xxxxx X. Xxxx.................................. 63 Director, Executive Vice President, Chief
Financial Officer, Secretary
Xxxxxxx X. Xxxxxxx............................. 61 Executive Vice President
Xxxxxxx Xxxxxxx................................ 56 Vice President, Assistant Secretary
Xx. Xxxxxxx X. Xxxxxxx, Xx. has been President and Chief Executive Officer
of Heico Holding, Inc. since October 1997. Prior to October 1997, he was
Chairman of the Board of Heico Holding, Inc. Xx. Xxxxxxx serves as Chairman of
the board of directors of Xxxxx Wire Corporation and WorldPort
Communications, Inc. Xx. Xxxxxxx serves as Director and Chairman and Chief
Executive Officer of NS Acquisition Corporation. Xx. Xxxxxxx is the father of
Xxxxxxx Xxxxxxx, Xx. and Xxxxx Xxxxxxx Xxxxxxxx.
Xx. Xxxxxxx X. Xxxxxxx has served as a Director and Assistant Secretary of
Heico Holding, Inc. since October 1997. Xx. Xxxxxxx is also Director and
Assistant Secretary of NS Acquisition Corp. Xx. Xxxxxxx is the president of a
professional corporation that is a partner at the law firm of XxXxxxxxx, Will &
Xxxxx since 1985.
Xx. Xxxxxxx X. Xxxxxxx, Xx. has served as a Director of Heico Holding, Inc.
since October 1997. Xx. Xxxxxxx serves as a Director of Xxxxxxxxx-Ceco
Corporation. Xx. Xxxxxxx has served as the Executive Vice-President of The Heico
Companies, L.L.C. since 1997. Prior to 1997, he was President of Spartan Tool
Company, a manufacturer of sewer cleaning equipment owned by Heico
Holding, Inc. Xx. Xxxxxxx is the son of Xxxxxxx X. Xxxxxxx, Xx.
Xx. Xxxxx Xxxxxxx Xxxxxxxx has served as a Director of Heico Holding, Inc.
since October 1997. Since 1995, Xx. Xxxxxxxx has been Managing Director of Heico
Acquisitions. Xx. Xxxxxxxx is also a Director of Xxx's Foods, Inc. Xx. Xxxxxxxx
is the daughter of Xxxxxxx X. Xxxxxxx, Xx.
Xx. Xxxxx X. Xxxx has served as a Director, Executive Vice President, Chief
Financial Officer and Secretary of Heico Holding, Inc. since 1997. Prior to
1997, Xx. Xxxx served as Chief Financial Officer of Xxxxxxxxx Corporation n/k/a
Heico Holding, Inc.
Xx. Xxxxxxx X. Xxxxxxx has served as Executive Vice President of the Heico
Holding, Inc. since 1997.
Xx. Xxxxxxx Xxxxxxx has served as Vice President and Assistant Secretary of
Heico Holding, Inc. since October 1997. Prior to October 1997, Xx. Xxxxxxx
served as Vice President, General Counsel and Secretary of the Xxxxxxxxx
Corporation n/k/a Heico Holding, Inc.
I-1
2. DIRECTORS AND EXECUTIVE OFFICERS OF NS ACQUISITION CORP.
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each director and executive officer of NS Acquisition Corp. Each person
identified below has held his position since the formation of NS Acquisition
Corp. on June 26, 2000. The principal address of NS Acquisition Corp. and,
unless indicated below, the current business address for each individual listed
below is c/o Heico Holding, Inc., 0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000. Telephone: (000) 000-0000. Unless otherwise noted, each
individual listed below is a citizen of the United States.
NAME AGE POSITION
---- -------- -----------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx......................... 63 Chairman of the Board of Directors and Chief
Executive Officer
Xxxxxxx X. Xxxxxxx............................. 55 Director, Assistant Secretary
X.X. Xxxxxxxxxxx............................... 54 President, Secretary
Xx. Xxxxxxx X. Xxxxxxx, Xx. serves as Chairman and Chief Executive Officer
of NS Acquisition Corp. Xx. Xxxxxxx has been President and Chief Executive
Officer of Heico Holding, Inc. since October 1997. Prior to October 1997, he was
Chairman of the Board of Heico Holding, Inc. Xx. Xxxxxxx serves as Chairman of
the board of directors of Xxxxx Wire Corporation and WorldPort
Communications, Inc.
Xx. Xxxxxxx X. Xxxxxxx serves as Director and Assistant Secretary of NS
Acquisition Corp. Xx. Xxxxxxx has served as a Director and Assistant Secretary
of Heico Holding, Inc. since October 1997. Xx. Xxxxxxx is the president of a
professional corporation that is a partner at the law firm of XxXxxxxxx, Will &
Xxxxx since 1985.
Xx. X.X. Xxxxxxxxxxx serves as President and Secretary of NS Acquisition
Corp. He is also the President and Chief Executive Officer of Xxxxx Wire
Corporation. Xx. Xxxxxxxxxxx serves on the board of directors of QuadraMed
Corporation.
I-2
Manually signed copies of the Letters of Transmittal, properly completed and
duly signed, will be accepted. The Letter of Transmittal, Certificates and any
other required documents should be sent by each shareholder or such
shareholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of the addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
EquiServe Trust Company
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
EquiServe Trust Company EquiServe Trust Company Securities Transfers & Reporting
Corporate Actions Corporate Actions Services, Inc.
P.O. Box 9573 00 Xxxxxxxxxx Xxxxx C/O EquiServe Trust Company
Boston, MA 02205-9573 Braintree, MA 02184 000 Xxxxxxx Xxxxxx/Xxxxxxxx
Xxx Xxxx, XX 00000
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal, or other related tender offer
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
XXXXXX & CO., INC.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Call Collect: (000) 000-0000
Banks and Brokerage Firms Call: (000) 000-0000
SHAREHOLDERS PLEASE CALL: (000) 000-0000
