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EXHIBIT 99.(a)(4)
January 16, 1996
To Holders of Options to Purchase
Shares of the Company's Common Stock:
Dear Sir or Madam:
As you may know, CIMCO, Inc. (the "Company") has entered into an
Agreement and Plan of Merger (the "Merger Agreement") with M.A. Xxxxx Company
("Xxxxx"), pursuant to which a subsidiary of Xxxxx has commenced a tender offer
for all of the outstanding Common Stock of the Company for $10.50 per share.
Pursuant to the Merger Agreement, upon the successful completion of the tender
offer, a subsidiary of Xxxxx will merge with and into the Company and, as a
result, the Company will become a wholly- owned subsidiary of Xxxxx (the
"Merger"). In the Merger, all outstanding shares of Common Stock of the
Company not owned by Xxxxx or its affiliates will be converted into the right
to receive $10.50 cash, without interest thereon.
AT A MEETING HELD ON DECEMBER 19, 1995, THE BOARD OF DIRECTORS OF THE
COMPANY UNANIMOUSLY APPROVED THE MERGER AND DETERMINED THAT THE MERGER WAS FAIR
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY.
Xxxxx will not be assuming your options nor issuing options in
substitution therefor. As a result, and in accordance with the terms of the
plan or agreement under which your options were granted and the Merger
Agreement, your options will be accelerated and you will have the opportunity,
by completing and returning to the Company the enclosed Acceptance Form, to
receive the "spread" on your options, less withholding taxes, if applicable.
Specifically, in order to allow holders of options to participate in the Merger
without having to pay the exercise price under their options, the Merger
Agreement provides that all options to purchase Common Stock of the Company
will become fully vested and immediately exercisable prior to the Merger and
that each holder of options will be allowed to tender his or her options to the
Company in return for cash equal to the product of (a) the difference between
$10.50 and the exercise price of such holder's options, and (b) the number of
Shares of Common Stock of the Company covered by such options, less any
withholding taxes, if applicable.
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Accordingly, you are being asked to sign and return the enclosed
Acceptance Form. If you hold more than one Stock Option Agreement, you should
be sure that the Acceptance Form refers to each such Agreement.
TO ENSURE THAT THE MERGER PROCEEDS AS SCHEDULED, YOU ARE ASKED TO HAND
DELIVER OR FAX YOUR ACCEPTANCE FORM TO XXXXXXXX XXXX AT THE COMPANY (FAX NO.
000-000-0000) BY TUESDAY, JANUARY 23, 1996. THE EFFECTIVE TIME OF THE MERGER
IS CURRENTLY ANTICIPATED TO OCCUR ON OR AFTER JANUARY 27, 1996. IF THE MERGER
OCCURS, AND THE COMPANY HAS NOT RECEIVED YOUR ACCEPTANCE FORM(S), THE ABILITY
TO EXCHANGE YOUR OPTIONS FOR THE "SPREAD" MAY BE LOST.
Please note that unless and until the Merger is consummated, you will
continue (subject to the terms of your options and your Stock Option Agreement)
to be an option holder of the Company, and the Company will not be obligated to
pay the amount set forth above.
If you have any questions regarding these matters, please call the
undersigned at the Company at (000) 000-0000, extension 218.
Sincerely,
Xxxxxxxx Xxxx,
Vice President -
Adminstration
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ACCEPTANCE FORM
In anticipation of the merger between CIMCO, Inc., a Delaware
corporation (the "Company"), and Hanwest, Inc. ("Hanwest"), a Delaware
corporation and subsidiary of M.A. Xxxxx Company, a Delaware corporation
("Xxxxx"), the undersigned, _______________________ ("Optionee"), hereby agrees
to the cancellation by the Company of Optionee's Incentive or Nonqualified
Stock Option identified below (the "Option"). Optionee hereby represents and
warrants to the Company that the Option is as described below. Optionee agrees
not to exercise the Option (or any portion thereof) after the date hereof until
this Acceptance Form is expressly revoked by the Optionee in writing received
by the Company prior to the Payment or the Merger. Tender of this Acceptance
Form shall be deemed the tender of the Option for purposes of the plan under
which the Option was granted and the Merger Agreement between the Company and
Xxxxx. As full payment for the cancellation of the Option, Optionee shall
receive from the Company an amount in cash equal to the product of (a) the
difference between $10.50 and the exercise price of the Option, and (b) the
number of Shares of Common Stock of the Company covered by the Option, less any
withholding taxes, if applicable (the "Payment"). Optionee acknowledges that
if the Company does not merge with Hanwest, then the Option shall remain in
effect (subject to the terms thereof) and the Company shall in no way be
obligated to pay the Payment.
Optionee acknowledges that all appropriate federal, state and other tax
withholdings will be deducted from the Payment. Optionee shall be solely
responsible for all income taxes relating to the Payment. By agreeing to the
cancellation of the Option, Optionee waives any right to any notices under the
Option or the plan under which the Option was granted including, without
limitation, notices of termination of the plan or of acceleration of the
Option, and consents to the termination of such plan. Upon delivery of the
Payment to the address set forth below, or directly to Optionee, Optionee
agrees that Optionee shall have no further rights under the Option and that the
Option shall be null and void and of no further effect.
Address:__________________________ _________________________________
SIGNATURE
_________________________________ _________________________________
PRINT NAME
_________________________________
DATE
OPTIONS(S) COVERED BY THE FOREGOING ACCEPTANCE FORM:
GRANT DATE NUMBER OF SHARES EXERCISE PRICE
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