OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOILMARK, INC.
AT
$6.36 NET PER SHARE
BY
XXXXXX ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
ILLINOIS TOOL WORKS INC.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, MAY 17, 2001 UNLESS THE OFFER IS EXTENDED.
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THIS OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED
AS OF APRIL 10, 2001 (THE "MERGER AGREEMENT"), BY AND AMONG ILLINOIS TOOL
WORKS INC. ("PARENT"), XXXXXX ACQUISITION INC. ("SUB") AND FOILMARK, INC. (THE
"COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS
APPROVED AND DECLARED ADVISABLE THE MERGER AGREEMENT, THE OFFER AND THE MERGER
(EACH AS DEFINED HEREIN) AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE IN THE
BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES OF COMMON
STOCK OF THE COMPANY (THE "SHARES") PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SHARES
REPRESENTING AT LEAST A MAJORITY OF THE TOTAL OUTSTANDING VOTING SECURITIES OF
THE COMPANY ON A FULLY-DILUTED BASIS AFTER GIVING EFFECT TO THE EXERCISE,
CONVERSION OR TERMINATION OF ALL OPTIONS, WARRANTS, RIGHTS AND SECURITIES
EXERCISABLE OR CONVERTIBLE INTO SUCH VOTING SECURITIES (THE "MINIMUM TENDER
CONDITION") AND (2) THE APPLICABLE WAITING PERIOD (AND ANY EXTENSION THEREOF)
UNDER THE XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE
"HSR ACT") SHALL HAVE TERMINATED OR EXPIRED AND ANY CONSENTS, APPROVALS AND
FILINGS UNDER ANY FOREIGN ANTITRUST LAW, THE ABSENCE OF WHICH WOULD PROHIBIT THE
PURCHASE OF ALL SHARES TENDERED PURSUANT TO THE OFFER, SHALL HAVE BEEN OBTAINED
OR MADE PRIOR TO THE ACCEPTANCE OF SHARES PURSUANT TO THE OFFER.
IMPORTANT
ANY STOCKHOLDER WISHING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES IN THE OFFER SHOULD EITHER: (1) COMPLETE AND SIGN THE LETTER OF
TRANSMITTAL IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF TRANSMITTAL AND
MAIL OR DELIVER THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO
THE DEPOSITARY (AS DEFINED HEREIN) TOGETHER WITH CERTIFICATES REPRESENTING THE
SHARES TENDERED; (2) FOLLOW THE PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH IN
SECTION 3 OF THIS OFFER TO PURCHASE ENTITLED "PROCEDURES FOR ACCEPTING THE OFFER
AND TENDERING SHARES;" OR (3) REQUEST SUCH STOCKHOLDER'S BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR
THE STOCKHOLDER. A STOCKHOLDER HAVING SHARES REGISTERED IN THE NAME OF A BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY, OR OTHER NOMINEE MUST CONTACT SUCH
PERSON IF THEY DESIRE TO TENDER SUCH SHARES.
ANY STOCKHOLDER WHO WISHES TO TENDER SHARES AND CANNOT DELIVER CERTIFICATES
REPRESENTING SUCH SHARES AND ALL OTHER REQUIRED DOCUMENTS TO THE DEPOSITARY ON
OR PRIOR TO THE DATE ON WHICH THE OFFER EXPIRES OR WHO CANNOT COMPLY WITH THE
PROCEDURES FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS MAY TENDER SUCH SHARES
PURSUANT TO THE GUARANTEED DELIVERY PROCEDURE SET FORTH IN SECTION 3 OF THIS
OFFER TO PURCHASE ENTITLED "PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES."
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT AT THE ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS
OFFER TO PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF
TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND OTHER RELATED MATERIALS MAY
BE OBTAINED FROM THE INFORMATION AGENT. STOCKHOLDERS MAY ALSO CONTACT THEIR
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE.
April 20, 2001.
TABLE OF CONTENTS
PAGE
--------
1. Terms of the Offer.......................................... 3
2. Acceptance of Payment and Payment for Shares................ 4
3. Procedures for Accepting the Offer and Tendering Shares..... 6
4. Withdrawal Rights........................................... 8
5. Material United States Federal Income Tax Considerations.... 9
6. Price Range of Shares....................................... 10
7. Certain Information Concerning the Company.................. 11
8. Certain Information Concerning Parent and Sub............... 11
9. Source and Amount of Funds.................................. 12
10. Background of the Offer; Past Contacts or Negotiations with
the Company................................................. 13
11. The Merger Agreement; Other Arrangements.................... 14
12. Purpose of the Offer; Plans for the Company................. 22
13. Certain Effects of the Offer................................ 22
14. Dividends and Distributions................................. 23
15. Certain Conditions of the Offer............................. 24
16. Certain Legal Matters; Regulatory Approvals................. 25
17. Appraisal Rights............................................ 27
18. Fees and Expenses........................................... 30
19. Miscellaneous............................................... 30
SCHEDULE I: DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND SUB...................... 32
1. Directors and Executive Officers of Parent.................. 32
2. Directors and Executive Officers of Sub..................... 34
SCHEDULE II: SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW.................... 36
SUMMARY
The following is a summary of some of the key terms of this offer to
purchase all of the outstanding common stock of Foilmark, Inc., a Delaware
corporation, for $6.36 per share in cash. We urge you to read carefully the
remainder of this offer to purchase and the accompanying letter of transmittal
because the information in this Summary is not complete. Additional important
information is contained in the remainder of this offer to purchase and the
letter of transmittal.
- THE SUB.
The Sub referred to in this offer to purchase is Xxxxxx Acquisition Inc., a
Delaware corporation formed for the purpose of making this tender offer and the
merger described herein. Xxxxxx Acquisition is a wholly owned subsidiary of
Illinois Tool Works Inc., a Delaware corporation. See Section 8 of this offer to
purchase--"Certain Information Concerning Parent and Sub."
- CLASS AND AMOUNT OF SHARES SOUGHT.
We are seeking to purchase all of the outstanding shares of Foilmark common
stock. See "Introduction" and Section 1 of this offer to purchase--"Terms of the
Offer."
- OFFER PRICES; FEES AND COMMISSIONS.
We are offering to pay $6.36 per share, net to you in cash, less any
required withholding of taxes and without the payment of interest. If you are
the record owner of your shares and you tender your shares to us in the offer,
you will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares on
your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. We will not be obligated to pay for or reimburse you for such broker or
nominee charges. See the "Introduction" to this offer to purchase. In addition,
if you do not complete and sign the Substitute Form W-9 included in the letter
of transmittal, you may be subject to required backup federal income tax
withholding. See Instruction 9 to the letter of transmittal.
- SOURCE OF FUNDS.
Xxxxxx Acquisition will be provided funds of up to approximately
$55 million by its parent company, Illinois Tool Works, for the purchase of
shares in the offer. This offer is not conditioned on any financing
arrangements. See Section 9 of this offer to purchase--"Source and Amount of
Funds." Illinois Tool Works expects to obtain such funds from cash on hand and
its other working capital sources. See Section 8 of this offer to
purchase--"Certain Information Concerning Parent and Sub."
- TIME FOR ACCEPTANCE.
You will have until 12:00 midnight, New York City time, on Thursday,
May 17, 2001, to tender your shares in the offer. If you cannot deliver
everything that is required in order to make a valid tender by that time, you
may be able to use a guaranteed delivery procedure, which is described later in
this offer to purchase. See Sections 1 and 3 of this offer to purchase--"Terms
of the Offer" and "Procedures for Accepting the Offer and Tendering Shares."
- EXTENSION OF THE OFFER.
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we can extend the offer without
Foilmark's consent for up to 45 days if on the initial expiration date any of
the conditions to our offer are not satisfied or waived. We may also
i
extend the offer for any period required by the United States securities laws or
the SEC or if the waiting period under the Xxxx-Xxxxx-Xxxxxx Act has not
terminated or expired.
We may, if all conditions to the offer have been satisfied or waived but the
number of shares tendered in the offer is less than 90% of the fully diluted
shares outstanding, provide a "subsequent offering period" for the offer. A
subsequent offering period will be an additional period of time not to exceed
twenty business days, beginning after we have purchased shares tendered during
the offer, during which shareholders may tender, but not withdraw, their shares
and receive the offer consideration. See Section 1 of this offer to
purchase--"Terms of the Offer."
- NOTIFICATION OF EXTENSIONS.
We will make a public announcement if we extend the offer, and we will
inform American Stock Transfer & Trust Company, the depositary for the offer, of
the extension by not later than 9:00 a.m., New York City time, on the next
business day after the day on which the offer was scheduled to expire. See
Section 1 of this offer to purchase--"Terms of the Offer."
- SIGNIFICANT CONDITIONS TO THE OFFER.
We are not obligated to purchase any tendered shares if the total number of
shares validly tendered and not withdrawn is less than a majority of the total
outstanding number of shares of Foilmark voting stock on a fully-diluted basis.
We are not obligated to purchase shares that are validly tendered if there is a
material adverse change in Foilmark's business. The offer is also subject to a
number of other conditions including the expiration or termination of any
applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, or a similar provision of any foreign antitrust law. See
Sections 1 and 15 of this offer to purchase--"Terms of the Offer," and "Certain
Conditions of the Offer."
- METHOD OF TENDER.
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to American Stock
Transfer & Trust Company, the depositary for the offer, not later than the time
the tender offer expires. If your shares are held in street name, the shares can
be tendered by your nominee through the depositary. If you cannot deliver
everything that is required by the depositary by the expiration of the offer,
you may get a little extra time to do so by having a broker, a bank or other
fiduciary which is a member of the Securities Transfer Agents Medallion Program
or other eligible institution, guarantee that the missing items will be received
by the depositary within three National Association of Securities Dealers
Automated Quotation System trading days. However, the depositary must receive
the missing items within that three trading day period. See Section 3 of this
offer to purchase--"Procedures for Accepting the Offer and Tendering Shares."
- TIME OF PAYMENT.
If all of the conditions of the offer are satisfied or waived and your
shares are accepted for payment, we will pay you promptly after the expiration
of the offer. See Section 2 of this offer to purchase--"Acceptance of Payment
and Payment for Shares."
- WITHDRAWAL OF TENDERED SHARES.
You can withdraw previously tendered shares at any time until the offer has
expired and, if we have not agreed to accept your shares for payment by
June 19, 2001, you can withdraw them at any time after such time until we accept
the shares for payment. This right to withdraw does not apply to any subsequent
offering period. See Section 4 of this offer to purchase--"Withdrawal Rights."
ii
To withdraw previously tendered shares, you must deliver a written notice of
withdrawal, or a facsimile of one, with the required information to the
depositary while you still have the right to withdraw the shares. If you
tendered by giving instructions to a broker or nominee, you must instruct the
broker or nominee to arrange for the withdrawal of your shares. See Sections 1
and 4 of this offer to purchase--"Terms of the Offer" and "Withdrawal Rights."
- BOARD OF DIRECTORS RECOMMENDATION.
The offer is being made pursuant to an agreement and plan of merger dated as
of April 10, 2001 among Foilmark, Illinois Tool Works and Xxxxxx Acquisition.
The Board of Directors of Foilmark has approved and declared advisable the
merger agreement, the offer, the merger and the other transactions contemplated
by the merger agreement. The Board of Directors of Foilmark recommends that its
stockholders accept the offer and tender their shares. See Section 10 of this
offer to purchase--"Background of the Offer; Past Contacts or Negotiations with
the Company."
- MERGER AFTER TENDER OFFER.
If we purchase at least a majority of the total outstanding number of shares
of Foilmark common stock on a fully-diluted basis in the offer, and all other
applicable conditions are met, Xxxxxx Acquisition will be merged with Foilmark
and all remaining stockholders (other than stockholders who have properly
perfected appraisal rights under Delaware state law) will receive the same price
per share paid in the offer. See "Introduction" and Section 12 of this offer to
purchase--"Purpose of the Offer; Plans for the Company."
- APPRAISAL RIGHTS.
No appraisal rights are available in connection with the offer. After the
offer, appraisal rights will be available to holders of shares who do not vote
in favor of the merger if a stockholder vote is required, subject to and in
accordance with Delaware state law. A holder of shares must properly perfect its
right to seek an appraisal under Delaware state law in connection with the
merger in order to exercise the appraisal rights provided under Delaware state
law. See Section 17 of this offer to purchase--"Appraisal Rights."
- MARKET FOR SHARES AFTER THE OFFER.
If we purchase all of the tendered shares and the merger takes place, there
will no longer be a trading market for the shares. Even if the merger does not
take place, if we purchase all of the tendered shares:
- there may be so few remaining stockholders and publicly held shares that
the shares will no longer be eligible to be traded through the National
Association of Securities Dealers Automated Quotation System;
- there may not be any public trading market for the shares or, even if
there is a public market for the shares, the shares may be very thinly
traded and your ability to buy or sell shares may be very limited; and
- Foilmark may cease to make quarterly reports, annual reports and other
disclosures with SEC or otherwise cease being required to comply with the
SEC's rules relating to publicly held companies. See Section 13 of this
offer to purchase--"Certain Effects of the Offer."
- TAXES
In general, the receipt of cash by you pursuant to the offer or the merger
will constitute a taxable transaction for United States federal income tax
purposes. For United States federal income tax
iii
purposes, by tendering shares you generally would recognize gain or loss in an
amount equal to the difference between the cash received by you pursuant to the
offer or merger and your tax basis in the shares. In addition, under the United
States federal income tax laws, the payments made by the depositary to you
pursuant to the offer or merger may, under certain circumstances, be subject to
backup withholding at a rate of 31%. To avoid backup withholding with respect to
payments made pursuant to the offer or merger, you must provide the depositary
with proof of an applicable exemption from backup withholding or a correct
taxpayer identification number, and you must otherwise comply with the
applicable requirements of the backup withholding rules. See Section 5 of this
offer to purchase "Material United States Federal Income Tax Considerations."
- RETURN OF TENDERED SHARES.
If any of the shares you tender are not accepted for purchase for any
reason, certificates representing such shares will be returned to you or to the
person you specify in your tendering documents. See Section 2 of this offer to
purchase--"Acceptance of Payment and Payment for Shares."
- RECENT MARKET PRICES.
On April 10, 2001, the last trading day before Illinois Tool Works and
Foilmark announced that they had signed the merger agreement, the last sale
price of the shares reported on the National Association of Securities Dealers
Automated Quotation System was $3.50 per share. On April 19, 2001, the last
trading day before Xxxxxx Acquisition commenced the offer, the last sale price
of the shares reported on the National Association of Securities Dealers
Automated Quotation System was $6.27 per share. We advise you to obtain a recent
quotation for shares of Foilmark in deciding whether to tender your shares. See
Section 6 of this offer to purchase--"Price Range of Shares."
- QUESTIONS AND INFORMATION.
You can call MacKenzie Partners, Inc. at (000) 000-0000 (toll free).
XxxXxxxxx Partners is acting as the information agent for our tender offer. See
the back cover page of this offer to purchase.
iv
To: THE HOLDERS OF COMMON STOCK
OF FOILMARK, INC.:
INTRODUCTION
Xxxxxx Acquisition Inc., a Delaware corporation ("Sub") and a wholly owned
subsidiary of Illinois Tool Works Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all of the outstanding shares of common stock, par
value $.01 per Share (the "Shares") of Foilmark, Inc., a Delaware corporation
(the "Company"), at a purchase price of $6.36 per Share (the "Offer Price"), net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in this Offer to Purchase (as amended or supplemented
from time to time, the "Offer to Purchase") and the related Letter of
Transmittal (the "Letter of Transmittal," which, together with the Offer to
Purchase, as each may be amended or supplemented from time to time, collectively
constitute the "Offer").
Tendering stockholders who are record owners of the Shares and tender their
Shares directly to the Depositary (as defined below) will not be obligated to
pay brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to
the purchase of Shares by Sub pursuant to the Offer. Stockholders who hold their
Shares through a broker or nominee should consult such institution as to whether
it charges any service fees. Parent or Sub will pay all charges and expenses of
American Stock Transfer & Trust Company, as depositary (the "Depositary"), and
MacKenzie Partners, Inc., as information agent (the "Information Agent"),
incurred in connection with the Offer. See Section 18 of this Offer to
Purchase--"Fees and Expenses."
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer, Shares
representing at least a majority of the total outstanding voting securities of
the Company on a fully-diluted basis after giving effect to the exercise,
conversion or termination of all options, warrants, rights and securities
exercisable or convertible into such voting securities (the "Minimum Tender
Condition") and (2) the applicable waiting period (and any extension thereof)
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act") shall have terminated or expired and any consents, approvals and
filings under any foreign antitrust law, the absence of which would prohibit the
purchase of all Shares tendered pursuant to the Offer, shall have been obtained
or made prior to the acceptance of Shares pursuant to the Offer. The Offer also
is subject to certain other terms and conditions. See Sections 1, 15 and 16 of
this Offer to Purchase.
The Offer will expire at 12:00 midnight, New York City time, on May 17, 2001
(the "Expiration Date") unless the Offer is extended, in which case the
Expiration Date will be the latest time and date the Offer, as extended,
expires.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of April 10, 2001, among the Company, Parent and Sub (the "Merger Agreement")
pursuant to which, after completion of the Offer and satisfaction or waiver of
certain conditions, Sub will be merged with and into the Company (the "Merger")
and the Company will be the surviving corporation (the "Surviving Corporation").
On the effective date of the Merger (the "Effective Time"), each outstanding
Share (other than Shares owned by Parent, Sub or any subsidiary or affiliate of
Parent, Sub or the Company or held in the treasury of the Company or by
stockholders who have properly perfected appraisal rights under Delaware state
law) will by virtue of the Merger, and without any action by the holder thereof,
be cancelled and converted into the right to receive $6.36 per Share in cash, or
any higher price per Share paid pursuant to the Offer, without interest thereon
(the "Merger Consideration"). The Merger Agreement is more fully described in
Section 11 of this Offer to Purchase entitled "The Merger Agreement; Other
Arrangements." Certain United States federal income tax consequences of the
exchange of the Shares pursuant to the Offer and the Merger, as the case may be,
are discussed in Section 5 of this Offer to Purchase entitled "Material United
States Federal Income Tax Considerations."
The Company Board has by a unanimous vote of those directors present at the
meeting (i) approved and declared advisable the Merger Agreement, the Offer, the
Merger and the other transactions contemplated by the Merger Agreement,
(ii) determined that the Offer, the Merger and the other
1
transactions contemplated by the Merger Agreement are fair to, and in the best
interests of, the stockholders, (iii) recommended that stockholders accept the
Offer and tender their Shares pursuant to the Offer, and (iv) recommended that
the Company's stockholders approve and adopt the Merger Agreement.
JPMorgan, a division of Chase Securities Inc., the Company's financial
advisor ("JPMorgan"), has delivered to the Company Board a written opinion dated
April 10, 2001 to the effect that, as of that date and based on and subject to
the matters described in the opinion, the $6.36 per Share cash consideration to
be received by the Company Stockholders in the Offer and the Merger, taken
together, was fair to such holders from a financial point of view. A copy of
JPMorgan's written opinion, which describes the assumptions made, procedures
followed, matters considered and limitations on the review undertaken, is
contained in the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") concurrently filed with the Securities and
Exchange Commission (the "SEC") on the date of the Offer to Purchase in
connection with the Offer, a copy of which (without certain exhibits) is being
furnished to stockholders of the Company concurrently herewith. Stockholders are
urged to carefully read the full text of such opinion in its entirety.
The Company has informed Sub that, as of April 10, 2001, there were
8,092,572 Shares issued and outstanding (excluding 39,200 Shares held in the
Company's treasury), and there were 1,189,414 Shares reserved for issuance
pursuant to outstanding options under the Company's employee stock option plans.
As of the date of this Offer to Purchase, Parent may be deemed to
beneficially own 2,893,040 Shares (approximately 36% of the Shares issued and
outstanding) by virtue of its rights under the Stock Option and Tender
Agreements entered into with the following Company stockholders: the Estate of
Xxxxx X. Xxxxx, Xx., Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx Xxxxx, Xxxxx X.
Xxxxx, Xx., Xxxxxx X. Xxxxxxxx, Xxxxxxxx Venture Partners, L.P., and Overseas
Private Investor Partners (the "Stockholders"). The Stock Option and Tender
Agreements require each of the Stockholders to tender their respective Shares
and to vote all of their respective Shares in favor of the Merger and against
any alternative acquisition proposal. In addition, each Stockholder has granted
Parent a proxy to vote their respective Shares and an option to purchase such
Shares that is exercisable under certain conditions. See Section 11 of this
Offer to Purchase--"The Merger Agreement; Other Arrangements."
The Merger is subject to the satisfaction or waiver of certain conditions,
including, among other things, the approval and adoption of the Merger Agreement
by the requisite vote of the stockholders of the Company, if required. If the
Minimum Tender Condition is satisfied, Sub would have sufficient voting power to
approve the Merger without the affirmative vote of any other stockholder of the
Company. Under the Delaware General Corporation Law (the "DGCL") if, after
consummation of the Offer, Sub owns at least 90% of the Shares then outstanding,
Sub will be able to cause the Merger to occur without a vote of the Company's
stockholders. However, if Sub owns less than 90% of the Shares then outstanding
after consummation of the Offer, a vote of the Company's stockholders will be
required under the DGCL to approve the Merger. The Company has agreed, if
required, to duly call, give notice of, convene and hold a meeting of its
stockholders, to be held as promptly as practicable after the expiration of the
Offer for the purpose of obtaining stockholder approval of the Merger Agreement.
See Section 11 of this Offer to Purchase--"The Merger Agreement; Other
Arrangements."
No appraisal rights are available in connection with the Offer. Stockholders
may have appraisal rights in connection with the Merger if they comply with
applicable Delaware state law and do not vote such Shares in favor of the Merger
or, if no such vote is required, if they comply with the requirements of
Delaware state law regarding the perfection of available appraisal rights. See
Section 17 of this Offer to Purchase--"Appraisal Rights."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY 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 the
terms and conditions of any extension or amendment, if the Offer is extended or
amended), Sub will accept for payment and pay the Offer Price for all Shares
validly tendered and not properly withdrawn prior to the Expiration Date as
permitted under Section 4 of this Offer to Purchase entitled "Withdrawal
Rights."
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer, Shares
representing at least the Minimum Tender Condition and (2) the applicable
waiting period (and any extension thereof) under the HSR Act shall have
terminated or expired and any consents, approvals and filings under any foreign
antitrust law, the absence of which would prohibit the purchase of all Shares
tendered pursuant to the Offer shall have been obtained or made prior to the
acceptance of Shares pursuant to the Offer. The Offer is also subject to certain
other terms and conditions. See Sections 1, 15 and 16 of this Offer to Purchase.
Subject to the limitations set forth in this Offer, the Merger Agreement and
the applicable rules and regulations of the SEC described below, Sub reserves
the right, at any time and from time to time in its sole discretion, to extend
the period during which the Offer is open by giving oral or written notice of
such extension to the Depositary. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the right, if any, of a tendering stockholder to withdraw such
stockholder's Shares. See Section 4 of this Offer to Purchase--"Withdrawal
Rights." There can be no assurance that Sub will exercise its right to extend
the Offer.
Sub has agreed that it will not, without the prior consent of the Company
(a) reduce the number of Shares subject to the Offer or reduce or waive the
Minimum Tender Condition, (b) reduce the per share consideration to be paid
pursuant to the Offer below the Offer Price, (c) modify or add to the conditions
set forth in Section 15 of this Offer to Purchase, (d) except as provided in the
next paragraph, extend the Offer, or (e) change the form of consideration
payable in the Offer.
Pursuant to the Merger Agreement, Sub may, without the consent of the
Company, (a) extend the Offer for up to forty-five (45) days, if at the initial
scheduled expiration date of the Offer any of the conditions to Sub's obligation
to purchase Shares are not satisfied or waived, until such time as such
conditions are satisfied or waived, (b) extend the Offer, if all of the
conditions to the Offer are satisfied or waived but the number of Shares validly
tendered and not withdrawn is less than ninety percent (90%) of the then
outstanding number of shares on a fully-diluted basis, for an aggregate period
not to exceed twenty (20) business days (for all such extensions); provided that
Sub shall immediately accept and promptly pay for all Shares tendered prior to
the date of such an extension and shall otherwise meet the requirements of
Rule 14d-11 under the Securities Exchange Act of 1934 (the "Exchange Act") in
connection with each such extension, (c) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer, and (d) extend the Offer in increments of
not more than twenty (20) business days, if at the initial scheduled expiration
of the Offer (or any extension thereof) the waiting period (and any extension
thereof) applicable to any of the transactions under the HSR Act shall not have
been terminated or shall not have expired or any consents, approvals and filings
under any foreign antitrust law, the absence of which would prohibit the
consummation of the Merger, shall not have been obtained or made.
The rights reserved in the foregoing paragraphs are in addition to any
additional rights described in Section 15 of this Offer to Purchase entitled
"Certain Conditions of the Offer."
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement. An announcement, in the case of
an extension, will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration of the Offer, in
accordance with the public announcement requirements of Rule 14e-1(d).
3
Subject to applicable law (including Rules 14d- 4(d), and 14d-6(c) 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 Sub may choose to make any public
announcement, Sub shall 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.
Subject to the Merger Agreement, if Sub makes a material change in the terms
of the Offer or the information concerning the Offer or waives any material
condition of the Offer, Sub will disseminate additional tender offer materials
(including by public announcement as set forth below) and extend the Offer to
the extent required by Rules 14d-4(d) and 14e-1 under the Exchange Act. These
rules generally provide that the minimum period during which the Offer must
remain open following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in the percentage
of securities sought, will depend upon the facts and circumstances then
existing, including the relative materiality of the changed terms or
information. In the SEC's view, an offer should remain open for a minimum of
five (5) business days from the date the material change is first published,
sent or given to stockholders, and, if material changes are made with respect to
information that approaches the significance of price and the percentage of
securities sought, a minimum of ten (10) business days may be required to allow
for adequate dissemination and investor response. With respect to a change in
price, a minimum ten (10) business day period from the date of the change is
generally required to allow for adequate dissemination to stockholders.
Accordingly, if, prior to the Expiration Date, Sub increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the tenth business day from the date that notice
of the increase or decrease is first published, sent or given to holders of
Shares, Sub will extend the Offer at least until the expiration of such tenth
business day. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday and consists of the time period
from 12:01 a.m. through 12:00 midnight, New York City time.
Pursuant to, but subject to certain conditions in, the Merger Agreement, Sub
has agreed to (i) accept for payment all Shares validly tendered and not
properly withdrawn pursuant to the Offer as soon as permitted under applicable
law, and (ii) pay for such Shares promptly thereafter.
The Company has provided Sub with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list 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
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
2. ACCEPTANCE OF 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 any such extension or
amendment), Sub will accept for payment, purchase and pay for all Shares which
have been validly tendered and not properly withdrawn pursuant to the Offer at
the earliest time following expiration of the Offer when all conditions to the
Offer described in Section 15 of this Offer to Purchase entitled "Certain
Conditions of the Offer" have been satisfied or waived by Sub. Subject to the
Merger Agreement and any applicable rules and regulations of the SEC, including
Rule 14e-1(c) under the Exchange Act (relating to Sub's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
Sub expressly reserves the right to delay the acceptance for payment of or the
payment for any tendered Shares in order to comply in whole or in part with any
applicable laws, including, without limitation, the HSR Act and similar foreign
statutes and regulations. See Section 16 of this Offer to Purchase--"Certain
Legal Matters; Regulatory Approvals."
4
For purposes of the Offer, Sub will be deemed to have accepted for payment
(and thereby purchased) Shares tendered and not properly withdrawn, if and when
Sub gives oral or written notice to the Depositary of Sub's acceptance for
payment of such Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price for the Shares with the
Depositary, which will act as agent for tendering stockholders for the purposes
of receiving payments from Sub and transmitting payments to tendering
stockholders. UNDER NO CIRCUMSTANCES WILL SUB PAY INTEREST ON THE PURCHASE PRICE
FOR ANY SHARES ACCEPTED FOR PAYMENT, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING PAYMENT.
The reservation by Sub of the right to delay the acceptance, purchase of or
payment for Shares is subject to the terms of the Merger Agreement and the
provisions of Rule 14e-1(c) under the Exchange Act, which requires Sub to pay
the consideration offered or return the Shares deposited by or on behalf of
tendering stockholders promptly after the termination or withdrawal of the
Offer.
In all cases, Sub will pay for Shares purchased in the Offer only after
timely receipt by the Depositary of (i) the certificates representing the Shares
(the "Share Certificates") or confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at The
Depositary Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of this Offer to Purchase entitled "Procedures
for Accepting the Offer and Tendering Shares;" (ii) the appropriate Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined below) in lieu of the Letter of Transmittal; and (iii) any other
documents required under the Letter of Transmittal.
"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 message states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of the Book-Entry
Confirmation that the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Sub may enforce the Letter of
Transmittal against the participant.
If Sub does not purchase any tendered Shares pursuant to the Offer for any
reason, or if a holder of Shares submits Share Certificates representing more
Shares than are tendered, Share Certificates representing unpurchased or
untendered Shares will be returned, without expense to the tendering stockholder
(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 Section 3 of this Offer to Purchase entitled "Procedures for Accepting the
Offer and 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, Sub increases the Offer Price, Sub will
pay the increased Offer Price to all holders of Shares that are purchased in the
Offer, whether or not the Shares were tendered before the increase in the Offer
Price.
Sub reserves the right to transfer or assign, in whole or in part, from time
to time, to one or more direct or indirect subsidiaries of Parent, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve Sub of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
5
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDERS
To tender Shares pursuant to the Offer, a stockholder must comply with one
of the following: (a) a properly completed and duly executed Letter of
Transmittal in accordance with the instructions of the Letter of Transmittal,
with any required signature guarantees, Share Certificates to be tendered and
any other documents required by the Letter of Transmittal must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, (b) such Shares must be properly
delivered pursuant to the procedures for book-entry transfer, as described
below, and a confirmation of such delivery received by the Depositary, which
confirmation must include an Agent's Message if the tendering stockholder has
not delivered a Letter of Transmittal, prior to the Expiration Date, or (c) the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below.
BOOK-ENTRY TRANSFER
The Depositary will establish accounts with respect to the Shares at the
Book-Entry Transfer Facility for purposes of the Offer within two business days
after the date of this Offer to Purchase. Any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make a
book-entry delivery of Shares by causing the Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer at the Book-Entry Transfer Facility, 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 received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the tendering stockholder
must comply with the guaranteed delivery procedure set forth below.
SIGNATURE GUARANTEES
No signature guarantee is required on the Letter of Transmittal where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box labeled "Special Delivery Instructions" or the box labeled "Special
Payment Instructions" on the Letter of Transmittal or (ii) for the account of a
bank, broker, dealer, credit union, savings association or other entity which is
a member in good standing of a recognized Medallion Program approved by the
Securities Transfer Association Inc., including the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program and the New York Stock
Exchange Medallion Signature Program, or any other "eligible guarantor
institution" as defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing, an "Eligible Institution"). In all other cases, all signatures on a
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If a Share Certificate is registered in the name of a person or persons
other than the signer of the Letter of Transmittal, or if payment is to be made
or delivered to a person other than the registered holder, or if a Share
Certificate for unpurchased Shares is to be issued or returned to a person other
than the registered holder, then the Share Certificate must be endorsed or
accompanied by a duly executed stock power, in either case signed exactly as the
name of the registered holder appears on the Share Certificate, with the
signature on such Share Certificate or stock power guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
6
GUARANTEED DELIVERY
If a stockholder desires to tender Shares pursuant to the Offer and the
Share Certificates evidencing such stockholder's Shares are not immediately
available or such stockholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or such
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, the stockholder's Shares may nevertheless be tendered, provided
that all of the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) the Depositary receives, as described below, a properly completed and
duly executed notice of guaranteed delivery (the "Notice of Guaranteed
Delivery"), substantially in the form made available by Sub, on or
prior to the Expiration Date; and
(iii) the Depositary receives the Share Certificates (or a Book-Entry
Confirmation) evidencing all tendered Shares, in proper form for
transfer, in each case together with the Letter of Transmittal,
properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by the Letter of
Transmittal, within three National Association of Securities Dealers
Automated Quotation System trading days after the date of execution of
such Notice of Guaranteed Delivery.
NOTICE OF GUARANTEED DELIVERY
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the form
of Notice of Guaranteed Delivery made available by Sub.
Notwithstanding any other provision of the Offer, Sub will pay for Shares
only after timely receipt by the Depositary of: (i) Share Certificates
representing, or Book-Entry Confirmation with respect to, the Shares, (ii) a
properly completed and duly executed Letter of Transmittal, together 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.
DETERMINATION OF VALIDITY
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Sub in its sole discretion, which determination will be final and binding on
all parties. Sub reserves the absolute right to reject any and all tenders
determined by it not to be in proper form or the acceptance for payment of which
may, in the opinion of its counsel, be unlawful. Subject to the terms of the
Merger Agreement, Sub also reserves the absolute right to waive any condition of
the Offer or any defect or irregularity in the tender of any Shares of any
particular stockholder of the Company, whether or not similar defects or
irregularities are waived in the case of other stockholders of the Company.
Subject to the Merger Agreement, Sub's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. 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, Sub, or any of their respective affiliates or
assigns, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification.
APPOINTMENT AS PROXY
By executing the Letter of Transmittal, a tendering stockholder irrevocably
appoints designees of Sub as such stockholder's agents, attorneys-in-fact and
proxies, with full power of substitution, in the
7
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by Sub and with respect to any and all other Shares or
other securities or rights issued or issuable in respect of those Shares or
after the date of this Offer to Purchase. All such powers of attorney and
proxies will be considered irrevocable and coupled with an interest in the
tendered Shares, as the case may be. This appointment will be effective when,
and only to the extent that, Sub accepts such Shares for payment. Upon such
acceptance for payment, all other powers of attorney and proxies given by such
stockholder with respect to such Shares and such other securities or rights
prior to such payment will be revoked without further action, and no subsequent
powers of attorney or proxies may be given, nor may any subsequent written
consent be executed by such stockholder (and, if given or executed, will not be
deemed to be effective) with respect thereto. With respect to the Shares for
which the appointment is effective, the designees of Sub will be empowered to
exercise all voting and other rights of such stockholder as the designees, in
their sole discretion, may deem proper at any annual or special meeting of the
Company's stockholders or any adjournment or postponement thereof, or by written
consent in lieu of any such meeting or otherwise. In order for Shares to be
deemed validly tendered, immediately upon the acceptance for payment of such
Shares, Sub or its designee must be able to exercise full voting rights to the
extent permitted under applicable law with respect to such Shares.
TENDER CONSTITUTES BINDING AGREEMENT
Sub's acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between Sub and
the tendering stockholder upon the terms and subject to the conditions of the
Offer.
RISK OF LOSS
Delivery of documents to the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary. The method of delivery of Share 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
stockholder, and the delivery will be deemed made only when actually received by
the Depositary (including, in the case of a book-entry transfer, a Book-Entry
Confirmation). If delivery is by mail, registered mail with return receipt
requested and properly insured is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn (i) at any time prior to the Expiration Date and
(ii) at any time after Tuesday, June 19, 2001 (or such later date as may apply
if the Offer is extended), unless accepted for payment by Sub pursuant to the
Offer prior to that date. However, pursuant to Rule 14d-7 under the Exchange
Act, no withdrawal rights apply to Shares tendered during any subsequent
offering period and no withdrawal rights apply during a subsequent offering
period with respect to Shares tendered in the Offer and accepted for payment.
See Section 1 of this Offer to Purchase--"Terms of the Offer."
If Sub 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 Sub's rights under the Offer, the Depositary
may nevertheless retain tendered Shares on behalf of Sub, and such Shares may
not be withdrawn, except to the extent that tendering stockholders are entitled
to and duly exercise their withdrawal rights as described in this Section 4. Any
such delay will be by an extension of the Offer to the extent required by law.
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 page of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the
8
Shares to be withdrawn, the number of Shares to be withdrawn and (if Share
Certificates have been tendered) the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If Share
Certificates representing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Shares tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3 of this Offer to Purchase entitled "Procedures for Accepting the Offer
and Tendering Shares," the notice of withdrawal must specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in the first
sentence of this paragraph.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will be considered not validly tendered for purposes of the Offer. However,
withdrawn Shares may be tendered again at any time prior to the Expiration Date
by following one of the procedures described in Section 3 of this Offer to
Purchase entitled "Procedures for Accepting the Offer and Tendering Shares."
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Sub in its sole discretion, whose
determination will be final and binding. None of Parent, Sub, or their
respective affiliates or assigns, the Depositary, the Information Agent 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.
5. MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.
The following is a summary of the material United States federal income tax
consequences that are generally applicable to holders of Shares who exchange
such Shares for cash pursuant to the Offer and to holders of Shares who exchange
such shares for cash pursuant to the Merger. This discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations,
and judicial and administrative decisions, all of which are subject to change,
possibly with retroactive effect. Holders of Shares should be aware that this
discussion does not deal with all federal income tax considerations that may be
relevant to particular holders in light of their individual circumstances. For
example, this discussion does not address the tax consequences of the Offer and
the Merger to holders of Shares who are dealers in securities, foreign persons,
or do not hold their Shares as capital assets. Nor does it address the tax
consequences of the Offer or the Merger to holders of Shares who acquired such
Shares through the exercise of employee stock options or otherwise as
compensation or holders who are otherwise subject to special tax treatment under
the Code (such as insurance companies, tax-exempt entities and regulated
investment companies). In addition, the following discussion does not address
the tax consequences of the Offer or the Merger to the holders of Shares under
foreign, state, or local tax laws. Accordingly, all holders of Shares are urged
to consult their own tax advisors to determine the particular tax consequences
to them of the Offer and the Merger, including the applicable federal, state,
local and foreign tax consequences.
In general, the receipt of cash by the holders of Shares pursuant to the
Offer and/or the Merger will constitute a taxable transaction for United States
federal income tax purposes. For United States federal income tax purposes, a
holder tendering Shares generally would recognize gain or loss in an amount
equal to the difference between the amount of cash received by the holder
pursuant to the Offer and/or the Merger and the holder's tax basis in the
Shares. Generally, gain or loss must be calculated separately for each
identifiable block of Shares (i.e., shares acquired at the same per share cost
in a single transaction). Generally, a holder's gain or loss will be a capital
gain or loss. Any such capital gain or loss will be long term if, as of the date
of the disposition of its Shares, the holder held such Shares for more than one
year. In the case of holders of Shares who are individuals, long-term
9
capital gains are currently subject to tax at a generally more favorable tax
rate (a maximum rate of 20%). There are limitations on the deductibility of
capital losses.
In general, a holder of a Company Employee Stock Option who, pursuant to the
Offer and/or the Merger, has such option cancelled in exchange for a cash
payment of an amount equal to the excess (if any) of the price per Share to be
paid pursuant to the Offer and/or the Merger over the exercise price per Share
subject to such option will, for United States federal income tax purposes,
recognize ordinary income to the extent of such excess.
BACKUP UNITED STATES FEDERAL INCOME TAX WITHHOLDING.
Under the United States federal income tax laws, the payments made by the
Depositary to holders of Shares, pursuant to the Offer and/or the Merger may,
under certain circumstances, be subject to backup withholding at a rate of 31%.
To avoid backup withholding with respect to payments made pursuant to the Offer
and/or the Merger, each holder must provide the Depositary with proof of an
applicable exemption from backup withholding or a correct taxpayer
identification number, and must otherwise comply with the applicable
requirements of the backup withholding rules. The Letter of Transmittal provides
instructions on how to provide the Depositary with information to prevent backup
withholding with respect to cash received pursuant to the Offer and/or the
Merger. See Instruction 9 of the Letter of Transmittal. Any amount withheld
under the backup withholding rules is not an additional tax. Rather, the tax
liability of the persons subject to backup withholding will be reduced by the
amount of tax withheld.
THE FOREGOING IS INTENDED AS A GENERAL SUMMARY ONLY. BECAUSE THE TAX
CONSEQUENCES TO A PARTICULAR HOLDER MAY DIFFER BASED ON THAT XXXXXX'S PARTICULAR
CIRCUMSTANCES, EACH HOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING
THE TAX CONSEQUENCES OF THE OFFER AND THE MERGER.
6. PRICE RANGE OF SHARES.
The Shares trade on the National Association of Securities Dealers Automated
Quotation System under the symbol "FLMK." The following tables set forth, for
the calendar quarters shown, the high and low closing sale prices for the Shares
on the National Association of Securities Dealers Automated Quotation System
based on published financial sources.
FOILMARK, INC. COMMON STOCK
HIGH CLOSE LOW CLOSE
---------- ---------
Calendar 1999
First Quarter............................................. 2.4375 1.375
Second Quarter............................................ 2.875 1.4375
Third Quarter............................................. 3.625 2.3125
Fourth Quarter............................................ 3.625 2.50
Calendar 2000
First Quarter............................................. 4.4375 2.50
Second Quarter............................................ 4.0625 3.25
Third Quarter............................................. 5.6875 3.625
Fourth Quarter............................................ 5.375 3.4062
Calendar 2001
First Quarter............................................. 5.1875 2.875
Second Quarter (through April 19, 2001)................... 6.40 2.8125
10
In the Merger Agreement, the Company has represented to each of Parent and
Sub that as of April 10, 2001, there were 8,092,572 Shares (excluding 39,200
Shares held in the Company's treasury). On April 10, 2001, the last full day of
trading before the public announcement of the execution of the Merger Agreement,
the closing price of the Shares on the National Association of Securities
Dealers Automated Quotation System was $3.50 per Share. On April 19, 2001, the
last full day of trading before the commencement of the Offer, the closing price
of the Shares on the National Association of Securities Dealers Automated
Quotation System was $6.27 per Share.
Stockholders are urged to obtain a current market quotation for the Shares.
The Company has never paid dividends on its capital stock, and the Merger
Agreement prohibits the Company from declaring or paying any dividends, except
for the payment of dividends or distributions by a wholly owned subsidiary of
the Company to the Company, from the date of the Merger Agreement until the
Effective Time.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 0 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000. The Company's
business telephone is (000) 000-0000. The Company is a designer, developer,
manufacturer and distributor of hot stamp foils (also referred to as thermal
transfer films), holographic security and packaging products and pad printing
machines and supplies. The Company has three reportable segments: thermal
transfer film (TTF); holography; and pad printing machines and supplies. The
Company's business groups within these segments are Holographic OVD Security
Products, Holographic Packaging, TTF, Thermal Engineered Finishes (TEF) and Pad
Print Machines and Supplies. The Company's products are manufactured in the U.S.
and Canada.
Holographic OVD security products consist of holographic thermal transfer
films, pressure sensitive tamper-evident labels and heat seal laminates and
films and are used to authenticate items such as drivers licenses, transaction
cards, currency and high-end consumer packaging. Holographic packaging products
consist of holographic packaging film, board/paper laminations and holographic
TTF, which are used to enhance consumer packaging to increase perceived value
and shelf appeal of consumer products. TTF consists of vacuum-metalized films
used to enhance labels, book covers, greeting cards and cosmetic packaging. TEF
consists of films with complex gravure patterns and simulate the look of xxxxx
and stones. Pad print machinery and supplies consist of marking enhancement
machines which perform processes with ink decoration and supplies include rubber
pads, inks, etched steel plates and silk screens.
The Company has internal sales support personnel and outside sales
representatives and manufacturer's sales representatives and markets its
products through trade shows, advertising, public relations, telemarketing,
direct mail and the Company's web site. Distributors sell the Company's products
worldwide. The Company also sells its film through a direct sales force and
indirectly through distributors. Pad printing machinery is sold directly or
through manufacturer's representatives.
8. CERTAIN INFORMATION CONCERNING PARENT AND SUB.
Sub is a Delaware corporation and, to date, has engaged in no activities
other than those incident to its formation and the Offer and the Merger. Sub is
currently a wholly owned subsidiary of Parent. The principal executive offices
of Sub are located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 and Sub's
telephone number is (000) 000-0000.
Parent is a Delaware corporation with its principal executive offices
located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000. The telephone number
of Parent is (000) 000-0000. Parent is a $10 billion diversified manufacturer of
highly engineered components and industrial systems. The
11
company consists of approximately 600 decentralized operations in 43 countries
and employs 55,300 people.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Parent and Sub and certain other information are set forth in
Schedule I to this Offer to Purchase.
Except as described elsewhere in this Offer to Purchase, (i) none of Parent,
Sub nor, to the best knowledge of Parent and Sub, any of the persons listed in
Schedule I to this Offer to Purchase or any associate or majority owned
subsidiary of Parent or Sub or any of the persons so listed beneficially owns or
has any right to acquire, directly or indirectly, any Shares; and (ii) none of
Parent, Sub nor, to the best knowledge of Parent and Sub, any of the persons or
entities referred to above nor any director, executive officer or subsidiary of
any of the foregoing has effected any transaction in the Shares during the past
60 days.
Except as provided in the Merger Agreement or as otherwise described in this
Offer to Purchase, none of Parent, Sub nor, to the best knowledge of Parent and
Sub, 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, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss,
guarantees of profits, division of profits or loss or the giving or withholding
of proxies.
Except as set forth in this Offer to Purchase, (i) none of Parent, Sub nor,
to the best knowledge of Parent and Sub, any of the persons listed on
Schedule I hereto, 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 SEC applicable to
the Offer, and (ii) there have been no contracts, negotiations or transactions
between Parent or any of its subsidiaries or, to the best knowledge of Parent,
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, a tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
None of the persons listed in Schedule I to this Offer to Purchase has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). None of the persons listed in
Schedule I has, during the past five years, been a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) 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.
9. SOURCE AND AMOUNT OF FUNDS.
THE OFFER IS NOT CONDITIONED UPON ANY FINANCING ARRANGEMENTS.
Parent and Sub estimate that the total amount of funds required to purchase
all of the outstanding Shares that Parent or its affiliates do not own pursuant
to the Offer and the Merger and to pay related fees and expenses will be
approximately $55 million. Parent expects to obtain such funds from cash on hand
and its other working capital sources.
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10. BACKGROUND OF THE OFFER; PAST CONTACTS OR NEGOTIATIONS WITH THE COMPANY.
In July of 2000, Foilmark retained JPMorgan, a division of Chase
Securities Inc. ("JPMorgan"), to advise on the Company's strategic alternatives.
The Company Board considered various strategic alternatives and agreed that the
Company should explore the possibility of a strategic transaction. The Company's
management and JPMorgan identified and contacted approximately 60 parties to
determine their interest in strategic transactions involving the Company. Thirty
of these parties expressed an interst in a potential transaction and were sent
confidential information memoranda after executing confidentiality agreements.
By December of 2000, eight of these parties, including Parent, submitted
preliminary indications of interest.
In January of 2001, five of these parties conducted due diligence
investigations. JPMorgan circulated a bid letter and a form of merger agreement
for these parties to review and use as the basis for final proposals.
In February of 2001, JPMorgan received final bids from Parent, another
strategic bidder (the "Strategic Bidder") and a financial bidder (the "Financial
Bidder").
In February of 2001, JPMorgan made a presentation to members of the Company
Board regarding the three final bids submitted, including Xxxxxx's. After
evaluation of the three bids as to which bid was in the best interests of the
Company and its stockholders, the Company Board agreed to pursue further
discussions with Parent based on several factors, including Parent's knowledge
of the Company, the likelihood of completing Parent's proposed transaction, and
the proposed valuation and consideration offered by Parent.
In March of 2001, negotiations on the terms of the Merger Agreement and
related agreements commenced among Parent, the Company and their respective
counsel. These negotiations covered all aspects of the transaction, including,
among other things, the representations and warranties made by the parties, the
restrictions on the conduct of their businesses, the conditions to completion of
the Offer and the Merger, the provisions regarding termination, the details of
the "no shop" clause, the amount, triggers and payment of the termination fee
and the consequences of termination and the delivery and terms of the Stock
Option and Tender Agreements.
On March 15, 2001, the Strategic Bidder submitted a revised bid, increasing
the offer price per Share from an indicated value of approximately $5.30 per
Share to an indicated value of approximately $6.50 per Share (which represented
approximately $2.65 in cash and 2.5 shares of common stock of the Strategic
Bidder for each Share). The Strategic Bidder's revised bid was subject to the
approval of the Strategic Bidder's stockholders and the cash component of the
Strategic Bidder's revised bid was subject to a financing contingency and was
not supported by financing commitments.
On March 22, 2001, the Company Board held a special telephonic meeting
during which the Company Board discussed the proposed business combination with
Parent. Dechert and Xxxxxxxx, Xxxxx & Xxxxxx LLP ("Xxxxxxxx"), counsel to the
Company, reviewed the background of the Company's discussions with Parent as
well as the current status of negotiations and reviewed the terms of the
proposed business combination transaction. Representatives of JPMorgan reviewed
the financial terms of the transaction as proposed at that time. The Compny
Board discussed the strategic, business and financial merits and the timing of
the possible transaction with Parent and the terms of Parent's proposal, and
directed management to continue negotiations with Parent.
On March 23, 2001, subsequent to the completion of additional financial due
diligence, Parent submitted a revised offer. The Company rejected the proposed
revised offer.
During the weeks of March 26 and April 2, 2001, Parent representatives and
representatives from JPMorgan and certain members of the Company Board had a
series of conversations to discuss the terms and assumptions of the most
recently proposed offer.
On April 6, 2001, Parent agreed to increase its offer to $6.36 per Share.
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On April 10, 2001, the Company Board held a special telephonic meeting to
review the status of negotiations and discussions with Parent since the Company
Board's March 22, 2001 meeting and reviewed revised drafts of the Merger
Agreement and related agreements. Representatives of JPMorgan, Dechert and
Xxxxxxxx also participated. Representatives of Dechert and Xxxxxxxx reviewed wth
the Company Board the main legal principles applicable to the proposed business
combination transaction (including the Board's fiduciary duties and authority in
considering the transaction). Representatives of Dechert and Xxxxxxxx also
reviewed in detail the principal terms of the proposed Merger Agreement and
related agreements and summarized the remaining open issues and responded to
questions by the Company Board. The Company Board reviewed and discussed the
principal terms of the proposed transaction, including the price to be paid in
the Offer, closing conditions, termination rights, the termination fee, the
Stock Option and Tender Agreements and the Company's ability to consider
alternative proposals. Also at this meeting, JPMorgan reviewed with the Company
Board the financial terms of the transaction proposed at that time and a
financial comparison of Xxxxxx's bid with the other bids received and delivered
its opinion to the Company Board to the effect that, as of such date and based
upon and subject to various considerations, the consideration to be received in
the Offer and the Merger, taken together, was fair, from a financial point of
view, to the holders of common stock of the Company. After further deliberation,
the Company Board, by the unanimous vote of all directors present and voting at
the meeting:
- determined that the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger and the Stock Option and
Tender Agreements, are consistent with and in furtherance of the long-term
business strategy of the Company and are advisable and are fair to and in
the best interest of the Company and its stockholders;
- approved and adopted the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger and the Stock
Option and Tender Agreements and the transactions contemplated thereby;
- resolved to recommend acceptance of the Offer and approval and adoption of
the Merger Agreement by the Company's stockholders; and
- authorized Xxxxx X. Xxxxx, Xx. and Xxxxxx X. Xxxxx to execute, on behalf
of the Company, the Merger Agreement and such other documents that certain
of the Company's officers find necessary or advisable in their sole
discretion, together with any changes, deletions, additions and
alterations which such officers approve consistent with the resolutions of
the Company Board.
On April 10, 2001, the Merger Agreement was executed by Parent, Sub and the
Company, and Parent and the Company issued a joint press release announcing the
transaction on April 11, 2001.
On April 20, 2001, Parent and Sub commenced the Offer.
11. THE MERGER AGREEMENT; OTHER ARRANGEMENTS.
THE MERGER AGREEMENT
The following is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as exhibit (d)(1) to the Tender Offer
Statement on Schedule TO (the "Schedule TO") filed by Xxxxxx and Sub on
April 20, 2001 with the SEC in connection with the Offer. The following summary
may not contain all of the information important to you, and is qualified in its
entirety by reference to the Merger Agreement, which is deemed incorporated by
reference in this Offer to Purchase. Accordingly, we encourage you to read the
entire Merger Agreement. Capitalized terms used in this summary and not
otherwise defined in this Offer to Purchase shall have the meanings set forth in
the Merger Agreement.
THE OFFER. The Merger Agreement provides that, following the satisfaction
or waiver of the conditions of the Offer set forth in Section 15 of this Offer
to Purchase entitled "Certain Conditions of the Offer," Sub will purchase all
shares of Company Common Stock validly tendered and not withdrawn. Parent and
Sub have agreed not to, without the prior consent of the Company (a) reduce
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the number of shares of Company Common Stock subject to the Offer or reduce or
waive the Minimum Tender Condition, (b) reduce the consideration per share of
Company Common Stock to be paid pursuant to the Offer below the Offer Price,
(c) modify or add to the conditions of the Offer, (d) except for the specific
instances described below, extend the Offer, or (e) change the form of
consideration payable in the Offer.
Sub may, however, without the consent of the Company, extend the Offer
(a) for up to forty-five (45) days, if at the initial expiration date of the
Offer any of the conditions to the Offer are not satisfied or waived, (b) for an
aggregate of twenty (20) business days if all of the conditions to the Offer
have been satisfied but less than ninety percent (90%) of the then outstanding
number of shares have been validly tendered and not withdrawn, provided that Sub
immediately accepts and promptly pays for all shares tendered prior to the date
of the extension, (c) for any period required by any rule, regulation,
interpretation or position of the SEC, or (d) in increments of not more than
twenty business days, if at the expiration of the Offer, or any extension
thereof, the Merger cannot be consummated because the waiting period under the
HSR Act shall not have terminated or any foreign antitrust law approvals shall
not have been obtained.
DIRECTORS. The Merger Agreement provides that promptly after Sub purchases
and pays for that number of shares of Company Common Stock which represents at
least a majority of the Fully Diluted Shares, Sub shall be entitled to designate
such number of directors, rounded up to the next whole number, on the Company
Board which is equal to the product of the total number of directors on the
Company Board after giving effect to the directors designated pursuant to this
sentence multiplied by the percentage that the number of shares of Company
Common Stock so accepted for payment by Sub bears to total number of Fully
Diluted Shares, and the Company shall, at such time, cause Sub's designees to be
so appointed or elected. However, until the Effective Time, the Company shall
retain as members of the Company Board at least two directors who were directors
as of the date of the Merger Agreement. Following the election or appointment of
Sub's designees and prior to the Effective Time, any amendment or termination of
the Merger Agreement, extension for the performance or waiver of the obligations
of Parent or Sub or waiver of the Company's rights under the Merger Agreement,
requires the concurrence of each member of the Company Board who was a member on
the date of the Merger Agreement.
THE MERGER. The Merger Agreement provides that, following satisfaction or
waiver of the conditions set forth in the Merger Agreement, Sub shall be merged
with and into the Company in accordance with the DGCL, with the Company
surviving and becoming a wholly owned subsidiary of Parent. Each issued and
outstanding share of Company Common Stock (other than shares owned by the
Company, the Company Subsidiaries, Parent or Sub or stockholders, if any, who
are entitled to and who exercise their appraisal rights under the DGCL) will be
converted into the right to receive Merger Consideration, without interest.
COMPANY STOCK OPTIONS. Each Company Employee Stock Option outstanding
immediately prior to the Effective Time, whether or not then vested, shall be
canceled in exchange for a cash payment (subject to any required withholding of
Taxes and without interest) of an amount equal to the excess, if any, of the
price per share of Company Common Stock to be paid pursuant to the Offer over
the exercise price per share of Company Common Stock subject to such Company
Employee Stock Option, multiplied by the number of shares of Company Common
Stock that otherwise would have been issued upon exercise of such Company
Employee Stock Option. In addition, each of the Company Option Plans and the
Individual Options will be terminated and any provision in a Company Plan that
provides for the issuance, transfer or grant of or an interest in the capital
stock of the Company shall be deleted to ensure that after the Effective Time a
holder of a Company Employee Stock Option or a participant in any Company Plan
will not have any right to acquire capital stock of the Company or the Surviving
Corporation.
EMPLOYEE STOCK PURCHASE PLAN. The Company Board has agreed to take such
actions under the Company's Amended and Restated Employee Stock Purchase Plan
("ESPP") as may be necessary or desirable in Parent's reasonable judgment to
extend any Offering Period (as defined in the ESPP)
15
pending on the date of the Merger Agreement until such time as the Merger
Agreement may be terminated in accordance with its terms without the Offer or
the Merger being consummated (as so extended, the "Pending Offering Period").
The extension of the Offering Period ensures that the Company's employees do not
exercise any option to purchase shares of Company Common Stock granted under the
ESPP during the term of the Merger Agreement. In addition, prior to Sub's first
acceptance of shares of Company Common Stock in the Offer, the Company Board
will take such actions as may be necessary or desirable in Parent's reasonable
judgment to (i) cancel any Pending Offering Period without any further purchases
of shares of Company Common Stock, (ii) refund all amounts contributed during
the Pending Offering Period, and (iii) terminate the ESPP effective no later
than the date of Sub's first acceptance of shares of Company Common Stock in the
Offer. The Company Board has also made a determination that the consummation of
the Offer constitutes a "change-in-control event" within the meaning of the
ESPP.
STOCKHOLDER APPROVAL. The DGCL requires that the Merger be adopted by the
Company Board and, if the "short-form" merger procedure described below is not
available, approved by the holders of a majority of the Company's outstanding
voting securities. The Company Board unanimously adopted and approved the Offer,
the Merger and the Merger Agreement by all members present. As a result, the
only additional action that may be necessary to effect the Merger is approval of
the Merger Agreement by the Company's stockholders if a "short-form" merger
procedure is not available. If required by the DGCL, the Company will call and
hold a special meeting of its stockholders as promptly as practicable following
the consummation of the Offer for the purposes of considering and voting upon
the adoption of the Merger Agreement. At any such meeting, all shares of Company
Common Stock then owned by Sub or any other Subsidiary of Parent will be voted
in favor of the approval of the Merger Agreement and the Merger. If Sub acquires
through the Offer voting power with respect to at least a majority of the Fully
Diluted Shares (which would be the case if the Minimum Tender Condition were
satisfied and Sub were to accept for payment shares of Company Common Stock
tendered pursuant to the Offer), Sub will have sufficient voting power to effect
the Merger without the affirmative vote of any other stockholder of the Company.
The DGCL also provides for a "short-form" merger procedure if a corporation
owns at least 90% of the outstanding shares of each class of voting stock of a
corporation. A "short-form" merger may be consummated without prior notice to,
or the approval of, the other stockholders. Accordingly, if, as a result of the
Offer, Sub or any other Subsidiary of Parent acquires or controls the voting
power of at least 90% of the outstanding shares of Company Common Stock, Sub
intends to effect the Merger without prior notice to, or any action by, any
other stockholder of the Company.
CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The Merger
Agreement provides that the respective obligations of each party to effect the
Merger is subject to the satisfaction or waiver of the following conditions:
(i) if required, the Company shall have obtained the Company Stockholder
Approval; (ii) the waiting period under the HSR Act shall have been terminated
or shall have expired and any consents, approvals and filings under any foreign
antitrust law, the absence of which would prohibit the consummation of Merger,
shall have been obtained or made; (iii) no temporary restraining order,
preliminary or permanent injunction or other Order or other legal restraint or
prohibition preventing or imposing any conditions or limitations on the
consummation of any of the Transactions shall be in effect; and (iv) Sub shall
have accepted shares of Company Common Stock for payment pursuant to the Offer,
provided that this condition shall not be applicable if, in breach of the Merger
Agreement or the terms of the Offer, Sub fails to purchase shares of Company
Common Stock validly tendered and not withdrawn.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains customary
representations and warranties of the parties which expire as of the Effective
Time. These include representations and warranties of the Company with respect
to, among other things, organization, standing and power; company subsidiaries
and equity interests; capital structure; authorizations, validity of the Merger
Agreement and necessary action; no conflicts and consents; SEC documents,
financial statements and undisclosed liabilities; information supplied; absence
of certain changes or events; taxes; benefit plans, ERISA compliance and excess
parachute payments; litigation; compliance with applicable laws;
16
contracts and debt instruments; guarantees; intellectual property; takeover
laws; affiliate transactions; environmental, health and safety; real and
personal property; insurance; compensation; certain advances; licenses and
permits; copies of certain documents; underlying documents; risk management
instruments; brokers, fees and expenses; and opinion of financial advisor.
The Merger Agreement also contains customary representations and warranties
of Parent and Sub, including among other things, organization, standing and
power; financing; ownership of Company Common Stock; authorization, validity of
the Merger Agreement and necessary action; no conflicts and consents;
information supplied; brokers; and litigation.
CONDUCT OF BUSINESS BY THE COMPANY. The Merger Agreement provides that from
the date of the Merger Agreement until the Effective Time the Company will, and
will cause each of its Subsidiaries to, conduct its business in the ordinary and
usual course of business and, except for matters expressly permitted by the
Merger Agreement or disclosed in the Company Disclosure Letter, the Company will
not, and will not permit its Subsidiaries to, do any of the following without
the prior written consent of Parent: (i) (A) declare, set aside or pay any
dividends, (B) split, combine or reclassify any of its capital stock,
(C) purchase, redeem or otherwise acquire any shares of capital stock or
(D) adopt a plan of complete or partial liquidation or otherwise reorganize its
operations; (ii) issue, deliver, sell or grant any securities of any kind, other
than the issuance of Company Common Stock upon the exercise of Company Employee
Stock Options outstanding on the date of the Merger Agreement; (iii) amend its
organizational documents; (iv) acquire any business, assets or any Person in any
manner; (v) (A) grant any increase in compensation, severance or termination
pay, (B) enter into or amend any employment, consulting, indemnification,
severance or termination agreement with any such present or former employee,
officer or director, (C) enter into or amend in any material respect any
collective bargaining agreement or Company Plan, (D) accelerate any rights or
benefits, or make any material determinations under any collective bargaining
agreement or Company Plan, (E) loan or advance money or other property in excess
of $25,000 in the aggregate, to all present or former employees, officers or
directors or (F) grant or amend any Company Employee Stock Option; (vi) make any
change in accounting methods, principles or practices, except as required by a
change in GAAP; (vii) sell or otherwise dispose of (or permit to become subject
to any Lien, other than a Permitted Lien) any properties or assets;
(viii) (A) incur any indebtedness or guarantee any indebtedness of another
Person or enter into any arrangement having the economic effect of any of the
foregoing, or (B) make any loans, advances or capital contributions to, or
investments in, any other Person; (ix) make any expenditures that, in the
aggregate, are in excess of $250,000; (x) make any Tax election or settle or
compromise any Tax liability or refund; (xi) (A) pay, discharge or satisfy any
claims, liabilities or obligations, other than payment, discharge or
satisfaction in accordance with their terms, of liabilities reflected or
reserved against in the most recent consolidated financial statements,
(B) cancel any material indebtedness or waive any claims or rights of
substantial value or (C) waive the benefits of, or modify in any manner, any
confidentiality, standstill or similar agreement to which it is a party;
(xii) amend any Material Contract involving amounts in excess of $100,000 or
enter into any Material Contract; (xiii) authorize any of, or commit or agree to
take any of, the foregoing actions; and (xiv) take any action that could
reasonably be expected to result in any of the Company's representations and
warranties becoming untrue or any condition to the Offer or the Merger not being
satisfied in all material respects.
REASONABLE BEST EFFORTS; NOTIFICATION. Each of the parties to the Merger
Agreement have agreed, subject to the satisfaction or waiver of the conditions
to the Merger, to use their respective reasonable best efforts to take all
actions necessary, proper or advisable to consummate the Offer, the Merger and
the other Transactions, including (i) obtaining all necessary consents and
approvals from Governmental Entities, and making all necessary registrations and
filings with any Governmental Entity, including under the HSR Act,
(ii) obtaining all necessary consents, approvals or waivers from third parties,
(iii) defending any lawsuit or other legal proceeding challenging the Merger
Agreement or any other Transaction Agreement or the consummation of the
Transactions, and (iv) the execution and delivery of any additional instruments
necessary to consummate the Transactions.
17
In addition, the Company and the Company Board have agreed to take all
commercially reasonable action necessary to ensure that no state takeover
statute or regulation is or becomes applicable, and if any state takeover
statute or regulation should become applicable, take all commercially reasonable
action necessary to ensure that the Offer, the Merger and the other Transactions
may be consummated as promptly as practicable on the terms contemplated by the
Transaction Agreements.
Without Parent's prior written consent, the Company shall not (and will not
allow any Company Subsidiary to), commit to any divestitures, licenses, hold
separate arrangements or similar matters affecting business operating practices.
If such divestitures, licenses, hold separate arrangements or similar matters
are contingent on consummation of the Offer, the Company shall commit to, and
shall use its reasonable best efforts to effect (and shall cause its
Subsidiaries to commit to and use their reasonable best efforts to effect), any
such divestitures, licenses, hold separate arrangements or similar matters.
However, neither Parent nor any of its Subsidiaries shall be required to agree
(with respect to Parent, the Company or any of their respective Subsidiaries) to
any divestitures, licenses, hold separate arrangements or similar matters,
including covenants affecting business operating practices, if such actions
would reasonably be expected to have a Parent Material Adverse Effect or a
Company Material Adverse Effect.
NO SOLICITATION. The Merger Agreement provides that until the earlier of
the Effective Time or the termination of the Merger Agreement, the Company and
the Company Subsidiaries shall not (and will use its best efforts to cause each
of its and each of its Subsidiaries' officers, directors or management employees
or any investment banker, financial advisor, attorney, accountant or other
representatives retained by it or any of its Subsidiaries not to) directly or
indirectly (i) solicit, encourage, engage in discussions or negotiate with,
provide information with respect to the Company, enter into an agreement, or
take any other action intended to facilitate any inquiry or effort relating to
an Alternative Acquisition (an "Alternative Acquisition Proposal"), or
(ii) make or authorize any statement, recommendation or solicitation in support
of any possible Alternative Acquisition. However, prior to Sub accepting any
shares of Company Common Stock for payment pursuant to the Offer, the Company
Board may, to the extent required by the its fiduciary obligations under
Delaware law, in response to a proposal for an Alternative Acquisition (as
defined below) that the Company Board determines, in good faith after
consultation with independent counsel and an independent financial advisor, is
or is reasonably likely to result in a Superior Company Proposal (as defined
below), that was not solicited by the Company or otherwise resulted from a
breach of the Merger Agreement (subject to providing prior written notice to
Parent), (x) furnish information with respect to the Company to the Person or
group making such Alternative Acquisition Proposal and its representatives
pursuant to a confidentiality agreement with terms not materially more favorable
than those applicable to Parent under the Confidentiality Agreement and
(y) participate in discussions and negotiations with such Person regarding such
Alternative Acquisition Proposal.
The Company Board may not (i) withdraw or modify its approval or
recommendation of the Merger Agreement, the Offer or the Merger in a manner
adverse to Parent or Sub, (ii) approve or permit the Company to enter into any
letter of intent, agreement in principle, definitive agreement or similar
agreement which is reasonably likely to lead to any Alternative Acquisition
Proposal, (iii) approve or recommend any Alternative Acquisition Proposal or
(iv) propose, agree or resolve to take any of the foregoing actions. However, if
prior to Sub's acceptance for payment of the Company Common Stock pursuant to
the Offer, the Company Board receives a Superior Company Proposal and the
Company Board determines in good faith, that it is necessary to do so in order
to comply with its fiduciary obligations under Delaware law, the Company Board
may, during such period, in response to a Superior Company Proposal that was
unsolicited and did not otherwise result from a breach of its no solicitation
covenant, withdraw or modify its approval or recommendation of the Offer, the
Merger and the Merger Agreement and approve or recommend such Superior Company
Proposal.
The Company must, within 24 hours, advise Parent in writing of any
Alternative Acquisition Proposal or any inquiry that could lead to any
Alternative Acquisition Proposal, which writing shall include the identity of
the Person making such Alternative Acquisition Proposal or inquiry and the
18
material terms of any such Alternative Acquisition Proposal or inquiry. The
Company has also agreed to keep Parent reasonably informed of the status of any
Alternative Acquisition Proposal or inquiry and to provide to Parent copies of
all material correspondence provided to or provided by the Company in connection
with any Alternative Acquisition Proposal.
"Alternative Acquisition" means any possible business combination with or
any possible acquisition of the Company (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise) or any material portion of its
capital stock or assets.
"Superior Company Proposal" means any proposal made by a third party to
acquire all or substantially all the equity securities or assets of the Company,
on terms the Company Board determines in its good faith judgment (after
consultation with a financial adviser, with only customary qualifications, and
independent legal counsel) to be superior for the holders of the Company Common
Stock, from a financial point of view, to the Offer and the Merger, taking into
account all the terms and conditions of such proposal and the Merger Agreement,
(including any proposal made by Parent to amend the terms of the Merger
Agreement, the Offer and the Merger) including the likelihood of consummation.
TERMINATION. The Merger Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval by the stockholders of the Company:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if Sub has not accepted for payment any shares of Company Common
Stock pursuant to the Offer on or before August 31, 2001 (the
"Outside Date"), unless the failure to consummate the Merger is
the result of a breach of the Merger Agreement by the party
seeking to terminate the Merger Agreement;
(ii) if any Governmental Entity issues an Order or takes any other
action (that has become final and nonappealable) permanently
enjoining, restraining or otherwise prohibiting the Merger;
(iii) if Sub shall have failed to commence the Offer within ten
business days following the date of the Merger Agreement or the
Offer shall have terminated or expired without Sub having
purchased any shares of Company Common Stock, provided that
this right to terminate is not available to any party whose
failure to fulfill its obligations under the Merger Agreement
or the failure of whose representations and warranties to be
true results in the failure of any such condition; or
(iv) if the Company Stockholder Approval is not obtained;
(c) by Parent, if Sub has not accepted for payment any shares of Company
Common Stock pursuant to the Offer and the Company breaches or fails to
perform in any material respect any of its representations, warranties,
covenants or agreements contained in the Merger Agreement, and such breach
or failure to perform gives rise to the failure of a condition to the Offer
that cannot be cured within 30 days of receiving written notice from Parent
(provided that Parent is not then in material breach of the Merger
Agreement);
(d) by Parent, if the Company Board withdraws or modifies in a manner
adverse to Parent its approval or recommendation of the Offer, the Merger or
the Merger Agreement or fails to recommend that its stockholders accept the
Offer or give the Company Stockholder Approval or if the Company Board fails
to reaffirm publicly and unconditionally its recommendation to the Company's
stockholders within 10 business days of Parent's written request to do so;
(e) by the Company, if Sub has not accepted for payment any shares of
Company Common Stock pursuant to the Offer and the Company Board shall have
finally determined to approve, endorse or recommend an Alternative
Acquisition Proposal (provided the Company has paid or concurrently pays to
Parent the Termination Fee described below); or
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(f) by the Company, if Sub has not accepted for payment any shares of
Company Common Stock pursuant to the Offer and Parent or Sub breaches or
fails to perform in any material respect any of its representations,
warranties, covenants or agreements contained in the Merger Agreement and
such breach or failure to perform gives rise to the failure of a condition
to the Merger that cannot be cured within 30 days of receiving written
notice from the Company (provided that the Company is not then in material
breach of the Merger Agreement).
Notwithstanding the foregoing, the Company cannot terminate the Merger
Agreement until at least seventy-two hours have passed since the Company's
written notice to Parent advising that the Company has received a Superior
Company Proposal, the material terms such Superior Company Proposal and that the
Company intends to accept such Superior Company Proposal.
EFFECT OF TERMINATION; FEES AND EXPENSES. The Company shall pay to Parent a
fee in an amount equal to $2,000,000 (the "Termination Fee") if the Merger
Agreement is terminated under paragraphs (c)(but only with respect to a breach
of its no solicitation covenant),(d) or (e) described above under
"--Termination." If Parent receives the Termination Fee, such fee shall be
Parent's exclusive remedy for any breach of the Company's representations,
warranties or covenants contained in the Merger Agreement.
INDEMNIFICATION; D&O INSURANCE. The Merger Agreement provides that all
rights to indemnification in favor of the current or former directors, officers
or employees of the Company and its Subsidiaries under their respective
organizational documents (or in any indemnification agreement to which it is a
party) for acts or omissions occurring prior to the Effective Time shall survive
the Merger and continue for a period of not less than six years from the
Effective Time.
In addition, Parent shall maintain for a period of six years from the
Effective Time the Company's current D&O Insurance policy to the extent that it
provides coverage for events occurring prior to the Effective Time, provided the
annual premium is not in excess of 150% of the last annual premium paid prior to
the date of the Merger Agreement (the "Maximum Premium"). Parent may, however,
satisfy its obligations by requesting that the Company extend coverage under its
D&O Insurance by obtaining a six-year "tail" policy on terms and conditions no
less advantageous than the existing D&O Insurance, provided the cost of such
coverage does not exceed three times the Maximum Premium. Finally, Parent may
satisfy its obligations under this provision if Parent's D&O Insurance provides
(or is amended to provide) substantially similar coverage for events occurring
prior to the Effective Time for persons who are directors and officers of the
Company on the date of the Merger Agreement.
CERTAIN EMPLOYEE MATTERS. Parent has agreed to maintain each Company Plan
as in effect on the date of the Merger Agreement (other than the Company Option
Plans and the ESPP) or provide plans with benefits no less favorable than those
provided under each Company Plan for a period of one year after the Effective
Time. If any employees of the Surviving Corporation become participants in any
substitute plan, credit will be given to employees under such plan for all prior
service with the Company for purposes of determining eligibility only.
GOING PRIVATE TRANSACTIONS.
The Merger would have to comply with any applicable federal law operative at
the time of its consummation including Rule 13e-3 under the Exchange Act which
applies to certain "going private" transactions. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
fairness of the Merger and the consideration offered to minority stockholders in
the Merger be filed with the SEC and disclosed to stockholders prior to the
consummation of the Merger. Sub does not believe that Rule 13e-3 will be
applicable to the Merger unless the Merger is consummated more than one year
after the termination of the Offer
CONFIDENTIALITY AGREEMENT.
The following is a summary of certain provisions of the Confidentiality
Agreement. This summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the
20
Confidentiality Agreement, a copy of which is filed with the SEC as
Exhibit (d)(2) to the Schedule TO and incorporated herein by reference.
Capitalized terms not otherwise defined below shall have the meanings set forth
in the Confidentiality Agreement.
The Confidentiality Agreement has a three-year term and provides that the
Company will make available to Parent certain information concerning its
business, financial condition, operations and assets (the "Evaluation Material")
solely for purposes of evaluating the potential acquisition of all or any
portion of the assets, securities or business of the Company. Parent has agreed
to keep the Evaluation Material confidential, except for disclosure to its
Representatives who need such information in order to evaluate the potential
transaction.
STOCK OPTION AND TENDER AGREEMENTS.
Parent has entered into Stock Option and Tender Agreements with the
following Stockholders: The Estate of Xxxxx X. Xxxxx, Xx., Xxxxx X. Xxxxx,
Xxxxxx X. Xxxxx, Xxxxxx Xxxxx, Xxxxx X. Xxxxx, Xx., Xxxxxx X. Xxxxxxxx, Xxxxxxxx
Xxxxxxx Partners, L.P., and Overseas Private Investor Partners (collectively,
the "Stockholders"). The following is a summary of certain provisions of the
Stock Option and Tender Agreements. This summary does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Stock
Option and Tender Agreements, copies of which are filed with the SEC as Exhibits
(d)(3)-(9) to the Schedule TO and incorporated herein by reference. Capitalized
terms not otherwise defined below shall have the meanings set forth in the Stock
Option and Tender Agreements.
The Stock Option and Tender Agreements require each of the Stockholders to
tender their respective Shares to Parent as soon as practicable after
commencement of the Offer. In addition, the Stockholders have granted Parent the
Option to purchase all of their respective Shares for the higher of the Offer
Price in cash or such higher price per Share in cash as Parent or any of its
subsidiaries may offer to pay for Shares in the Offer, beginning on the date
that the Merger Agreement is terminated after an Alternative Acquisition
Proposal (as defined in the Merger Agreement) has been made, proposed,
communicated or disclosed in any manner, and ending on the date (the "Expiration
Date") that is the later of ten business days following (1) such termination of
the Merger Agreement and (2) the receipt by Parent of any of the governmental
consents or the expiration of any waiting periods which would otherwise prevent
the consummation of the Merger. If Parent exercises the Option, but does not
acquire a number of Shares representing at least the Minimum Tender Condition
within twelve months after such exercise, and within such twelve-month period
Parent sells the Shares acquired upon exercise of the Option pursuant to a
merger, liquidation, reorganization or business combination involving the
Company, then upon consummation of such disposition, Parent will pay to the
Stockholders in cash the amount, if any, by which the consideration per Share
received by Parent in the disposition exceeds the Offer Price (or such higher
price per Share as Parent or any of its subsidiaries may offer to pay for Shares
in the Offer), multiplied by the number of Shares sold in the disposition.
The Stockholders have also agreed to vote all of their respective Shares in
favor of approval of the Merger Agreement and the Merger and against any
alternative acquisition. In addition, the Stockholders have granted Parent an
irrevocable proxy to vote all of their respective Shares in favor of approval of
the Merger Agreement and the Merger and against any alternative acquisition.
The Stock Option and Tender Agreements may be terminated at any time (1) by
mutual written consent of the parties, (2) by either party on or after the
termination of the Merger Agreement other than pursuant to an Applicable
Termination, or (3) by either party on or after the Expiration Date, provided
that Parent's obligations with respect to any disposition within twelve months
after exercise of the Options shall survive any such termination.
LETTER AGREEMENT WITH XXXXX X. XXXXX, XX.
On April 10, 2001, Xxxxxx entered into a letter agreement with Xxxxx X.
Xxxxx, Xx. which, subject to the consummation of the Merger, amends the terms
and conditions of his employment agreement. Pursuant to the letter agreement,
Xxxxxx agreed to honor the salary, bonus and other financial elements
21
of Xx. Xxxxx'x employment agreement and employ Xx. Xxxxx as a Vice President and
General Manager of Parent. In addition, the letter agreement provides that,
except in connection with a marked negative change in the scope of Xx. Xxxxx'x
duties from his position as Vice President, the Merger will not constitute a
"change of control," "take-over transaction" or a "termination event" for
purposes of the employment agreement.
The summary of the terms of Xx. Xxxxx'x letter agreement is qualified in its
entirety by reference to the complete text of the letter agreement, which has
been filed as Exhibit d(12) to the Schedule TO, and is incorporated herein by
reference.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER. The purpose of the Offer is to acquire control of,
and the entire common stock equity interest in, the Company. The purpose of the
Merger is to acquire all outstanding Shares not tendered and purchased pursuant
to the Offer. If the Offer is successful, Sub intends to consummate the Xxxxxx
as soon as practicable following the satisfaction or waiver of each of the
conditions to the Merger set forth in the Merger Agreement.
PLANS FOR THE COMPANY. If at least enough Shares equal to the Minimum
Tender Condition are purchased pursuant to the Offer, Parent will designate its
representatives to be a majority of the Company Board. It is also expected that,
initially following the Merger, the business operations of the Company will be
continued by the surviving corporation substantially as they are currently being
conducted. The directors of Sub will be the initial directors of the surviving
corporation, and the officers of the Company will be the initial officers of the
surviving corporation. Certain members of the Company's current management are
not expected to continue with the surviving corporation following the Merger.
Upon completion of the Offer and the Merger, Parent intends to conduct a
detailed review of the Company and its assets, corporate structure,
capitalization, operations, policies, management and personnel. After such
review, Parent will determine what actions or changes, if any, would be
desirable in light of the circumstances which then exist.
Except as described in this Offer to Purchase, neither Parent nor Sub has
any present plans or proposals that would relate to or result in: (i) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, (ii) a purchase,
sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Company Board or management, including,
but not limited to, any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Company Board or to change
any material term of the employment contract of any executive officer, (iv) any
material change in the Company's capitalization, indebtedness or dividend
policy, (v) any other material change in the Company's corporate structure or
business, (vi) a class of securities being delisted from a national securities
exchange or ceasing to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association, or (vii) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act. See Sections 11
and 13 of this Offer to Purchase--"The Merger Agreement; Other Arrangements" and
"Certain Effects of the Offer," respectively.
13. CERTAIN EFFECTS OF THE OFFER.
MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by stockholders other than Sub. Sub cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for, or
marketability of, the Shares or whether such reduction would cause future market
prices to be greater or less than the Offer Price.
STOCK QUOTATION. Listing the Shares on the National Association of
Securities Dealers Automated Quotation System is voluntary, so the Company may
terminate such listing at any time. Neither Parent nor Sub has any intention to
cause the Company to seek to terminate the inclusion of the Shares on
22
the National Association of Securities Dealers Automated Quotation System prior
to the Merger. However, depending upon the number of Shares purchased pursuant
to the Offer, the Shares may no longer meet the standards for continued
inclusion on the National Association of Securities Dealers Automated Quotation
System. According to its published guidelines, the National Association of
Securities Dealers considers delisting the Shares if, among other things, the
number of publicly held Shares, as the case may be, falls below 750,000 or the
number of holders of round lots of Shares falls below 400. Shares held by
officers or directors of the Company or their immediate families, or by any
beneficial owner of more than 10% or more of the Shares, ordinarily will not be
considered as being publicly held for this purpose. In the event the Shares are
no longer eligible for listing on the National Association of Securities Dealers
Automated Quotation System, quotations might still be available from other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of holders of Shares at
such time, the interest in maintaining a market in Shares on the part of
securities firms, the possible termination of registration of Shares under the
Exchange Act as described below and other factors. If, as a result of the
purchase of Shares pursuant to the Offer, the Shares no longer meet the criteria
for continued inclusion in the National Association of Securities Dealers
Automated Quotation System, the market for the Shares could be adversely
affected.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in the
Shares becoming eligible for deregistration under the Exchange Act. Such
registration of the Shares may be terminated upon application of the Company to
the SEC if the Shares are not listed on a national securities exchange and there
are fewer than 300 holders of record of the Shares. Termination of registration
of the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its stockholders and to the SEC 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 stockholders' meetings and
the related requirement of furnishing an annual report to stockholders, 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 of 1933 may
be impaired or eliminated. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities" or be
eligible for inclusion on the National Association of Securities Dealers
Automated Quotation System
Sub believes that the purchase of the Shares pursuant to the Offer may
result in the Shares becoming eligible for deregistration under the Exchange Act
and it would be the intention of Sub to cause the Company to make an application
for termination of registration of the Shares as soon as possible after
successful completion of the Merger, if the Shares are then eligible for such
termination.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
Regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding the market for the Shares and stock
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.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that from the date of the Merger Agreement
until the Effective Time, unless Parent has consented in writing, the Company
may not declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock.
23
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares promptly
after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (i) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer that number of Shares
which would represent at least a majority of the Fully Diluted Shares (the
"Minimum Tender Condition") and (ii) the waiting period (and any extension
thereof) applicable to the purchase of Shares pursuant to the Offer under the
HSR Act shall have been terminated or shall have expired and any consents,
approvals and filings under any foreign antitrust law, the absence of which
would prohibit the purchase of all Shares tendered pursuant to the Offer, shall
have been obtained or made prior to the acceptance of Shares pursuant to the
Offer. The term "Fully Diluted Shares" means all outstanding securities entitled
generally to vote in the election of directors of the Company on a fully diluted
basis, after giving effect to the exercise, conversion or termination of all
options, warrants, rights and securities exercisable or convertible into such
voting securities. Furthermore, notwithstanding any other term of the Offer or
the Merger Agreement, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for payment
or paid for, and may terminate or amend the Offer, with the consent of the
Company or 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 exists:
(a) there shall have been instituted or pending any suit, action or
proceeding that has a reasonable likelihood of success, (i) challenging the
acquisition by Parent or Sub of any Shares, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or any other
transactions contemplated by the Merger Agreement or the Stock Option and
Tender Agreements, or seeking to obtain from the Company, Parent or Sub any
damages that are material in relation to the Company and its subsidiaries
taken as a whole, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
any material portion of the business or assets of the Company, Parent or any
of their respective subsidiaries, or to compel the Company, Parent or any of
their respective subsidiaries to dispose of or hold separate any material
portion of the business or assets of the Company, Parent or any of their
respective subsidiaries, as a result of the Offer, the Merger or any of the
other transactions contemplated by the Merger Agreement or the Stock Option
and Tender Agreements, (iii) seeking to impose limitations on the ability of
Parent or Sub to acquire or hold, or exercise full rights of ownership of,
any Shares, including the right to vote the Shares purchased by it on all
matters properly presented to the stockholders of the Company, (iv) seeking
to prohibit Parent or any of its subsidiaries from effectively controlling
in any material respect the business or operations of the Company and the
subsidiaries of the Company, or (v) which otherwise is reasonably likely to
have a material adverse effect on the ability of Parent or Sub to perform
its obligations under the Merger Agreement or on the ability of Parent or
Sub to consummate the Offer, the Merger or the other transactions or a
material adverse effect on the business, assets and liabilities (taken
together), results of operations, financial condition or prospects of the
Company and its subsidiaries taken as a whole, or a material adverse effect
on the ability of the Company to perform its obligations under the Merger
Agreement or on the ability of the Company to consummate the Offer, the
Merger and the other transactions contemplated by the Merger Agreement and
the Stock Option and Tender Agreements (a "Company Material Adverse
Effect");
(b) any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction shall be enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed applicable to, or
any consent or approval withheld with respect to the Offer, the Merger or
any of the other transactions contemplated by the Merger Agreement or the
Stock Option and Tender Agreements, by any Governmental Entity that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in paragraph (a) above;
(c) except as disclosed in all Company SEC Documents that were filed and
publicly available prior to the date of the Merger Agreement (the "Filed
Company SEC Documents") or the letter,
24
dated as of the date of the Merger Agreement, delivered by the Company to
Parent and Sub (the "Company Disclosure Letter"), since the date of the most
recent audited financial statements included in the Filed Company SEC
Documents there shall have occurred any event, change, effect or development
that, individually or in the aggregate, has had or is reasonably likely to
have, a Company Material Adverse Effect, except where such event results,
directly or indirectly, from (i) changes affecting the economy generally,
(ii) changes affecting the industry in which the Company operates generally,
(iii) the public announcement or pendency of the Offer, the Merger or the
transactions contemplated by the Merger Agreement or the Stock Option and
Tender Agreements, or (iv) compliance by the Company with any of the terms
of the Merger Agreement;
(d) (i) it shall have been publicly disclosed or Parent shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of more than 15% of the outstanding Shares has been acquired by another
Person (including any group as defined in the Exchange Act) or (ii) the
Company Board or any committee thereof shall have withdrawn or modified in a
manner adverse to Parent its approval or recommendation of the Offer and the
Merger Agreement or the Company Board or any committee thereof shall have
resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company in the
Merger Agreement shall not be true and correct as of the date of the Merger
Agreement and as of such time as though made at such time, except (i) to the
extent such representation and warranty expressly relates to a specific date
(in which case on and as of such specific date), (ii) to the extent Parent
had consented in writing to any supplement or amendment to the Company
Disclosure Letter, or (iii) where the failure to be so true and correct
would not, individually or in the aggregate, result in a Company Material
Adverse Effect;
(f) the Company shall have failed to perform in any respect any
obligation or to comply in any respect with any agreement or covenant of the
Company to be performed or complied with by it under the Merger Agreement;
except for such failures which would not, individually or in the aggregate,
result in a Company Material Adverse Effect; or
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the reasonable judgment of Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition (including any
action or inaction by Parent or any of its affiliates) makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent and may
be asserted by Sub or Parent regardless of the circumstances giving rise to such
condition or may be waived by Sub and Parent in whole or in part at any time and
from time to time in their sole discretion. The failure by Parent, Sub or any
other affiliate of Parent at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Sub is not aware of any material pending legal proceeding relating
to the Offer. Based on its examination of publicly available information filed
by the Company with the SEC and other publicly available information concerning
the Company, Sub is not aware of any governmental license or regulatory permit
that is material to the Company's business that might be adversely affected by
Sub's purchase of the Shares as contemplated herein or, except as set forth
below, of any approval or other action by any government or governmental
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the purchase or ownership of Shares by Sub or Parent as
contemplated in the Offer. Should any such approval or other action be required,
Sub currently contemplates that, except as described below under "State Takeover
Statutes," such approval or other action will be sought. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that if such approval
were
25
not obtained or such other action were not taken, adverse consequences might not
result to the Company's business, or certain parts of the Company's business
might not have to be disposed of, any of which could cause Sub to elect to
terminate the Offer without the purchase of Shares under certain conditions. See
Section 15 of this Offer to Purchase--"Certain Conditions of the Offer."
STATE TAKEOVER STATUTES. A number of states (including Delaware, where the
Company is incorporated), have adopted laws which purport, to varying degrees,
to apply to attempts to acquire corporations that are incorporated in, or which
have substantial assets, stockholders, principal executive offices or principal
places of business or whose business operations otherwise have substantial
economic effects in, such states. Except as described herein, Sub does not know
whether any of these laws will, by their terms, apply to the Offer or the Merger
or any other business combination between Sub or any of its affiliates and the
Company. To the extent that certain provisions of these laws purport to apply to
the Offer or the Merger or other business combination, Sub believes that there
are reasonable bases for contesting such laws. In 1982, 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 could, as a matter of corporate law,
constitutionally disqualify a potential acquiror from voting shares of a target
corporation without the prior approval of the remaining stockholders where,
among other things, the corporation is incorporated in, and has a substantial
number of stockholders in, the state. Subsequently, in TLX Acquisition Corp. v.
Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they apply to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. x. XxXxxxxxxx, a
Federal District Court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit.
Section 203 of the DGCL ("Section 203"), in general, prevents an "interested
stockholder" (including a person who owns or has the right to acquire 15% or
more of the corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other actions) with a
Delaware corporation for a period of three years following the date such person
became an interested stockholder. The Company Board has taken all appropriate
action so that neither Parent nor Sub is or will be considered an "interested
stockholder" pursuant to Section 203.
Neither Parent nor Sub has determined whether any other state takeover laws
or regulations will by their terms apply to the Offer or the Merger, and except
as set forth above, neither Sub nor Parent have attempted to comply with any
state takeover statutes in connection with the Offer or the Merger. Sub and
Parent reserve the right to challenge the validity or applicability of any state
law allegedly applicable to the Offer or the Merger, and nothing in this Offer
to Purchase nor any action taken by Parent or Sub in connection with the Offer
is intended as a waiver of that right. In the event it is asserted that one or
more state takeover statutes 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, Sub might be required to file certain
information with, or to receive approvals from, the relevant state authorities
or holders of Shares, and Sub might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer or the Merger. In such case, Sub may not be obligated to
accept for payment or pay for any tendered Shares. See Section 16 of this Offer
to Purchase--"Certain Conditions of the Offer."
ANTITRUST IN THE UNITED STATES
Under the HSR Act and the rules that have been promulgated thereunder by the
FTC, certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division and the FTC and certain
waiting period requirements have been satisfied. The purchase of Shares pursuant
to the Offer is subject to such requirements.
Pursuant to the requirements of the HSR Act, Sub filed a Notification and
Report Form with respect to the Offer and Merger with the Antitrust Division and
the FTC on April 11, 2001. The
26
waiting period applicable to the purchase of Shares pursuant to the Offer is
scheduled to expire at 11:59 p.m., New York City time, fifteen days after such
filing. However, prior to such time, the Antitrust Division or the FTC may
extend the waiting period by requesting additional information or documentary
material relevant to the Offer from Sub. If such a request is made, the waiting
period will be extended until 11:59 p.m., New York City time, on the tenth day
after substantial compliance by Sub with such request. Thereafter, such waiting
period can be extended only by court order.
Any extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4 of this Offer
to Purchase--"Withdrawal Rights." If Sub's purchase of Shares is delayed
pursuant to a request by the Antitrust Division or the FTC for additional
information or documentary material pursuant to the HSR Act, the Offer will be
extended in certain circumstances. See Section 15 of this Offer to
Purchase--"Certain Conditions of the Offer."
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the purchase of Shares by Sub pursuant to
the Offer. At any time before or after the consummation of any such
transactions, the Antitrust Division or the FTC could take such action under the
antitrust laws of the United States as it deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant to
the Offer or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Parent or the Company. Private parties (including
individual states) may also bring legal actions under the antitrust laws of the
United States. Sub does not believe that the consummation of the Offer will
result in a violation of any applicable antitrust laws. However, 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, what the result will be. See Section 15 of this
Offer to Purchase--"Certain Conditions of the Offer," including conditions with
respect to litigation and certain governmental actions and Section 11 of this
Offer to Purchase--"The Merger Agreement; Other Arrangements" for certain
termination rights.
FOREIGN REGULATORY MATTERS.
Completion of the transaction also may require certain approvals by foreign
regulatory authorities. The parties conduct business in a number of foreign
countries. Under the laws of certain foreign nations and multinational
authorities, the transaction may not be completed unless certain filings are
made with these nations' antitrust regulatory authorities or multinational
antitrust authorities and these antitrust authorities approve or clear closing
of the transaction. Other foreign nations and multinational authorities have
voluntary and/or post-merger notification systems. Should any such approval or
action be required, the parties currently contemplate that such approval or
action would be sought.
Although the parties believe that they will obtain all material required
regulatory approvals in a timely manner, it is not certain that all such
approvals will be received in a timely manner or at all or that foreign or
multinational antitrust authorities will not impose unfavorable conditions for
granting the required approvals.
17. APPRAISAL RIGHTS.
No appraisal rights are available in connection with the Offer.
If Sub acquires at least 90% of the Shares pursuant to the Offer, the Merger
may be consummated without a stockholders' meeting and without the approval of
the Company's stockholders.
Holders of Shares at the Effective Time who do not wish to accept the Merger
Consideration pursuant to the Merger will have the right to seek an appraisal
and to be paid the "fair value" of their Shares at the Effective Time (exclusive
of any element of value arising from the accomplishment or expectation of the
Merger) judicially determined and paid to it in cash provided that such holder
complies with the provisions of such Section 262 of the DGCL.
The following is a brief summary of the statutory procedures to be followed
in order to dissent from the Merger and perfect appraisal rights under Delaware
law. This summary is not intended to be complete and is qualified in its
entirety by reference to Section 262, the text of which is set forth in
27
Schedule II hereto. Any stockholder considering demanding appraisal is advised
to consult legal counsel. Dissenters' rights, if any, will not be available
unless and until the Merger (or a similar business combination) is consummated.
Stockholders of record who desire to exercise their appraisal rights must
fully satisfy all of the following conditions. A written demand for appraisal of
Shares must be delivered to the Secretary of the Company (x) before the taking
of the vote on the approval and adoption of the Merger Agreement if the Merger
is not being effected without a vote of stockholders pursuant to Section 253 of
the DGCL (a "short-form merger"), but rather is being consummated following
approval thereof at a meeting of the Company's stockholders (a "long-form
merger") or (y) within twenty days after the date that the Surviving Corporation
mails to the stockholders a notice (the "Notice of Merger") to the effect that
the Merger is effective and that appraisal rights are available (and includes in
such notice a copy of Section 262 and any other information required thereby) if
the Merger is being effected as a short-form merger without a vote or meeting of
the Company's stockholders. If the Merger is effected as a long-form merger,
this written demand for appraisal must be in addition to and separate from any
proxy or vote abstaining from or against the approval and adoption of the Merger
Agreement, and neither voting against, abstaining from voting, nor failing to
vote on the Merger Agreement will constitute a demand for appraisal within the
meaning of Section 262. In the case of a long-form merger, any stockholder
seeking appraisal rights must hold the Shares for which appraisal is sought on
the date the demand is made and, continuously hold such Shares through the
Effective Time, and otherwise comply with the provisions of Section 262.
In the case of both a short-form merger and a long-form merger, a demand for
appraisal must be executed by or for the stockholder of record, fully and
correctly, as such stockholder's name appears on the Share Certificates. If
Xxxxxx are owned of record in a fiduciary capacity, such as by a trustee,
guardian or custodian, such demand must be executed by the fiduciary. If Shares
are owned of record by more than one person, as in a joint tenancy or tenancy in
common, such demand must be executed by all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute the demand for
appraisal for a stockholder of record; however, the agent must identify the
record owner and expressly disclose the fact that, in exercising the demand, he
is acting as agent for the record owner.
A record owner, such as a broker, who holds Shares as a nominee for others,
may exercise appraisal rights with respect to the Shares held for all or less
than all beneficial owners of Shares as to which the holder is the record owner.
In such case the written demand must set forth the number of Shares covered by
such demand. Where the number of Shares is not expressly stated, the demand will
be presumed to cover all Shares outstanding in the name of such record owner.
Beneficial owners who are not record owners and who intend to exercise appraisal
rights should instruct the record owner to comply strictly with the statutory
requirements with respect to the exercise of appraisal rights before the date of
any meeting of stockholders of the Company called to approve the Merger in the
case of a long-form merger and within twenty days following the mailing of the
Notice of Merger in the case of a short-form merger.
Stockholders who elect to exercise appraisal rights must mail or deliver
their written demands to: Secretary, Foilmark, Inc., 0 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000. The written demand for appraisal should
specify the stockholder's name and mailing address, the number of Shares covered
by the demand and that the stockholder is thereby demanding appraisal of such
shares. In the case of a long-form merger, the Company must, within ten days
after the Effective Time, provide notice of the Effective Time to all
stockholders who have complied with Section 262 and have not voted for approval
and adoption of the Merger Agreement.
In the case of a long-form merger, stockholders electing to exercise their
appraisal rights under Section 262 must not vote for the approval and adoption
of the Merger Agreement or consent thereto in writing. Voting in favor of the
approval and adoption of the Merger Agreement, or delivering a proxy in
connection with the stockholders meeting called to approve the Merger Agreement
(unless the proxy votes against, or expressly abstains from the vote on, the
approval and adoption of the Merger
28
Agreement), will constitute a waiver of the stockholder's right of appraisal and
will nullify any written demand for appraisal submitted by the stockholder.
Regardless of whether the Merger is effected as a long-form merger or a
short-form merger, within 120 days after the Effective Time, either the Company
or any stockholder who has complied with the required conditions of Section 262
and who is otherwise entitled to appraisal rights may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of the
shares of the dissenting stockholders. If a petition for an appraisal is timely
filed, after a hearing on such petition, the Delaware Court of Chancery will
determine which stockholders are entitled to appraisal rights and thereafter
will appraise the Shares owned by such stockholders, determining the fair value
of such Shares exclusive of any element of value arising from the accomplishment
or expectation of the Merger, together with a fair rate of interest to be paid,
if any, upon the amount determined to be the fair value. In determining fair
value, the Delaware Court of Chancery is to take into account all relevant
factors. In Xxxxxxxxxx v. UOP, Inc., et al., the Delaware Supreme Court
discussed the factors that could be considered in determining fair value in an
appraisal proceeding, stating that "proof of value by any techniques or methods
which are generally considered acceptable in the financial community and
otherwise admissible in court" should be considered and that "[f]air price
obviously requires consideration of all relevant factors involving the value of
a company." The Delaware Supreme Court stated that in making this determination
of fair value the court must consider "market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other facts which were
known or which could be ascertained as of the date of merger which throw any
light on future prospects of the merged corporation...." The Delaware Supreme
Court has construed Section 262 to mean that "elements of future value,
including the nature of the enterprise, which are known or susceptible of proof
as of the date of the merger and not the product of speculation, may be
considered." However, the court noted that Section 262 provides that fair value
is to be determined "exclusive of any element of value arising from the
accomplishment or expectation of the merger."
Stockholders who in the future consider seeking appraisal should have in
mind that the fair value of their Shares determined under Section 262 could be
more than, the same as, or less than the Merger Consideration if they do seek
appraisal of their Shares, and that opinions of investment banking firms as to
fairness from a financial point of view are not necessarily opinions as to fair
value under Section 262. Moreover, Parent intends to cause the Surviving
Corporation to argue in any appraisal proceeding that, for purposes thereof, the
"fair value" of the Shares is less than that paid in the Offer. The cost of the
appraisal proceeding may be determined by the Delaware Court of Chancery and
taxed upon the parties as the Delaware Court of Chancery deems equitable in the
circumstances. Upon application of a dissenting stockholder, the Delaware Court
of Chancery may order that all or a portion of the expenses incurred by any
dissenting stockholder in connection with the appraisal proceeding, including,
without limitation, reasonable attorneys' fees and the fees and expenses of
experts, be charged pro rata against the value of all Shares entitled to
appraisal. In the absence of such a determination or assessment, each party
bears its own expenses.
Any stockholder who has duly demanded appraisal in compliance with
Section 262 will not, after the Effective Time, be entitled to vote for any
purpose the Shares subject to such demand or to receive payment of dividends or
other distributions on such Shares, except for dividends or other distributions
payable to stockholders of record at a date prior to the Effective Time.
At any time within 60 days after the Effective Time, any former holder of
Shares shall have the right to withdraw his or her demand for appraisal and to
accept the Merger Consideration. After this period, such holder may withdraw his
or her demand for appraisal only with the consent of the Company as the
Surviving Corporation. If no petition for appraisal is filed with the Delaware
Court of Chancery within 120 days after the Effective Time, stockholders' rights
to appraisal shall cease and all stockholders shall be entitled to receive the
Merger Consideration. Inasmuch as the Company has no obligation to file such a
petition, and Parent has no present intention to cause or permit the Surviving
Corporation to do so, any stockholder who desires such a petition to be filed is
advised to file it on a timely basis. However, no petition timely filed in the
Delaware Court of Chancery demanding appraisal shall be dismissed as to any
stockholder without the approval of the Delaware Court of Chancery, and such
approval may be conditioned upon such terms as the Delaware Court of Chancery
deems just.
29
Failure to take any required step in connection with the exercise of
appraisal rights may result in the termination or waiver of such rights.
APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME. THE INFORMATION SET FORTH
ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES AVAILABLE
TO STOCKHOLDERS IF THE MERGER IS CONSUMMATED. STOCKHOLDERS WHO WILL BE ENTITLED
TO APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER WILL RECEIVE ADDITIONAL
INFORMATION CONCERNING APPRAISAL RIGHTS AND THE PROCEDURES TO BE FOLLOWED IN
CONNECTION THEREWITH BEFORE SUCH STOCKHOLDERS HAVE TO TAKE ANY ACTION RELATING
THERETO.
STOCKHOLDERS WHO SELL SHARES IN THE OFFER WILL NOT BE ENTITLED TO EXERCISE
APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE PRICE PAID
IN THE OFFER THEREFOR.
The foregoing summary of the rights of objecting stockholders under the DGCL
does not purport to be a complete statement of the procedures to be followed by
stockholders of the Company desiring to exercise any available dissenters'
rights. The foregoing summary is qualified in its entirety by reference to
Section 262. The preservation and exercise of dissenters' rights require strict
adherence to the applicable provisions of the DGCL.
18. FEES AND EXPENSES.
Parent and Sub have retained MacKenzie Partners, Inc. to be the Information
Agent and American Stock Transfer & Trust Company to be the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telecopy, telegraph and personal interview and may request
banks, brokers, dealers and other nominees to forward materials relating to the
Offer to beneficial owners of Shares. The Information Agent and the Depositary
each will receive reasonable and customary compensation for their respective
services in connection with the Offer, will be reimbursed for reasonable
out-of-pocket expenses, and will be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under federal
securities laws. Neither Parent nor Sub will pay any fees or commissions to any
broker or dealer or to any other person (other than to the Depositary and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by Sub for customary mailing and handling
expenses incurred by them in forwarding Offering materials to their customers.
19. MISCELLANEOUS.
Neither Sub nor Parent is 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 either Sub or Parent becomes aware of any valid state
statute prohibiting the making of the Offer or the acceptance of the Shares,
Parent and Sub will make a good faith effort to comply with that state statute.
If, after a good faith effort, Sub and Parent cannot comply with the state
statute, the Offer will not be made to, nor will tenders be accepted from or on
behalf of, the holders of Shares in that 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 Sub by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR SUB NOT CONTAINED HEREIN IN THE OFFER
DOCUMENTS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
Sub has filed with the SEC a Tender Offer Statement on Schedule TO pursuant
to Rule 14d-3 of the General Rules and Regulations under the Exchange Act,
together with exhibits furnishing certain additional information with respect to
the Offer, and may file amendments thereto. In addition, the
30
Company has filed with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9 under the
Exchange Act, setting forth the recommendations of the Company Board with
respect to the Offer and the reasons for such recommendations and furnishing
certain additional related information.
XXXXXX ACQUISITION INC.
April 20, 2001
31
SCHEDULE I:
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND SUB
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Parent. Unless
otherwise indicated below, each occupation set forth opposite each person refers
to employment with Parent. Unless otherwise indicated, the business address of
each such person is c/o Illinois Tool Works Inc. at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000 and each such person is a citizen of the United States.
DIRECTORS AND
EXECUTIVE OFFICERS PRESENT PRINCIPAL AND FIVE-YEAR EMPLOYMENT HISTORY
------------------ ------------------------------------------------------------
X. Xxxxx Xxxxxxx Director, Chairman and Chief Executive Officer. X. Xxxxx
Xxxxxxx, 58, has been Chairman of Parent since 1996 and
Chief Executive Officer of Parent since 1995. Xx. Xxxxxxx
served as President of Parent from 1994 until 1996 and as
Executive Vice President of Parent from 1983 until 1994. He
has 35 years of service with Parent. He is a director of
Allstate Insurance Company, Sears, Xxxxxxx & Co., The Quaker
Oats Company and the Federal Reserve Bank of Chicago. Xx.
Xxxxxxx has served as a director of Parent since 1995.
Xxxxxxx X. Xxxxxxxx III Director. Xxxxxxx X. Xxxxxxxx XXX, 53, has served as the
Chairman and Chief Executive Officer of Household
International, Inc., a consumer finance company, since 1994.
The address of Household International, Inc. is 0000 Xxxxxxx
Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000. Xx. Xxxxxxxx serves
on the boards of Household International, Inc., Household
Finance Company and MasterCard International. Xx. Xxxxxxxx
has served as a director of Parent since 1998.
Xxxxxxx X. Xxxxx Director. Xxxxxxx X. Xxxxx, 63, has served as the Chairman
of Tellabs, Inc. since September 2000. Xx. Xxxxx founded
Tellabs and served as President and Chief Executive Officer
from 1975 to September 2000. Tellabs designs, manufactures,
markets and services voice and data equipment. The address
of Tellabs is 0000 Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000.
Xx. Xxxxx is a director of Molex, Inc. and Tellabs, Inc. Xx.
Xxxxx has served as a director of Parent since 1996.
Xxxxxx X. Xxxxxxxxxx Director. Xxxxxx X. Xxxxxxxxxx, 62, has been Vice President
of Xxxxxx-Xxxx Company LLC, a construction and environmental
services company, since 1996. The address of Xxxxxx-Xxxx
Company LLC is Rocky Flats Environmental Site, P.O. Box
464-Building 115, Golden, Colorado 80402-0464.
Xx. Xxxxxxxxxx retired from the United States Army with the
rank of Lieutenant General after 33 years of service. Xx.
Xxxxxxxxxx has served as a director of Parent since 1996.
X. Xxxxxxx Xxxxxxxx Director. X. Xxxxxxx Xxxxxxxx, 68, was the Vice Chairman of
Parent from 1990 to 1995 and Executive Vice President of
Parent from 1983 through 1989. Xx. Xxxxxxxx had 36 years of
service with Parent prior to his retirement. He is a
director of Actuant Corporation. Xx. Xxxxxxxx has served as
a director of Parent since 1995.
32
Xxx X. Xxxxx, Xx. Director. Xxx X. Xxxxx, Xx., 61, has been Chairman of the
Board of Rockwell International Corporation, a manufacturer
of aviation electronics and automotive equipment, since 1998
and Chief Executive Officer of Rockwell International
Corporation since 1997. He was President and Chief Operating
Officer of Rockwell International Corporation from 1995 to
1997. The address of Rockwell International Corporation is
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx
00000. He is a director of Rockwell International
Corporation, Xxxxxx Micro Inc. and Apogent Technologies Inc.
Xx. Xxxxx has served as a director of Parent since 2000.
Xxxxxx X. XxXxxxxxx Director. Xxxxxx X. XxXxxxxxx, 61, has been a Partner of
Trident Capital LP, a venture capital firm, since 1993. The
address of Trident Capital, L.P. is 000 Xxxx Xxxxxxxx, Xxxxx
000, Xxxx Xxxxxx, Xxxxxxxx 00000. Xx. XxXxxxxxx served as
Assistant Secretary of the Navy from 1990 to 1993, Deputy
Under Secretary of Defense from 1987 to 1990, and as
Managing Director of Xxxxxx Xxxxxxx & Co. Incorporated, an
investment bank, from 1985 to 1987. He is a director of
DeVry, Inc. and the Northern Trust Corporation and its
subsidiary, The Northern Trust Company. Xx. XxXxxxxxx has
served as a director of Parent since 1993. He previously was
a director of Parent from 1978 through 1987.
Xxxxxx X. Xxxxx Director. Xxxxxx X. Xxxxx, 67, has been Chairman of the
Executive Committee of Parent since 1982. Xx. Xxxxx is a
director of X.X. Xxxxxxxx Inc. and Northern Trust
Corporation and its subsidiary, The Northern Trust Company.
He is a trustee of The Northwestern Mutual Life Insurance
Company. Xx. Xxxxx has served as a director of Parent since
1968.
Xxxxxxx X. Xxxxx Executive Vice President. Xxxxxxx X. Xxxxx, 50, has been
employed by Parent in various elected executive capacities
for more than five years.
Xxxxx X. Xxxxx Executive Vice President. Xxxxx X. Xxxxx, 49, was elected
Executive Vice President of Parent in 2000. He joined Parent
in 1976 and has held various management positions within the
polymers, fluids and machined components businesses.
Xx. Xxxxx is a citizen of the United Kingdom.
Xxxxxx X. Xxxxx, Xx. Executive Vice President. Xxxxxx X. Xxxxx, Xx., 52, was
elected Executive Vice President of Parent in 2000. He
joined Parent in 1989 and has held various sales, marketing
and general management positions with the consumer packaging
businesses.
Xxxxxx X. Xxxxxx Executive Vice President. Xxxxxx X. Xxxxxx, 52, was elected
Executive Vice President of Parent in 1998. He joined Parent
in 1980 and has held various management positions within
Parent's automotive metal fasteners and components
businesses.
Xxxxxxx X. Xxxxxx Senior Vice President, General Counsel and Secretary.
Xxxxxxx X. Xxxxxx, 61, has been employed by Parent in
various elected executive capacities for more than five
years.
Xxxx Xxxxxx Senior Vice President, Human Resources. Xxxx Xxxxxx, 60, has
been employed by Parent in various elected executive
capacities for more than five years.
33
Xxx X. Xxxxxx Senior Vice President and Chief Financial Officer. Xxx X.
Xxxxxx, 58, has been employed by Parent in various elected
executive capacities for more than five years.
Xxxxxx X. Xxxxxx Executive Vice President. Xxxxxx X. Xxxxxx, 50, was elected
Executive Vice President of Parent in 1996. He joined Parent
in 1991 and has held several management positions in the
welding businesses.
Xxxxx X. Xxxx Vice Chairman. Xxxxx X. Xxxx, 57, has been employed by
Parent in various elected executive capacities for more than
five years.
Xxxxx X. Xxxxxxx Vice Chairman. Xxxxx X. Xxxxxxx, 55, was elected Vice
Chairman in 1999. He joined Premark International in 1990
where he served as President and Chief Operating Officer
until May 1996. He served as Premark International's Chief
Executive Officer and President from May 1996 to October
1997, after which he served as Chairman of the Board, Chief
Executive Officer and President until Premark
International's merger with Parent in November 1999.
Xxxxx X. Xxxxx Executive Vice President, Xxxxx X. Xxxxx, 49, has been
employed by Parent in various elected executive capacities
for more than five years.
Xxxxx X. Xxxxxxxxxx Senior Vice President. Xxxxx X. Xxxxxxxxxx, 37, was elected
Senior Vice President of Parent in 1998. He joined Parent in
1993 after serving as a senior tax manager with Ernst &
Young and has served Parent in various capacities, most
recently as Vice President of Leasing and Investments.
Xxxx X. Xxxxxxxxx Executive Vice President. Xxxx X. Xxxxxxxxx, 54, has been
employed by Parent in various elected executive capacities
for more than five years.
2. DIRECTORS AND EXECUTIVE OFFICERS OF SUB.
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Sub. Unless otherwise
indicated below, each occupation set forth opposite each person refers to
employment with Sub. Unless otherwise indicated, the business address of each
such person is c/o Parent at Illinois Tool Works Inc. at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000 and each such person is a citizen of the United States.
DIRECTORS AND
EXECUTIVE OFFICERS PRESENT PRINCIPAL AND FIVE-YEAR EMPLOYMENT HISTORY
------------------ ------------------------------------------------------------
Xxxxxx X. Xxxxx, Xx. Director and President. Xxxxxx X. Xxxxx, Xx., 52, was
elected Executive Vice President of Parent in 2000. He
joined Parent in 1989 and has held various sales, marketing
and general management positions with the consumer packaging
businesses.
Xxxxxxx X. Xxxxxx Director, Vice President and Secretary. Xxxxxxx X. Xxxxxx,
61, has been employed by Parent in various elected executive
capacities for more than five years.
Xxxxx X. Xxxxxxxxx, Xx. Director, Vice President and Treasurer. Xxxxx X. Xxxxxxxxx,
Xx., 45 joined Parent in November 2000 as Vice President and
Treasurer. From January 1996 to September 1999,
Xx. Xxxxxxxxx was Assistant Treasurer of Xxxxxx
International Corporation. From June 1993 to December 1995,
Xx. Xxxxxxxxx was Manager of International Finance of
McDonald's Corporation.
34
Xxxx X. Xxxxx Vice President. Xxxx X. Xxxxx, 48, was elected Vice
President of Patents and Technology of Parent in
April 2000. Xx. Xxxxx joined parent in January 1994.
Xxxxx X. Xxxxxxxxxx Vice President. Xxxxx X. Xxxxxxxxxx, 37, was elected Senior
Vice President of Parent in 1998. He joined Parent in 1993
after serving as a senior tax manager with Ernst & Young and
has served Parent in various capacities, most recently as
Vice President of Leasing and Investments.
Xxxxxx X. XxXxxxx Vice President, Tax. Xxxxxx X. XxXxxxx, 61, has been Vice
President, Tax of Parent for more than five years.
Xx. XxXxxxx joined Parent in July 1976.
35
SCHEDULE II:
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
DELAWARE CODE ANNOTATED
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER, CONSOLIDATION OR CONVERSION
8 DEL. C. SECTION 262 (2000)
Section 262. Appraisal rights
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of
this section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing
pursuant to Section 228 of this title shall be entitled to an appraisal by
the Court of Chancery of the fair value of the stockholder's shares of stock
under the circumstances described in subsections (b) and (c) of this
section. As used in this section, the word "stockholder" means a holder of
record of stock in a stock corporation and also a member of record of a
nonstock corporation; the words "stock" and "share" mean and include what is
ordinarily meant by those words and also membership or membership interest
of a member of a nonstock corporation; and the words "depository receipt"
mean a receipt or other instrument issued by a depository representing an
interest in one or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to Section 251 (other than a merger effected pursuant
to Section 251(g) of this title), Section 252, Section 254, Section 257,
Section 258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date
fixed to determine the stockholders entitled to receive notice of and to
vote at the meeting of stockholders to act upon the agreement of merger
or consolidation, were either (i) listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or (ii) held of record by more than 2,000 holders; and
further provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a merger if the
merger did not require for its approval the vote of the stockholders of
the surviving corporation as provided in subsection (f) of Section 251 of
this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of any class
or series of stock of a constituent corporation if the holders thereof
are required by the terms of an agreement of merger or consolidation
pursuant to Sections 251, 252, 254, 257, 258, 263 and 264 of this title
to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts
in respect thereof) or depository receipts at the effective date
of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market
system security on an
36
interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000
holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of
this paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a., b. and c.
of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under Section 253 of this title is
not owned by the parent corporation immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary
Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate
of incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the
assets of the corporation. If the certificate of incorporation contains such
a provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking
of the vote on the merger or consolidation, a written demand for
appraisal of such stockholder's shares. Such demand will be sufficient if
it reasonably informs the corporation of the identity of the stockholder
and that the stockholder intends thereby to demand the appraisal of such
stockholder's shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to take such
action must do so by a separate written demand as herein provided. Within
10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of the date
that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to Section
228 or Section 253 of this title, each constituent corporation, either
before the effective date of the merger or consolidation or within ten
days thereafter, shall notify each of the holders of any class or series
of stock of such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that appraisal
rights are available for any or all shares of such class or series of
stock of such constituent corporation, and shall include in such notice a
copy of this section; provided that, if the notice is given on or after
the effective date of the merger or consolidation, such notice shall be
given by the surviving or resulting corporation to all such holders of
any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice may, and, if given on or after
the effective date of the merger or consolidation, shall, also notify
such stockholders of the effective date of the merger or consolidation.
Any stockholder entitled to appraisal rights may, within 20 days after
the date of mailing of such notice, demand in writing from the surviving
or resulting corporation the appraisal of such holder's shares. Such
demand will be sufficient if it reasonably informs the
37
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders
on or within 10 days after such effective date; provided, however, that
if such second notice is sent more than 20 days following the sending of
the first notice, such second notice need only be sent to each
stockholder who is entitled to appraisal rights and who has demanded
appraisal of such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the transfer
agent of the corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that shall be not more
than 10 days prior to the date the notice is given, provided, that if the
notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw such stockholder's demand for appraisal and
to accept the terms offered upon the merger or consolidation. Within
120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and
(d) hereof, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor of
the merger or consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such shares. Such
written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and
place fixed for the hearing of such petition by registered or certified mail
to the surviving or resulting corporation and to the stockholders shown on
the list at the addresses therein stated. Such notice shall also be given by
1 or more publications at least 1 week before the day of the hearing, in a
newspaper of general circulation published in the City of Wilmington,
Delaware or such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the Court, and the
costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may
38
require the stockholders who have demanded an appraisal for their shares and
who hold stock represented by certificates to submit their certificates of
stock to the Register in Chancery for notation thereon of the pendency of
the appraisal proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In determining such
fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting corporation or by
any stockholder entitled to participate in the appraisal proceeding, the
Court may, in its discretion, permit discovery or other pretrial proceedings
and may proceed to trial upon the appraisal prior to the final determination
of the stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting corporation pursuant
to subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that
such stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as
the Court may direct. Payment shall be so made to each such stockholder, in
the case of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court's decree
may be enforced as other decrees in the Court of Chancery may be enforced,
whether such surviving or resulting corporation be a corporation of this
State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value
of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or
to receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed
within the time provided in subsection (e) of this section, or if such
stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection
(e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation.
39
The Letter of Transmittal, Share Certificates and any other required
documents should be sent by each stockholder or such stockholder'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:
AMERICAN STOCK TRANSFER & TRUST COMPANY
FACSIMILE COPY NUMBER: 000-000-0000
CONFIRM BY TELEPHONE: 000-000-0000
BY FIRST CLASS MAIL, BY OVERNIGHT COURIER, BY HAND:
American Stock Transfer and Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers as 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.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (Call Collect)
E-mail: xxxxx@xxxxxxxxxxxxxxxxx.xxx
or
CALL TOLL FREE (000) 000-0000
